RNS Number:1543H
Banco LatinoamericanoDeExport SA
18 July 2001
FOR IMMEDIATE RELEASE
BANCO LATINOAMERICANO DE EXPORTACIONES, S.A. ("BLADEX")
REPORTS SECOND QUARTER 2001 RESULTS
Panama City, Republic of Panama, July 18, 2001 - Banco Latinoamericano de
Exportaciones, S.A. ("BLADEX" or the "Bank") (NYSE: BLX), a specialized
multinational bank established to finance trade in the Latin American and the
Caribbean region, today reported results for the second quarter ended June 30,
2001. Net income for the quarter was $33.2 million, an increase of 42%
compared with $23.3 million reported in the second quarter of 2000. Earnings
per common share after preferred dividends increased 55% to $1.78 for the
second quarter, compared with $1.15 for the second quarter of 2000.
The average number of common shares outstanding for the second quarter of 2001
was 18,452,962 shares compared to 19,916,069 shares for the second quarter of
2000.
Net income for the first six months of 2001 was $60.3 million, an increase of
22% compared with $49.4 million reported in the same period of 2000. Earnings
per common share after preferred dividends were $3.20 for the first six months
of 2001, compared with $2.45 in the first half of 2000, which represented an
increase of 31%.
There will be a conference call on July 19, 2001 at 11:00 a.m. ET (U.S. time).
Please call 877-925-2339
Commenting on the Bank's performance, Jose Castaneda, chief executive officer,
said, "Our record earnings in the second quarter are the result of a
combination of factors including strong growth in the Bank's loan portfolio,
continuing progress expanding our business with corporate customers in the
region, as well as special, one-time gains. Compared with the same quarter
last year, the Bank's loan portfolio increased 22%. We are particularly
pleased with the quality of this growth, since the market is unstable due to
various political and economic pressures evident in each of our major
markets."
"In this challenging operating environment with higher risks but not higher
returns, we continue to focus on asset quality as our number one priority. As
corporate defaults and refinancings increase, our adherence to a stringent
credit policy has contributed to our extremely low credit costs. We are
optimistic that even some of our non-accrual loans will be recovered in future
quarters. In the interim, our efficiency ratio remains one of the lowest in
the international banking business."
"The increase in net income in the second quarter was partly due to a one-time
gain of $2.4 million ($0.13 per common share) from the sale of certain
impaired bonds previously marked-to-market. The application of SFAS 133, which
caused an increase of approximately $4.9 million or $0.27 cents per common
share during the quarter, also contributed significantly to our record net
income. Excluding these special gains, our operating results showed some
improvement over the previous quarter primarily because declining interest
rates had a strong beneficial impact on the Bank's negative interest rate gap,
which was partially offset with lower returns on invested capital. As interest
rates stabilize, we expect the benefit from the interest rate gap to
dissipate."
"We are optimistic that our new Structured Finance unit in New York, Bladex
Securities, LLC, will begin to generate revenues before year end and show
steady, profitable growth in the future. At the end of the second quarter,
BLADEX finds itself in a robust financial condition which positions us well
for the future," Mr. Castaneda concluded.
SFAS 133, which deals with the fair market valuation of derivatives, was
adopted on January 1, 2001. The impact of SFAS 133 on the Bank's income and
earnings per share was as follows:
(In $ thousands, except per share amounts and percentages)
IQ01 IIQ01 CHANGE %
Net income before unrealized gains or losses from
fair market valuation and cumulative effect of 25,389 28,228 2,839 11%
accounting changes
Unrealized gains or losses from fair market 622 4,932 4,311 694
valuation (SFAS 133)
Cumulative effect of accounting changes (SFAS 133 1,129 0 (1,129) (100)
one-time adjustment made on January 1, 2001)
Net income 27,140 33,161 6,021 22
Earnings per share net of unrealized gains or losses
from fair market valuation and the effect of
cumulative accounting changes (SFAS 133) 1.33 1.51 0.18 14%
Also see Exhibit I hereto which sets forth the Bank's consolidated statement
of income for the second quarter of 2001 as compared to the second quarter of
2000.
During the first half of 2001, the Bank sold certain impaired bonds which
generated one-time earnings of $2.4 million in the second quarter of 2001 and
$0.7 million in the first quarter of 2001.
Under its share repurchase program, which started in early December 2000, the
Bank has repurchased as of June 30, 2001, 1,098,605 Class E common shares and
270,020 Class A common shares (which are not publicly traded), for a total of
$46.6 million. The average price paid by the Bank for the Class A common
shares and the Class E common shares from the inception of the share
repurchase program was $33.99. During the second quarter of this year, the
Bank repurchased 587,405 Class E common shares and 61,629 Class A common
shares for a total of $22.8 million. The average price paid by the Bank for
the Class A common shares and the Class E common shares during the second
quarter of 2001 was $35.11.
BUSINESS
The average credit portfolio (loans and selected investment securities net of
unearned discount, plus acceptances and contingencies) for the second quarter
of 2001 was $6,745 million. The following table sets forth the Bank's daily
average credit portfolio for each quarter in the fifteen-month period ending
June 30, 2001:
(In $ millions, except percentages)
IIQ00 IIIQ00 IVQ00 IQ01 IIQ01
DAILY AVERAGE CREDIT PORTFOLIO (1) 5,843 6,086 6,306 6,646 6,745
QUARTERLY GROWTH RATE OF DAILY AVERAGE CREDIT -1% 4% 4% 5% 1%
PORTFOLIO (%)
1. Includes the average of loans and selected investment securities net of
unearned discount, plus acceptances and contingencies.
The daily average credit portfolio has increased in each of the last four
quarters due to strong demand from several of the Bank's major markets. The
following table sets forth the Bank's daily average credit portfolio as well
as the daily average loan portfolio (loans and selected investment securities
net of unearned discount) and the daily average acceptances and contingencies
for each month in the six-month period ending June 30, 2001:
(In $ millions, except percentages)
JAN01 FEB01 MAR01 APR01 MAY01 JUN01
DAILY AVERAGE LOAN PORTFOLIO (1) 5,382 5,420 5,619 5,659 5,473 5,370
DAILY AVERAGE ACCEPTANCES & CONTINGENCIES 1,188 1,185 1,141 1,244 1,236 1,253
DAILY AVERAGE CREDIT PORTFOLIO (2) 6,570 6,605 6,759 6,903 6,709 6,622
MONTHLY GROWTH RATE OF DAILY AVERAGE LOAN 5% 1% 4% 1% -3% -2%
PORTFOLIO (%)
MONTHLY GROWTH RATE OF DAILY AVERAGE CREDIT 4% 1% 2% 2% -3% -1%
PORTFOLIO (%)
1. Includes loans net of unearned discount plus selected investment
securities.
2. Includes the average loan portfolio net of unearned discount, plus
acceptances and contingencies.
At June 30, 2001, (i) the Bank's outstanding credit portfolio, net of unearned
discount, was $6,773 million, (ii) the loan portfolio, net of unearned
discount, was $5,512 million and (iii) acceptances and contingencies amounted
to $1,262 million. At June 30, 2001, approximately $5,72458 million or 845% in
principal amount of the Bank's credit portfolio was outstanding to borrowers
in the following four countries: Brazil ($2,676 million or 39%); Argentina
($1,474523 million or 22%); Mexico ($1,363 million or 20%); and Peru ($211
million or 3%). A comparative credit distribution by country is shown in
Exhibit VIII hereto.
ASSET QUALITY
The following table sets forth the Bank's non-accruing loans and the ratio of
non-accruing loans to the Bank's loan portfolio at the dates set forth below:
(In $ millions, except percentages)
Jun. 30, Mar. 31, Jun. 30,
2000 2001 2001
Non-accruing loans 25.9 13.4 13.9
Ratio of non-accruing loans to loan 0.57% 0.24% 0.25%
portfolio
The Bank had no charged-off loans during the second quarter of 2001.
The following table sets forth the Bank's allowance for credit losses for the
quarters ended March 31, 2001 and June 30, 2001:
For the three months ended
March 31, 2001 June 30,
2001
Components of the allowance for credit losses (In $ millions,
except
percentages)
Allowance for loan losses:
At beginning of period 110.4 114.2
Provisions charged to expense 3.8 3.8
Recoveries 0.1 0.0
Charged off loans 0.0 0.0
Balance at end of period 114.2 118.0
Allowance for losses on off-balance sheet credit
risk:
At beginning of period 17.2 17.2
Provisions charged to expense 0.0 0.0
Balance at end of period 17.2 17.2
Allowance for losses on guarantees (potential
credit and market losses on options):
At beginning of period 5.0 0.0
Amount applied to market valuation of certain (5.0) 0.0
options (SFAS 133)
Balance at end of period 0.0 0.0
Credit portfolio, net of discount 6,859 6,773
Loan portfolio, net of discount 5,691 5,512
Acceptances and Contingencies 1,168 1,262
Non-accruing loans 13.4 13.9
Mark-to-market guarantees 94 98
Allowance for credit losses (net of non-accruing loans) 1.7% 1.8%
to total credit portfolio (net of discount,
non-accruing loans and mark-to-market guarantees)
Allowance for loan losses (net of non-accruing loans) 1.8% 1.9%
to loan portfolio (net of discount and non-accruing
loans)
Allowance for losses on off-balance sheet credit risk 1.6% 1.5%
to total acceptances and contingencies, net of
mark-to-market guarantees
NET REVENUES
Net revenues (net interest income and commission income minus commission
expense and other charges plus other income) for the second quarter of 2001
grew 14% compared to the second quarter of 2000. Net revenues for the first
six months of 2001 grew 5% compared to the first six months of 2000. The
following table shows net revenues for the periods set forth below:
(In $ millions)
IIQ00 IQ01 IIQ01 6M00 6M01
Net interest income 27.4 30.6 31.5 56.4 62.1
Commission income 6.1 4.4 6.7 13.2 11.1
Commission expenses (0.3) (0.3) (0.4) (0.6) (0.7)
Other income 0.0 0.1 0.0 0.1 0.1
Net revenues 33.2 34.8 37.8 69.0 72.6
NET INTEREST INCOME
Net interest income amounted to $31.5 million in the second quarter of 2001
compared to $27.4 million for the second quarter of 2000, representing an
increase of 15%. The net interest margin (net interest income divided by the
average balance of interest-earning assets) and net interest spread (average
yield earned on interest-earning assets less the average rate paid on
interest-bearing liabilities) for the second quarter of 2001 were 2.17% and
1.41%, respectively.
Net interest income amounted to $62.1 million in the first six months of 2001
compared to $56.4 million for the same period in 2000, representing an
increase of 10%. The net interest margin and net interest spread for the first
six months of 2001 were 2.17% and 1.34%, respectively.
The table below sets forth the net interest margin and the net interest spread
for each of the periods listed below:
IIQ00 IQ01 IIQ01 6M00* 6M01
Net Interest Margin 2.29% 2.17% 2.17% 2.30% 2.17%
Net Interest Spread 1.18% 1.26% 1.41% 1.23% 1.34%
*Excluding an adjustment in IQ00 of $525 thousand of interest income
relating to 1999. The net interest margin and net interest spread
including this adjustment were 2.32% and 1.25%, respectively.
The Bank estimates that the increase of 15 basis points in the net interest
spread during the second quarter of 2001, as compared to the first quarter of
2001, was due mainly to lower interest rates which had a favorable effect on
the Bank's liability sensitive interest rate gap.
The decline of 13 basis points in the net interest margin for the first six
months of 2001 compared to the same period in 2000 (as adjusted), was mainly
due to:
i. Lower lending margins which had a negative effect of 27 basis points on the
net interest margin;
ii. The decline in non-accruing loans, which had a positive effect of 2 basis
points on the net interest margin; and
iii. Lower interest rates, which generated a lower return on the Bank's
available capital funds and at the same time, had a positive effect on the
Bank's interest rate gap. The net effect of these factors combined was a
positive effect of 12 basis points on the net interest margin.
COMMISSION INCOME
Commission income for the second quarter of 2001 was $6.7 million, compared to
$6.1 million for the second quarter of 2000. Commission income for the second
quarter of 2001 covered 109% of the Bank's commission expenses plus operating
expenses. Commission income for the first six months of 2001 was $11.1
million, compared to $13.2 million for the same period of 2000. The following
table shows the components of commission income for the periods set forth
below:
(In $ thousands)
COMMISSION INCOME IIQ00 IQ01 IIQ01 6M00 6M01
Letters of credit 1,550 1,306 1,307 3,484 2,613
Guarantees:
Options 422 0 0 845 0
Other guarantees 1,952 1,273 1,491 3,993 2,764
Country risk coverage business 1,984 711 932 3,948 1,642
Loans 88 203 (121) 112 82
Asset sales 110 830 3,077 829 3,907
Other commission income 9 87 6 14 93
TOTAL COMMISSION INCOME 6,115 4,409 6,692 13,225 11,101
The increase in commissions generated by asset sales during the first six
months of 2001 compared to the same period in 2000, was due to commission
income of $3.1 million from the one-time sale of certain impaired bonds.
OPERATING EXPENSES
Total operating expenses for the second quarter of 2001 increased 13% compared
to the second quarter of 2000 and increased 3% compared to the first quarter
of 2001. Total operating expenses for the first six months of 2001 increased
15% compared to the same period of 2000. The following table shows the
components of total operating expenses for the periods set forth below:
(In $ thousands)
OPERATING EXPENSES IIQ00 IQ01 IIQ01 6M00 6M01
Salaries and other employee expenses 2,264 2,363 2,609 4,391 4,972
Communications 203 224 185 426 408
Depreciation of premises and equipment 268 318 318 533 636
Professional services 699 554 911 1,107 1,465
Maintenance and repairs 125 136 187 275 324
Rent of office and equipment 145 224 152 261 376
Other operating expenses 860 897 892 1,625 1,789
TOTAL OPERATING EXPENSES BEFORE PROVISION FOR 4,564 4,716 5,254 8,616 9,970
PERFORMANCE BONUS
Bonus paid on previous year's performance 0 423 0 239 423
Provision for performance bonus for employees 567 511 560 1,144 1,071
TOTAL OPERATING EXPENSES 5,131 5,650 5,814 9,999 11,464
The following table sets forth efficiency ratios for the quarters set forth
below:
RATIOS IIQ00 IIIQ00 IVQ00 IQ01 IIQ01
Total operating expenses to total average 0.43% 0.40% 0.45% 0.40% 0.40%
assets
Total operating expenses to net interest
income plus commission income 15.3% 14.5% 18.0% 16.1% 15.2%
Total commission income to total commission 113% 110% 81% 74% 109%
expenses plus operating expenses
PERFORMANCE AND CAPITAL RATIOS
The following table sets forth the return on average stockholders' equity and
return on average assets for the periods set forth below:
IIQ00 IQ01 IIQ01 6M00 6M01
Return on average stockholders' 13.6% 15.6% 18.7% 14.4% 17.1%
equity
Return on average assets 1.9% 1.9% 2.3% 2.0% 2.1%
The ratio of common equity to total assets was 11.9% at June 30, 2001,
compared to 14.0% at June 30, 2000, and compared to 11.6% at March 31, 2001.
Although the Bank is not subject to the capital adequacy requirements of the
Federal Reserve Board, if the Federal Reserve Board risk-based capital
adequacy requirements were applied, the Bank's Tier 1 and Total Capital Ratios
would be 17.1% and 18.7%, respectively, as of June 30, 2001, compared to 17.2%
and 18.9%, respectively, as of March 31, 2001.
Note:
Various numbers and percentages set out in this press release have been
rounded and accordingly may not total exactly.
There will be a conference call on July 19, 2001 at 11:00 a.m. ET in the U.S.
(10:00 a.m. Panamanian time). For those interested in participating, please
call 877-925-2339 (in the United Sates) and, if outside the United States,
please dial the applicable international access code + U.S. country code
followed by 847-413-2907. All participants should give the conference name
"BLADEX Quarterly Call" or the conference ID#4387986 3934429 to the telephone
operator answering the call five minutes before the call is set to begin.
For further information, please access our Web site on the Internet at:
www.blx.com or call:
Carlos Yap S.
Vice President, Finance and Performance Management
BANCO LATINOAMERICANO DE EXPORTACIONES S.A.
Head Office
Calle 50 y Aquilino de la Guardia
Apartado 6-1497 El Dorado
Panama City, Republic of Panama
Tel No. (507) 210-8581
Fax No. (507) 269 6333
E-mail Internet address: cyap@blx.com
- Or -
William W. Galvin
The Galvin Partnership
67 Mason Street
Greenwich, CT 06830
U.S.A.
Tel No. (203) 618-9800
Fax No. (203) 618-1010
E-mail Internet address: wwg@galvinpartners.com
The BLADEX Quarterly Earnings Report Conference Call will be available for
review on Conference Replay one hour after the conclusion of the conference
call. Please dial 888-843-8996 in the United States and, if outside the United
States, please dial the applicable international access code + U.S. country
code followed by 630-652-3044 and follow the instructions. The Conference ID#
for the call that will be replayed is 3934429 4387986.
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