SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 Or 15d-16 Of The
Securities Exchange Act of 1934
Long Form of Press Release
BANCO LATINOAMERICANO DE EXPORTACIONES, S.A.
(Exact name of Registrant as specified in its Charter)
LATIN AMERICAN EXPORT BANK
(Translation of Registrant's name into English)
Calle 50 y Aquilino de la Guardia
Apartado 6-1497
El Dorado, Panama City
Republic of Panama
(Address of Registrant's Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)
Form 20-F [x] Form 40-F [_]
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing information to the Commission
pursuant to Rule 12g-3-2(b) under the Securities Exchange Act of 1934.)
Yes [_] No [x]
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b). 82__.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
November 18, 2004
Banco Latinoamericano de Exportaciones, S.A.
By: /s/ Pedro Toll
---------------------
Name: Pedro Toll
Title: Deputy Manager
FOR IMMEDIATE RELEASE
Bladex Reports Third Quarter 2004 Net Income of US$33.7 million
3Q04 Financial Highlights
o Net Income in the 3Q04 was US$33.7 million, compared to US$24.3 million in
the 2Q04 and US$17.8 million in the 3Q03.
o The credit portfolio in Argentina at September 30, 2004, was US$327
million, down US$34 million, or 9%, from 2Q04, and US$126 million, or 28%
from 3Q03.
o On October 8, 2004, the Bank announced the receipt of a US$56 million
Argentine loan prepayment, which resulted in a loan loss provision
reversal of US$43 million. Along with other principal reductions, the
credit portfolio in Argentina as of October 31, 2004 had decreased to
US$253 million.
Panama City, Republic of Panama, November 17, 2004 - Banco Latinoamericano de
Exportaciones, S.A. (NYSE: BLX) ("Bladex" or "the Bank"), announced today its
results for the third quarter ended September 30, 2004. (The Bank's financial
statements are prepared in accordance with U.S. GAAP; all figures are stated in
U.S. dollars.)
The table below depicts selected key figures and ratios for the periods
indicated:
Key Figures
------------------------------------------------------------------------
9M03 9M04 3Q03 2Q04 3Q04
------------------------------------------------------------------------
Net Income (In US$ million) $95.3 $87.8 $17.8 $24.3 $33.7
EPS (*) $3.78 $2.23 $0.45 $0.62 $0.86
Return on Average Equity 29.7% 19.1% 12.6% 15.8% 21.2%
Tier 1 Capital Ratio 37.8% 43.8% 37.8% 41.1% 43.8%
Net Interest Margin 1.81% 1.71% 1.96% 1.72% 1.74%
------------------------------------------------------------------------
(*) Earnings per share calculations are based on the average number of
shares outstanding during each period. During the first nine months of
2004, the average number of common shares outstanding was 39.3 million,
compared to 25.1 million for the same period in 2003.
In a subsequent event, on October 8, 2004, the Bank announced the receipt of a
US$56 million prepayment on an Argentine restructured loan. The Bank accounted
for this prepayment by reversing allocated loan loss provisions back to
earnings, generating a profit for accounting purposes of US$43 million.
1
Comments from the Chief Executive Officer:
Jaime Rivera, Chief Executive Officer of Bladex, stated, "The third quarter
results were driven by continued progress in our strategy of deploying an
expanded trade finance business model, as well as a successful approach in
addressing the remaining issues pertaining to our portfolio in Argentina.
Notably, collections in Argentina remain strong. The January 1st, 2004 repayment
schedules for our restructured portfolio indicated a potential credit portfolio
level of US$357 million at October 31st. However, prepayments brought the figure
down to US$253 million.
Although positive in that they strengthen the balance sheet and improve net
income, the rapid principal collections in Argentina result in diminished
contributions to our net interest revenue stream. We have thus shifted
additional resources to our new commercial team to support the re-leveraging of
our balance sheet and the generation of additional fee income. The resulting
trends, as evident in our financial statements, are tangible. First, fee income
increased by 7% during this quarter. Second, our net interest margin increased
by 2 basis points.
The successful collection of our Argentine exposure, along with the change in
our portfolio mix and our profit generation, have continued to significantly
strengthen the capital position of the Bank. Accordingly, we are reviewing our
capital plan in light of our growth and investment perspectives.
Bladex remains focused on the disciplined execution of its strategy. We are
working from the unique competitive position that the combination of ample
resources, a first rate team, an unequaled client franchise, and our special
shareholder support, affords us," Mr. Rivera concluded.
2
NET INTEREST INCOME
(In US$ million)
-----------------------------------------------------------------
9M03 9M04 3Q03 2Q04 3Q04
-----------------------------------------------------------------
Net Interest Income $40.7 $33.0 $13.4 $11.1 $10.6
-----------------------------------------------------------------
The US$7.8 million decline in net interest income during the nine months of 2004
compared to the same period of 2003, was mainly due to lower spreads over LIBOR
on the Bank's accruing loan and investment securities portfolio, resulting both
from the generally improved risk perception in the Bank's markets, and from a
reduction in the stock of non-trade credit portfolio, which yields a higher
spread.
NET INTEREST MARGIN
The table below depicts the net interest margin (net interest income divided by
the average balance of interest-earning assets) and the net interest spread
(average yield earned on interest-earning assets, less the average rate paid on
interest-bearing liabilities) for the periods indicated:
-------------------------------------------------------------------------
9M03 9M04 3Q03 2Q04 3Q04
-------------------------------------------------------------------------
Net Interest Margin 1.81% 1.71% 1.96% 1.72% 1.74%
Net Interest Spread 1.18% 1.11% 1.31% 1.19% 1.02%
-------------------------------------------------------------------------
3Q04 vs. 2Q04
The 2 basis point increase in the quarter in the net interest margin was mainly
due to the impact of higher market interest rates on the Bank's available
capital, and increased interest collections in the Bank's non-accruing
portfolio, an effect that was partially offset by lower lending spreads over
LIBOR on the Bank's accruing portfolio.
The 17 basis point decline in the net interest spread primarily reflects lower
lending spreads over LIBOR.
9M04 vs. 9M03
The decrease of 10 basis points and 7 basis points in the net interest margin
and net interest spread, respectively, for the first nine months of 2004,
compared to the same period of 2003, was mainly due to lower spreads over LIBOR
on the Bank's accruing loan portfolio.
3
COMMISSION INCOME
The following table shows the components of commission income for the periods
indicated:
----------------------------------------------------------------------------------
(In US$ thousands) 9M03 9M04 3Q03 2Q04 3Q04
----------------------------------------------------------------------------------
Letters of credit $3,448 $3,147 $1,092 $907 $1,116
Guarantees:
Country risk coverage business 942 892 309 302 285
Other guarantees 791 352 242 120 103
Loans and other 1,113 426 270 169 81
------ ------ ------ ------ ------
Total Commission Income $6,294 $4,817 $1,913 $1,498 $1,584
Commission Expenses (248) (91) (131) (27) (15)
------ ------ ------ ------ ------
Commission Income, net $6,046 $4,726 $1,782 $1,471 $1,569
====== ====== ====== ====== ======
----------------------------------------------------------------------------------
Net commission income for the third quarter of 2004 improved by US$98 thousand,
or 7%, compared to the second quarter of 2004, mostly due to higher revenues
from letter of credit activity.
The 22% decline in net commission income during the first nine months of 2004,
compared to the same period in 2003, was mainly due to: i) a 62% decline in loan
commission income, related to lower volumes of loan commitments, and to a
one-time loan commitment fee of US$344 thousand that was recognized during the
first quarter of 2003, and ii) decreased volumes in letters of credit and
guarantees, reflecting risk-based action on the Bank's part during the early
part of 2004.
PROVISIONS FOR CREDIT LOSSES
During the third quarter of 2004, the Bank reversed US$23.7 million in
provisions for credit losses, compared to US$17.4 million in the second quarter
of 2004. The US$23.7 million provision reversals were mainly the result of:
(i) Principal payments and prepayments on Argentine restructured loans,
as well as recoveries in previously charged-off Argentine loans,
accounting for provision reversals of US$12.7 million.
(ii) A decrease in generic reserves assigned to certain countries,
resulting in provision reversals of US$11.0 million, mainly due to
upgrades in country credit ratings.
The US$23.7 million total is reflected in the income statement as a US$27.4
million entry in loan loss provision reversals, and US$3.7 million in provision
charges related to off-balance sheet credit risk. The US$3.7 million provision
charge for losses on off-balance sheet credit risk during the quarter reflected
increased letter of credit exposure in certain countries. As the letters of
credit become loans, the reserve for off-balance sheet risk will be reduced, and
the reserve for loan losses will be increased.
For the first nine months of 2004, provision reversals amounted to US$62.5
million, compared to US$49.4 million during the same period of 2003. During the
first nine months of 2004, Argentine provision
4
reversals amounted to US$51.2 million due to payments and prepayments on
Argentine restructured loans, as well as Argentine loan recoveries. In addition,
the Bank has decreased generic reserves assigned to certain countries due to
improved risk perception as reflected in country credit ratings. In 2003,
provision reversals were mainly due to the sale of US$199.5 million (nominal
value) of Argentine loans, which resulted in US$54.1 million of provision
reversals. This was partially offset by the increase in generic reserves due to
the higher risk levels in some countries in the Latin American and Caribbean
region (the "Region") during that period.
OPERATING EXPENSES
The following table shows a breakdown of the components of operating expenses
for the periods indicated:
-----------------------------------------------------------------------------------------
(In US$ thousands) 9M03 9M04 3Q03 2Q04 3Q04
-----------------------------------------------------------------------------------------
Salaries and other employee expenses $7,093 $7,252 $2,103 $2,493 $2,382
Depreciation 1,131 1,027 378 338 330
Professional services 2,163 1,793 632 870 416
Maintenance and repairs 831 905 292 349 299
Other operating expenses 3,533 4,231 1,350 1,676 1,365
------- ------- ------ ------ ------
Total Operating Expenses $14,749 $15,208 $4,755 $5,727 $4,792
======= ======= ====== ====== ======
-----------------------------------------------------------------------------------------
3Q04 vs. 2Q04
Total operating expenses for the third quarter of 2004 decreased by US$935
thousand, or 16%, compared to the second quarter of 2004, mainly due to
reductions in expenses related to consulting fees, technology outlays, and
general decreases in other operating expenses.
9M04 vs. 9M03
Total operating expenses for the first nine months of 2004 increased by US$458
thousand, or 3%, mostly due to higher insurance premiums, expenses related to
new product development, branding, and increased business promotion efforts.
5
BUSINESS OVERVIEW
The following tables are depicted as a bar chart
Credit Portfolio Outstanding
(US$ million)
Sep-03 Dec-03 Mar-04 Jun-04 Sep-04
Trade 1,580 1,719 1,740 1,854 1,871
Non-Trade 717 646 524 511 418
Non-Accrual 500 482 446 403 369
Total 2,797 2,847 2,710 2,768 2,658
Credit Disbursements
(US$ million)
4QTR03 1QTR04 2QTR04 3QTR04
Loans and investments 927 644 854 733
Contingencies 195 188 320 308
Total 1,122 831 1,174 1,041
At September 30, 2004, the Bank's credit portfolio totaled US$2.7 billion,
compared to US$2.8 billion at June 30, 2004. This decline was the result of
decreases in the Bank's stock of non-trade portfolio and non-accrual credit
portfolio in Argentina.
The percentage of trade credits (excluding the non-accruing portfolio in
Argentina) increased from 77% at June 30, 2004, to 80% at September 30, 2004.
The geographic composition of the Bank's credit portfolio (excluding the
non-accruing portfolio in Argentina) by client-type and transaction-type as of
September 30, 2004, was as follows:
--------------------------------------------------------------------------------------------------------------
Caribbean Other
and Central South Total Total
Brazil Mexico America America Other (*) 30-SEP-04 30-JUN-04
--------------------------------------------------------------------------------------------------------------
Financial Entities 87% 69% 72% 79% 100% 81% 79%
Non-Financial Entities 13% 31% 28% 21% 0% 19% 21%
Trade 88% 86% 82% 62% 19% 80% 77%
Non-Trade 12% 14% 18% 38% 81% 20% 23%
--------------------------------------------------------------------------------------------------------------
(*) Consists of securities purchased under agreements to resell classified
as U.S. country risk of US$30 million, guarantees of US$7 million issued
to a multilateral bank in Honduras, and US$82 thousand and US$33 thousand
of letters of credit confirmed for banks in Spain and the United States,
respectively.
6
As of September 30, 2004, 82% of the Bank's outstanding credit portfolio (loans,
investment securities and off-balance sheet items) excluding Argentina was
scheduled to mature on or before September 30, 2005. The equivalent figure as of
June 30, 2004, was 84%. The distribution of the Bank's credit portfolio as of
September 30, 2004, was as follows:
The following tables are depicted as a pie chart
Country Credit Portfolio
(US$ million, except percentages)
Other
Countries Mexico Ecuador Colombia Chile
$520 - 20% $311 - 12% $98 - 4% $138 - 5% $141 - 5%
Brazil Argentina
$1,123 - 42% $327 - 12%
Risk Weighted Portfolio(*)
(US$ million, except percentages)
Other
Countries Mexico Ecuador Colombia Chile
$279 - 21% $132 - 10% $11 - 1% $77 - 6% $44 - 3%
Brazil Argentina
$480 - 36% $327 - 24%
(*)Based on Basel I methodology.
BRAZILIAN EXPOSURE
At September 30 2004, June 30, 2004, and September 30, 2003, the Bank's net
exposure in Brazil and the composition of such exposure by client-type and
transaction-type, were as follows:
(In US$ million)
------------------------------------------------------------------------------------------------------
September 30, 2004 Jun. 30, Sep. 30,
2004 2003
------------------------------------------------------------------
Loans Investment Contingencies Total Total Total
Securities
------------------------------------------------------------------------------------------------------
Nominal Value $996.5 $11.0 $114.5 $1,122.0 $1,253.0 $1,195.8
Fair value adjustments n.a. 0.6 n.a. 0.6 0.7 1.2
------ ----- ------ -------- -------- --------
Credit Portfolio $996.5 $11.6 $114.5 $1,122.6 $1,253.7 $1,197.0
Allowance for credit losses (23.6) n.a. (0.6) (24.2) (34.3) (61.6)
------ ----- ------ -------- -------- --------
------------------------------------------------------------------------------------------------------
Net Exposure $972.9 $11.6 $113.9 $1,098.4 $1,219.4 $1,135.3
------------------------------------------------------------------------------------------------------
-------------------------------------------------------------
30-SEP-03 30-JUN-04 30-SEP-04
-------------------------------------------------------------
Financial Entities 81% 86% 87%
Non-Financial Entities 19% 14% 13%
Trade 74% 84% 88%
Non-Trade 26% 16% 12%
-------------------------------------------------------------
7
At September 30, 2004, the Bank's entire Brazilian portfolio was current on
interest and principal. The portfolio included a non-accruing restructured loan
to a corporation, which is current in interest and principal, in the amount of
US$43 million, unchanged from June 30, 2004, and compared to US$47 million at
September 30, 2003. As of September 30, 2004, the specific allowance for loan
losses related to this credit amounted to US$14 million.
ARGENTINE EXPOSURE
The following table is depicted as a bar chart
(US$ million)
Dec-01 Mar-02 Jun-02 Sep-02 Dec-02
Credit Portfolio 1,114 960 878 846 774
Net Exposure (1) 1,002 828 494 462 394
Reserve and fair value
adjustments of investments
as a % of nominal value 13% 17% 49% 50% 53%
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04
Credit Portfolio 758 584 452 435 399
Net Exposure (1) 401 350 272 240 222
Reserve and fair value
adjustments of investments
as a % of nominal value 51% 43% 40% 45% 45%
Jun-04 Sep-04 Oct-04
Credit Portfolio 360 327 253
Net Exposure (1) 202 178 157
Reserve and fair value
adjustments of investments
as a % of nominal value 45% 46% 39%
(1) Exposure net of specific allowances for credit losses and net of fair
value adjustment son investment securities (impairment loss).
(2) During October 2004 Argentine exposure was reduced by US$73 million due
to, among other principal reductions, a prepayment of an Argentine
restructured loan in the amount of US$56 million.
At September 30, 2004, the Bank's US$178 million exposure in Argentina, net of
the allowance for credit losses, represented 29% of its total stockholders'
equity, compared to 32% at June 30, 2004, and 48% at September 30, 2003.
The Bank's credit portfolio in Argentina is denominated in U.S. dollars (92%)
and Euros (8%).
The Bank's Argentine net exposure at the dates indicated is presented in the
following table:
8
(In US$ million)
--------------------------------------------------------------------------------------------------------------
October 31, 2004 Sep. 30, Jun. 30, Sep. 30,
2004 2004 2003
-------------------------------------------------------------------------
Investment Acceptances
Loans Securities and Total Total Total Total
Contingencies
--------------------------------------------------------------------------------------------------------------
Nominal Value ("gross portfolio") $220.4 $5.3 $31.8 $257.5 $330.9 $364.4 $456.9
Impairment loss on securities n.a. (4.4) n.a. (4.4) (4.4) (4.3) (4.8)
------ ---- ----- ------ ------ ------ ------
Credit Portfolio 220.4 0.9 31.8 253.1 326.5 360.1 452.1
Specific allowance for credit losses (76.0) n.a. (20.4) (96.4) (148.5) (158.2) (179.9)
------ ---- ----- ------ ------ ------ ------
--------------------------------------------------------------------------------------------------------------
Net Exposure $144.4 $0.9 $11.5 $156.8 $178.0 $201.9 $272.2
====== ==== ===== ====== ====== ====== ======
--------------------------------------------------------------------------------------------------------------
The US$33.6 million reduction in the Argentine credit portfolio during the third
quarter of 2004 was mainly due to: i) scheduled repayments of restructured loans
of US$15.1 million; ii) principal loan prepayments of US$10.3 million; iii)
sales of loans and investment securities for a total of US$8.7 million; and iv)
fair value adjustments of investment securities and changes in the valuation of
foreign currency (Euro) exchange rates (-US$0.5 million).
The Argentine credit portfolio reduction experienced in the twelve-month period
ended September 30, 2004 totaled US$125.6 million, or 28%. The reduction was
mainly due to: i) the sale of loans and investment securities totaling US$23.7
million; ii) payments and prepayments of US$103.9 million; and iii) fair value
adjustments of investment securities and changes in the foreign currency (Euro)
exchange rates (US$2.0 million).
On October 8, 2004, the Bank announced the prepayment of an Argentine
restructured loan to a financial institution in the amount of US$56.1 million,
which contributed to a reduction of the Bank's Argentine credit portfolio from
US$326.5 million as of September 30, 2004, to US$253.1 million as of October 31,
2004. This prepayment generated a reversal of provisions of approximately
US$42.8 million, increasing the Bank's stockholders' equity and net income by
the same amount.
9
The distribution of the Argentine credit portfolio by industry type at the dates
indicated was as follows:
(In US$ million, except percentages)
------------------------------------------------------------------------------------------------
Credit Portfolio Credit Portfolio
as of September, as of October,
Industry 30, 2004 % 31, 2004 %
------------------------------------------------------------------------------------------------
Non-Financial Entities
Beverage $12 4% $12 5%
Food production 14 4% 14 6%
Mining and oil and gas
extraction 40 12% 37 14%
Utilities 38 12% 28 11%
---- ---
------------------------------------------------------------------------------------------------
Total Non-Financial Entities $104 32% $91 36%
------------------------------------------------------------------------------------------------
Financial Entities
Controlled subsidiaries of
major US and European Banks $43 13% $42 17%
State owned banks guaranteed
by third party paper 56 17% 51 20%
State-owned banks 124 38% 68 27%
---- ---
------------------------------------------------------------------------------------------------
Total Financial Entities $222 68% $162 64%
------------------------------------------------------------------------------------------------
Total $327 100% $253 100%
==== ====
------------------------------------------------------------------------------------------------
As of September 30, 2004, the Bank had reverse repurchase agreements with
Argentine counterparties totaling US$30 million, which were fully collateralized
with U.S. Treasury securities, in comparison to US$112 million as of June 30,
2004 and US$132 million as of September 30, 2003. These assets are classified as
U.S. country risk.
Interest payments on Argentine credits (loans and investment securities) are
recorded on a cash basis. The Bank collected interest from Argentine borrowers
of US$5 million during the third quarter of 2004, compared to US$4 million
during the second quarter of 2004, and to US$6 million during the third quarter
of 2003. During the third quarter of 2004, interest payments received
represented 100% of the payments due and payable within the quarter, compared to
97% during both the second quarter 2004 and the third quarter of 2003. Although
significant amounts of interest have been received on a consistent basis from
most of the Bank's borrowers in the country, the ultimate collection of
principal on these credits is evaluated separately.
The composition and maturity profile of the Bank's remaining Argentine credit
portfolio in terms of performance as of September 30, 2004 and October 31, 2004,
were as follows:
(In US$ million, except percentages)
---------------------------------------------------------------------------------------------------------------------
Outstanding Outstanding Repayment Schedule
as of as of ----------------------------------------
Argentine Credit Portfolio Status Sep. 30, 2004 Oct. 31, 2004 % 2004 2005 2006 2007-2010 Past Due
---------------------------------------------------------------------------------------------------------------------
Performing under original terms $26 $27 11% $1 $11 $12 $2 $0
Restructured and performing under
renegotiated terms 281 217 86% 8 64 60 85 0
interest 19 9 4% 0 0 0 0 9
---- ---- -- --- --- --- --
---------------------------------------------------------------------------------------------------------------------
Total $327 $253 100% $9 $75 $72 $88 $9
==== ==== == === === === ==
---------------------------------------------------------------------------------------------------------------------
10
The "Restructured and performing under renegotiated terms" portfolio has an
average life of approximately 2 years. None of the restructurings have involved
reduction in the face amount of the debt. Assets "Not yet restructured and not
paying interest" as of October 31, 2004, consist of obligations from two
companies in the utilities sector.
ASSET QUALITY
The following table sets forth changes in the Bank's allowance for credit losses
for the quarters ended on the dates set forth below:
(In US$ million)
--------------------------------------------------------------------------------------------------
30-SEP-03 31-DEC-03 31-MAR-04 30-JUN-04 30-SEP-04
--------------------------------------------------------------------------------------------------
Allowance for credit losses
At beginning of period $322.8 $272.3 $258.3 $236.9 $220.8
Provisions (reversals) charged to
expense (5.1) (9.4) (21.4) (17.4) (23.7)
Credit recoveries (1) 2.0 0.0 0.0 1.3 4.6
Credits written-off against the
allowance (47.4) (4.6) 0.0 0.0 (1.6)
------ ------ ------ ------ ------
--------------------------------------------------------------------------------------------------
Balance at end of period $272.3 $258.3 $236.9 $220.8 $200.0
====== ====== ====== ====== ======
--------------------------------------------------------------------------------------------------
(1) 2Q04 includes a principal recovery of US$1.3 million of an Argentine
loan charged-off against the allowance in 1999. 3Q04 includes a principal
recovery due to the sale of US$4.4 million of an Argentine loan which had
been charged-off against the allowance in 2003, as well as a principal
recovery of US$0.2 million related to an Argentine loan charged-off in
1998.
As of September 30, 2004, the allowance for credit losses and the Bank's loan
and contingencies portfolio on a per country basis were as follows:
(In US$ million)
-------------------------------------------------------------------------------------------------------------
At June 30, 2004 At September 30, 2004 Change
(Sep. 30, 2004 vs.
Jun. 30, 2004)
-----------------------------------------------------------------------------------------------
Loans and Loans and Loans and
Contingencies Allowance for Contingencies Allowance for Contingencies Allowance for
(Nominal Value) credit losses (Nominal Value) credit losses (Nominal Value) credit losses
-------------------------------------------------------------------------------------------------------------
Argentina $355 $(158) $326 $(148) $(29) $10
Brazil 1,239 (34) 1,111 (24) (128) 10
Other Countries 1,102 (28) 1,141 (27) 40 1
------ ----- ------ ----- ----- ---
-------------------------------------------------------------------------------------------------------------
Total $2,696 $(221) $2,578 $(200) $(118) $21
====== ===== ====== ===== ===== ===
-------------------------------------------------------------------------------------------------------------
As of September 30, 2004, the Bank's credit portfolio outside Argentina is
current with respect to principal and interest amounts.
11
LIQUIDITY
The following table shows the net cash position of the Bank as a percentage of
its overall balance sheet and as a percentage of total deposits, at the
following dates:
------------------------------------------------------------------------
30-SEP-03 30-JUN-04 30-SEP-04
------------------------------------------------------------------------
Net cash position (1) / total assets 10.5% 8.9% 7.8%
Net cash position (1) / deposits 42.1% 26.5% 21.2%
------------------------------------------------------------------------
(1) The Bank's net cash position consists of: cash due from banks, plus
interest- bearing deposits with banks, less pledged certificates of
deposit.
As of September 30, 2004, the Bank's deposits increased by 3%, or US$25 million,
to US$866 million since June 30, 2004, and 41%, or US$253 million, from a year
ago, primarily reflecting new deposits from central banks in the Region. The
September 30, 2004 liquidity ratios reflect the Bank's decision to return its
liquidity position to historical levels.
PERFORMANCE AND CAPITAL RATIOS
At September 30, 2004 the number of common shares outstanding was 39.1 million,
compared to 39.4 million at June 30, 2004. The 231 thousand share difference
corresponds to the amount of shares repurchased in the open market under the
share repurchase program announced on August 5, 2004.
The following table sets forth the return on average stockholders' equity and
the return on average assets for the periods indicated below:
--------------------------------------------------------------------------
9M03 9M04 3Q03 2Q04 3Q04
--------------------------------------------------------------------------
ROE (return on average'
stockholders equity) 29.7% 19.1% 12.6% 15.8% 21.2%
ROA (return on average assets) 4.7% 4.8% 2.8% 4.0% 5.8%
--------------------------------------------------------------------------
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 as of
September 30, 2004 would have been 43.8% and 45.0%, respectively. Equivalent
figures for June 30, 2004, would have been 41.1% and 42.3%, respectively, and
37.8% and 39.0%, respectively, for September 30, 2003.
12
RECENT EVENTS
o Common Stockholders Dividends - On October 7, 2004, Bladex paid its common
stockholders cash dividends in a total amount of US$1.15 per share,
reflecting the regular quarterly dividend of US$0.15 per share, and a
special dividend of US$1.00 per share.
o Preferred Stockholders Dividends - On November 6, 2004, the Board of
Directors approved a dividend payment of $1.90 per preferred share, which
was paid on November 15, 2004.
o Share Buyback Program - Under its US$50 million stock repurchase program,
Bladex repurchased 231,200 shares for US$3.8 million during the quarter.
During the month of October 2004, the Bank repurchased an additional
230,700 shares for US$3.7 million.
o Bladex Day at the New York Stock Exchange - On October 12, 2004, Bladex
held an event at the New York Stock Exchange, commemorating its first 25
years of operations, and the launch of its new corporate identity.
Note: Various numbers and percentages set out in this press release have been
rounded, and accordingly, may not total exactly.
ABOUT Bladex
Bladex is a supranational bank originally established by the Central Banks of
Latin American and Caribbean countries to promote trade finance in the Region.
Based in Panama, its shareholders include central banks and state-owned entities
in 23 countries in the Region, as well as Latin American and international
commercial banks, and institutional and retail investors. Through September 30,
2004, over its 25 years of operations, Bladex had disbursed accumulated credits
of over US$127 billion.
--------------------------------------------------------------------------------
This press release contains forward-looking statements of expected future
developments. The Bank wishes to ensure that such statements are accompanied by
meaningful cautionary statements pursuant to the safe harbor established by the
Private Securities Litigation Reform Act of 1995. The forward-looking statements
in this press release refer to collections in Argentina remaining strong,
re-leveraging the Bank's balance sheet, the generation of fee income and
increases in the net interest margin. These forward-looking statements reflect
the expectations of the Bank's management and are based on currently available
data; however, actual experience with respect to these factors is subject to
future events and uncertainties, which could materially impact the Bank's
expectations. Among the factors that can cause actual performance and results to
differ materially are as follows: a decline in the willingness of international
lenders and depositors to provide funding to the Bank, causing a contraction of
the Bank's credit portfolio, adverse economic or political developments in the
Region, particularly in Argentina or Brazil, which could increase the level of
impaired loans in the Bank's loan portfolio and, if sufficiently severe, result
in the Bank's allowance for probable credit losses being insufficient to cover
losses in the portfolio, unanticipated developments with respect to
international banking transactions (including among other things, interest rate
spreads and competitive conditions), a change in the Bank's credit ratings,
events in Argentina and Brazil or other countries in the Region unfolding in a
manner that is detrimental to the Bank, or which might result in adequate
liquidity being unavailable to the Bank, or the Bank's operations being less
profitable than anticipated.
--------------------------------------------------------------------------------
13
There will be a conference call to discuss the quarterly results on November 18,
2004 at 11:00 a.m. New York City time. For those interested in participating,
please dial (800) 946-0719 in the United States or, if outside the United
States, (719) 457-2645. Participants should give the conference ID#875025 to the
telephone operator five minutes before the call is set to begin. There will also
be a live audio webcast of the event at www.blx.com.
Bladex's conference call will become available for review on Conference Replay
one hour after the conclusion of the conference, and will remain available
through November 23, 2004. Please dial (888) 203-1112 or (719) 457-0820 and
follow the instructions. The Conference ID# for the replayed call is 875025.
For more information, please access our website on the Internet at www.blx.com
or contact:
Carlos Yap S.
Senior Vice President, Finance
Bladex
Calle 50 y Aquilino de la Guardia
P.O. Box 6-1497 El Dorado
Panama City, Panama
Tel: (507) 210-8581
Fax: (507) 269-6333
e-mail address: cyap@blx.com
Investor Relations Firm
Melanie Carpenter / Peter Majeski
i-advize Corporate Communications, Inc.
80 Wall Street, Suite 515
New York, NY 10005
Tel: (212) 406-3690
e-mail address: bladex@i-advize.com
14
CONSOLIDATED BALANCE SHEET EXHIBIT I
------------------------------------------------------------------------------------------------------------------------------------
AT THE END OF,
--------------------------------------------
(A) (B) (C) (C) - (B)
Sep. 30, 2003 Jun. 30, 2004 Sep. 30, 2004 CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
ASSETS
Cash and due from banks ................................. $1,110 $747 $877 $131 18%
Interest-bearing deposits with banks (1) ................ 259,042 224,501 184,500 (40,000) (18)
Securities purchased under agreements to resell ......... 132,022 112,433 29,825 (82,608) (73)
Securities available for sale ........................... 54,006 43,273 51,064 7,791 18
Securities held to maturity ............................. 38,581 28,722 28,353 (369) (1)
Loans .................................................. 2,151,755 2,209,417 2,121,210 (88,207) (4)
Less:
Allowance for loan losses ............................. (243,479) (186,624) (162,230) 24,395 (13)
Unearned income ....................................... (3,654) (1,863) (1,154) 709 (38)
----------- ----------- ----------- -----------
Loans, net ............................................. 1,904,621 2,020,930 1,957,827 (63,103) (3)
Premises and equipment .................................. 4,367 3,726 3,450 (276) (7)
Customers' liabilities under acceptances ................ 44,511 50,356 64,854 14,498 29
Accrued interest receivable ............................. 12,015 11,218 10,447 (771) (7)
Derivatives financial instruments - assets .............. 1,654 0 0 0 0
Other assets ............................................ 7,204 6,397 6,296 (100) (2)
----------- ----------- ----------- -----------
TOTAL ASSETS ............................................ $2,459,133 $2,502,301 $2,337,494 ($164,808) (7)%
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing - Demand .......................... $16,554 $16,426 $19,731 $3,305 20%
Interest-bearing - Time ............................... 596,144 824,625 846,184 21,559 3
----------- ----------- ----------- -----------
Total Deposits .......................................... 612,698 841,051 865,915 24,864 3
Short-term borrowings and placements .................... 596,698 510,417 362,366 (148,051) (29)
Medium and long-term borrowings and placements .......... 573,689 405,007 326,410 (78,597) (19)
Acceptances outstanding ................................. 44,511 50,356 64,854 14,498 29
Accrued interest payable ................................ 5,479 5,602 5,456 (146) (3)
Derivatives financial instruments - liabilities ......... 8,866 4,876 0 (4,876) (100)
Reserve for losses on off-balance sheet credit risk ..... 28,837 34,134 37,816 3,683 11
Other liabilities ....................................... 20,595 21,090 62,276 41,186 195
----------- ----------- ----------- -----------
TOTAL LIABILITIES ....................................... $1,891,374 $1,872,533 $1,725,095 ($147,438) (8)%
----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY
Common stock, no par value .............................. 279,976 279,978 279,978
Capital surplus ......................................... 133,717 133,817 133,817
Capital reserves ........................................ 95,210 95,210 95,210
Accumulated other comprehensive income .................. 8,974 9,094 6,785
Retained earnings ....................................... 135,515 197,239 185,974
Treasury stock .......................................... (85,634) (85,570) (89,365)
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY ............................. $567,759 $629,768 $612,399 ($17,369) (3)%
----------- ----------- ----------- -----------
TOTAL LIABILITIES, AND STOCKHOLDERS' EQUITY ............ $2,459,133 $2,502,301 $2,337,494 ($164,808) (7)%
=========== =========== =========== ===========
------------------------------------------------------------------------------------------------------------------------------------
(C) - (A)
CHANGE %
------------------------------------------------------------------------------------------------
ASSETS ......................................................... ($233) (21)%
Cash and due from banks ........................................ (74,542) (29)
Interest-bearing deposits with banks (1) ....................... (102,197) (77)
Securities purchased under agreements to resell ................ (2,942) (5)
Securities available for sale .................................. (10,228) (27)
Securities held to maturity .................................... (30,545) (1)
Loans
Less: ........................................................ 81,249 (33)
Allowance for loan losses .................................... 2,501 (68)
Unearned income -----------
Loans, net .................................................... 53,205 3
Premises and equipment ......................................... (917) (21)
Customers' liabilities under acceptances ....................... 20,343 46
Accrued interest receivable .................................... (1,568) (13)
Derivatives financial instruments - assets ..................... (1,654) (100)
Other assets ................................................... (908) (13)
-----------
TOTAL ASSETS ................................................... ($121,640) (5)%
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits .......................................................
Noninterest-bearing - Demand ................................. $3,177 19%
Interest-bearing - Time ...................................... 250,040 42
-----------
Total Deposits ................................................. 253,217 41
Short-term borrowings and placements ........................... (234,332) (39)
Medium and long-term borrowings and placements (247,279) (43)
Acceptances outstanding ........................................ 20,343 46
Accrued interest payable ....................................... (23) (0)
Derivatives financial instruments - liabilities ................ (8,866) (100)
Reserve for losses on off-balance sheet credit risk ............ 8,980 31
Other liabilities .............................................. 41,681 202
-----------
TOTAL LIABILITIES ($166,279) (9)%
-----------
STOCKHOLDERS' EQUITY
Common stock, no par value .....................................
Capital surplus ................................................
Capital reserves ...............................................
Accumulated other comprehensive income .........................
Retained earnings ..............................................
Treasury stock .................................................
TOTAL STOCKHOLDERS' EQUITY .................................... $44,640 8%
-----------
TOTAL LIABILITIES, AND STOCKHOLDERS' EQUITY ................... ($121,640) (5)%
===========
------------------------------------------------------------------------------------------------
(1) Interest-bearing deposits with banks includes pledged certificate of
deposit in the amount of US$2.2 million at September 30, 2003, June 30,
2004, and September 30, 2004.
CONSOLIDATED STATEMENT OF INCOME EXHIBIT II
------------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED
-----------------------------------------------
(A) (B) (C) (C) - (B)
Sept. 30, 2003 Jun. 30, 2004 Sept. 30, 2004 CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages and per share amounts)
INCOME STATEMENT DATA:
Interest income .............................................. $22,769 $17,687 $18,535 $849 5%
Interest expense ............................................. (9,339) (6,632) (7,950) (1,318) 20
------- ------- ------- -------
NET INTEREST INCOME .......................................... 13,430 11,054 10,585 (469) (4)
Reversal of provision for loan losses ........................ 10,093 20,638 27,413 6,775 33
------- ------- ------- -------
NET INTEREST INCOME AFTER REVERSAL OF
PROVISION FOR LOAN LOSSES .................................... 23,523 31,692 37,998 6,306 20
OTHER INCOME (EXPENSE):
Commission income, net ....................................... 1,782 1,471 1,569 98 7
Provision for losses on off-balance sheet credit risk ........ (5,034) (3,212) (3,683) (471) 15
Derivatives and hedging activities ........................... (6,667) (89) 24 113 (126)
Impairment loss on securities ................................ (75) 0 0 0 n.a.(*)
Gain on the sale of securities available for sale ............ 8,860 332 2,589 2,257 679
Loss on foreign currency exchange ............................ 176 (205) 5 210 (102)
Other income (expense) ....................................... (7) 1 14 13 1,463
------- ------- ------- -------
NET OTHER INCOME (EXPENSE) ................................... (965) (1,702) 518 2,220 (130)
OPERATING EXPENSES:
Salaries and other employee expenses ......................... (2,103) (2,493) (2,382) 111 (4)
Depreciation of premises and equipment ....................... (378) (338) (330) 9 (3)
Professional services ........................................ (632) (870) (416) 454 (52)
Maintenance and repairs ...................................... (292) (349) (299) 50 (14)
Other operating expenses ..................................... (1,350) (1,676) (1,365) 312 (19)
------- ------- ------- -------
TOTAL OPERATING EXPENSES ..................................... (4,755) (5,727) (4,792) 935 (16)
NET INCOME ................................................... $17,803 $24,263 $33,724 $9,461 39
======= ======= ======= =======
NET INCOME AVAILABLE FOR COMMON
STOCKHOLDERS ................................................ $17,803 $24,263 $33,724 $9,461 39%
PER COMMON SHARE DATA:
Net income, after Preferred Stock dividend ................... 0.45 0.62 0.86
Diluted earnings per share ................................... 0.45 0.62 0.86
COMMON SHARES OUTSTANDING:
Period average ............................................... 39,343 39,353 39,297
PERFORMANCE RATIOS:
Return on average assets ..................................... 2.83% 3.97% 5.82%
Return on average stockholders' equity ....................... 12.65% 15.81% 21.18%
Net interest margin .......................................... 1.96% 1.72% 1.74%
Net interest spread .......................................... 1.31% 1.19% 1.02%
Total operating expenses to total average assets ............. 0.76% 0.94% 0.83%
------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
(C) - (A)
CHANGE %
---------------------------------------------------------------------------------------
INCOME STATEMENT DATA:
Interest income .............................................. ($4,233) (19)%
Interest expense ............................................. 1,389 (15)
-------
NET INTEREST INCOME .......................................... (2,845) (21)
Reversal of provision for loan losses ........................ 17,320 172
-------
NET INTEREST INCOME AFTER REVERSAL OF
PROVISION FOR LOAN LOSSES .................................... 14,475 62
OTHER INCOME (EXPENSE):
Commission income, net ....................................... (212) (12)
Provision for losses on off-balance sheet credit risk ........ 1,351 (27)
Derivatives and hedging activities ........................... 6,690 (100)
Impairment loss on securities ................................ 75 (100)
Gain on the sale of securities available for sale ............ (6,270) (71)
Loss on foreign currency exchange ............................ (171) (97)
Other income (expense) ....................................... 21 (292)
-------
NET OTHER INCOME (EXPENSE) ................................... 1,483 (154)
OPERATING EXPENSES:
Salaries and other employee expenses ......................... (279) 13
Depreciation of premises and equipment ....................... 49 (13)
Professional services ........................................ 216 (34)
Maintenance and repairs ...................................... (7) 2
Other operating expenses ..................................... (15) 1
-------
TOTAL OPERATING EXPENSES ..................................... (37) 1
NET INCOME ................................................... $15,922 89
=======
NET INCOME AVAILABLE FOR COMMON
STOCKHOLDERS ................................................ $15,922 89%
PER COMMON SHARE DATA:
Net income, after Preferred Stock dividend ...................
Diluted earnings per share ...................................
COMMON SHARES OUTSTANDING:
Period average ...............................................
PERFORMANCE RATIOS:
Return on average assets .....................................
Return on average stockholders' equity .......................
Net interest margin ..........................................
Net interest spread ..........................................
Total operating expenses to total average assets .............
---------------------------------------------------------------------------------------
(*) "n.a." means not applicable.
SUMMARY CONSOLIDATED FINANCIAL DATA
(Consolidated Statements of Income, Balance Sheet, and Selected Financial Ratios) EXHIBIT III
------------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED SEPT. 30,
-----------------------------------
2003 2004
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except per share amounts & ratios)
INCOME STATEMENT DATA:
Net interest income ...................................................................... $40,717 $32,962
Reversal of provision for loan losses and off-balance sheet credit risk .................. 49,380 62,545
Commission income, net ................................................................... 6,046 4,726
Derivatives and hedging activities ....................................................... (7,789) 48
Impairment loss on securities ............................................................ (953) 0
Gain on early extinguishment of debt ..................................................... 789 6
Gain on the sale of securities available for sale ........................................ 22,211 2,922
Loss on foreign currency exchange ........................................................ (384) (201)
Other income (expense) ................................................................... (5) 17
Operating expenses ....................................................................... (14,749) (15,208)
----------- -----------
NET INCOME ............................................................................... $95,263 $87,817
=========== ===========
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS ............................................. $94,895 $87,817
BALANCE SHEET DATA:
Securities purchased under agreements to resell .......................................... 132,022 29,825
Investment securities .................................................................... 92,587 79,417
Loans, net ............................................................................... 1,904,621 1,957,827
Total assets ............................................................................. 2,459,133 2,337,494
Deposits ................................................................................. 612,698 865,915
Short-term borrowings and placements ..................................................... 596,698 362,366
Medium and long-term borrowings and placements ........................................... 573,689 326,410
Total liabilities ........................................................................ 1,891,374 1,725,095
Stockholders' equity ..................................................................... 567,759 612,399
PER COMMON SHARE DATA:
Net income, after Preferred Stock dividend ............................................... 3.78 2.23
Diluted earnings per share ............................................................... 3.76 2.23
Book value (period average) .............................................................. 17.00 15.63
Book value (period end) .................................................................. 14.42 15.65
COMMON SHARES OUTSTANDING:
Period average ........................................................................... 25,079 39,334
Period end ............................................................................... 39,343 39,122
SELECTED FINANCIAL RATIOS:
PERFORMANCE RATIOS:
Return on average assets ................................................................. 4.69% 4.81%
Return on average stockholders' equity ................................................... 29.72% 19.08%
Net interest margin ...................................................................... 1.81% 1.71%
Net interest spread ...................................................................... 1.18% 1.11%
Total operating expenses to total average assets ......................................... 0.73% 0.83%
ASSET QUALITY RATIOS:
Non-accruing loans and investments to total loan and investment portfolio ............... 19.81% 15.16%
Net charge offs to total loan and investment portfolio ................................... 5.54% -0.19%
Allowance for loan losses to total loans ................................................. 11.33% 7.65%
Allowance for loan losses to non-accruing loans .......................................... 52.37% 48.14%
Allowance for losses on off-balance sheet credit risk to total
contingencies .......................................................................... 6.86% 8.86%
CAPITAL RATIOS:
Stockholders' equity to total assets ..................................................... 23.09% 26.20%
Tier 1 capital to risk-weighted assets ................................................... 37.78% 43.75%
Total capital to risk-weighted assets .................................................... 39.03% 45.00%
------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME EXHIBIT IV
------------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS
ENDED SEPT. 30,
------------------------
2003 2004 CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
INCOME STATEMENT DATA:
Interest income ................................................... $ 76,873 $ 55,730 ($21,143) (28)%
Interest expense .................................................. (36,155) (22,768) 13,387 (37)
-------- -------- --------
NET INTEREST INCOME ............................................... 40,717 32,962 (7,756) (19)
Reversal of provision for loan losses ............................. 54,847 66,389 11,542 21
-------- -------- --------
NET INTEREST INCOME AFTER REVERSAL OF PROVISION
FOR LOAN LOSSES ................................................. 95,565 99,351 3,786 4
OTHER INCOME (EXPENSE):
Commission income, net ............................................ 6,046 4,726 (1,320) (22)
Provision for losses on off-balance sheet credit risk ............. (5,467) (3,844) 1,623 (30)
Derivatives and hedging activities ................................ (7,789) 48 7,836 (101)
Impairment loss on securities ..................................... (953) 0 953 (100)
Gain on early extinguishment of debt .............................. 789 6 (783) (99)
Gain on the sale of securities available for sale ................. 22,211 2,922 (19,289) (87)
Loss on foreign currency exchange ................................. (384) (201) 183 (48)
Other income (expense) ............................................ (5) 17 22 (452)
-------- -------- --------
NET OTHER INCOME (EXPENSE) ........................................ 14,448 3,674 (10,774) (75)
OPERATING EXPENSES:
Salaries and other employee expenses .............................. (7,093) (7,252) (159) 2
Depreciation of premises and equipment ............................ (1,131) (1,027) 104 (9)
Professional services ............................................. (2,163) (1,793) 370 (17)
Maintenance and repairs ........................................... (831) (905) (74) 9
Other operating expenses .......................................... (3,533) (4,231) (699) 20
-------- -------- --------
TOTAL OPERATING EXPENSES .......................................... (14,749) (15,208) (458) 3
NET INCOME ........................................................ $ 95,263 $ 87,817 ($ 7,446) (8)
======== ======== ========
------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES EXHIBIT V
-----------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED,
---------------------------------------------------------------------------------------------------------
September 30, 2003 June 30, 2004 September 30, 2004
--------------------------------- --------------------------------- ---------------------------------
AVERAGE AVG. AVERAGE AVG. AVERAGE AVG.
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
----------------------------------------------------------- --------------------------------- ---------------------------------
(In US$ thousands, except percentages)
INTEREST EARNING ASSETS
Interest-bearing
deposits with banks.. $ 317,169 $ 824 1.02% $ 201,083 $ 516 1.02% $ 217,305 $ 777 1.40%
Securities purchased
under agreements
to resell ........... 132,022 642 1.90 129,374 590 1.80 90,393 502 2.17
Loans, net of discount 1,630,161 13,854 3.33 1,797,147 10,791 2.38 1,691,634 11,113 2.57
Impaired loans ........ 523,420 5,765 4.31 387,236 4,599 4.70 347,789 4,693 5.28
Investment securities.. 111,003 1,683 5.93 75,224 1,190 6.26 74,670 1,450 7.60
TOTAL INTEREST EARNING --------------------------------- --------------------------------- ---------------------------------
ASSETS .............. $ 2,713,775 $ 22,769 3.28% $ 2,590,064 $ 17,687 2.70% $ 2,421,792 $ 18,535 2.99%
--------------------------------- --------------------------------- ---------------------------------
Non interest earning
assets .............. 54,146 61,884 58,706
Allowance for loan
losses .............. (278,190) (201,514) (180,272)
Other assets .......... 8,305 7,670 6,614
----------- ----------- -----------
TOTAL ASSETS .......... $ 2,498,036 $ 2,458,103 $ 2,306,840
----------- ----------- -----------
INTEREST BEARING
LIABILITITES
Deposits .............. $ 559,101 $ 1,638 1.15% $ 773,165 $ 2,309 1.18% $ 754,364 $ 3,068 1.59%
Short-term borrowings
and placements ...... 565,633 2,796 1.93 546,876 2,058 1.49 449,535 2,006 1.75
Medium and long-term
borrowings and
placements .......... 723,394 4,905 2.65 417,305 2,266 2.15 368,824 2,876 3.05
TOTAL INTEREST BEARING --------------------------------- --------------------------------- ---------------------------------
LIABILITIES ......... $ 1,848,128 $ 9,339 1.98% $ 1,737,346 $ 6,632 1.51% $ 1,572,723 $ 7,950 1.98%
--------------------------------- --------------------------------- ---------------------------------
Non interest bearing
liabilities and other
liabilities ......... $ 91,526 $ 103,512 $ 100,714
TOTAL LIABILITIES ..... 1,939,654 1,840,858 1,673,437
STOCKHOLDERS' EQUITY .. 558,382 617,246 633,402
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY ............ $ 2,498,036 $ 2,458,103 $ 2,306,840
----------- ----------- -----------
NET INTEREST SPREAD ... 1.31% 1.19% 1.02%
----- ----- -----
NET INTEREST INCOME
AND NET INTEREST
MARGIN .............. $ 13,430 1.96% $ 11,054 1.72% $ 10,585 1.74%
------------------ ------------------ ------------------
-----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT VI
CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES
---------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------
2003 2004
-------------------------------------------- -----------------------------------
AVERAGE AVG. AVERAGE AVG.
BALANCE INTEREST RATE BALANCE INTEREST RATE
---------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
INTEREST EARNING ASSETS
Interest-bearing deposits with banks......... $434,615 $3,901 1.18% $228,758 $1,929 1.11%
Securities purchased under agreements
to resell................................. 132,022 1,995 1.99 117,165 1,709 1.92
Loans, net of discount....................... 1,686,790 47,144 3.69 1,761,982 33,230 2.48
Impaired loans............................... 610,787 17,487 3.78 386,740 14,792 5.03
Investment securities........................ 136,330 6,346 6.14 75,798. 4,069 7.05
-------------------------------------- -------------------------------------
TOTAL INTEREST EARNING ASSETS................ $3,000,544 $76,873 3.38% $2,570,443 $55,730 2.85%
-------------------------------------- -------------------------------------
- -
Non interest earning assets.................. 55,621 59,244
Allowance for loan losses.................... (354,778) (199,702)
Other assets................................. 16,336 7,576
---------- ----------
TOTAL ASSETS................................. $2,717,723 $2,437,561
---------- ----------
INTEREST BEARING LIABILITITES
Deposits..................................... $552,180 $5,433 1.30% $745,758 $7,470 1.32%
Short-term borrowings and placements......... 634,721 9,913 2.06 549,317 6,470 1.55
Medium and long-term borrowings
and placements............................. 982,924 20,809 2.79 424,405 8,828 2.73
-------------------------------------- -------------------------------------
TOTAL INTEREST BEARING LIABILITIES........... $2,169,825 $36,155 2.20% $1,719,479 $22,768 1.74%
-------------------------------------- -------------------------------------
Non interest bearing liabilities and
other liabilities.......................... $120,944 $103,226
TOTAL LIABILITIES............................ 2,290,769 1,822,705
STOCKHOLDERS' EQUITY......................... 426,954 614,856
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY..................................... $2,717,723 $2,437,561
---------- ----------
NET INTEREST SPREAD.......................... 1.18% 1.11%
----- -----
NET INTEREST INCOME AND NET
INTEREST MARGIN............................ $40,717 1.81% $32,962 1.71%
-------------------- -------------------
---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT VII
CONSOLIDATED STATEMENT OF INCOME
(In US$ thousands, except percentages & ratios)
----------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS FOR THE THREE MONTHS ENDED NINE MONTHS
ENDED ------------------------------------------------------------- ENDED
SEP 30/03 SEP 30/03 DEC 31/03 MAR 31/04 JUN 30/04 SEP 30/04 SEP 30/04
-------------------------------------------------------------------------------------------
INCOME STATEMENT DATA:
Interest income........................ $76,873 $22,769 $21,522 $19,508 $17,687 $18,535 $55,730
Interest expense....................... (36,155) (9,339) (8,253) (8,186) (6,632) (7,950) (22,768)
-----------------------------------------------------------------------------------------
NET INTEREST INCOME ................... 40,717 13,430 13,270 11,322 11,054 10,585 32,962
Reversal of provision for
loan losses.......................... 54,847 10,093 14,661 18,338 20,638 27,413 66,389
-----------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER REVERSAL
OF PROVISION FOR LOAN LOSSES......... 95,565 23,523 27,930 29,660 31,692 37,998 99,351
OTHER INCOME (EXPENSE):
Commission income, net................. 6,046 1,782 1,400 1,686 1,471 1,569 4,726
Provision for losses on
off-balance sheet credit risk........ (5,467) (5,034) (5,127) 3,051 (3,212) (3,683) (3,844)
Derivatives and hedging
activities........................... (7,789) (6,667) (199) 113 (89) 24 48
Impairment loss on securities.......... (953) (75) 0 0 0 0 0
Gain on early extinguishment
of debt.............................. 789 0 0 6 0 0 6
Gain on the sale of securities
available for sale................... 22,211 8,860 0 0 332 2,589 2,922
Gain (loss) on foreign
currency exchange.................... (384) 176 3 (1) (205) 5 (201)
Other income (expense) ................ (5) (7) 38 2 1 14 17
-----------------------------------------------------------------------------------------
NET OTHER INCOME (EXPENSE)............. 14,448 (965) (3,886) 4,858 (1,702) 518 3,674
TOTAL OPERATING EXPENSES............... (14,749) (4,755) (7,812) (4,689) (5,727) (4,792) (15,208)
-----------------------------------------------------------------------------------------
NET INCOME............................. $95,263 $17,803 $16,233 $29,830 $24,263 $33,724 $87,817
======= ======= ======= ======= ======= ======= =======
NET INCOME AVAILABLE FOR
COMMON STOCKHOLDERS.................. $94,895 $17,803 $16,233 $29,830 $24,263 $33,724 $87,817
----------------------------------------------------------------------------------------------------------------------------------
SELECTED FINANCIAL DATA
PER COMMON SHARE DATA
Net income after preferred
stock dividend....................... $3.78 $0.45 $0.41 $0.76 $0.62 $0.86 $2.23
PERFORMANCE RATIOS
Return on average assets............... 4.69% 2.83% 2.71% 4.71% 3.97% 5.82% 4.81%
Return on average stockholders'
equity............................... 29.72% 12.65% 11.15% 20.20% 15.81% 21.18% 19.08%
Net interest margin.................... 1.81% 1.96% 2.07% 1.69% 1.72% 1.74% 1.71%
Net interest spread.................... 1.18% 1.31% 1.41% 1.11% 1.19% 1.02% 1.11%
Total operating expenses to
average assets....................... 0.73% 0.76% 1.31% 0.74% 0.94% 0.83% 0.83%
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EXHIBIT VIII
CREDIT PORTFOLIO
DISTRIBUTION BY COUNTRY
(In US$ millions)
------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------
(A) (B) (C)
COUNTRY 30SEP03 30JUN04 30SEP04 (C) - (B) (C) - (A)
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ARGENTINA........................ $452 $360 $327 (34) (126)
BRAZIL........................... 1,197 1,254 1,123 (131) (74)
CHILE............................ 44 122 141 19 98
COLOMBIA......................... 94 110 138 27 43
COSTA RICA....................... 32 59 43 (16) 11
DOMINICAN REPUBLIC............... 135 28 28 (0) (107)
ECUADOR.......................... 64 95 98 3 34
EL SALVADOR...................... 21 42 62 20 41
GUATEMALA........................ 32 28 21 (7) (11)
HONDURAS......................... 0 2 9 7 9
JAMAICA.......................... 23 23 20 (3) (3)
MEXICO........................... 253 251 311 61 58
NICARAGUA........................ 10 9 9 0 (1)
PANAMA........................... 44 65 90 25 46
PARAGUAY......................... 1 0 0 0 (1)
PERU............................. 103 108 88 (20) (15)
TRINIDAD & TOBAGO................ 77 55 77 22 0
VENEZUELA........................ 81 34 36 2 (46)
OTHER (1)........................ 132 124 37 (87) (95)
------ ------ ------ ----- -----
TOTAL CREDIT PORTFOLIO (2)........ $2,797 $2,768 $2,658 ($110) ($139)
UNEARNED INCOME (3)............... ($4) ($2) ($1) $1 $3
------ ------ ------ ----- -----
TOTAL CREDIT PORTFOLIO,
NET OF UNEARNED INCOME...... $2,793 $2,766 $2,657 ($109) ($136)
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(1) At September 30, 2004 includes: (i) securities purchased under agreements
to resell with Argentine counterparties of US$30 million at September 30,
2004, which were fully collaterized with US Treasury securities, and which
the Bank classifies as US country risk; (ii) guarantees issued of US$7
million to a Multilateral Bank in Honduras; and iii) US$82 thousand and
US$33 thousand of letter of credit confirmed for a bank in Spain and
United States, respectively.
(2) Includes book value of loans, fair value of investment securities,
securities purchased under agreements to resell, acceptances, and
contingencies including confirmed letters of credit, stand-by letters of
credit and reimbursement undertaking and guarantees covering commercial
and country risks and credit commitments.
(3) Represents unearned income on loans.