Bladex Corporate PresentationAs of June 30, 2016
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: + 36 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 of Latin America
Multi-national DNA embedded in its regional presence, ownership structure, management and organizational culture
Current Credit Ratings
FY’15 YoY(%)
2Q’16 QoQ(%)
Net Profit (mm): $104.0 +2% $22.3 -5%
Net Interest Income (mm): $145.5 +3% $38.2 -3%
Return on Average Equity: 11.0% 9.1%
Gross Loans (mm): $6,692 +0.1% $6,520 0%
Total Assets (mm): $8,286 +3% $7,634 0%
Total Deposits (mm): $2,795 +12% $3,206 +4%
Market Capitalization (mm): $1,010 -13% $1,036 +10%
Non-performing loans to gross loan portfolio: 0.78% 1.30%
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 organizations
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
1979 Moody’s Fitch S&P
Date of Rating Dec. 2007 Jul. 2012 May 2008
Date of Confirmation Nov. 2014 Jul. 2016 Jul. 2016
Date of Last Update Jul. 2016 Jul. 2016 Jul. 2016
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 structureClass A shareholders provide substantial support to Bladex, representing a direct link between the Bank and the governments of 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
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Out of 10 directors, 9 are independent and one represents the Bank’s management (CEO)
Class A – Central Banks or designees from 23 LatAm countries
Class B – LatAm & international banks and financial institutions
Class E – Public Float (NYSE listed)
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 demographicsSustained growth and sound economic policies
Deep knowledge of Latin America
Core competency in trade finance
Support of Investment &
Regional Integration
EfficientMeasurement and
Management
In-depth knowledge of Latin America’s local marketsBacked by 23 Latin American governmentsVast correspondent banking network throughout LatAm & other 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 structureLEAN, client focused efficient organizational structureSingle point of contact, providing client-specific solutions, and focused on long-term relationships
Driver of progress, economic growth and
developmentSupporting
specialization in both primary and
manufacturing sectors
Enhancing LatAm’s role in global and regional value chainsGrowth of ‘Multi-latinas’ as drivers of business expansion
Supporting business integration boosted by free trade agreements
Bladex’s products and services are categorized into three main areas: i) Financial Intermediation Business, ii) Structuring and Syndications Business and iii) Treasury.
Financial Intermediation
Syndication and Structuring
Treasury
• Trade: Foreign trade products – short and medium term instruments that help drive the cross-border activity of corporations.
• Working Capital: Support to trade finance clients throughout the entire production cycle chain, across a wide range of primary, secondary and tertiary activity sectors. Structured Credit and lending facilities for short and medium-term financing of supply chain, materials & equipment, and inventories.
• Financial solutions designed to meet clients' needs. • Provides access to structured funding for a wide base of financial institutions and
companies in Latin America.
• Debt capital market and deposit products for investment and cash flow optimization. • Treasury services.
World-Class Standards in Corporate GovernanceEnterprise-Wide Risk Management
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Financial InstitutionsAmong top 10 in their respective marketsSignificant corporate banking activity / client base
CorporationsUS Dollar generation capacityGrowth oriented beyond domestic marketAmong top 10 in respective industriesTrack Record & Corporate Governance
Focus on Strategic Sectors for the RegionOil & Gas (upstream, integrated, and downstream), Agribusiness, Food processing, Manufacturing, well diversified in other sectors
Regional FocusMexicoCentral America and The CaribbeanBrazilSouth America
• Southern Cone (1)
• Andean Region (2)
(1) Includes Argentina, Chile, Paraguay and Uruguay.(2) Includes Bolivia, Colombia, Ecuador, Peruand Venezuela
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REGIONS
CLIENT BASE
INDUSTRYSECTORS
Leverage Proven Origination Capacity
LatAm GDP Growth
LatAm GDP Growth
LatAm Trade Flow GrowthLatAm Trade Flow Growth
Bladex Client Base GrowthBladex Client Base Growth
Valued Products & Services
Valued Products & Services
15%+ ROAEBladex
OriginationBladex
Origination
Active Portfolio
Management
Active Portfolio
Management
Improved Financial Margins
NIM ~ 1.8% - 2.0%
Stable Fees from Use of Capital
~ 15% – 20% of Core Net Revenues
Prudent Credit RiskManagementCost of Credit
~ 1.2% – 1.5%
Continued Focus on Efficiency
Efficiency Ratio< 30%
Sustainable Moderate Growth
~ 3% to 8%
Core Financial Intermediation(On-book Portfolio)
Solid CapitalizationA minimum of 13.5% Tier 1 Basel III Ratio
Target ConsistentCore Performance
FinancialInstitutions
Syndications & Structuring
Partners Trade Services
Distribution:
Asset Distribution & Services
Fee Based Services:
Investors Other
Tap Additional Income Sources
15%+ ROAE
12%+ ROAE12%+ ROAE
3%+ ROAE3%+
ROAE
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Financial Business Model targets sustainable, superior returns
• Our Financial Business Model is based on our proven origination capacity of well-diversified Latin American risk. With an adequate risk-return profile, together with solid operational efficiency and capitalization, the Bank aims to deliver a consistent return through its ROAEand to its shareholders from its core financial intermediation activities, commensurate with its cost of capital. The Bank’s efforts to enhanceits asset distribution and trade finance services, aim to increase its return target well above the Bank’s cost of capital.
Strategy Hones Strengths & Positions to Seize Growth Opportunities
Develop Emerging Businesses
• Develop robust syndication platform
• Expand diversified market distribution capabilities
Risk sharing programsSecondary market transactionsSecuritization Platform
• Expand vendor finance and leasing capabilities
Build New Businesses
• Explore adjacent markets & establish pipeline of new business activities in trade and regional integration, such as:
Credit InsuranceCapital Market transactionsStructured Trade FinanceTrade-related ServicesFactoringTrade Infrastructure Project Finance
Strengthen Core Business
• Improve Operating Efficiency through LEAN Processes, Structure & Organization
• Active credit portfolio management
Achieve sustainable & consistent return on equityImprove quality of earningsAchieve greater risk dispersion
• Expand Contingency BusinessDevelop Guarantee and L/C Issuance Platform
+
+
7Core ROAE = 12% ROAE = 15%
Adhering to World-Class Standards
(*) Except for the Bank’s Chief Executive Officer (CEO), allother 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 of Panama, and other entities throughout the Region
Commercial Division
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Enterprise risk management & externally certified internal audit functionInternal alignment of corporate culture, measurement system and process management to optimize total shareholder return
.
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 ServicesRisk Management Division
Commercial 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, 2016As of June 30, 2016
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Reduced exposure to Brazil by22 percentage points since 2005to June 30, 2016
As of June 30, 2016
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… and Focus on Asset Quality
Impaired 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 and funding model minimizes interest rate risk exposure• Conservative loss reserve methodology (IFRS 9)• Pro-active loss prevention, and diligent recovery processes
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Low risk Business
Commercial Portfolio by Type of Transaction
• As of June 30, 2016, 74% of commercial portfolio had a remaining maturity term of 1 year, with average maturity of 129 days.
• Medium term commercial portfolio had a remaining maturity term of 2.4 years.
• Commercial portfolio - remaining maturity of 316 days.
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Commercial Portfolio by Term
• Bladex’s portfolio is composed primarily of tradeassets, low-risk class, with short-dated exposures, andsuperior loss performance.
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 70% of the Bank’s total deposits as of June 30, 2016.
• Focus on increased diversification of global and regional funding sources on numerous relevant dimensions: client base, geography and currency
• Broad access to debt capital markets through public and private debt issuance programs in USD and other currencies, and international syndications
• Increased focus in medium and long-term funding to match a growing asset base with similar characteristics and consolidate the funding base stability maintaining competitive funding costs
Deposits by Type of Client Diversified Funding Sources
As of June 30, 2016 As of June 30, 2016
Funding Sources and Cost of Funds
Funding by Currency (*)
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(US$ million)
As of June 30, 2016
…with Conservative Liquidity Management
Liquidity Management Highlights Liquidity Placements
Liquidity Coverage RatioLiquidity Ratio(US$ million)
As of June 30, 2016Advanced liquidity management operating under Basel III framework, monitoring liquidity through Liquidity Coverage Ratio(“LCR”) and Net Stable Funding Ratio (“NSFR”)
1.12x NSFR1.13x 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. High-quality, short-term trade finance book, which serves as an alternate source of liquidity, with approximately $1 billion in loans maturing on a monthly basis
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Expanding Earnings Capacity & Profitability...
Net Profit Net Interest Income & Margin
Fees and Other Income Efficiency Ratio
Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB.The financial information corresponding to the years 2011-2013 follow the previous accounting standard, US-GAAP. Bladex completed its transition process to IFRSfrom US-GAAP in 2015.
(US$ million, except percentages)
(US$ million) (US$ million, except percentages)
(US$ million)
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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)
Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB.The financial information corresponding to the years 2011-2013 follow the previous accounting standard, US-GAAP. Bladex completed its transition process to IFRSfrom US-GAAP in 2015.
Return on Average Equity “ROAE” Return on Average Assets “ROAA”
…and Solid Performance
Tier 1 Capital Ratio
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Risk Weighted Assets – Basel III(US$ million)
2011 n.a.
2012 n.a.
2013 n.a.
2014 $5,914
2015 $6,104
30-Jun-16 $6,363n.a. means not available
Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB.The financial information corresponding to the years 2011-2013 follow the previous accounting standard, US-GAAP. Bladex completed its transition process to IFRSfrom US-GAAP in 2015.
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Key Financial Metrics
17Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB.The financial information corresponding to the years 2011-2013 follow the previous accounting standard, US-GAAP. Bladex completed its transition process toIFRS from US-GAAP in 2015.
(In US$ million, except percentages) 2011 2012 2013 2014 2015 6M16
Total Income $138.8 $137.4 $133.7 $167.6 $173.9 $81.4Business Profit $66.3 $83.5 $89.4 $99.7 $99.0 $50.2Non-Core Items 16.9 9.5 (4.6) 2.7 5.0 (4.4) Net Profit $83.2 $93.0 $84.8 $102.4 $104.0 $45.7 EPS (US$) $2.25 $2.46 $2.21 $2.65 $2.67 $1.17
Return on Average Equity (ROAE) 11.4% 11.6% 10.0% 11.5% 11.0% 9.4%Business Return on Average Equity ("Business ROAE") 9.1% 10.4% 10.6% 11.2% 10.4% 10.3%Return on Average Assets (ROAA) 1.5% 1.5% 1.2% 1.4% 1.3% 1.2%Busines Return on Assets ("Business ROAA") 1.2% 1.4% 1.3% 1.3% 1.3% 1.3%Net Interest Margin ("NIM") 1.81% 1.70% 1.75% 1.88% 1.84% 2.06%Net Interest Spread ("NIS") 1.62% 1.44% 1.55% 1.72% 1.68% 1.84%
Loan Portfolio 4,960 5,716 6,148 6,686 6,692 6,520 Commercial Portfolio 5,354 5,953 6,630 7,187 7,155 6,767 Allowance for expected credit losses on loans at amortized cost and off-balance sheet credit risk to Commercial Portfolio (%) 1.82% 1.31% 1.18% 1.22% 1.33% 1.60%Non-Performing Loans to gross Loan Portfolio (%) 0.65% 0.00% 0.05% 0.06% 0.78% 1.30%Allowance for expected credit losses on loans at amortized cost and off-balance sheet credit risk to Non-Performing Loans (x times) 3.0 0.0 25.0 21.7 1.8 1.3
Efficiency Ratio 36% 42% 41% 32% 30% 28%Business Efficiency Ratio 39% 43% 37% 32% 31% 26%
Market Capitalization 596 822 1,081 1,167 1,010 1,036Total assets 6,360 6,756 7,471 8,022 8,286 7,634 Tier 1 Capital Ratio Basel III (Basilea I for years 2012-2013) 18.6% 17.9% 15.9% 15.5% 16.1% 15.6%Leverage 8.4 8.2 8.7 8.8 8.5 7.7
Performance
Efficiency
Scale & Capitalization (*)
Portfolio Quality (*)
Results
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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Dividends per Share
BLX Stock Price and Volume Evolution
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
Trade Finance Bank in Latin America with more than 35 years of Remarkable SuccessInvestment Grade Profile with Strong and Unique Shareholding Structure Deep knowledge of Latin America
with Core in Trade FinanceStrategically positioned to capture growth opportunities
Sustainable Portfolio Strategy focused on DiversificationStrong Asset Quality Management and a Low Risk Core Business Focus
Increased diversification of Regional and Global Funding SourcesAdvanced Liquidity Management operating under Basel III Framework
Profit for 2015 of $104.0 million(+2% YoY), and $45.7 million for 6M16. Return on Average Equity of 9.4%for 6M16.Solid 15.6% Tier 1 Capitalization Ratio (Basel III) as of June 30, 2016.
Seasoned Senior Management with ample experience in C‐Suite rolesWorld‐Class Standards in Corporate Governance, focused on Enterprise‐Wide Risk Management
Investment Highlights
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PANAMAHEAD OFFICETorre V, Business ParkAve. La Rotonda, Costa del EsteApartado 0819-08730Panamá, República de PanamáTel: (507) 210-8500
ARGENTINAAv. Corrientes 222 –P.18º(1043AAP) Capital FederalBuenos Aires, ArgentinaTel: (54-11) 4331-2535Contact: Federico Pérez SartoriEmail: [email protected]
BRAZILRua Leopoldo Couto de MagalhäesJunior 110, 1º andar04542-000, Sao Paulo, BrazilTel: (55-11) 2198-9606Contact: Roberto KanegaeEmail: [email protected]
MEXICOMEXICO D.F.Rubén Darío 281, piso 15, Oficina #1501Colonia Bosque de ChapultepecCP. 11580, México D.F.Tel: (52-55) 5280-0822Contact: Alejandro BarrientosEmail: [email protected]
MONTERREYTorre Avalanz, piso 20 oficina 2035Batallón de San Patricio #109Col. Valle Oriente, San Pedro, Garza GarcíaNuevo León, C.P. 66260, MéxicoTel: (52-81) 4780-2377Contact: Alejandro BarrientosEmail: [email protected]
PERUDean Valdivia 243Piso 7, Oficina 701San Isidro, LimaTel: (511) 207-8800Contact: Victor MantillaEmail: [email protected]
COLOMBIACalle 113 # 7-45Edificio Teleport Business ParkTorre B, Oficina 1008Bogotá, ColombiaTel: (57-1) 214-3677Contact: Camilo AlvaradoEmail: [email protected]
UNITED STATESNEW YORK AGENCY 10 Bank Street, Suite 1220White Plains, NY 10606Tel: (001) 914-328-6640Contacto: Pierre DulinEmail: [email protected]
Regional Presence in Latin America
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Balance Sheet
Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards (IFRS) asissued by IASB. Bladex completed its transition process to IFRS from US-GAAP in 2015.
(In US$ million) 31-Dec-2014 31-Dec-2015 30-Jun-2016AssetsCash and cash equivalents $781 $1,300 $945Financial instruments:
At fair value through profit or loss 58 53 0At fair value through OCI 339 142 75Securities at amortized cost, net 55 108 104
Loans at amortized cost 6,686 6,692 6,520Allowance for expected credit losses (78) (90) (102) Unearned interest & deferred fees (9) (9) (9)
Loans at amortized cost, net 6,600 6,592 6,410At fair value - derivative financial instruments used for hedging - receivable 12 7 22Other assets 178 83 78 Total assets $8,022 $8,286 $7,634
Liabilities and stockholders' equityTotal deposits $2,507 $2,795 $3,206At fair value - derivative financial instruments used for hedging - payable 40 30 36Securities sold under repurchase agreements 301 114 93Short-term borrowings and debt 2,693 2,430 1,217Long-term borrowings and debt, net 1,400 1,882 2,047Allowance for expected credit losses on off-balance sheet credit risk 10 5 6Other liabilities 162 57 36Total stockholders' equity 911 972 992 Total liabilities and stockholders' equity $8,022 $8,286 $7,634
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Profit and Loss
23Financial Information corresponding to the year 2014-2015 were prepared in accordance with International Financial Reporting Standards(IFRS) as issued by IASB. Bladex completed its transition process to IFRS from US-GAAP in 2015.
2014 2015 6M16
Interest income $212,898 $220,312 $121,631Interest expense 71,562 74,833 43,927 Net Interest Income 141,336 145,479 77,704
Other incomeFees and commissions, net 17,502 19,200 6,807 Derivate financial instruments and foreign currency exchange 208 (23) (339) Gain (loss) per financial instrument at fair value through profit or loss 2,361 5,731 (3,767) Gain (loss) per financial instrument at fair value through OCI 1,871 363 (315) Gain on sale of loans at amortized cost 2,546 1,505 403 Other income, net 1,786 1,603 907
Net other income 26,274 28,379 3,696
Total Income 167,610 173,858 81,400
ExpensesImpairment loss from expected credit losses on loans at amortized cost 6,782 17,248 12,109 Impairment loss from expected credit losses on investment securities 1,030 5,290 486 Impairment (gain) loss from expected credit losses on off-balance sheet financial instrument 3,819 (4,448) 666 Salaries and other employee expenses 31,566 30,435 12,778 Depreciation of equipment and leasehold improvements 1,545 1,371 663 Amortization of intangible assets 942 596 203 Professional services 5,177 4,621 1,324 Maintenance and repairs 1,544 1,635 873 Other expenses 12,839 13,126 6,588
Total Expenses 65,243 69,874 35,690
Profit for the Period $102,366 $103,984 $45,710