RNS Number:3539D
Banco LatinoamericanoDeExport SA
9 May 2001
FOR IMMEDIATE RELEASE
BANCO LATINOAMERICANO DE EXPORTACIONES, S.A. ("BLADEX")
REPORTS FIRST QUARTER 2001 RESULTS
Panama City, Republic of Panama, April 30, 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 first quarter ended March 31,
2001. Net income for the quarter was $27.1 million, compared with $26.1
million reported in the first quarter of 2000. Earnings per common share after
preferred dividends were $1.42 for the first quarter, compared with $1.29 in
the first quarter of 2000.
The average number of common shares outstanding for the first quarter of 2001
was 18,898,091 shares compared to 19,915,188 shares for the first quarter of
2000.
Compared with the fourth quarter of 2000, net income for the first quarter of
2001 rose 19% and earnings per common share after preferred dividends
increased by 22%.
There will be a conference call on May 1, 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, "BLADEX's results in the first quarter of 2001 are encouraging and
reflect the progress we are making in transforming BLADEX into a more
proactive and agile competitor in the Latin American marketplace. The Bank
today is a different organization than it was in the first quarter of 2000.
Because most changes in the Bank's business have been effected over the last
few quarters, to fully understand the impact of such changes, it would make
more sense to compare the Bank's performance in the first quarter of 2001 to
its performance in the preceding quarters, rather than to compare the Bank's
performance today with its performance in the first quarter of 2000."
"For instance, while our average credit portfolio in the first quarter of 2001
increased 13% from the average credit portfolio in the first quarter of 2000,
the increased rate of the credit portfolio growth is evident in the 5%
increase in average credit portfolio growth in this quarter compared with the
fourth quarter of 2000. Similarly, the net interest margin and net interest
spread in the first quarter of 2001 increased compared to the fourth quarter
of 2000. Most important, BLADEX achieved such growth with continued focus and
emphasis on asset quality."
"Earnings in the first quarter increased by $1.8 million reflecting the
adoption as of January 1, 2001, of SFAS 133 and 138 dealing with the fair
market value of all derivative instruments on the balance sheet. The fair
market valuation of certain options raised earnings by $1.3 million and the
fair market value of derivatives used in the Bank's hedging activities added
$0.5 million to earnings. The Bank's equity accounts were positively impacted
by $1.1 million, relating to the mark-to-market of the assets available for
sale. The Bank's policy is not to engage in hedging activities or maintain
derivative positions other than routine swaps to hedge existing normal
currency and interest rate positions."
"Our operating expenses were down 8% compared to the prior quarter. However,
during the first quarter of 2001 we continued our plan of investment in people
and the Bank's operating infrastructure in order to further improve our
customer service capability. Further, in the last year, we have taken steps to
increase our presence in the Mexican and Brazilian markets by opening
representative offices in these markets. BLADEX professionals in those offices
are already building relationships and generating business with creditworthy
companies in the region. The new transaction unit established in New York will
give the Bank the capacity to structure and distribute assets and expand its
business by offering new products and financial solutions to its clients. Our
plan is to continue to make additional investments in the Bank's
infrastructure capabilities that would improve customer service by decreasing
the time required to authorize new loans and commitments, thereby making
BLADEX more competitive."
Under the share repurchase program, which started in early December 2000, the
Bank has repurchased to date 611,700 Class E common shares and 208,391 Class A
common shares (which are not publicly traded), for a total of $27.0 million.
During the first quarter of this year, the Bank repurchased 393,900 Class E
common shares and 160,094 Class A common shares for a total of $18.6 million.
During the 15-month period ending March 31, 2001, the Bank paid cash dividends
in an amount of $58.7 million and repurchased common shares in an aggregate
amount of $39.4 million, including the repurchase of $6.9 million Class A
common shares, $15.7 million Class B common shares and $16.8 million Class E
common shares.
IMPACT OF SFAS 133 ON THE BANK'S FINANCIALS
The adoption of SFAS 133 affected (i) the "cumulative effect of accounting
changes" account, and (ii) the "other income" account, both of which, impacted
the Statement of Income, as follows (See Exhibit I and II):
(In $ thousand)
INTEREST RATE
STATEMENT OF INCOME OPTIONS SWAPS TOTAL
CUMULATIVE EFFECT OF ACCOUNTING CHANGES 1,359 (229) 1,130
Transitional adjustments (one time adjustments
made on January 1, 2001)
OTHER INCOME (57) 678 621
Unrealized gain or losses from fair market
valuation
EFFECT OF SFAS 133 ON STATEMENT OF INCOME 1,302 449 1,751
Also, the adoption of SFAS 133 affected the "other comprehensive income"
account in the Bank's Consolidated Balance Sheet as follow (See Exhibit III):
(In $ thousand)
ASSETS AVAILABLE FOR SALE
CONSOLIDATED BALANCE SHEET
OTHER COMPREHENSIVE INCOME
421
Transitional adjustments related to SFAS 133
(one time adjustments made on January 1, 2001)
Unrealized gain or losses from fair market valuation 686
OTHER COMPREHENSIVE INCOME 1,107
BUSINESS
The average credit portfolio (loans and selected investment securities net of
unearned discount, acceptances and contingencies) for the first quarter of
2001 was $6,649 million. The following table sets forth the Bank's daily
average credit portfolio for each quarter in the fifteen-month period ending
March 31, 2001:
(In $ millions, except percentages)
IQ00 IIQ00 IIIQ00 IVQ00 IQ01
DAILY AVERAGE CREDIT PORTFOLIO (1) 5,899 5,843 6,086 6,306 6,649
QUARTERLY GROWTH RATE OF DAILY AVERAGE CREDIT
PORTFOLIO (%) -1% -1% 4% 4% 5%
1. Includes the average loan portfolio net of unearned discount, plus
acceptances and contingencies.
The average credit portfolio has increased during the last three-quarters due
to strong demand from several of our major markets. The following table sets
forth the Bank's daily average credit portfolio as well as the daily average
loan portfolio and the daily average acceptances and contingencies for each
month in the six-month period ending March 31, 2001:
(In $ millions, except percentages)
OCT00 NOV00 DEC00 JAN01 FEB01 MAR01
DAILY AVERAGE LOAN PORTFOLIO (1) 5,049 5,037 5,124 5,385 5,423 5,622
DAILY AVERAGE ACCEPTANCES & CONTINGENCIES 1,281 1,262 1,165 1,188 1,185 1,141
DAILY AVERAGE CREDIT PORTFOLIO (2) 6,331 6,299 6,289 6,573 6,607 6,763
MONTHLY GROWTH RATE OF DAILY AVERAGE LOAN
PORTFOLIO (%) 1% 0% 2% 5% 1% 4%
MONTHLY GROWTH RATE OF DAILY AVERAGE CREDIT
PORTFOLIO (%) 1% -1% 0% 5% 1% 2%
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 March 31, 2001, (i) the Bank's outstanding credit portfolio, net of
unearned discount, was $6,859 million, (ii) the loan portfolio, net of
unearned discount, was $5,691 million and (iii) acceptances and contingencies
amounted to $1,168 million. At March 31, 2001, approximately $5,836 million or
85% in principal amount of the Bank's credit portfolio was outstanding to
borrowers in the following four countries: Brazil ($2,642 million or 39%);
Argentina ($1,522 million or 22%); Mexico ($1,441 million or 21%); and Peru
($232 million or 3%). A comparative credit distribution by country is shown in
Exhibit VI 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)
Mar. 31, Dec. 31, Mar. 31,
2000 2000 2001
Non-accruing loans 21.9 14.7 13.4
Ratio of non-accruing loans to loan
portfolio 0.49% 0.28% 0.24%
The following table sets forth the Bank's allowance for credit losses for the
quarters ended December 31, 2000 and March 31, 2001:
For the three months ended
December March
31, 2000 31, 2001
Components of the allowance for (In $ millions,
credit losses except percentages)
Allowance for loan losses:
At beginning of period 121.0 110.4
Provisions charged to expense 4.8 3.8
Recoveries 0.2 0.1
Charged off loans 15.6 0.0
Balance at end of period 110.4 114.2
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 5.0
Amount applied to market valuation of certain options 0.0 5.0
(SFAS 133)
Balance at end of period 5.0 0.0
Credit portfolio, net of discount 6,474 6,859
Loan portfolio, net of discount 5,309 5,691
Acceptances and Contingencies 1,165 1,168
Non-accruing loans 14.7 13.4
Mark-to-market guarantees 100 94
Allowance for credit losses (net of non-accruing loans) 1.8% 1.7%
to total credit portfolio (net of discount, non-accruing
loans and mark-to-market guarantees)
Allowance for loan losses (net of non-accruing loans) to 1.8% 1.8%
loan portfolio (net of discount and non-accruing loans)
Allowance for losses on off-balance sheet credit risk to 1.6% 1.6%
total acceptances and contingencies, net of
mark-to-market guarantees
As a result of the adoption of SFAS 133, the allowance for losses on
guarantees was eliminated and the balance of $5.0 million was applied to cover
a charge for $5.6 million generated by the market valuation of certain
options. The difference of $0.6 million was netted against unamortized
premiums related to the options for $1.9 million, and the balance was applied
to the "cumulative effect of accounting changes" account in the Bank's
statement of income.
NET REVENUES
The following table shows net revenues (net interest income plus commission
income) for the periods set forth below, without giving effect to an
adjustment to interest income of $525 thousand made during the first quarter
of 2000 which corresponded to interest income from the third and fourth
quarters of 1999:
(In $ millions, except percentages)
IQ00 IVQ00 IQ01
Net interest income 28.4 29.1 30.6
Commission income 7.1 4.9 4.4
Net revenues 35.6 34.1 35.1
NET INTEREST INCOME
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 first quarter of 2001 were 2.17% and 1.26%, respectively,
compared to 2.16% and 1.01%, respectively, for the fourth quarter of 2000. The
Bank estimates that the increase of 1 basis point in the net interest margin
during the first quarter of 2001, as compared to the fourth quarter of 2000,
was due to lower interest rates, which had a favorable effect on the Bank's
liability sensitive interest rate gap. This factor more than compensated for
the lower return on the Bank's available capital funds originated by lower
interest rates. The Bank estimates that the 25 basis point increase in the net
interest spread was due to lower interest rates which had a favorable effect
on the Bank's liability sensitive interest rate gap.
COMMISSION INCOME
Commission income for the first quarter of 2001 was $4.4 million, compared to
$7.1 million for the first quarter of 2000. Commission income for the first
quarter of 2001 covered 74% of the Bank's commission expenses plus operating
expenses. The following table sets forth the components of commission income
for the first quarter ended March 31, 2001 compared to the first and fourth
quarters of 2000:
FOR THE THREE MONTHS ENDED MARCH 31,
COMMISSION INCOME IQ00 IVQ00 IQ01
(In $ thousands)
Letters of credit 1,934 1,816 1,306
Guarantees:
Options 422 302 0
Other guarantees 2,041 1,600 1,273
Country risk coverage business 1,964 1,076 711
Loans 24 13 203
Asset sales 719 120 830
Other commission income 5 16 87
TOTAL COMMISSION INCOME 7,109 4,944 4,409
OPERATING EXPENSES
Total operating expenses for the first quarter of 2001 were $5.7 million,
representing an increase of 16% compared to the first quarter of 2000 and a
decline of 8% compared to the fourth quarter of 2000. The following table sets
forth the components of total operating expenses for the first quarter ended
March 31, 2001 compared to the first and fourth quarters of 2000:
OPERATING EXPENSES IQ00 IVQ00 IQ01
(in $ thousands)
Salaries and other employee expenses 2,127 2,345 2,363
Communications 223 225 224
Depreciation of premises and equipment 264 333 318
Professional services 407 1,792 554
Maintenance and repairs 150 209 136
Rent of office and equipment 116 197 224
Other operating expenses 765 980 897
TOTAL OPERATING EXPENSES BEFORE PROVISION FOR PERFORMANCE
BONUS 4,052 6,081 4,716
Bonus paid on previous year performance 239 0 423
Provision for performance bonus for employees 577 41 511
TOTAL OPERATING EXPENSES
4,868 6,123 5,650
The following table sets forth efficiency ratios for the quarters set forth
below:
RATIOS IQ00 IIQ00 IIIQ00 IVQ00 IQ01 LatAm US Banks*
Banks*
Total 0.39% 0.43% 0.40% 0.45% 0.40% 7.5% 3.6%
operating
expenses to
total average
assets
Total 13.5% 15.3% 14.5% 18.0% 16.1% 66.7% 56.2%
operating
expenses to
net interest
income plus
commission income
Total 137% 113% 110% 81% 74% 42% 95%
commission
income to total
commission
expenses plus
operating
expenses
(*) Sources: Merrill Lynch's "Latin American Banks - Operating Cost Monitor"
report dated March 14, 2001, and Lehman Brothers' "The Long View" report dated
February 9, 2001 equity research coverage reports
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:
IQ00 IVQ00 IQ01
Return on average stockholders' equity 15.2% 12.9% 15.6%
Return on average assets 2.11% 1.69% 1.90%
The ratio of common equity to total assets was 11.6% at March 31, 2001,
compared to 14.4% at March 31, 2000, and compared to 12.4% at December 31,
2000. 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 17.2% and 18.8%, respectively. The Bank's Tier 1 capital adequacy
ratio declined from 26.4% as of March 31, 2000 to 17.2% as of March 31, 2001
due to strong medium-term loan growth experienced during this period.
There will be a conference call on May 1, 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 877-925-2339 (or 877-9-BLADEX). All participants should give the
conference name "BLADEX Quarterly Call" or the conference ID# 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.
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