Hello, everyone, and welcome to Bladex's First Quarter 2019 Conference Call on this 17th day of April 2019. This call is being recorded and is for investors and analysts only. If you are a member of the media, you are invited to listen only. Bladex has prepared a PowerPoint presentation to accompany their discussion. It is available through the webcast and on the bank's corporate website at www.bladex.com. Joining us today are Mr. Gabriel Tolchinsky, Chief Executive Officer; and Miss. Ana Graciela de Mendez, Chief Financial Officer. Their comments will be based on the earnings release, which was issued earlier today and is available on the corporate website. The following statement is made pursuant to the safe harbor for - and forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking such as statements regarding Bladex's future results, plans and anticipated trends in markets affecting end results and financial conditions. These forward-looking statements are Bladex's expectations on the day of the initial broadcast of the conference call and Bladex does not undertake to update these expectations based on the subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in this communications. And with that, I am pleased to turn today's call over to Mr. Tolchinsky for the presentation. Please go ahead.

Thank you, Carey. Good morning, everyone. Thank you for joining us today. Before Ana Graciela delves into key aspects of our earnings results for the first quarter, I would like to discuss with you the economic and business environment in Latin America, important developments that took place during the quarter and the impact of these developments on our perception of risk and on our financial results. During the last two quarters conference calls, we mentioned that the credit quality of our portfolio, cost structure and allowances for expected credited losses set the base to improve our earnings generation capacity. Our first quarter results are another step in that direction. On the economic and business environment front, we started the year with high expectations for Latin America's economic growth, only to slowly downgrade them as the quarter progressed. The larger context is not very helpful. The events that we have identified that's key for emerging markets Latin America and commodity related industries namely the effect of a strong U.S. dollar protectionist red - rhetoric on trade and tariffs and a slowdown of economic activity in China, Europe and the U.S. were not only prevalent but also intensified during the first quarter of 2019. Additionally, political and macroeconomic uncertainty also impacted overall growth prospects for key countries in Latin America. In terms of the global context after raising interest rates four times in 2018, responding to strong U.S. growth, low unemployment and core inflation readings above 2% the Federal Reserve switched to a neutral mode saying that the data are not currently sending a signal that we need to move in one direction or another. After a turbulent fourth quarter of 2018, the Fed's more dovish stance stabilized financial market conditions. The yield on the 10-year U.S. Treasury retreated to around 2.5%…

Thanks, Gabriel. Good morning and thank you for joining our conference call on the results for the first quarter of 2019. I will make reference to the presentation uploaded on our website. First, let me highlight on Page four the bank's first quarter 2019 profits for $21.2 million or $0.54 per share, representing a 47% increase with respect to the year before due to a 4% increase in revenue, a 31% reduction in operating expenses and lower credit provisions. On a quarter-over-quarter basis profits for the first quarter of 2019 were up by 2%, on the absence of losses of non-financial instrument and on seasonally lower operating expenses, while net interest income remained relatively stable. These effects were partly offset by lower fees and decreased loan balances due to seasonally lower first quarter activity and credit provisions for $0.9 million in the first quarter of 2019 compared to reversals in credit allowances for $1.3 million recorded in the fourth quarter of 2018. Quarterly profits continued on the positive trend from the previous quarter and represented the highest profit level in the last eight quarters. Our ROE and ROA were 8.6% and 1.3% respectively and our efficiency ratio improved to below 31% from 36% in 4Q 2018 and 47% in 3Q 2018, while we maintained a solid Tier 1 Basel III capital ratio at 20%. Now, I will refer to the evolution of net interest income and financial margins on pages five and six. Net interest income for the first quarter of 2019 increased 5% year-on-year to $28 million, mainly driven by a 6 basis point increase in net interest margin to 1.74%, as the bank benefited from the net positive effect of higher interest rate. Given the Bank's narrow interest rate GAAP structure, higher rates generally results in a net…

Thank you, Ana Graciela. Carey, please open the session for the Q&A.

Yes, sir. [Operator Instructions] And our first question will be from Yuri Fernandes from JPMorgan.

Hi, gentlemen. Thanks for the very good explanations and congratulations on the quarter. Gabi you were super clear on the macro outlook, but regarding growth can you give us a bit more color on what you're expecting for loan growth this year? I understood like the outlook is not as - as bright as we were initially thinking at the beginning of the year. But do you expect to like - like loan growth to continue growing at those 5% yearly base to decelerate so this - decelerate from those levels? My first question is regarding this. And my second question, I think maybe it's more for Ana Graciela, it's regarding expenses, I recall that in the last year, in the first Q, you had some one-off event there, there were some restriction in the company, but I also recall that you booked most often the variable expenses remuneration in the first quarter and that was not the case during this quarter. So what should we expect for this variable remuneration, should these be deferred during the year? Should we expecting, I mean, like a comparison year-over-year for the coming quarters? Thank you.

Thank you, Yuri. Thank you very much for your question. Let me first start with respect to loan growth. As you know, we don't provide forward-looking guidance, but it is still our expectations that our loan book will continue to grow. We are pointing at risks that have evolved from macro considerations which are very relevant to the way that we construct our portfolio. But overall our business continues to be very solid and we are very comfortable with the credits we underwrite, our credit underwriting methodology, and believe that we can still continue to grow under what we believe is the more challenging context. Now it's good to also compare some numbers, even though overall growth expectations have come down, we are looking to focus on countries that do have very reasonable growth prospects. We mentioned that we intend to grow in Panama, in Chile, in Peru, in Columbia and the growth rates in those countries, some of them are quite significant. The - I believe Economist Intelligence Unit has Panama growing at around 6% for 2019. That's a quite a significant growth rate. And when we look at credit demand we see similar type of growth out of Panama. Chile is expected to grow at around 3.4%. But in terms of credit demands we expect around a 6% growth there. Similar numbers for both Peru and Columbia. So even though we see and we're very cognizant of the headwinds that are coming from the macro environment, the underlying elements of our business and how we approach it continue to be positive. So I hope that answers your question.

Okay. Thank you. Sorry, go ahead.

No, no, I was just saying yes. Thank you.

Okay. Well, thank you for your questions, Yuri. And yes, with respect to expenses, you remember correctly, we recorded - we're close to $5 million of non-recurring expense in the first quarter of 2018. A lot of it was due to variable compensation. That was really particular - a particular point in time given the banks result. But we usually do provisions on a deferred basis over the year and we started to do that again this year. So you shouldn't see with respect to variable compensation any increases going forward. We already have accounted for some of that in this quarter and we see that as stable. As I also mentioned during the last quarters call, that we saw a recurring base of expenses around $46 million per year. We're still targeting on that amount. Hopefully a little lower than that. But that remains pretty much the case. And that - you know, to highlight also that this - in this quarter we reported close to $10 million is usually lower as well.

Thank you very much, Ana Graciela.

You're welcome.

Thank you. Our next question will be from Robert Tate with Global Rational Capital.

Hello. Hi, Gabriel. Ana, thank you very much for the business [ph] obviously. It's been very good and in fact I'm just looking at your net interest margins and equity ratio, the result has been very effective, but the return on equity is not much higher than the last quarter despite the improvements in net interest margin and efficiency ratio. Is that because of the higher capital ratio and the possibly lower fee income?

Thank you very much Robert for your question. I think that you are correct that was part of the reason we did not have - we did not report higher results, but it's also very consistent with a normal seasonality that - that we have in the business. We are a bank that focuses in Latin America. The entirety of South America is essentially on vacation the first quarter and there is a usual seasonality effect. So it would be hard to extrapolate loan growth, and overall the generation - fee generation capacity from the first quarter. That's why Ana Graciela was referring to the 12 month trend and we continue to see a very good pipeline of transactions in the syndication and structuring business.

Okay. Thank you. And then also just the following question, in the past you've mentioned the decision to increase loan maturity - average loan maturities, I guess to seek higher yield from very secure loans, lower-risk loans. And was just wondering what's the progress is on that in light of the current economic environment? And then also whether ultimately your return on equity of around 10% is achievable in 2019 given the unique environment that you're currently facing?

Okay. Thank you again Robert. The bank focuses on two main business lines, trade finance and Latin American integration and as Ana Graciela explained there is a lot of - we see a lot of opportunity in companies trying to establish themselves or grow within the region and set up operation in different countries in order to better be within the supply chain and the trade value chain. And for those companies we will be looking to do and are looking to do medium term type lending and those loans do carry a better margin for the term. We continue to have a portfolio that is relatively short term as trade finance is still very much a core element and we'll continue to be a core element of the bank on a go forward basis. So we do expect our the average life of our portfolio to be some more in the one year range, maybe a month or two below that or a month or two above that, but that is the - in general terms what we expect from our overall portfolio. Now that said, we see a lot of opportunities because we do see clients trying to establish operations and getting closer to the market that they're trying to reach. And given that seasonally low quarter we don't see what has happened in the four - in the first quarter as an indication of what's going to happen in the rest of the year and feel very comfortable on our pipeline of transactions on a go forward basis. Has that answered your question?

Yes. Thank you. And then just I guess the last part of that question was just, I guess whether you know, return on equity obtained overall is still achievable in this environment? Or whether it's unachievable? Or - yeah, I'll leave it up to you.

Of course, our goal is to get to double digits ROE, that continues to be our goal and that's what the bank believes that's achievable with our business model and our penetration in the region. If those things take time we are going in the right direction and believe that we've taken THE steps to continue to go in that positive direction.

Okay. Thank you very much. And then just one final question. The impairments of the loan in the sugar industry that led I think in the third quarter of last year, I think that was led by 75%. And I was just wondering if there's any more developments on that figure alone. And what proportion of the - of the remaining unimpaired you know, proportion of that loan - you know, what - how big is that relative to your equity value?

We don't talk about specific loans. But I will say that our overall coverage of problem loans is 80%, actually a little slightly higher and our overall NPL exposure is $63 million, so $64 million. So just - you know, you can do more or less the math with respect to that. But it's - we believe that we are very well covered for the restructurings that are - in our problem loan portfolio.

If I may add, that 80% coverage that Gabriel mentioned is individually allocated, but if you look at the overall reserves, credit reserves, they cover 1.36 times these credit impaired loans. So again, yeah, very well covered in that respect.

Okay. Thank you very much, Gabriel. Thank you so much, Ana.

Yeah, Robert.

[Operator Instructions] All right. I'm showing no further questions in the queue at this time.

Thank you very much for joining us today. We look forward to talking to you when we report our results for the second quarter of 2019. Until then, thank you again and good-bye.

Good-bye.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may now disconnect.