blx corporate presentation 2 q17 english

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Banco Latinoamericano de Comercio Exterior, S.A.

Corporate Presentation

As of June 30, 2017

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.”

2

A Leading Franchise with a Solid Track Record

Unique Profile Key Financial Highlights

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). Subject to laws,

regulations and guidelines of U.S. Securities Act of the SEC

and the NYSE

Class “A” shareholders, Central Banks or designees from

23 Latin America countries (“LatAm”), provide substantial

support and represent a direct link between the Bank and

the governments of the Region

Multi-national DNA embedded in its ownership structure,

regional presence management and organizational culture.

Bladex has representative offices in Argentina, Brazil,

Colombia, Mexico and Peru and is subject to supervision

by regulatory authorities in these jurisdictions

Through its New York Agency, Bladex is subject to the

applicable laws and regulations of financial entities

operating in the USA. Supervision of the Federal Reserve

Bank of the United States of America (FED) and The New

York State Department of Financial Services (NYSDFS)

The Bank, through its commercial activities and diversified

sources of funding, is supervised by various regulatory

entities in different countries such as United States, Mexico

and Japan, among others

Corporate Governance that reflects world standard best

practices

While headquartered in Panama, Bladex’s book of

business, liquidity and funding are largely independent of

the Panamanian Banking System

Current Credit Ratings

FY’15 FY’16 6M17 6M17

/6M16

Profit for the period (mm) $104.0 $87.0 $40.9 -10%

Net Interest Income (mm) $145.5 $155.2 $63.8 -18%

Return on Average Equity 11.0% 8.8% 8.1%

Gross Loans (mm) $6,692 $6,021 $5,570 -15%

Total Assets (mm) $8,286 $7,181 $6,422 -16%

Total Deposits (mm) $2,795 $2,803 $3,354 5%

Market Capitalization (mm) $1,010 $1,153 $1,078 4%

NPLs to gross loan portfolio 0.78% 1.09% 1.12%

Moody’s Fitch S&P

Date of Rating Dec. 2007 Jul. 2012 May 2008

Date of Confirmation Nov. 2014 Jun. 2017 Jul. 2017

Date of Last Update Jul. 2017 Jun. 2017 Jul. 2017

Short-Term P-2 F2 A-2

Long-Term Baa2 BBB+ BBB

Perspective Stable Stable Stable

3

Strong and Unique Shareholder Structure

Class 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

constitute 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

4

Board of Directors is

distinguished by its

independence and

diversity

Out of 10 Directors

(including the Bank’s

CEO), 8 are independent

Class A – Central Banks or

designees from 23 LatAm countries

Class B – LatAm & international

banks and financial institutions

Class E – Public Float (NYSE listed)

Unique Shareholding Structure

As of June 30, 2017

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

Deep knowledge of

Latin America

Core competency in

trade finance

Support of

Investment &

Regional Integration

Efficient Measurement

and Management

In-depth knowledge of Latin America’s local markets

Backed by 23 Latin American governments

Vast 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 structure

LEAN, client focused efficient organizational structure

Single point of contact, providing client-specific

solutions, and focused on long-term relationships

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

Bladex’s products and services are categorized into three main areas: i) Financial

Intermediation, ii) Structuring and Syndications and iii) Treasury

Financial Intermediation

Syndication and Structuring

Treasury

Trade: Foreign trade products – short and to a lesser extent, medium term

instruments that help drive the cross-border activity of corporations

Working Capital: Support provided 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 mainly short term

financing of supply chain, materials & equipment, and inventories

Financial solutions designed to meet clients' needs mostly in medium-term tenor

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 Governance

Enterprise-Wide Risk Management

5

Financial Institutions Among top 10 in their

respective markets

Significant corporate

banking activity / client

base

Corporations US Dollar generation

capacity

Growth oriented beyond

domestic market

Focus on the high and

medium corporate

segments of each

industry

Focus on Strategic Sectors for the Region Agribusiness, Oil & Gas (mainly integrated),

Metals & Mining, Food processing and other

Manufacturing

Regional Focus Mexico

Central America and The

Caribbean

Brazil

South America

• Southern Cone (1)

• Andean Region (2)

5

REGIONS

CLIENT BASE

INDUSTRY

SECTORS

(1) Includes Argentina, Chile, Paraguay and Uruguay. (2) Includes Bolivia, Colombia, Ecuador, Peru and Venezuela

New Business Target:

Origination Distribution & Services Portfolio Management

Core Target:

15%+ RoAE

Medium Term

Value Creation

NY006PF6_1.cdr 3% + RoAE Medium Term

Business Model

• Leverage the origination capacity of

Bladex to generate additional

commission income

Robust Margins

Net Interest Margin –

NIM (~ 1.8% - 2.0%)

Stable Fees from Use of

Capital

(~ 15% – 20% of Core

Business Net Revenues)

Credit Cost adjusted

to the Cycle

Cost of Credit

(~ 1.2% – 1.5%)

Continued Focus on

Efficiency

Efficiency Ratio

(< 30%)

Sustainable

Moderate Growth

(+3% / + 8%)

Solid Capitalization

Tier 1 Basel III Ratio

(> 13.5%)

Financial Intermediation

(On-book Portfolio)

Asset and Liabilities

Analysis

Composition, structure

and trends

Active Credit Portfolio Management

Capital Base

Optimization

Tier 1 and Tier 2

Structuring

(STF & Other)

Risk Sharing

Programs

Secondary

Markets

Transactional Focus

(Commissions):

“Trade Fund”

12% + RoAE Recurring

Insurance

Coverage

Syndications

Platform

Asset Distribution & Services

Portfolio

Distribution:

6

Trade Flow LatAm

Source: The Economist ,as of April, 2017

Bladex origination growth

Bladex client base growth

Adhering to World-Class Standards

Commercial

Division

Board of Directors

CEO

Internal

Audit

Nomination

and Compensation

Committee

Finance and Business

Committee

Risk Policy and

Assessment Committee

Audit and

Compliance Committee

Commercial

Division Finance

Division

Corporate

Services

Legal Counsel

& Compliance

Risk

Management

.

FIRST LINE

OF DEFENSE

Operational

Management

-------------------------

Business and

Support Areas

Function

THIRD LINE

OF DEFENSE

Verification -----------------------

Audit Function

SECOND LINE

OF DEFENSE

Monitoring

------------------------- Risk & Legal

Management

function

Regulatory & Prevention

Compliance

AML

Committee

7

Internal alignment of corporate culture, measurement system

and process management to optimize total shareholder return

Early implementation of Basel III (2014) and IFRS 9 (2015)

Strive to follow international best practices for Corporate

Government

Multi-regulatory discipline

Auditing overseen by the PCAOB of the United States

Commercial Strategy Focused on Diversification

8

Sustained Portfolio Growth Commercial Portfolio Composition

Commercial Portfolio By Country Commercial Portfolio By Industry

As of June 30, 2017 As of June 30, 2017

8

Reduced exposure to Brazil by

29 percentage points since 2008

to June 30, 2017

As of June 30, 2017

9

Commercial Portfolio Exposure by Industry

Regional Exposure by Industry as of June 30, 2017

Dynamic industry exposure

management focused on sectors with

favorable terms-of-trade

Oil & Gas exposure emphasizes

integrated companies; Upstream

exposures remain at multi-year lows

Commercial Portfolio remains very

liquid with 80% maturing within one

year (+3 pts QoQ,

+6 pts YoY)

10

Focus on Asset Quality

Proven track record of strong asset quality, with significant risk

mitigants:

Low-risk asset class, with short-dated exposures and superior

loss performance compared to other asset classes

Unexpected economic events globally and a downturn in

Latin-American economies have increased volatility and credit

risk in the Region, however LatAm prospects are improving

NPL and provisions for ECL stay relatively confined to specific

countries, industries and clients; Brazil represents 88% of all

NPL exposure

Slow-paced ongoing restructuring negotiations continue to drive

provisions

US dollar based lending to US dollar generators, no meaningful

net FX exposures

Conservative loss reserves methodology (IFRS 9)

Pro-active loss prevention, and diligent recovery processes 10

11

Low risk Business

Commercial Portfolio by Type of Transaction

As of June 30, 2017, 80% of Commercial Portfolio

had a remaining maturity term of 1 year, with

average maturity of 116 days

Medium term commercial portfolio with a remaining

maturity term of 2.4 years

Commercial Portfolio - remaining maturity of 271

days

11

Commercial Portfolio by Term

Bladex’s portfolio is composed primarily of trade

assets*, low-risk class, with short-dated exposures,

and superior loss performance

(*) Bladex Investment Securities Portfolio amounts to only 1% of assets as of June 30, 2017 (mostly sovereign or state-owned). The Bank will continue to

reduce its holdings to minimize market risk

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

Record level of deposits at US$3.4 billion as of June 30,

2017, 63% of funding. 71% of deposits from central banks or

designees (Class A), which provide a resilient funding base

Focus on increased diversification of global and regional

funding sources regarding client base, geography and

currency

Broad access to debt capital markets through public and

private debt issuance programs in USD and other currencies,

as well as to global loan syndications

The Bank relies primarily on deposits to cover its short-term

funding needs as the lending book moved towards shorter

tenors, while increasing overall funding stability with medium

and long-term funding maintaining competitive funding costs

Deposits by Type of Client Diversified Funding Sources

As of June 30, 2017 As of June 30, 2017

Funding Sources and Cost of Funds

Funding by Currency (*)

12

As of June 30, 2017

Conservative Liquidity Management

Liquidity Management Highlights Liquidity Placements

Liquidity Coverage Ratio Liquidity Ratio

(US$ million)

As of June 30, 2017

Liquidity monitoring parameters established by Basel III through

Liquidity Coverage Ratio (“LCR”) and Net Stable Funding

Ratio (“NSFR”)

US$ 771 Million

1.42x NSFR

1.08x LCR

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 US$1 billion in

loans maturing on a monthly basis

13

14

Expanding Earnings Capacity & Profitability...

Profit for the period Net Interest Income & Margin

Fees and Other Income Efficiency Ratio

Note: Financial Information from 2014 to date were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB. The financial information

corresponding to the year 2013 follows the previous accounting standard, US-GAAP. Bladex completed its transition process to IFRS from US-GAAP in 2015.

(US$ million, except percentages)

(US$ million)

(US$ million)

(US$ million, except percentages)

15

Supported by Strong Balance Sheet

Total Assets Loan Portfolio

Deposits Stockholder’s Equity

(US$ million)

(US$ million) (US$ million)

(US$ million)



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

Solid Performance

Tier 1 Capital Ratio

16

Risk Weighted Assets – Basel III

(US$ million)

2013 n.a.

2014 $5,914

2015 $6,104

2016 $5,662

30-Jun-2017 $5,048

n.a. means not available



17

Key Financial Metrics

17

Financial Information from 2014 to date were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by IASB. The financial information


(*) Includes results from the participation of investment funds.

(In US$ million, except percentages) 2013 2014 2015 2016 6M17

Total Income $133.7 $167.6 $173.9 $168.0 $72.7

Business Profit $89.4 $99.7 $99.0 $91.5 $40.9

Non-Core Items (4.6) 2.7 5.0 (4.5) -

Net Profit $84.8 $102.4 $104.0 $87.0 $40.9

EPS (US$) $2.21 $2.65 $2.67 $2.23 $1.04

Return on Average Equity (ROAE) 10.0% 11.5% 11.0% 8.8% 8.1%

Business Return on Average Equity ("Business ROAE") 10.6% 11.2% 10.4% 9.2% 8.1%

Return on Average Assets (ROAA) 1.2% 1.4% 1.3% 1.2% 1.2%

Busines Return on Assets ("Business ROAA") 1.3% 1.3% 1.3% 1.2% 1.2%

Net Interest Margin ("NIM") 1.75% 1.88% 1.84% 2.08% 1.91%

Net Interest Spread ("NIS") 1.55% 1.72% 1.68% 1.84% 1.58%

Loan Portfolio 6,148 6,686 6,692 6,021 5,570

Commercial Portfolio 6,630 7,187 7,155 6,444 5,840

Allowance for expected credit losses on loans, loan commitments and

financial guarantee contracts to Commercial Portfolio (%) 1.18% 1.22% 1.33% 1.73% 2.06%

Non-Performing Loans to gross Loan Portfolio (%) 0.05% 0.06% 0.78% 1.09% 1.12%

Allowance for expected credit losses on loans, loan commitments and

financial guarantee contracts to Non-Performing Loans (x times) 25.0 21.7 1.8 1.7 1.9

Efficiency Ratio 41% 32% 30% 27% 33%

Market Capitalization 1,081 1,167 1,010 1,153 1,078

Total assets 7,471 8,022 8,286 7,181 6,422

Tier 1 Capital Ratio Basel III (Basel I for years 2011-2013) 15.9% 15.5% 16.1% 17.9% 20.3%

Leverage 8.7 8.8 8.5 7.1 6.3

(*)

Bladex Value Proposition to Shareholders

Bladex offers investors access to

an entire continent with improving

long-term growth prospects

Business model provides diversified

exposure to emerging markets, but

with well mitigated credit quality,

market, & operational risks

Book value growth underpins share

price

Committed to total shareholder

return (“TSR”). Attractive dividend

yield (steadily above 5%) with a

pay-out target that preserves a

robust capital base

Attractive 12-month forward

valuations as of June 30, 2017:

10.0x P/E

1.0x P/BV

18

Dividends per Share

BLX Stock Price and Volume Evolution

Investment Highlights

19

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 with 37 years

covering LatAm

Investment Grade Profile with

Strong and Unique Shareholding

Structure

Deep knowledge of LatAm with

core in trade finance

Strategically positioned to identify

and deliver on growth

opportunities

Portfolio strategy focused on

diversification and sustainable

growth

Strong asset quality

management Increased diversification of regional

and global funding sources

Advanced liquidity management

operating under Basel III framework

Sustained income growth

Fee generation growth through

diversification

Continued efficiency gains

Attractive returns though the

cycle

Seasoned senior management

World-Class standards in

Corporate Governance, focused

on enterprise-wide risk

management

20

Balance Sheet

Financial Information from 2014 to date 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.

20

(In US$ million) 31-Dec-2014 31-Dec-2015 31-Dec-2016 30-Jun-2017

Assets

Cash and cash equivalents $781 $1,300 $1,070 $819

Financial instruments:

At fair value through profit or loss 58 53 0 0

At fair value through OCI 339 142 31 16

Securities at amortized cost, net 55 108 77 63

Loans at amortized cost 6,686 6,692 6,021 5,570

Allowance for expected credit losses on loans (78) (90) (106) (116)

Unearned interest & deferred fees (9) (9) (7) (7)

Loans at amortized cost, net 6,600 6,592 5,907 5,448

At fair value - derivative financial instruments used for hedging - receivable 12 7 9 6

Other assets 178 83 87 87

Total assets $8,022 $8,286 $7,181 $6,422

Liabilities and stockholders' equity

Total deposits $2,507 $2,795 $2,803 $3,354

At fair value - derivative financial instruments used for hedging - payable 40 30 60 34

Securities sold under repurchase agreements 301 114 0 0

Short-term borrowings and debt 2,693 2,430 1,470 487

Long-term borrowings and debt, net 1,400 1,882 1,777 1,486

Allowance for expected credit losses on loan commitments and financial guarantee contracts 10 5 6 5

Other liabilities 162 57 54 54

Total stockholders' equity 911 972 1,011 1,024

Total liabilities and stockholders' equity $8,022 $8,286 $7,181 $6,422

21

Profit and Loss

21

Financial Information from 2014 to date 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.

(In US$ thousand) 2014 2015 2016 2Q17 6M16 6M17

Interest income $212,898 $220,312 $245,898 $56,099 $121,631 $115,230

Interest expense 71,562 74,833 90,689 26,754 43,927 51,453

Net Interest Income 141,336 145,479 155,209 29,345 77,704 63,777

Other income

Fees and commissions, net 17,502 19,200 14,306 5,013 6,807 8,282

Derivate financial instruments and foreign currency exchange 208 (23) (486) 473 (339) 604

Gain (loss) per financial instrument at fair value through profit or loss 2,361 5,731 (2,883) (649) (3,767) (709)

Gain (loss) per financial instrument at fair value through OCI 1,871 363 (356) (35) (315) 79

Gain on sale of loans at amortized cost 2,546 1,505 806 12 403 98

Other income, net 1,786 1,603 1,378 255 907 609

Net other income 26,274 28,379 12,764 5,069 3,696 8,963

Total Income 167,610 173,858 167,974 34,414 81,400 72,740

Expenses

Impairment loss from expected credit losses on loans at amortized cost 6,782 17,248 34,760 5,666 12,109 9,619

Impairment loss (recovery) from expected credit losses on investment securities 1,030 5,290 3 (11) 486 (465)

Impairment loss (recovery) from expected credit losses on loan commitments and financial

guarantee contracts 3,819 (4,448) 352 (1,324) 666 (1,161)

Operating expenses

Salaries and other employee expenses 31,566 30,435 25,196 7,768 12,778 14,464

Depreciation of equipment and leasehold improvements 1,545 1,371 1,443 356 663 787

Amortization of intangible assets 942 596 644 178 203 379

Other expenses 19,560 19,382 18,533 4,300 8,785 8,178

Total operating expenses 53,612 51,784 45,816 12,602 22,429 23,808

Total Expenses 65,243 69,874 80,930 16,933 35,690 31,801

Profit for the Period $102,366 $103,983 $87,044 $17,481 $45,710 $40,939

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: [email protected]

BRAZIL Rua Leopoldo Couto de Magalhäes

Junior 110, 1º andar

04542-000, Sao Paulo, Brazil

Tel: (55-11) 2198-9606

Contact: Roberto Kanegae


MEXICO Rubén Darío 281, piso 15, Oficina #1501

Colonia Bosque de Chapultepec

CP. 11580, México D.F.

Tel: (52-55) 5280-0822

Contact: Alejandro Barrientos


PERU Dean Valdivia 243

Piso 7, Oficina 701

San Isidro, Lima

Tel: (511) 207-8800

Contact: Federico Field


COLOMBIA Calle 113 # 7-45

Edificio Teleport Business Park

Torre B, Oficina 1008

Bogotá, Colombia

Tel: (57-1) 214-3677

Contact: Camilo Alvarado


UNITED STATES NEW YORK AGENCY

10 Bank Street, Suite 1220

White Plains, NY 10606

Tel: (001) 914-328-6640

Contacto: Pierre Dulin


Regional Presence

in Latin America

Investor Relations Contact

Irma Garrido Arango – SVP, Corporate

Development & Investor Relations

E-mail: [email protected]

Tel.: (+507) 210-8559

mailto:[email protected]





