Banco Latinoamericano de Comercio Exterior SA Q2 FY2025 earnings call

Highlights - Second quarter was one of the strongest in Bladex's history with record earnings, strong revenue growth via fee income, pristine asset quality, and robust capital levels. - Commercial portfolio grew, deposits increased, net interest income up, and fee income surged due to the Staatsolie syndicated deal. ### Macro Backdrop - Global environment complex with trade tensions, geopolitical risks; Latin America resilient. ### Strategic Initiatives - Partnership with CGI for trade finance platform fully operational, enhancing efficiency, security, and client experience.

The commercial portfolio grew to $10.8 billion, up 1% quarter-over-quarter and 18% year-over-year. The investment portfolio balances increased 8% quarter-over-quarter and 20% year-over-year, reaching just over $1.3 billion. Total assets reached $12.7 billion, up 2% quarter-over-quarter and 16% year-over-year. Deposits increased to $6.4 billion, 10% above the prior quarter and 23% higher than a year ago, representing 62% of total funding. Net interest income totaled nearly $68 million, up 4% from the previous quarter and 8% versus last year. Fee income stood at $20 million for the quarter, up 88% quarter-over-quarter and 59% year-over-year.

Guidance - Reaffirmed full-year guidance, expecting to be close to or slightly above guidance. - Confidence in net interest margin range of 2.30% assuming no major rate changes. - Anticipate strong execution of medium-term structured transactions and continued growth in core earnings.

Risks - Global environment complexity, trade tensions, geopolitical risks (e.g., Iran-Israel conflict), shifting protectionist policies, potential impact on market volatility and uncertainty.

Q: Strong syndication fees, market conditions and future outlook?

A: Record fees include one-off, but strong pipeline; spreads stable with focus on structured trade and working capital.

Q: Impact of new letter of credit platform on fees?

A: New platform will increase LC fees through higher transaction volume, better margins, and cost efficiency.

Q: Expansion into factoring?

A: Focus on factoring as part of working capital solutions, with resources invested and room for growth.

Q: Near and midterm outlook for ROE and efficiency?

A: Record results impacted by one-off, but guidance expects upper end, less dependent on market rates.