RNS Number:7863L
Banco LatinoamericanoDeExport SA
17 October 2001
FOR IMMEDIATE RELEASE
BANCO LATINOAMERICANO DE EXPORTACIONES, S.A. ("BLADEX")
REPORTS THIRD QUARTER 2001 RESULTS
Panama City, Republic of Panama, October 17, 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 third quarter ended September
30, 2001. Net income for the third quarter was $18.9 million, a decrease of
24% compared with $24.8 million reported in the third quarter of 2000.
Earnings per common share after preferred dividends decreased 15% to $1.05 for
the third quarter, compared with $1.23 for the third quarter of 2000.
The average number of common shares outstanding for the third quarter of 2001
was 17,705,034 shares compared to 19,873,899 shares for the third quarter of
2000.
Net income for the first nine months of 2001 was $79.2 million, an increase of
7% compared with $74.2 million reported in the same period of 2000. Earnings
per common share after preferred dividends were $4.27 for the first nine
months of 2001, compared with $3.68 in the first nine months of 2000, which
represented an increase of 16%.
The average number of common shares outstanding for the first nine months of
2001 was 18,347,659 shares compared to 19,901,617 shares for the same period
of 2000.
There will be a conference call on October 18, 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, "Well before the tragic events of September 11, the third quarter was
evolving as a particularly difficult operating environment. The spreading
recessionary concerns throughout Latin America produced a sharp increase in
the level of risk perception of the region, which is reflected in the
substantial increase in the JP Morgan's EMBI+ index for our largest markets
during this year. This index tracks total returns for traded external debt
instruments in emerging markets. From June 30, 2001 to October 12, 2001, the
index for Argentina rose 78% and the index for Mexico and Brazil grew by
approximately 40%. The number of defaults in the corporate sector is up
sharply and, since September 11, there is a heightened level of concern and
uncertainty in the markets in which we operate".
"In this environment, BLADEX' focus on asset quality has once again been a
significant advantage as we have worked closely with our customers to focus on
our core business of financing trade, which is of paramount interest to the
governments and central banks in the region".
"Our reported results in the latest quarter do not reflect the considerable
operating progress the Bank has made under very difficult market conditions.
Indicative of this is the 6% increase in operating net interest income in the
third quarter of 2001 compared with the second quarter of this year. Also
noteworthy is the $8.6 million negative swing in unrealized gains or losses
from fair market valuation (SFAS 133) between the second and third quarters of
this year, which is a non-operating element in our financial results. To help
shareholders and investors better understand BLADEX's relatively good
operating performance in this difficult market, we have presented below
condensed profit and loss statements which detail the impact of non-operating
items on the reported results of BLADEX for both the latest quarter and
nine-month period".
"These times are difficult and uncertain, but BLADEX is well capitalized, has
very high asset quality relative to market conditions, and will continue to
meet the needs of its customers," Mr. Castaneda concluded.
The following table sets forth the condensed profit and loss statements for
the third and second quarter of 2001 and the third quarter of 2000:
(In $ millions, except percentages)
IIIQ00 IIQ01 IIIQ01 CHANGE % CHANGE %
vs vs
IIQ01 IIIQ00
Operating net interest income 13.2 15.1 16.0 0.9 6 2.8 21
Effect of interest rate gap 0.6 5.8 4.7 -1.2 -20 4.1 665
Interest income on available 13.5 9.8 8.0 -1.9 -19 -5.6 -41
capital funds
One-time interest income and 1.7 0.7 0 -0.7 -100 -1.7 -100
adjustments
Net interest income 29.0 31.5 28.6 -2.8 -9 -0.4 -1
Net commission income 5.6 3.9 5.0 1.0 27 -0.7 -12
One-time commission income - 2.4 - -2.4 -100 0 n.a.
Net revenues 34.7 37.8 33.6 -4.1 -11 -1.1 -3
Operating expenses 4.4 4.3 4.5 0.2 5 0.1 2
Core operating expenses
Other operating expenses * 0.7 1.5 2.5 1.0 67 1.8 257
Operating expenses 5.1 5.8 7.0 1.2 21 1.9 37
Operating income 29.6 32.0 26.6 -5.4 -17 -3.0 -10
Provision for possible credit 4.8 3.8 4.0 0.3 7 0.8 -17
losses
Net income before unrealized gains 24.8 28.2 22.6 -5.6 -20 -2.2 -9
or losses from fair market
valuation and cumulative effect of
accounting changes
Unrealized gains or losses from 0 4.9 -3.7 -8.6 -175 -3.7 n.a.
fair market valuation (SFAS 133)
Net income 24.8 33.2 18.9 -14.3 -43 -5.9 -24
Net revenues, net of interest 19.5 24.8 25.7 0.8 3 6.2 32
income on available capital funds
and one-time items
Operating income, net of interest 14.4 19.0 18.6 -0.4 -2 4.3 30
income on available capital funds
and one-time items
Net income, net of SFAS 133 -0.7 -4 5.1 53
accounting changes, interest income
on available capital funds and 9.6 15.3 14.6
one-time items
(*) Other operating expenses include continuing investments in technology,
strategic additions to personnel, and expenses associated with our new
representative offices as well as the structured transaction unit in New York.
Compared with the third quarter of 2000, net revenue in the latest quarter,
net of interest income on available capital and one-time items, increased by
32%. Net income, net of accounting changes (SFAS 133), interest income on
available capital and one-time items, for the third quarter of 2001 increased
by 53% compared with the third quarter of 2000. Also see Exhibit I hereto,
which sets forth the Bank's consolidated statement of income for the third
quarter of 2001 as compared to the third quarter of 2000.
The following table sets forth the condensed profit and loss statements for
the first nine months of 2001 and 2000:
(In $ millions, except percentages)
9M00 9M01 CHANGE %
Operating net interest income 44.7 45.8 1.1 2
Effect of interest rate gap 1.1 14.8 13.7 1,249
Interest income on available capital funds 37.4 29.3 -8.1 -22
One-time interest income and adjustments 2.2 0.8 -1.4 -62
Net interest income 85.4 90.8 5.4 6
Net commission income 18.0 12.4 -5.6 -31
One-time commission income 0.3 3.1 2.8 1,030
Net revenues 103.7 106.2 2.5 2
Operating expenses 12.5 12.8 0.3 2
Core operating expenses
Other operating expenses * 2.6 5.7 3.1 119
Operating expenses 15.1 18.5 3.4 23
Operating income 88.7 87.8 -0.9 -1
Provision for possible credit losses 14.4 11.5 -2.9 -20
Net income before unrealized gains or losses from fair 74.3 76.3 2.0 3
market valuation and cumulative effect of accounting
changes
Unrealized gains or losses from fair market valuation 0.0 3.0 2.9 4,637
(SFAS 133)
Net income 74.2 79.2 5.0 7
Net revenues, net of interest income on available 63.8 73.0 9.2 14
capital funds and one-time items
Operating income, net of interest income on available 48.8 54.5 5.7 12
capital funds and one-time items
Net income, net of SFAS 133 accounting changes, 34.4 43.0 8.6 25
interest income on available capital funds and
one-time items
(*) Other operating expenses include continuing investments in technology,
strategic additions
to personnel, and expenses associated with our new representative offices as
well as the structured
transaction unit in New York.
Also see Exhibit III hereto, which sets forth the Bank's consolidated
statement of income for the first nine months of 2001 as compared to the same
period of 2000.
Under its share repurchase program, which started in early December 2000, the
Bank has repurchased, through September 30, 2001, 1,565,705 Class E common
shares and 318,140 Class A common shares (which are not publicly traded) for a
total of $64.5 million. The average price paid by the Bank for the Class A
common shares and the Class E common shares from the inception of this share
repurchase program was $34.26. During the third quarter of this year, the Bank
repurchased 467,100 Class E common shares and 48,120 Class A common shares for
a total of $18.0 million. The average price paid by the Bank for the Class A
common shares and the Class E common shares during the third quarter of 2001
was $34.96.
BUSINESS
The average credit portfolio (loans and selected investment securities net of
unearned discount, plus acceptances and contingencies) for the third quarter
of 2001 was $6,814 million. The average credit portfolio has increased in each
of the last five quarters due to strong demand in several of the Bank's major
markets. The following table sets forth the Bank's daily average credit
portfolio for each quarter in the fifteen-month period ended September 30,
2001:
(In $ millions, except percentages)
IIIQ00 IVQ00 IQ01 IIQ01 IIIQ01
DAILY AVERAGE CREDIT PORTFOLIO (1) 6,086 6,306 6,646 6,745 6,814
QUARTERLY GROWTH RATE OF DAILY AVERAGE CREDIT 4% 4% 5% 1% 1%
PORTFOLIO (%)
1. Includes the average of loans and selected investment securities net of
unearned discount, plus acceptances and contingencies.
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 ended September 30, 2001:
(In $ millions, except percentages)
APR01 MAY01 JUN01 JUL01 AUG01 SEP01
DAILY AVERAGE LOAN PORTFOLIO (1) 5,659 5,473 5,370 5,667 5,655 5,579
DAILY AVERAGE ACCEPTANCES & CONTINGENCIES 1,244 1,236 1,253 1,206 1,187 1,146
DAILY AVERAGE CREDIT PORTFOLIO (2) 6,903 6,709 6,622 6,873 6,842 6,725
MONTHLY GROWTH RATE OF DAILY AVERAGE LOAN 1% -3% -2% 6% 0% -1%
PORTFOLIO (%)
MONTHLY GROWTH RATE OF DAILY AVERAGE CREDIT 2% -3% -1% 4% 0% -2%
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 September 30, 2001, (i) the Bank's outstanding credit portfolio, net of
unearned discount, was $6,704 million, (ii) the loan portfolio, net of
unearned discount, was $5,587 million and (iii) acceptances and contingencies
amounted to $1,118 million. At September 30, 2001, approximately $5,39258
million or 805% in principal amount of the Bank's credit portfolio was
outstanding to borrowers in the following four countries: Brazil ($2,644
million or 39%); Argentina ($1,342 million or 20%); Mexico ($1,193 million or
18%); and Peru ($213 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)
Sep. 30, Jun. 30, Sep. 30,
2000 2001 2001
Non-accruing loans 27.5 13.9 13.9
Ratio of non-accruing loans to loan 0.54% 0.25% 0.25%
portfolio
The Bank had no charged-off loans during the third quarter of 2001. The
following table sets forth the Bank's allowance for credit losses for the
quarters ended June 30, 2001 and September 30, 2001:
For the three
months ended
June 30, 2001 September
30, 2001
Components of the allowance for credit losses (In $ millions,
except
percentages)
Allowance for loan losses:
At beginning of period 114.2 118.0
Provisions charged to expense 3.8 4.0
Recoveries 0.0 0.0
Charged off loans 0.0 0.0
Balance at end of period 118.0 122.0
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
Credit portfolio, net of discount 6,773 6,704
Loan portfolio, net of discount 5,512 5,587
Acceptances and Contingencies 1,262 1,118
Non-accruing loans 13.9 13.9
Mark-to-market guarantees 98 92
Allowance for credit losses (net of non-accruing loans) 1.8% 1.9%
to total credit portfolio (net of discount,
non-accruing loans and mark-to-market guarantees)
Allowance for loan losses (net of non-accruing loans) 1.9% 1.9%
to loan portfolio (net of discount and non-accruing
loans)
Allowance for losses on off-balance sheet credit risk 1.5% 1.7%
to total acceptances and contingencies, net of
mark-to-market guarantees
NET REVENUES
Net revenues (net interest income and commission income less commission
expense plus other income) for the third quarter of 2001 declined 3% compared
to the third quarter of 2000. Net revenues for the first nine months of 2001
grew 2% compared to the first nine months of 2000. The following table shows
net revenues for the periods set forth below:
(In $ millions)
IIIQ00 IIQ01 IIIQ01 9M00 9M01
Net interest income 29.0 31.5 28.6 85.4 90.8
Commission income 5.9 6.7 5.3 19.1 16.4
Commission expenses (0.2) (0.4) (0.3) (0.9) (1.0)
Other income 0.0 0.0 0.0 0.1 0.1
Net revenues 34.7 37.8 33.6 103.7 106.2
NET INTEREST INCOME
Net interest income amounted to $28.6 million in the third quarter of 2001
compared to $29.0 million for the third quarter of 2000, representing a
decrease of 1%. 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 third quarter of 2001 were 1.86% and
1.25%, respectively.
Net interest income amounted to $90.8 million in the first nine months of 2001
compared to $85.4 million for the same period in 2000, representing an
increase of 6%. The net interest margin and net interest spread for the first
nine months of 2001 were 2.06% and 1.31%, respectively.
The table below sets forth the net interest margin and the net interest spread
for each of the periods listed below:
JUL01 AUG01 SEP01 IIIQ00(1) IIQ01 IIIQ01 9M00(2) 9M01
Net Interest Margin 1.92% 1.82% 1.85% 2.17% 2.17% 1.86% 2.26% 2.06%
Net Interest Spread 1.28% 1.21% 1.26% 1.02% 1.41% 1.25% 1.16% 1.31%
(1) Excluding one-time interest income of $1.7 million received during the
IIIQ00.
(2) Excluding an adjustment in IQ00 of $525 thousand of interest income
relating to 1999, and excluding one-time interest income of $1.7 million
received during the IIIQ00. The net interest margin and net interest
spread without this adjustment were 2.32% and 1.22%, respectively, for the
first nine months of 2000.
The Bank estimates that the decline of 31 basis points in the net interest
margin during the third quarter of 2001, as compared to the second quarter of
2001, was mainly due to:
i. One-time interest income of $708 thousand from the sale of impaired bonds
recorded during the second quarter of 2001, which negatively affected the
net interest margin by 5 basis points;
ii. Higher liquidity levels, which had a negative effect of 7 basis points on
the net interest margin;
iii. Lower interest rates, which generated a lower return on the Bank's
available capital funds, and which had a negative effect of 12 basis
points on the net interest margin; and
iv. An inverted interest rate yield curve, which had a negative effect of 7
basis points on the Bank's interest rate gap.
The decline of 20 basis points in the net interest margin for the first nine
months of 2001 compared to the same period in 2000 (as adjusted) was mainly
due to:
i. Lower interest rates, which generated a lower return on the Bank's
available capital funds, and which at the same time had a positive effect
on the Bank's interest rate gap, resulting in a negative effect of 4 basis
points on the net interest margin;
ii. Lower lending margins, which had a negative effect of 19 basis points on
the net interest margin; and
iii. Lower non-accruing loans, which had a positive effect of 3 basis points
on the net interest margin.
COMMISSION INCOME
Commission income for the third quarter of 2001 was $5.3 million, compared to
$5.9 million for the third quarter of 2000. Commission income for the first
nine months of 2001 was $16.4 million, compared to $19.1 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 IIIQ00 IIQ01 IIIQ01 9M00 9M01
Letters of credit 1,811 1,307 1,472 5,295 4,084
Guarantees:
Options 382 0 0 1,227 0
Other guarantees 1,894 1,491 1,548 5,887 4,312
Country risk coverage business 1,572 932 732 5,520 2,374
Loans 60 (121) 112 173 194
Asset sales 128 3,077 1,434 957 5,341
Other commission income 13 6 4 27 97
TOTAL COMMISSION INCOME INCOME 5,861 6,692 5,301 19,086 16,402
The higher commissions generated by asset sales during the first nine months
of 2001 compared to the same period in 2000 included $3.1 million from the
one-time sale of certain impaired bonds in the second quarter of 2001.
OPERATING EXPENSES
Total operating expenses for the third quarter of 2001 increased 39% compared
to the third quarter of 2000 and increased 21% compared to the second quarter
of 2001. Total operating expenses for the first nine months of 2001 increased
23% 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 IIIQ00 IIQ01 IIIQ01 9M00 9M01
Salaries and other employee expenses 2,086 2,614 2,675 6,477 7,652
Communications 221 185 190 647 599
Depreciation of premises and equipment 276 318 292 809 928
Professional services 1,010 911 1,408 2,117 2,873
Maintenance and repairs 161 187 163 436 487
Rent of office and equipment 126 152 244 386 621
Other operating expenses 782 892 1,205 2,406 2,994
TOTAL OPERATING EXPENSES BEFORE PROVISION FOR 4,662 5,259 6,178 13,278 16,153
PERFORMANCE BONUS
Bonus paid on previous year's performance 0 0 0 239 423
Provision for performance bonus for employees 396 560 845 1,540 1,916
TOTAL OPERATING EXPENSES 5,058 5,819 7,022 15,057 18,492
The increase of 22% in operating expenses before provision for performance
bonus during the first nine months of 2001, as compared to the same period in
2000, was due to continuing investments in technology, strategic additions to
personnel, and expenses associated with our new representative offices as well
as the structured transaction unit in New York and consulting fees related to
business initiatives.
The following table sets forth efficiency ratios for the quarters set forth
below:
RATIOS IIIQ00 IVQ00 IQ01 IIQ01 IIIQ01
Total operating expenses to total average 0.40% 0.45% 0.40% 0.40% 0.45%
assets
Total operating expenses to net interest 14.5% 18.0% 16.1% 15.2% 20.7%
income plus commission income
Total commission income to total commission 110% 81% 74% 108% 72%
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:
IIIQ00 IIQ01 IIIQ01 9M00 9M01
Return on average stockholders' 14.2% 18.7% 10.6% 14.4% 14.9%
equity
Return on average assets 2.0% 2.3% 1.2% 2.0% 1.8%
The ratio of common equity to total assets was 11.0% at September 30, 2001,
compared to 12.7% at September 30, 2000, and compared to 11.9% at June 30,
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 September 30, 2001, compared to
19.7% and 21.4%, respectively, as of September 30, 2000 and compared to 17.1%
and 18.7%, respectively, as of June 30, 2001.
Notes:
a. Various numbers and percentages set out in this press release have been
rounded and, accordingly, may not total exactly.
b. Certain amounts set out in this press release for periods in the year 2000
have been reclassified to make them uniform with the presentation adopted
in 2001.
c.
There will be a conference call on October 18, 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#4847537 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 4847537.
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