Good morning, ladies and gentlemen, and welcome to Bladex First Quarter 2024 Earnings Conference Call. A slide presentation is accompanying today's webcast and is also available on the Investors section of the company's website, www.bladex.com. There will be an opportunity for you to ask questions at the end of today's presentation. Please note, today's conference call is being recorded. [Operator Instructions]. I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead.

Good morning, everyone, and thank you for joining to discuss our 2024 first quarter results. I will start by providing a high-level summary of our performance, and then Annie Mendez, our CFO, will discuss the results in more detail. After that, I'll make a couple of comments regarding key initiatives in our strategic plan. And then I will open the call for questions. 2024 had a very strong start, extending the positive profitability trend from the previous quarters. This is notable not only because Q4 had a couple of positive one-off transactions, but more importantly, because we have been able to achieve these results in a more challenging landscape marked by reopening of debt capital markets, increased liquidity in domestic and global markets, and also increased competition from local and international banks. In this context, we have managed to grow our portfolio, maintain our income generation, protect margins, increase deposits, and continue generating significant fee income throughout the first quarter of the year. Moving on to Slide 2. Here we show the highlights of the first quarter results. Starting with the balance sheet. Growth of the credit book was 3% quarter-on-quarter and 12% year-on-year, with pristine asset quality. At the same time, deposits increased 7% quarter-over-quarter and 32% year-on-year, gaining a larger share of our funding structure. As a result of the continued growth on the deposit base, the bank has been tactically reducing the use of bilateral facilities from corresponding bank. This, of course, has benefited our funding costs. Also, during the first quarter, Bladex once again topped the Mexican debt capital markets with a new bond placement for MXN 3 billion, equivalent to $180 million, which is widely oversubscribed. Today, close to $1.3 billion, almost 15% of total funding, comes from the Mexican market. On the P&L side, we are seeing margins stabilizing at the level we projected for the year with NIM close to 2.5%. Fee income, on the other hand, also had a strong quarter, led primarily by solid revenues from our letters of credit. All this led to a net income of $51.3 million for the quarter, 11% higher than our previous record breaking Q4 and 39% higher year-on-year. Finally, we're excited to report 16.8% ROE for the quarter, an improvement of 126 basis points over the last quarter. I'm going to leave the highlights here for now and turn the call to Annie, our CFO, who will talk about the results in more detail. Annie?

Thank you, Jorge. Good morning to everyone. I will now go into more detail on the financial performance during the first quarter of 2024, starting on Slide 3. As Jorge introduced, the bank continued to improve its bottom line results, reaching net income in excess of $51 million during the first quarter, up by 39% from last year and 11% from the previous quarter. On the back of these strong results, the annualized return on equity reached a notable 16.8%. Let me now walk you through our balance sheet and profit and loss statements, underlining the main items driving this sustained exceptional performance. Moving on to Slide 4. Bladex balance sheet remained stable from the previous quarter at $10.7 billion, up by 16% from the year before on the basis of continued growth in the loan and investment portfolio balances, along with a sound liquidity position. The bank's cash position, which is mostly placed with the Federal Reserve Bank of New York, stood at $1.7 billion at quarter-end, representing 16% of total assets and 37% of liability deposits. Our prudent liquidity management approach follows the Basel methodology's liquidity coverage ratio as required by Panama's banking regulator. Along with strong asset quality and capitalization, a sound liquidity position represents a pillar of the bank's investment-grade ratings. More details on the other two main asset components, loans and investment securities, are presented in the following slide. The bank's investment securities portfolio reached $1.1 billion at quarter-end. 77% of this portfolio is placed with non-LatAm issuers, mostly from the U.S., providing country risk diversification to our credit book. Furthermore, 81% is placed with investment-grade issuers and is eligible to be discounted with the Federal Reserve through our New York agency, thus providing contingent liability funding. The average remaining tenure of the portfolio is…

Thank you very much, Annie. Great job. As we have communicated before, after two years of careful execution, Bladex is transitioning from the optimization phase to the expansion phase of our 5-year strategic plan. In this new phase, the focus is the enhancement of our product suite. Significant technological upgrades are needed to achieve this objective. In this sense, after a lengthy and very thorough vendor selection process, Bladex will soon announce the selection of two strategic IT platforms that will enhance our product suite. One platform is related with trade finance solutions and the other one will support the treasury management space. I want to share with you the transformative impact of these new solutions in our bank. First of all, the trade finance platform will provide the operational support to significantly scale our biggest fee income-generating product, letters of credit. The new platform not only has an extremely friendly client interface, but also will allow us to efficiently process a significantly higher number of transactions while minimizing manual errors as end-to-end processes will be refined through automation. Moreover, the platform will allow us to provide structured working capital solutions for our corporate clients, specifically on the buyer side on the first stage of implementation. Once the platform is up and running, we will be able to enter multiple highly transactional supply chain finance programs of existing clients and new clients at the same time. Today, we're only able to join a limited number of programs as we are forced to select only the ones that have limited transactionality. This will bring significant gains in both lending volumes and also credit spreads since supply chain finance programs typically command a premium over the typical direct lending facilities. Similarly, the implementation of a new IT solution for the treasury area…

[Operator Instructions] Our first question comes from Patrick Brown. Great results. Congrats. There's a slight decrease in margins this quarter. Can you further comment on this?

Thank you, Patrick. Good question. We are seeing some pressure on credit spreads. And I'll say it's mainly for two reasons. One is we're seeing more liquidity, and we're also seeing more competition from banks both locally and international banks. But I'll say that the main reason is perhaps that local and international debt capital markets are starting again to compete with our medium-term portfolio. Now this is not new for us. Good news here is that we have a very strong pipeline of good-quality syndicated deals with healthy spreads, I would say, that should close in this second quarter of the year. So that should compensate.

Next question also from Patrick Brown. We see a decrease in quarterly expenses related to the fourth quarter. What should we expect going forward?

Thank you. Good question as well. This one is a little tricky because expenses are seasonally high in Q4, and particularly last Q4, and are seasonally low in Q1. I guess I'll say the average run rate that you should expect is closer to the level of Q3 in 2023. And as I mentioned before, we do expect to keep investing in transformations in the IT platforms going forward.

Next question is from Iñigo Vega with Jefferies. Iñigo Vega: Hi. Good morning. I've got a couple of questions. One, going back to the NIM. I mean, the NIM was 2.5% in Q1, which is one in line with your target for the full year. You mentioned a bit more competition, more liquidity. Interest rates, who knows, but this should come down at some point over the next 18 months. How realistic is to think 2.5% NIM, not only for this year, but for the following year? Like we've seen these moving pieces like spreads on the core business and, obviously, your loan position on interest rates to the equity. And my second question is on OpEx. I mean you've done a big OpEx effort already. You were talking about these solutions, which are key in the strategic plan. How big are they in terms of the OpEx effort? I mean, how much do we still need to see OpEx going up, I guess, still this year? And what is the lag for full monetization? So when do you think these two IT platforms could be fully monetized? Are we talking like two years, three years, four years? Thank you.

Thank you, Iñigo. Let me start with the second question first, and then the margins question, I'll turn it to Annie. So on the OpEx and the IT investments, we do expect to a gradual, let's say, implementation for both platforms, to begin the second half of this year. Implementations for these platforms usually takes between a year and 18 months. Obviously, part of the purpose here is to generate incremental revenues to protect precisely our NIM. We expect the incremental revenues to be around 10% of revenue by 2026. And the tools combined are about 50% of total IT investments in the next five years. The rest is basically cybersecurity infrastructure and other applications. So if it -- I think the correct way to look at it is in terms of average incremental IT expenses will be around 1.5% of total revenues in average going forward. I don't know if that answers your question. Iñigo Vega: Yes. Absolutely. Absolutely, very clear.

Okay. And in terms of NIM, our guidance that we put there assume two Fed cuts in the second half of the year. Now -- so who knows what's going to happen with the rates, as you say. But we remain committed to our net interest margin of 2.5% given what we're seeing. Iñigo Vega: Okay. So you think -- yes, so you think that the 2.5%, you can have like a bit of pressure from low interest rates in the second half, but you can offset that through a slightly higher margin on the core business, is that right?

The core business, also in terms of deposits gaining share on funding, will also help us to protect the spreads there.

Yes. And considering, Iñigo, the repricing takes a while, so for this year, in our base case, we didn't see so much different impact. It probably -- if the rates do go down, it would probably see more pressure next year from the lower rates. Iñigo Vega: Perfect. Super clear. Thank you so much.

You're welcome.

Okay. Thank you very much. That's all the questions we have for today. I'll pass the line back to the Bladex team for closing remarks.

All right. Let me just make a couple of comments before closing. We're happy, of course, with the traction that the strategic plan has. I think the results speak for themselves. I mean noninterest income has doubled since we started to execute the plan. And clearly, it has the potential to scale even further with the implementations of the tools I've described. I mean deposits that you saw are growing faster than the commercial portfolio, which is, of course, helping our net interest spread. Credit quality remains pristine. And our ROE for the quarter is the highest in at least 28 years. So I mean, super happy. The whole team is very clear and focused on the roadmap going forward and extremely committed to it. I'm going to leave it there and see you again in the next call. Thank you so much.

This concludes today's presentation. Thank you. Have a great day.