Good morning, ladies and gentlemen, and welcome to Banco Latinoamericano de Comercio Exterior, S. A. Fourth 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 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 Banco Latinoamericano de Comercio Exterior, S. A.'s fourth quarter and full year results for 2024. I'm here today with a few members of my executive team, including Annette Vanjorde, who assumed the CFO position starting December. I will begin with an overview of what has been another record-breaking year for Banco Latinoamericano de Comercio Exterior, S. A. Following that, I will update you on the progress of our strategic plan. Then, Annie, our CFO, will provide a detailed analysis of our financial results for both the quarter and the year. Finally, I will discuss today's macroeconomic and trade environment and share our guidance for 2025 before we open the call for questions. In 2024, Banco Latinoamericano de Comercio Exterior, S. A. reached a historic milestone with an exceptional performance across all key metrics, surpassing the ambitious goals we have set for the year. Building on a record year in 2023, we continue to push boundaries and achieve new heights. Throughout 2024, our commercial portfolio grew by 18%, reaching a record of $10 billion. This growth was particularly strong in Brazil, the Dominican Republic, and Guatemala, reflecting our robust expansion, profitability, and diversification. Additionally, the health of our portfolio remained excellent, with non-performing loans close to zero once again, highlighting our disciplined risk management practices. Similarly, deposits experienced a significant increase of 23% for year-end closing balances and a 33% in average balances for the year, surpassing our guidance of 30% growth for average balances. Due to seasonal factors, deposit levels as of the end of December were slightly lower compared to those at the end of the third quarter. However, average balances continued to rise during this period. Furthermore, for the first weeks of 2025, deposits have resumed…

Thank you, Jorge, and good morning to everyone. Let's now move to slide four. Jorge just highlighted record-breaking results for the year, with net income reaching $206 million and a return on equity of 16.2%, up from 14.7% last year. This strong performance was driven by sustained business growth, higher revenues, improved efficiency, and well-contained credit costs. I will now provide further details on each of these components. Quarterly profits in 2024 consistently exceeded the $50 million mark, extending the positive trend of prior years. In the fourth quarter, our profitability continued to be supported by strong top-line performance, with net income reaching $51.5 million, an 11% increase year over year. Compared to the previous quarter, net income was down 3%, primarily due to higher expenses related to our ongoing strategic initiatives, which I will discuss. Let's now take a closer look at our balance sheet growth and other key drivers of profitability, starting with the credit portfolio on slide five. First, I want to clarify our approach to portfolio management. Our credit portfolio comprises both the commercial portfolio managed by our commercial team and the investment securities portfolio managed by treasury. The commercial portfolio, which represents the bank's core business activity in Latin America, includes loans and off-balance sheet instruments, such as letters of credit. At year-end, our total credit portfolio stood at close to $11.2 billion, reflecting an 18% increase from the prior year, mainly driven by loan growth of $1.2 billion or 16% year over year. The consistent quarterly expansion throughout the year underscores the strength of our client relationships and market demand. As shown in the bottom right chart, our commercial portfolio remains well diversified and primarily short-term in nature, with 73% scheduled to mature within the next year and an average remaining tenure of approximately…

Great, Annie. Thank you. Before wrapping it up, I want to briefly refer to the macroeconomic context and in particular to the implications for Latin America of President Trump's America First policy. There is no doubt that US foreign policy will remain crucial, influencing the region's economic trajectory. There are two relevant dimensions here. The first one is related to the government's immigration policy, and the second is, of course, trade policy. Regarding immigration policy, we think that the mass deportations of illegal immigrants from Latin American countries may end up having a negative effect on the flow of remittances for the region to the extent that the number of people in the US who send money home is reduced. Remittances, which were $160 billion for 2024, are no doubt an economic pillar for several countries in the region, particularly in Central America. Having said that, we see the economic impact more in the medium term if mass deportations continue to exceed what they have been in previous administrations. In any case, it is something that we are permanently monitoring. Regarding foreign trade policy and the impact of tariffs and potential tariffs, the impact will depend on how long they stay in place and the potential offset from dollar appreciation. It is hard to predict at this point what is going to end up happening. In the case of Mexico, the US's biggest trade partner, we believe that the endgame of the Trump administration is a renegotiation of the USMCA agreement. This review is scheduled for 2026, and it is likely that the US will use this opportunity to extract concessions. We anticipate that discussions surrounding tariffs on Canada and Mexico will persist until the eventual renegotiation of the USMCA. It is possible that such a review is brought forward.…

Thank you very much for the presentation. We will now begin the Q&A section for investors and analysts. If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking on put hand down. There's also the possibility to ask your question through the Q&A icon at the bottom of the screen. You may select the icon and type your question with your name and company. Written questions that are not addressed during the earnings call will be returned by the investor relations team. Our first question comes from Ricardo Buchpiguel with BTG.

Everyone, and thank you for the opportunity of making questions. I have two here on my side. So first, can you please comment on what is implying your NIM contraction estimate for 2025 in terms of Fed Fund rate reduction? And it seems that it's pricing a little bit more than just the reduction in the reference rate, so I want to have your color on what could be eventually driving more this new contraction. And secondly, you mentioned that the loan structuring syndication business has been performing very well at the start of the year. Right? And see if you could comment a little bit on what could be potential drivers for this dynamic. And also taking into account a more potentially more active deal flow in this segment. And also the launch of the new trade finance platform this year. How should we expect fee income to perform against 2024? Right? Should we have a deceleration more towards, like, a growth of 30%, or will it be more closer to the 40% that we see, or more towards the 20%? Any color will be very helpful. Thank you.

Ricardo, three great questions. The one on the net interest margin compression, you're right. It's not only the Fed funds rate comprising. I'm gonna let Annie speak about that. And then on syndications, we do have a very strong pipeline going forward. I'm gonna let Samuel, our chief commercial officer, tackle that one, and then I'll talk a little bit about fees at the end. So, Annie, why don't you tackle the net interest margin work?

Sure, Jorge. Good morning, Ricardo. Yes. As you well mentioned, we did see some tighter lending spreads toward the end of the year. We saw a more competitive market environment with Latin American issuers more active in several markets and much wider availability to US dollar financing. In fact, for the guidance that we put in this year, we're assuming that the lending spreads remain at those levels. Probably we could also see some more pressure, but in our estimation, we hope to keep it away. And then, like you mentioned, in the second half, the aspect would be the 100 basis point reduction that the Fed already lowered towards the end of last year. And that had started to impact our overall asset yields and then reducing the benefit of the equity invested in those assets. But, of course, our liabilities also started to reprice very quickly. Remember that we do have a very short-term repricing structure in our balance sheet. So both assets and liabilities adjust, I would say, mostly within one year or less than a year. So that's what we have been seeing.

On the syndication side, well, syndications fees are obviously dependent on market conditions and particularly on investment in M&A activity across the region. With that said, when you look at the historical figures of that business, you can see that annual income has been around the $5 million mark. In the last couple of years, we've seen an important increase versus the historical $5 million mark, very much in line with the strategic changes that are being made. We have created businesses that bring higher fees like project finance infrastructure, as well as we've been bringing professionals with more experience in structuring and distributing more complex transactions, which tend to bring higher fees as well. That is to say that we believe that the current growth on average should be sustainable and trending upwards, all things equal, of course. Of course, with regards to other fee-generating businesses such as the letters of credit business, like mentioned before, we continue to strengthen the basis or the base, not only in terms of tech development, which was already mentioned, but also very much focused on onboarding new letters of credit clients, as well as a strong focus on cross-selling to existing clients. And I think we have made great strides on that and continue to see good momentum. Thank you, Sam. That was helpful and a perfect leeway for the fee question. So fees increased more than 30% this year, meaning 2024. We are expecting around a 10% increase for 2025 after that 30%. It will really depend on syndications and the pipeline that Sam mentioned. We do foresee that the letters of credit fees will continue their upward trend as clients start onboarding our new platform. It will take some time, but we're confident that we can do at least 10% more for 2025.

Very clear answers, guys. Thank you very much.

Thank you, Ricardo.

Our next question comes from Ricardo Valadino. He says, hello, Ana and Jorge. Congratulations on executing your strategic plan successfully up to this point. I have two questions. First, how do you see the current Trump administration tariffs affecting Banco Latinoamericano de Comercio Exterior, S. A.'s outlook? Second, you have guided for around 2.30% NIM. How do you see NIS as a part of this 2025 guidance?

Okay. Thank you, Ricardo. I'm gonna tackle the first one on Mexico exposure. And then I believe that the second one was already mentioned in the previous question by the BTG analyst. But regarding Mexico, it is our second biggest exposure countrywide, it's 12% of our portfolio. Now, as I mentioned, 78% of that exposure is short-term, and only 10% of that exposure is placed with companies that export to the US. So, I mean, these are very solid companies. We have made different stress tests with different levels of tariffs, and we feel comfortable about the resilience. I mean, we are talking about net debt to equity ratio at around 3.5 times, even in distress scenarios. So these are, in general, as I said, low-leverage corporations that have demonstrated resilience in past periods of uncertainty. So we're confident about our Mexico portfolio. Annie, do you want to add?

Yeah. Just to comment on the projection for the NIM of 2.30%. Like I said, we anticipate we continue having some pressure in our lending spreads, and we also are projecting for two additional Fed rate cuts, 25 basis points each, for the second half of the year. That's embedded in that projection. And with respect to the net interest spread or the NIS, we do foresee that that should remain around fourth-quarter levels, at 1.69, perhaps a couple of basis points lower than that.

Thank you. Our next question comes from Patrick Brown. Congratulations on the excellent results. We see that you are already at 16% ROE according to slide three. However, your guidance is 13-15% for 2026. Why are you expecting less profitability in the future?

Thank you for that question. Good question. We've gotten that question before. The truth is that, remember that the 2026 guidance you saw in slide three was given back in 2022 in an investor day presentation when we launched this plan for the first time. Now, our projections back then assumed normalized levels of Fed funds rates at 2.5%, which, of course, we all know has not happened. Now, with the information we have today, and considering everything else equal, we feel comfortable that the profitability will be in the higher end of that range for sure in 2026. And the reason is very straightforward. I mean, so far, three years of execution, we have, and I'm gonna give round numbers here, almost doubled the size of the balance sheet, keeping, as we've seen, NPLs close to zero. We've doubled, almost doubled the income with more than tripled net income. And all of this has been done without even implementing the trade nor the treasury platform. So remember, as I said earlier, the purpose of the tools and the whole plan is to basically enhance the ability of this bank to scale and to bring fee income to ultimately make our results less dependent on market rates and trades. So, quite honestly, it's hard not to be optimistic about the potential of this bank and this unique franchise going forward.

Thank you. Our next question comes from Daniel Mora with Credit Corp.

Hi. Good morning, and thank you for the presentation. I have just two questions. The first one is regarding the conflict of tariffs and the foreign trade outlook in Latin America. Just similar to the case of Mexico, I would like to understand what is the exposure, the total exposure of the loan portfolio to trade with the United States, or if you feel there is any more exposure regarding clients between countries that are not exposed to the United States but could still be impacted by that context. That will be my first question. And the second one is regarding the trade finance and treasury platform. I would like to know the status of each one, and also if the deployment of those platforms will be in all the countries in which you operate, or will you start only in a few countries?

Thank you, Daniel. A great first one regarding exports to the US. It's mostly Mexico, and that's where we've done most of our stress tests. So we're not worried about tariffs being imposed in other countries at this moment. Now, if you think about it, if tariffs are imposed in Mexico and China, and it's not for sure at this point, this will mean that these countries will likely lose market share in US imports. So that opens the opportunity for other countries in LATAM to export to the US. For example, we believe Brazil could benefit in this short term, as it could redirect exports of oil or agricultural products to the US. Also, potentially, Central America and the Caribbean countries have the potential to increase their market share in the US market for food or even light manufacturing. What I'm trying to say is that Banco Latinoamericano de Comercio Exterior, S. A. has the ability to position itself to be able to finance and take advantage of the new trade dynamics in the region because, again, of the short-term nature of the portfolio. So we see from our end, given the short-term nature, we see more opportunities here with that volatility than anything else. Sam, you want to add something? What was the second question? Oh, yeah. Yeah. Into the second question, yeah. The platform that we're launching with CGI initially with letters of credit, it's country agnostic. It's US dollars, it's hard currency, so we could do it offshore, so we could virtually do it in any of the countries that we operate. What we will do is start piloting with our closest relationships or the more meaningful in that business and then start deploying to the rest of the clients. The idea is to have all of our clients operating through that platform, and with time, we believe we can get there, but, of course, it would take some time.

That's perfect. Thank you so much. That's very clear.

Okay. Thank you.

Our next question comes from Valentina Marin with Banco co. I have two questions. First, what countries do you expect to lead portfolio growth in 2025? Do you expect any particular focus? What would be the reason for such focus? And second, do you expect to continue reducing provisions? What would be your target for COR in 2025, 2026?

Okay. I'm gonna let Sam tackle the first one on portfolio growth. That's his area. And then I'll talk a little bit about provisions for 2025.

Okay. Overall, on average, we believe growth should continue to be balanced throughout the countries in which we operate. We're obviously monitoring very closely what opportunities this more volatile geopolitical context and potential escalation of trade war can bring to us. In times like these, some global investors tend to wait on the side, which could bring opportunities for us to move quickly. As always, Mexico could be one of such countries, as it has great corporations that will survive no matter what happens. We also continue to see Central American conglomerates expanding outside the region, north and south, and we're working hard to capture some of those opportunities to finance M&A in particular. Finally, like our CFO already mentioned, where we see a promising path of economic recovery in countries such as Argentina and El Salvador, we don't plan to move aggressively in those countries, but there could be good opportunities to grow from where we are today with the best credits in each of those countries.

Great, Sam. Thank you. Regarding reserves, remember reserves are model-based. I believe reserves in 2023 were right below $30 million, I think it was $28 million. And we have to keep in mind that we had one non-bank at five, non-performing loan there in Mexico, and that took most of the hit in 2023. In 2024, it was $17 million. So given that we are projecting similar growth in a similar country mix, we believe that reserves for 2025 should be around what they were for 2024. So in the $17 to $20 million range. Are there any other questions?

Please hold while we poll for questions. Our next question comes from David Liefkowitz.

Thank you very much, and congratulations on the great result in 2024. I have three questions. The first question is, some of what has been said in today's presentation implies a concentrated portfolio. So I'd like to know what is the largest concentration you have and how you manage loan concentration? Second question, there was a great increase in credit commitment fees this year, and I'd like to know if that implies any changes in the portfolio makeup for next year. And finally, third question, most of your investment portfolio is 92% of it is held to maturity securities. In which country is most of this held to maturity portfolio held, and are there any changes contemplated? Thank you.

Thank you very much. Very good questions. First one regarding loan concentration. First of all, keep in mind this is a wholesale bank, so we're naturally concentrated because of the nature of the business. We are, as you saw, very diversified in terms of countries and also in terms of sectors. We feel very comfortable that our top exposures are either quasi-sovereign companies, normally short-term, or have very strong collateral. So concentration is always something that we are monitoring at the credit committee level, at the risk level, and also at the board. Regarding the second question, can you remember what the second question was? Sorry.

Very good. Yes.

Commitment. I'm gonna let Sam talk about commitment. They have increased, and we expect good performance of the commitment fees to the extent that we're growing our project finance business. But Sam can give further color on that.

Sure. I think first it's important to make clear that we're not the typical wholesale banking that has a very active or material book of contingency lines or backstop facilities. RCF, some funded RCF. We don't have much of those. We don't look for those. The nature of our commitments, they come from, yes, they're growing from the project finance parts that typically when a project, when we fund a project, not the needs of the projects are being disbursed as construction builds up. So there is some delay drawdown term loans as we call, and those are, yes, project finance is still very small in terms of the total book, but that business is growing. Also, what is growing with the growth of the letters of credit business, we're seeing also opportunities to, like, in some of the tenders around the countries that we operate, some of the trailers asked for our commitment right before the tender opens. So those are very short-term commitments, and we like those. And also, that guarantees that we're gonna be the bank of choice for the issuance of the letter of credit that we look for those. So I think that's another source of where those are coming. And third, less important than the others, but also we continue to be on the lookout in the secondary markets. And we have found over the last few years some really good opportunities to buy committed facilities at discounts, and there's some of the numbers or the growth that come from those, I'd say, opportunistic purchases as well. So I think this is a bit of the picture on the commitment business side.

Thank you. The third question was regarding the investment portfolio. That is, in fact, most of it held to maturity. It's mostly in the US. I'm gonna let our head of treasury and capital markets give a little bit more color on that. Eduardo, you want to share some thoughts?

Yes. Thank you, Jorge. Yes. As Jorge explained, I mean, most of the portfolio is held with issuers outside of Latin America. It's a portfolio for a very short duration. Average duration is two years. And most of it is investment grade, more than 80%. We see these portfolios as a source of diversification of credit exposures outside of the region. It must be remembered that by our bylaws, we can only lend in member countries, but this portfolio, predominantly invested outside the region, provides a source of diversification. And, as Annie explained before, also because most of these, I mean, I would say all of these bonds are global efficiencies and most of them are investment grade. There's also a vehicle through which you can access the Fed discount window in a situation of market disruption. So, in short, most of the exposures are US. Minor exposures in European and Japanese issuers. And mostly more than 80% investment grade.

Thank you very much. Thanks.

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

Thank you, Sofia. Before we conclude today's call, I want to take a moment to acknowledge someone very special to Banco Latinoamericano de Comercio Exterior, S. A. As we announced back in November, after an extraordinary 35-year career in life, Ana de Mendez, your CFO, has decided to step down. While she remains with us until April, ensuring a smooth transition to Annette, this has been her last earnings call. Ana has been an integral part of Banco Latinoamericano de Comercio Exterior, S. A.'s leadership, driving the bank's financial performance with excellence, integrity, and true commitment to our strategic vision. Under her help, we have delivered record-breaking results, as you've seen, and positioned the bank for continued success. On behalf of the entire management team and the board, I want to extend my deepest gratitude to Ana for her years of dedication and invaluable contributions. Ana, we will miss your leadership, but more than anything, we will miss you as a colleague and as a friend. At the same time, I want to take this opportunity to welcome Annette as she steps into her new role. Annette brings a wealth of experience and deep knowledge of our business, and I have no doubt that she will continue to build on the strong foundation that Ana has established. Ana, do you want to say a few words?

Sure. Thank you, Jorge, and thank you all. It has been an incredible journey at Banco Latinoamericano de Comercio Exterior, S. A. I am deeply grateful for the privilege of working with such a talented, committed team. These past years have been filled with challenges, milestones, and achievements that I am immensely proud of. I want to thank our investors, our board, my colleagues, and especially my team for their support, trust, and collaboration. Banco Latinoamericano de Comercio Exterior, S. A. is in an excellent position for the future, and I have no doubt that the bank will continue to thrive under Jorge's leadership and the outstanding team we have built. I am especially delighted to see my close colleague and dear friend Annette take on this role, confident that her expertise and vision will continue driving Banco Latinoamericano de Comercio Exterior, S. A. forward. Thank you, all.

Hi, everyone. Thank you, Jorge, and thank you, Ana. Well, Ana leaves big shoes to fill, and I am honored to step into this role and continue building upon the strong foundation she has helped establish. Over the past months, I've had the privilege of working closely with Ana, and her guidance, knowledge, and leadership have been invaluable. I look forward to continuing to execute our strategy and drive long-term value to our shareholders, clients, and stakeholders. On behalf of your client team, I wish you all the best in your next chapter, and thank you for everything you have done for Banco Latinoamericano de Comercio Exterior, S. A.

Thank you both. I think this concludes the call. Thank you, everyone, and I'll see you in the next call. Goodbye. Thank you. Good day.

Thank you. This conference call is now closed. You may disconnect, and have a nice day.