Good morning, ladies and gentlemen and welcome to Bladex Third 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. As a reminder, all participants will be in a listen-only mode. 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 us today to discuss our third quarter results. I'll begin with an overview of another record breaking quarter for Bladex. Following that, Annie, our CFO will provide a detailed analysis of our financial results for the quarter. Right after that I will update you on the progress of our strategic plan and also provide a revised guidance for the remaining of the year. After that, we'll open the call for questions. So moving on to Slide 2, the summary slide. On the balance sheet, the commercial portfolio reached $9.7 billion for the first time, representing a quarter-on-quarter growth of 5% and a year-on-year growth of 17%. Deposits also reach a new record of $5.6 billion, growing 34% in the last 12 months, with corporate client deposits nearly doubling compared to last year. This remarkable growth in our most cost efficient source of funding is a result of the coordinated efforts of our commercial and treasury teams guided by clear deposit growth KPIs in their balance scorecards. The resulting shift in the funding mix has allowed us to reduce our funding spreads. We're very pleased with the progress, but more importantly we see significant potential for further expanding our deposit base in the near future. On the P&L side, despite the more competitive lending environment due to increased dollar liquidity, widely open debt, capital markets for Latin American stock names, the lower local interest rates in most countries, we have once more achieved record results. I would especially like to highlight the evolution of noninterest income. Total fees for the first three quarters are up 45% compared to the same period last year. The letters of credit business also had a record performance generating $7 million in the last three months, a growth of 8% Q-on-Q and 12% year-on-year. Syndication fees decreased slightly this quarter, but we feel confident that with a pipeline we have, we are on track to close the year also with record figures in both number of deals and total syndication fees. Regarding expenses, as we have forecasted in previous calls, our costs have increased in line with the anticipated investments required by this second phase of our strategic plan. As a result, and in line with expectations, our efficiency ratio rose slightly to 27% which is in line with the guidance we have been providing for the year. These strong financial results culminated in a record net income of $53 million for the quarter, a 16% increase compared to the same period last year, which results in a return on equity of 16.4%. Given this stronger-than-expected performance, I will provide you all with a revised guidance for the year before opening the call for questions. Let me now hand it over to Annie, our CFO for a detailed financial analysis. Annie, please go ahead.

Thank you, Jorge and good morning to everyone. Let's now move to Slide 3. Quarterly profitability continues to be enhanced by sustained top line performance, as Jorge mentioned, driving third quarter net income to $53 million, marking an annual increase of 16% and up by 6% quarter-on-quarter and representing a $1.44 per share. Year-to-date, net income for the first nine months of this year reached over $154 million, a solid 29% growth from the same period of last year. In the graph, you can see the growth trend since we started executing our strategy in 2022. With year-to-date results that have more than tripled from 2021's levels. The bank has sustained its profitability for the last three quarters at an ROE level above 16% and an ROA of 1.9% when compared with the levels observed at the inception of our strategic plan, ROE has tripled from the same period of 2021 while ROA has more than doubled. Let me now go into more detail over balance sheet growth and other profitability drivers into more detail, starting with the asset composition on Slide 4. Total assets reached $11.4 billion, up by 13% from last year and 5% quarter-on-quarter. This was mainly the result of strong loan growth, surpassing the $8 billion mark for the first time in Bladex's history, up by 17% from last year and 9% from the preceding quarter. The commercial portfolio, which includes loans and off balance sheet items, reached $9.7 billion as our significant loan growth was coupled by a letter of credit business continuing to grow in scale. A liquidity position of $1.7 billion, mostly placed with the New York Fed, represented 15% of total assets and 30% of deposits, reflecting a prudent liquidity management aligned with Basel's liquidity coverage ratio. As can be seen in…

Thank you, Annie. Let me now take a step back and give you a bigger strategic picture on the successive phases of our five-year plan that we started executing in 2022. As I have mentioned in previous calls, we are transitioning from the optimization phase to the expansion phase of our plant. Phase 1 objectives have been achieved. We’ve optimized our balance sheet leverage. We’ve expanded our customer base, preserving the risk profile. We have significantly increased deposits. We have strengthened our teams and we have improved operational efficiencies. The results have surpassed our initial expectations, unlocking more value than we had anticipated. While we have accomplished a great deal, some of our most challenging work still lies ahead, as we transition to the second phase of our strategy. Phase 2 focuses on the expansion of our product offering. This phase involves implementing two new platforms to support our trade finance business and our Treasury Business. As we have highlighted, we believe that these two areas hold significant upside. The trade platform will not only digitalize our letters of credit unit with a state-of-the-art client interface, but also add substantial transactional processing power to our working capital solutions business. I’m pleased to report that we’re making solid progress in the implementation with our partner CGI announced last quarter. Project is on target. We have already completed close to 30% of the work and we anticipate having the platform up and running in the second half of next year. On the other hand, the Treasury platform enabled us to offer derivative products to our clients and to further enhance our capability to provide local currency lending, always hedging the resulting FX exposures. We believe that offering Treasury products to our client base will unlock a relevant source of non-interest income that…

Thank you very much for the presentation. We will now begin the Q&A session for investors and analysts. [Operator Instructions] Our first question comes from Ricardo Buchpiguel with BTG. You can open your microphone.

Hi everyone and thank you for the opportunity of making questions. I have two here on my side. So first, we saw that part of the deceleration in the commercial portfolio came from higher loans in Brazil, right? So meanwhile spreads in the country are a bit – meanwhile you see that spreads in the country are a little bit more compressed due to the higher activity in DCM, right? So I want you to understand if you are indeed seeing lower spreads in loans, specifically in Brazil, and if you should expect a spread compression, at least in this region. And for my second question, I see that we have the U.S. election approaching, so I want to hear your thoughts on how do you believe a potential election of Trump could negatively impact trade volumes in [indiscernible] and therefore the commercial portfolio? And also how was Bladex impacted when he was elected in 2016, if there was any significant impact? Thank you.

Ricardo, thank you. Thank you very much for your questions. I'm going to start with the second question. The first, the U.S. elections upcoming in a few days. And then I'm going to pass it on to Samuel, our Brazilian Chief Commercial Officer that better explain the margins and our exposures in Brazil. First thing I have to say, as you mentioned, it is clear that the presidential elections in the U.S. are very relevant for the region. The resulting effects for the overall region are hard to predict. I mean, you have short-term effects, you have long-term effects, you have direct, indirect, you have depending on the country and the economic dynamic of the country, you may have in the trade partners, you may have a different reality. Having said that, we see primarily three impacts. One is, remittances flows, especially relevant for Central American countries. Also, overall trade flows particularly relevant for South American countries in Mexico. And of course, inflation and interest rates which are relevant for everyone. We're monitoring the effects of remittances flows, particularly in countries where we have relevant exposures, like Guatemala for example where we have close to 10% of exposure and remittances there represent close to 15% of GDP or the Dominican Republic or even Mexico where remittances are 3.5% of GDP. On the trade flows, we are vigilant on the ongoing tensions with China. Keeping in mind also that in the not so long-term, additional disruptions in the global supply chains could potentially accelerate the new assuring trend as companies potentially move to Mexico or some other Central American countries looking for more resilient suppliers closer to the U.S. In any case and having in having said all that, we feel confident that the short-term nature of the business model will allow us to navigate the potential volatility that will for sure take place and also take advantage of the opportunities that for sure will arise given that. I don't know, Sam, you want to…

Yes. On Brazil, Thanks for the question, Ricardo. And you are right, Brazil, we are seeing more competition, particularly from the international DCM side and that is obviously putting pressure on spreads. Brazil is probably the most competitive market of LATAM, the one that we compete. On the other hand, Brazil is still, I would say, quite underrepresented in our portfolio given its potential. Our growth in Brazil has more to do with the fact that we are now as we've been rolling out our new strategy. We have a better or more suited product offering for Brazil or for how sophisticated Brazilian clients are. So we are basically capturing some share on that and that is driving our growth. So everything to do with the new strategy, particularly on the structured trade finance side and our growth in Brazil will not be necessarily correlated with the low market conditions as well as GDP. Because again, we are – as we roll out our new strategy, we're able to onboard clients that in the past we didn't have the right product to onboard.

Very, very clear guys. Thank you very much.

Our next question comes from Daniel Mora with Credicorp Capital. You can open your microphone.

Hi, good morning and thank you for the presentation. I have also a couple of questions. The first one is regarding margins. We have seen very positive performance not only in recent quarters but in the last couple of years. But I would like to understand what will be or what is the current NIM sensitivity to interest rates and what can we expect of NIM given the decreases in interest rates coming from the Fed and how can we think this under the analysis that you normally present considering the volume effect and the interest rate effect? Because we can initially think that we should observe a normalization of margins going forward considering the decreases in rates. And I would like to understand what will be the effect of this also on profitability given that we currently observe as at 16% ROE. That will be my first question. And the second one is given the fact that we are now in the expansion phase with the deployment of the new two initiatives and increase of net interest income, do you have a target of what percentage can that net interest income represent of the total income compared to what we are seeing right now. And if given the strong results that we are seeing right now, we can expect of a higher ROE above the current guidance between 13% and 15% for 2026. Thank you so much.

Thank you, Daniel for your questions on interest rate sensitivity. I’m going to let Annie, our CFO speak to that and then I’ll tackle the second question. Annie?

Okay. Yes, thank you. So yes, you’re right and we have mentioned in several occasions that we are sensitive to market – U.S. dollar market interest rates. So as and to talk about the sensitivity, or sensitivity to interest rates in net interest margin is every 100 basis points movement in interest rates could have like a 12 basis points impact on our net interest margin that all translates into like 100 basis points of ROE as well, that that’s basically because we have a floating book in both sides of the balance sheet. And so the assets and liabilities repriced very similarly. Although we do have some short-term positions, and at the end, the overall asset yields that diminishes and that is invested in our equity, it has an impact. And then what we see going forward is that definitely the strategy that we are having place and that pretty much relates to your second question that Jorge is going to address. But we do anticipate through the structured trade transactions that if Sam mentioned and the deployment of new products, both non-interest and also margin related, it should be able to enhance our lending spreads and sustain the profitability. But I leave it for Jorge now to continue.

Yes, that’s exactly right, Annie. The platforms are exactly geared to generate additional non-interest income. Currently, our non-interest income represents about 13% of total revenues. And we expect this to gradually climb up to 18% by the end of 2026. That’s our target as of today.

Perfect. Thank you so much. Very clear.

Our next question comes from Miruna Chirea with Jefferies. You can open your microphone.

Hello. Thank you very much for the presentation and for taking my question. I just had a quick one on loan growth, please. I can see that you are growing your loans 5% this quarter on what looks like very good margins as well. So I was wondering, where do you see this growth over the next two years? And how do you think about the longer-term growth opportunity and capital management? Thank you.

Yes, well, loan growth for sure has been stronger than we initially expected this year. Brazil, Guatemala, the Dominican Republic have surpassed our initial growth estimates. Sam already talked a little bit about Brazil. Guatemala and the Dominican Republic are also noteworthy. They ranked four and fifth today in our largest exposures about 10%. In the Dominican Republic, in particular, portfolio growth has been fueled, I will say, by increased investments in the energy sector, which have been supported through a recently created project finance and infrastructure unit, along with the country’s overall robust growth dynamics. Mexico represents slow and steady growth, also very much driven by the new product rollouts as part of the new strategy. That’s for 2024. 2025, the way to think about portfolio or country diversification, I mean, it’s relatively correlated with, obviously with the size of the economy. There are some countries that are underrepresented in that sense, like Brazil and Mexico, like Sam said. And some countries are overrepresented like Guatemala or the Dominican Republic. But it’s hard to say now what our exposures would be, even by next year, given the short-term ratio of the portfolio. You want to add something, Sam?

I think we, as part of the new strategy, we favor quality versus quantity. So we will continue to have our price discipline. If we see that the opportunities are there to continue to grow profitably, we will continue. We’ve been experiencing that. We’re still rolling out the new strategy which is opening new markets for us. And we believe there is – we will always strive also to use our capital efficiently and we will. We see there is room to grow as we grow our capital base. That is the focus, but yet maintaining pricing discipline as we establish since the initial phase of the plan.

Yes, good point.

Please hold while we poll for questions. Our next question comes from William Hayes [ph]. You can open your microphone.

Good morning. Congratulations on some superb results. But it’s interesting to note that these results haven’t really moved the needle in the marketplace. And I would suggest that a payout ratio of 35% is quite conservative in both your historical and peer comparisons. Given not only your actual earnings, but expectations and especially your focus on non-interest income growth, which does not really require capital allocations. When do you intend to increase your payout of earnings through dividends?

Good question. Annie, you want to tackle that? I mean, let Annie compliment. But as you well known the policy, it’s an ongoing discussion. Broader capital management, I would say it’s an ongoing discussion. In the case of Bladex, it’s a quarterly decision that the Board takes. And the ongoing discussion revolves around total shareholder value and making sure that the upside and the stock price is there. And that’s our job. But also the dividend yield is attractive enough. I don’t know, Annie, if you want to compliment anything else.

Sure. And hello, Bill. How are you?

Good. Thank you.

Yes, right on, Jorge, it’s always a discussion. Sam just mentioned about us always looking at profitable opportunities. So it’s a balance between growth and returning capital. Right now we are performing very well at 16% ROE. And so that being the case, we think that the current dividend level, and that’s the Board’s decision it’s pretty good. And it’s an ongoing discussion at the Board level on a quarterly basis. So, I think that’s what we can say about that.

Thank you. Okay. Thank you very much. That’s all the questions we have for today. I’ll pass the line back to Jorge Salas for the concluding remarks.

Thank you, Sophia. Before we conclude, I would just like to extend a warm welcome to two prominent sell-side analysts who have recently initiated coverage on Bladex, Credicorp and BTG Pactual. The inclusion of this respected institutions in our coverage universe is a testament, we feel, of the growing interest in our renewed Bladex. We look forward to engaging with their teams and appreciate their commitment to providing valuable insights to the investment community across Latin America and the world. With that, we’ll leave the call there and thank you very much for joining.

This does concludes today’s conference call. You may disconnect and have a nice day.