The Latin American Trade Finance Bank Bladex Corporate Presentation - - PowerPoint PPT Presentation

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The Latin American Trade Finance Bank Bladex Corporate Presentation - - PowerPoint PPT Presentation

The Latin American Trade Finance Bank Bladex Corporate Presentation As of June 30, 2015 Disclaimer This presentation contains forward-looking statements. These statements are made under the safe harbor provisions established by the


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Bladex Corporate Presentation

As of June 30, 2015

The Latin American Trade Finance Bank

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Disclaimer

“This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions established by the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. The forward-looking statements in this presentation reflect the expectations of the Bank’s management and are based on currently available data; however, actual experience with respect to these factors is subject to future events and uncertainties, which could materially impact the Bank’s expectations. A number of factors could cause actual performance and results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the anticipated growth of the Bank’s credit portfolio, including its trade finance portfolio; the continuation of the Bank’s preferred creditor status; the impact of increasing interest rates and of improving macroeconomic environment in the Region on the Bank’s financial condition; the execution of the Bank’s strategies and initiatives, including its revenue diversification strategy; the adequacy of the Bank’s allowance for credit losses; the need for additional provisions for credit losses; the volatility of the Bank’s Treasury trading revenues; the Bank’s ability to achieve future growth and increase its number of clients, the Bank’s ability to reduce its liquidity levels and increase its leverage; the Bank’s ability to maintain its investment-grade credit ratings; the availability and mix of future sources of funding for the Bank’s lending operations; potential trading losses; existing and future governmental banking and tax regulations; the possibility of fraud; and the adequacy of the Bank’s sources of liquidity to replace large deposit withdrawals.”

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A Leading Franchise with a Solid Track Record

The Latin America Trade Finance Bank Key Financial Highlights Remarkable Trajectory: + 35 years of Success

Bladex is the Latin American Trade Finance Bank, providing integrated financial solutions across Latin America’s foreign trade value chain First Latin American bank to be listed on the NYSE and to be rated Investment Grade (both in 1992) Currently rated Baa2 / BBB / BBB+, all with Stable outlook Class “A” shareholders (Central Banks or designees from 23 Latin America (“LatAm”) countries) provide substantial support and represent a direct link between the Bank and the governments

  • f Latin America

Multi-national DNA embedded in its ownership structure, management and culture

Current Credit Ratings

FY2014 YoY (%)

Net Income (mm): $106.9 +26% Net Interest Income (mm): $141.1 +15% Return on Average Equity: 12% 10%(2) Gross Loans (mm): $6,686 +9% Total Assets (mm): $8,025 +7% Total Deposits (mm): $2,507 +6% Market Capitalization (mm): $1,167(1) +8% Asset Quality (non-accruing loans

to commercial portfolio):

0.06% 0.05%(2)

1988 1992 2003 2005 2009 2014

Following incorporation in 1978, Bladex initiated its operations in 1979 and issued its first bond in the international capital markets Bladex is granted a license to operate as an agency by the New York State Banking Authorities Bladex is the First Latin American bank registered with the SEC for its IPO, establishing a full listing on the NYSE Bladex conducts a Common Stock Rights Offering, with stand-by commitments issued by a group of Class A shareholders and multilateral

  • rganizations

Bladex launches its client diversification strategy into trade-oriented corporations; expansion of its suite of products and services Bladex initiates funding diversification strategy: increase in central bank deposits, local & international debt sales, syndicated loan facilities Bladex cooperates with the International Finance Corporation to establish the first critical commodities finance facility in Latin America

(1) As of December 31, 2014; (2) As of December 31, 2013 1979

Moody’s Fitch S&P

Date of Rating

  • Dec. 2007
  • Jul. 2012

May 2008 Date of Confirmation

  • Nov. 2014
  • Jul. 2015
  • Jul. 2015

Short-Term P-2 F2 A-2 Long-Term Baa2 BBB+ BBB Perspective Stable Stable Stable

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Strong and Unique Shareholder Structure

A unique shareholding structure

Class A shareholders provide substantial support to Bladex, representing a direct link between the Bank and the governments

  • f Latin America – most of which have granted preferred creditor status to the Bank – and also constituting the main source of

deposits, a very reliable funding source Class A shareholders enjoy super-majority rights related to changes in the Bank’s Articles of Incorporation Class A shareholders can only sell shares to other class A shareholders, thus maintaining the essence of the existing shareholder structure and ensuring support from central banks

Shareholder Composition Board of Directors Composition

Class A – Central Banks or designees from 23 LatAm countries Class B – LatAm & international banks and financial institutions Class E – Public Float (NYSE listed)

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Out of 10 directors, 9 are independent and one represents the Bank’s management (CEO)

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Defined Value Proposition with Strong Business Fundamentals

Business Value Proposition Strong Underlying Business Fundamentals Business Products & Services Multi-Pronged Business Segmentation

Global provider of natural resources with positive demographics Sustained growth and sound economic policies

Pan Regional Reach Product & Market Expertise Agility & Efficiency Client Focused

  • In-depth knowledge of Latin America’s local markets
  • Backed by 23 Latin American governments
  • Vast correspondent banking network throughout LatAm &
  • ther regions of the world
  • Uniquely qualified staff with strong product expertise in

Trade Value Chain, Cross-border Finance, Supply-side & Distribution, both intra-regional and inter-regional

  • Efficient organizational structure
  • LEAN workflows
  • LEAN, client focused culture with a single point of contact
  • Providing client-specific solutions
  • Focused on long-term relationships

CLIENT BASE REGIONS COUNTRIES INDUSTRY SECTORS

Financial Institutions

  • Among top 10 in all

countries

  • Corporate banking

activity Corporations

  • Foreign exchange

generation capacity

  • Growth oriented beyond

domestic market

  • Among top 10 in

respective industry sector

  • Corporate governance

Focus on Strategic Sectors for the Region O&G, Agribusiness, Food processing, Manufacturing Driver of progress, economic growth and development Supporting specialization in both primary and manufacturing sectors Enhancing LatAm’s role in global and regional value chains Growth of ‘Multi-latinas’ as drivers of business expansion Supporting business integration boosted by free trade agreements

Pre-export and export finance Import financing Term loans and revolving credit facilities Letters of credit and guarantees Banker's acceptances

Trade Financing

Pre-export financing with contract assignment and

  • ther

guarantees Vendor finance (factoring, reverse factoring and forfaiting) Financing guaranteed by ECAs and/or private insurance programs

Structured Trade Solutions

Medium- and long-term loans Acquisition finance Trade-related term loans Trade & non- trade revolving credit facilities Liability management Bridge loans

Syndications

Leasing Term loans Guarantees A/B financing with multilaterals Working capital loans

Financial Loans Trade Non-Trade

  • Central

America and the Caribbean

  • Southern

Cone

  • Andean

Region

  • Mexico
  • Brazil

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Business Model targets sustainable, superior returns

Leverage Proven Origination Capacity

LatAm GDP Growth LatAm GDP Growth LatAm Trade Flow Growth LatAm Trade Flow Growth Bladex Client Base Growth Bladex Client Base Growth Valued Products & Services Valued Products & Services

3%+ ROAE

15%+ ROAE

12%+ ROAE

Bladex Origination Bladex Origination Active Portfolio Management Active Portfolio Management

~ 2% NIM ~ 1.5% ROAA < 1.4% Cost of Credit < 30% Efficiency ~ 10% Growth

On-book Portfolio

> 13.5% Tier 1 BIII

Target Consistent Core Performance

Financial Institutions Structuring Partners Trade Services Distribution

Asset Distribution & Services

Fee Based Services Investors Other

Tap Additional Income Sources

15%+ ROAE

12%+ ROAE 12%+ ROAE 3%+ ROAE 3%+ ROAE

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Strategy Hones Strengths & Positions to Seize Growth Opportunities

Develop Emerging Businesses

  • Develop robust syndication

platform

  • Expand diversified market

distribution capabilities Risk sharing programs Secondary market transactions Securitization Platform

  • Expand vendor finance and

leasing capabilities Local vehicles (e.g. SOFOM in Mexico)

Contribute towards sustainable 15% ROAE

Build New Businesses

  • Explore adjacent markets &

establish pipeline of new business activities in trade and regional integration, such as: Credit Insurance Capital Market transactions Structured Trade Finance Trade-related Services Factoring Trade Infrastructure Project Finance

Ensure Long Term Viability

Strengthen Core Business

  • Improve Operating Efficiency

through LEAN Processes, Structure & Organization

  • Active credit portfolio

management Achieve sustainable & consistent return on equity Improve quality of earnings Achieve greater risk dispersion

  • Expand Contingency Business

Develop Guarantee and L/C Issuance Platform

Ensure sustainable 12% Core ROAE

+ +

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Adhering to World-Class Standards

(*) Except for the Bank’s Chief Executive Officer (CEO), all other members of the Board of Directors are independent.

Board of Directors* CEO

Commercial Division Internal Audit

Risk Policy and Assessment Committee Finance & Business Committee Nomination and Compensation Committee Audit and Compliance Committee

Very high corporate governance

standards

Multiple regulators: FED, SEC,

NYSDFS, Superintendency of Banks

  • f Panama, and other entities

throughout the Region

Commercial Division

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Enterprise risk management &

externally certified internal audit function

Internal alignment of corporate

culture, measurement system and process management to

  • ptimize total shareholder return

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FIRST LINE OF DEFENSE Operating Management

  • Front end &

enabling functions

THIRD LINE OF DEFENSE

Assurance

  • Audit function

Finance Division

SECOND LINE OF DEFENSE

Monitoring

  • Risk function

Corporate Services Risk Management Division

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Mitigating Risk …

Reducing Risk within Improved Risk Profile in the Region Contributing to the Growth and Prosperity of Latin America

  • Improved risk perception of the LatAm

Region over the past 20 years

  • Currently, 75% of the Credit Portfolio is

in investment-grade countries, compared to 21% and 14% in 2003 and 1993, respectively

  • Accumulated credit disbursements of

$225 billion, with write-offs representing

  • nly 0.12% of total credit disbursements
  • Disbursement volumes surpass or rival

those of much larger institutions, both in the private sector and multilaterals

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… through a Sustainable Portfolio Strategy Focused on Diversification …

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Sustained Portfolio Growth Commercial Portfolio Composition Commercial Portfolio By Country Commercial Portfolio By Industry

As of June 30, 2015 As of June 30, 2015 As of June 30, 2015

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  • Reduced exposure to Brazil by 8

percentage points since 2011 to June 30, 2015

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… and Focus on Asset Quality

Non-Performing Loans Evolution

Proven track record of strong asset quality, with significant risk mitigants:

  • Low-risk asset class, with short-dated exposures, and superior loss performance
  • US dollar based lending, no meaningful net FX exposures,
  • Floating-rate lending & funding model minimizes interest rate risk exposure
  • Conservative loss reserve methodology
  • Pro-active loss prevention, and rigorous NPL monitoring process
  • Diligent recovery processes

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Diversified Regional and Global Funding Sources….

(*) Original Currency: all non-USD denominated liabilities are hedged into US Dollars with the exception of most MXN issuances which fund assets in the same currency.

Funding Highlights

  • Proven capacity to secure funding and maintain high

liquidity levels, even during crises

  • Deposits from central banks shareholders or designees

provide a resilient funding base. They represent 72% of the Bank’s total deposits as of June 30, 2015

  • Focus on increased diversification of global and regional

funding sources on numerous relevant dimensions: client base, geography and currency

  • Broad access to funding through public and private debt

issuance programs in USD and other currencies

  • Increased focus in medium and long-term funding to

match a growing asset base with similar characteristics

Deposits by Type of Client Diversified Funding Sources

As of June 30, 2015 As of June 30, 2015

Funding Sources and Cost of Funds Funding by Currency (*)

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(US$ million) As of June 30, 2015

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…with Conservative Liquidity Management

Liquidity Management Highlights Liquidity Placements Liquidity Coverage Ratio Liquidity Ratio

(US$ million)

As of June 30, 2015 Advanced liquidity management operating under Basel III framework, monitoring liquidity through Liquidity Coverage Ratio (“LCR”) and Net Stable Funding Ratio (“NSFR”) 30% Liquidity Ratio (Liquid Assets / Total Deposits) 1.12x NSFR 1.02x LCR (Basel III) Liquid balances mainly held in cash-equivalent deposits in A-1 / P-1 rated financial institutions or A-rated negotiable money market instruments, amounted to $960 million as of June 30, 2015 High-quality, short-term trade finance book, which serves as an alternate source of liquidity, with approximately $1 billion in loans maturing on a monthly basis

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Expanding Earnings Capacity & Profitability...

Net Income Net Interest Income & Margin Fees and Other Income Efficiency Ratio

(US$ million) (US$ million) (US$ million, except percentages) (US$ million, except percentages)

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… Supported by Strong Balance Sheet…

Total Assets Loan Portfolio Deposits Stockholder’s Equity

(US$ million) (US$ million) (US$ million) (US$ million)

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Return on Average Equity “ROAE” Return on Average Assets “ROAA”

…and Solid Performance

Tier 1 Capital Ratio

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Risk Weighted Assets ($ million) Basel I Basel III

2011 $4,090 n.a. 2012 $4,609 n.a. 2013 $5,473 n.a. 2014 $6,027 $5,914 30-Jun-15 $6,233 $5,953

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Key Financial Metrics

(In US$ million, except when indicated otherwise)

2011 2012 2013 2014 6M15 Business Net Income $66.3 $83.5 $89.4 $103.5 $48.8 Non-Core Income 16.9 9.5 (4.6) 3.4 0.3 Net Income attributable to Bladex stockholders 83.2 93.0 84.8 106.9 49.1 EPS (US$) $2.25 $2.46 $2.21 $2.76 $1.26 Return on Average Equity (ROAE) 11.4% 11.6% 10.0% 12.0% 10.6% Business ROAE 9.1% 10.4% 10.6% 11.6% 10.5% Return on Average Assets (ROAA) 1.5% 1.5% 1.2% 1.4% 1.3% Business ROAA 1.2% 1.4% 1.3% 1.4% 1.3% Net Interest Margin (NIM) 1.81% 1.70% 1.75% 1.87% 1.81% Net Interest Spread (NIS) 1.62% 1.44% 1.55% 1.71% 1.65% Loan Portfolio 4,960 5,716 6,148 6,686 6,920 Commercial Portfolio 5,354 5,953 6,630 7,187 7,411 Allowance for Credit Losses to Commercial Portfolio 1.82% 1.31% 1.18% 1.20% 1.23% Allowance for Credit Losses to Non-Accruing Loan Balances (x times) 3.0 0.0 25.0 21.4 4.4 Efficiency Ratio 36% 42% 41% 32% 33% Business Efficiency Ratio 39% 43% 37% 32% 33% Market Capitalization 596 822 1,081 1,167 1,254 Assets 6,360 6,756 7,471 8,025 8,308 Tier 1 Capital Ratio Basel I 18.6% 17.9% 15.9% 15.3% 15.4% Leverage (times) 8.4 8.2 8.7 8.8 8.7

(*) End-of-period balances.

Results Portfolio Quality (*) Performance Efficiency Scale & Capitalization (*)

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Bladex Value Proposition to Shareholders

  • Bladex offers

investors access to an entire continent with compelling long- term growth prospects

  • Business model

provides diversified exposure to emerging markets, but with well mitigated Credit Quality, Market, & Operational risks

  • Committed to total

shareholder return (“TSR”) … Attractive dividend yield (annual dividend yield over 5.0%) as a function of core business growth (target 40% - 50% payout ratio)

  • Attractive valuation

multiples

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Diversified Commercial Portfolio with Robust Asset Quality Defined Strategy to Achieve Sustainable Growth Diversified Funding & Conservative Liquidity Management Experienced Management and Conservative Risk Management Practices Compelling Returns sustained by Strong and Reliable Performance Metrics* Leading Franchise in LatAm with Solid Track Record and a Tailored Business Model Trade Finance Bank in Latin America with 35 years of Remarkable Success Investment Grade Profile with Strong and Unique Shareholding Structure Deep knowledge of Latin America with Core in Trade Finance Strategically positioned to capture growth opportunities Sustainable Portfolio Strategy focused on Diversification Strong Asset Quality Management and a Low Risk Core Business Focus Increased diversification of Regional and Global Funding Sources Advanced Liquidity Management

  • perating under Basel III Framework

Net Income of $106.9 million as of December 2014 (+26% YoY) Return on Average Equity of 12% Solid 15.6% Tier 1 Capitalization Ratio (Basel III) Seasoned Senior Management with more than 45 years in C‐Suite roles World‐Class Standards in Corporate Governance, focused on Enterprise‐ Wide Risk Management

(*) As of December 2014

Investment Highlights

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PANAMA

HEAD OFFICE

Torre V, Business Park

  • Ave. La Rotonda, Costa del Este

Apartado 0819-08730 Panamá, República de Panamá Tel: (507) 210-8500

ARGENTINA

  • Av. Corrientes 222 –P.18º

(1043AAP) Capital Federal Buenos Aires, Argentina Tel: (54-11) 4331-2535 Contact: Federico Pérez Sartori Email: fpsartori@bladex.com

BRAZIL

Rua Leopoldo Couto de Magalhäes Junior 110, 1º andar 04542-000, Sao Paulo, Brazil Tel: (55-11) 2198-9606 Contact: Roberto Kanegae Email: rkanegae@bladex.com

MEXICO

MEXICO D.F.

Rubén Darío 281, piso 15, Oficina #1501 Colonia Bosque de Chapultepec

  • CP. 11580, México D.F.

Tel: (52-55) 5280-0822 Contact: Alejandro Barrientos Email: abarrientos@bladex.com

MONTERREY

Torre Avalanz, piso 20 oficina 2035 Batallón de San Patricio #109

  • Col. Valle Oriente, San Pedro, Garza

García Nuevo León, C.P. 66260, México Tel: (52-81) 4780-2377 Contact: Alejandro Barrientos Email: abarrientos@bladex.com

PERU

Dean Valdivia 243 Piso 7, Oficina 701 San Isidro, Lima Tel: (511) 207-8800 Contact: Victor Mantilla Email: vmantilla@bladex.com

COLOMBIA

Calle 113 # 7-45 Edificio Teleport Business Park Torre B, Oficina 1008 Bogotá, Colombia Tel: (57-1) 214-3677 Contact: Camilo Alvarado Email: calvarado@bladex.com

UNITED STATES

NEW YORK AGENCY 370 Lexington Avenue, Suite 500 New York, NY 10017 Tel: (001) 212-754-9191

Regional Presence in Latin America

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