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.
August 18, 2004
Banco Latinoamericano de Exportaciones, S.A.
By: /s/ Pedro Toll
---------------------
Name: Pedro Toll
Title: Deputy Manager
FOR IMMEDIATE RELEASE
"Bladex" reports Second Quarter 2004 Net Income of US$24.3 million
2Q04 Financial Highlights
o Net Income in the 2Q04 was US$24.3 million, compared to US$29.8 million in
the 1Q04, and US$67.1 million in the 2Q03.
o Credit portfolio in Argentina at June 30, 2004, was US$360 million, down
US$224 million, or 38%, from a year ago, and down US$39 million, or 10%,
from 1Q04.
o Credit disbursements grew 41% during the quarter. Following repayments on
the Argentine credit portfolio and reductions of the non-trade exposure,
the total credit portfolio grew by US$58 million, or 2%.
o The trade portfolio grew by US$114 million, or 7%
Panama City, Republic of Panama, August 17, 2004 - Banco Latinoamericano de
Exportaciones, S.A. - Bladex (NYSE: BLX or the "Bank"), announced today its
results for the second quarter ended June 30, 2004. (The Bank's financial
statements are prepared in accordance with U.S. GAAP, and all figures are stated
in U.S. dollars.)
For the quarter, the Bank reported net income of US$24.3 million, or US$0.62 per
share, compared to net income of US$29.8 million, or US$0.76 per share, in the
previous quarter, and net income of US$67.1 million, or US$3.65 per share, in
the second quarter of 2003. Net income for the second quarter reflected
Argentine provision reversals of US$18.3 million, compared to Argentine
provision reversals of US$18.9 million for the first quarter due to payments and
prepayments on the Argentine restructured loans.
First half 2004 net income amounted to US$54.1 million, or US$1.37 per share,
compared to US$77.5 million, or US$4.32 per share, for the same period in 2003.
The results for the first half of 2004 reflected Argentine provision reversals
of US$37.2 million, compared to provision reversals and gain on the sale of
securities for US$57.5 million in the first half of 2003. The 2003 results
reflected the sale of US$169.5 million of Argentine assets. No such sales have
taken place during 2004.
1
Key Figures
------------------------------------------------------------------------
6M03 6M04 2Q03 1Q04 2Q04
------------------------------------------------------------------------
Net Income (In US$ million) $77.5 $54.1 $67.1 $29.8 $24.3
EPS (*) $4.32 $1.37 $3.65 $0.76 $0.62
Return on Average Equity 43.2% 18.0% 70.3% 20.2% 15.8%
Tier 1 Capital Ratio 32.2% 41.1% 32.2% 37.9% 41.1%
Net Interest Margin 1.76% 1.70% 1.78% 1.69% 1.72%
------------------------------------------------------------------------
(*) Earnings per share calculations are based on the average number of shares
outstanding during each period. During the first quarter of 2004 the
average number of common shares outstanding was 39.4 million, an amount
unchanged from the first quarter of 2004, and compared to 18.3 million
during the second quarter of 2003.
Comments from the Chief Executive Officer:
Jaime Rivera, Chief Executive Officer of Bladex, stated, "The second quarter saw
continued progress with respect to our client, product, and portfolio
strategies.
We are working in an environment that plays to Bladex's strengths. Although
overall economic growth levels are not as robust as we had envisioned, trade
flows are benefiting from strong commodity prices and from policies geared
towards promoting foreign trade as one of the cornerstones of economic growth.
With the completion of the CAFTA negotiations, and with the ongoing talks among
the United States, the European Community and several countries in the Region,
we are now more confident than ever about our strategic premise calling for
increased business opportunities for Bladex.
The second quarter highlights for Bladex were the following:
First, the obligors under our rescheduled credit portfolio in Argentina met all
of their US$18.7 million in principal payments due. In addition, the Bank
received US$19.6 million in prepayments, a reflection of the improving liquidity
and, in some cases, improved balance sheet strength of some of our clients in
the country.
Second, the Bank's new client coverage model is yielding results. Disbursements
in the second quarter totaled US$1.2 billion, 41%, or US$343 million, above the
levels of the first quarter. We were thus able to grow the credit portfolio by
2%, in spite of significant reductions in our stock of non-trade portfolio.
Third, we are encouraged by the continued increase in deposit balances, which
have risen 64% to US$841 million in the last year.
2
Fourth, Bladex took action on the capital management front. The increased common
dividend, the special dividend, and the stock repurchase program announced on
August 5, 2004, comprise a balanced package designed with the long-term
interests of the Bank and its shareholders in mind.
The second quarter showed the initial results of our new product deployment
strategy, as we booked US$43.4 million of new country risk guarantee
transactions. Continued work along the new product front holds the key to
operating earnings growth. With all other issues addressed, operating earnings
growth has now become the principal priority of the Bank." Mr. Rivera concluded.
NET INTEREST INCOME
(In US$ million)
-------------------------------------------------------------------------
6M03 6M04 2Q03 1Q04 2Q04
-------------------------------------------------------------------------
Net Interest Income $27.3 $22.4 $13.5 $11.3 $11.1
-------------------------------------------------------------------------
The US$4.9 million decline in net interest income during the first six months of
2004 compared to the same period of 2003 was mainly due to:
i) Lower spreads over LIBOR on the accruing loan and investment
securities portfolio, resulting both from the generally improved
risk perception in the Region, and from the reduction of the stock
of higher-spread, non-trade and medium-term loans; and
ii) Reduced levels of interest collection from the Bank's portfolio in
Argentina, reflecting smaller average balances in the country.
Net interest margin
The table below provides the net interest margin (net interest income divided by
the average balance of interest-earning assets) and net interest spread (average
yield earned on interest-earning assets, less the average rate paid on
interest-bearing liabilities) for the periods indicated:
-------------------------------------------------------------------------
6M03 6M04 2Q03 1Q04 2Q04
-------------------------------------------------------------------------
Net Interest Margin 1.76% 1.70% 1.78% 1.69% 1.72%
Net Interest Spread 1.15% 1.15% 1.18% 1.11% 1.19%
-------------------------------------------------------------------------
2Q04 vs. 1Q04
The 3 basis points increase in the net interest margin for the second quarter of
2004 compared to the first quarter of 2004, was mainly due to higher market
interest rates, which had a positive impact on the asset-sensitive interest rate
gap, and generated a higher return on the Bank's available capital funds; this
was offset by lower spreads over LIBOR and smaller interest collections on the
non-accruing portfolio.
3
The 8 basis points increase in the net interest spread reflects the re-pricing
of assets in an increasing interest rate environment, partially offset by lower
lending spreads over LIBOR.
6M04 vs. 6M03
The 6 basis points decrease in the net interest margin for the six months of
2004, compared to the same period in 2003 was mainly due to lower spreads over
LIBOR, and a lower interest rate environment, which had a negative impact on the
asset-sensitive interest rate gap, and generated a lower return on the Bank's
available capital funds.
COMMISSION INCOME
The following table shows the components of commission income for the periods
indicated:
-----------------------------------------------------------------------------
(In US$ thousands) 6M03 6M04 2Q03 1Q04 2Q04
-----------------------------------------------------------------------------
Letters of credit $2,356 $2,031 $1,115 $1,124 $907
Guarantees:
Country risk coverage business 633 608 306 306 302
Other guarantees 550 250 255 130 120
Loans and other 843 345 267 176 169
------ ------ ------ ------ ------
Total Commission Income $4,381 $3,233 $1,943 $1,735 $1,498
Commission Expenses (117) (76) (108) (50) (27)
------ ------ ------ ------ ------
Commission Income, net $4,264 $3,157 $1,835 $1,686 $1,471
====== ====== ====== ====== ======
-----------------------------------------------------------------------------
Net commission income for the second quarter of 2004 decreased by 13% compared
to the first quarter of 2004 mostly due to lower revenues from letter of credit
activity in certain countries where the Bank chose to reduce its exposure due to
risk considerations.
The 26% decline in net commission income during the first six months of 2004,
compared to the same period in 2003, was mainly due to: i) a 59% decline in
commission income on loans and other, mostly related to a one-time loan
commitment fees 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, or the decision to exit
non-trade related activities.
REVERSAL OF PROVISIONS FOR CREDIT LOSSES
During the second quarter of 2004, the Bank reversed US$17.4 million of its
allowance for credit losses (which includes reversal of provisions for loan
losses and provisions for losses on off-balance sheet
4
credit risk), in comparison to a reversal of US$21.4 million in the first
quarter of 2004. The second quarter reversals were mainly the result of:
(i) Principal payments and prepayments on the Argentine restructured
loans, as well as a loan recovery in the amount of US$1.3 million on
an Argentine loan charged-off in 1999;
(ii) An increase in the Bank's general reserve coverage for credits in
Brazil and Ecuador, in line with increased credit exposure levels in
these countries;
(iii) A reduction of specific reserves due to a principal prepayment of a
loan by a Brazilian client in non-accrual status; and
(iv) A decrease in general reserves for Venezuela, in line with reduced
credit exposure levels in the country.
For the first six months of 2004, provision reversals amounted to US$38.8
million, compared to US$44.3 million reversals during the first six months of
2003. The US$5.5 million difference is mainly due to the impact of the US$169.5
million Argentine asset sales during the first six months of 2003. No such sales
have taken place during 2004. (For additional information, please refer to Asset
Quality section on page 11.)
OPERATING EXPENSES
The following table shows a breakdown of the components of operating expenses
for the periods indicated:
-----------------------------------------------------------------------------
(In US$ thousands) 6M03 6M04 2Q03 1Q04 2Q04
-----------------------------------------------------------------------------
Salaries and other employee expenses $4,990 $4,870 $2,441 $2,377 $2,493
Depreciation 753 697 377 359 338
Professional services 1,531 1,376 1,043 507 870
Maintenance and repairs 538 605 324 256 349
Other operating expenses 2,183 2,867 1,225 1,190 1,676
------ ------- ------ ------ ------
Total Operating Expenses $9,994 $10,415 $5,410 $4,689 $5,727
====== ======= ====== ====== ======
-----------------------------------------------------------------------------
2Q04 vs. 1Q04
Total operating expenses for the second quarter of 2004 increased by US$1.0
million, or 22%, compared to the first quarter of 2004, mainly due to an
increase in expenses related to the annual shareholder's meeting, regulatory
related expenses, costs associated with the incorporation of the new commercial
team, and business promotion expenses, including the launching of the new brand
and corporate image.
5
6M04 vs. 6M03
Total operating expenses for the first six months of 2004 increased by US$421
thousand, or 4%, mostly due to higher insurance premiums, expenses related to
new product development, branding, and increased business promotion efforts.
BUSINESS OVERVIEW
[The following table represents a bar chart in the printed report.]
Credit Disbursements
(US$ million)
4QTR03 1QTR04 2QTR04
------ ------ ------
Percent increase
Loans 927 644 854
Contingencies 195 188 320
----- --- -----
Total 1,122 831 1,174
===== === =====
The Credit disbursements grew 41% during the second quarter of 2004.
[The following table represents a bar chart in the printed report.]
Credit Portfolio Outstanding
(US$ million)
Jun-03 Sep-03 Dec-03 Mar-04 Jun-04
------ ------ ------ ------ ------
Trade 1,455 1,580 1,719 1,740 1,854
Non-Trade 857 717 646 524 511
Non-Accrual 632 500 482 446 403
----- ----- ----- ----- -----
Total 2,944 2,797 2,847 2,710 2,768
===== ===== ===== ===== =====
During the second quarter, the Bank increased credit disbursements by 41% to
US$1.2 billion. The trade portfolio (excluding the non-accruing portfolio) grew
7%, and the Argentine credit exposure and the stock of non-trade credits (mostly
medium term) both decreased by 6%.
The geographic composition (excluding the non-accruing credit portfolio in
Argentina) of the Bank's credit portfolio by type of client as of June 30, 2004,
was as follows:
----------------------------------------------------------------------------------------------------------------
Caribbean
Dominican and Central South Total Total
Brazil Mexico Republic America America Other (*) 30-JUN-04 31-MAR-04
----------------------------------------------------------------------------------------------------------------
Banks 86% 61% 100% 59% 75% 100% 79% 69%
Other 14% 39% 0% 41% 25% 0% 21% 31%
Trade 84% 83% 100% 87% 66% 6% 77% 75%
Non-Trade 16% 17% 0% 13% 34% 94% 23% 25%
----------------------------------------------------------------------------------------------------------------
(*) Other - consists of securities purchased under agreements to resell
classified as U.S. country risk of US$112 million, guarantees of US$7
million issued to a multilateral bank in Honduras, and a US$4 million
letter of credit confirmed for a corporation in the Cayman Islands.
As of June 30, 2004, 84% of the Bank's outstanding credit portfolio (loans,
investment securities and contingencies) excluding Argentina was scheduled to
mature on or before June 30, 2005.
6
The Bank's total credit related assets and contingencies, and risk-weighted
assets by country (based on Basel I methodology), as of June 30, 2004 were as
follows:
[The following table represents a bar chart in the printed report.]
Nominal Country Exposure
(US$ million, except percentages)
Brazil $1,254 - 46%
Argentina $360 - 13%
Chile $122 - 4%
Dominican Republic $28 - 1%
Mexico $251 - 9%
Venezuela $34 - 1%
Other countries $720 - 26%
[The following table represents a bar chart in the printed report.]
Risk Weighted Country Exposure
(US$ million, except percentages)
Brazil $524 - 36%
Argentina $360 - 24%
Chile $67 - 5%
Dominican Republic $6 - 0%
Mexico $129 - 9%
Venezuela $34 - 2%
Other countries $355 - 24%
BRAZILIAN EXPOSURE
At June 30 2004, March 31, 2004, and June 30, 2003, the Bank's exposure in
Brazil was as follows:
(In US$ million)
----------------------------------------------------------------------------------------------
Investment
Loans Securities Contingencies Total
----------------------------------------------------------------------------------------------
Nominal Value $1,110.6 $14.0 $128.4 $1,253.0
Fair value adjustments n.a. 0.7 n.a. 0.7
-------- ----- ------ --------
Credit Portfolio at June 30, 2004 $1,110.6 $14.7 $128.4 $1,253.7
Allowance for credit losses (33.3) n.a. (1.0) (34.3)
-------- ----- ------ --------
----------------------------------------------------------------------------------------------
Net Exposure at June 30, 2004 $1,077.3 $14.7 $127.4 $1,219.4
======== ===== ====== ========
----------------------------------------------------------------------------------------------
Net Exposure at Mar. 31, 2004 $915.0 $16.0 $109.2 $1,040.3
======== ===== ====== ========
----------------------------------------------------------------------------------------------
Net Exposure at June 30, 2003 $873.9 $24.7 $168.6 $1,067.3
======== ===== ====== ========
----------------------------------------------------------------------------------------------
---------------------------------------------------------------
Credit Exposure
of Brazil 30-JUN-03 31-MAR-04 30-JUN-04
---------------------------------------------------------------
Banks 79% 78% 86%
Other 21% 22% 14%
Trade 70% 82% 84%
Non-Trade 30% 18% 16%
---------------------------------------------------------------
7
At the end of the second quarter 2004, the Bank's Brazilian portfolio had no
past due interest or principal amounts. At June 30, 2004, the Brazilian
portfolio included one restructured loan on non-accrual status, which is current
in interest and principal for, US$43 million to a Brazilian corporation,
compared to US$47 million as of March 31, 2004 (the decrease was due to a
principal prepayment). As of June 30, 2004, the specific allowance for loan
losses on this credit was US$14 million, compared to US$16 million as of March
31, 2004.
ARGENTINE EXPOSURE
[The following table represents a bar chart in the printed report.]
US$ million
Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Nominal value 1,155 1,001 961 929 847 824 618 457 440 403 364
Net Exposure (1) 1,002 828 494 462 394 401 350 272 240 222 202
Reserve and mark-to-market
as a % of nominal value 13% 17% 49% 50% 53% 51% 43% 40% 45% 45% 45%
----------
(1) Exposure net of specific allowances for credit losses and net of fair
value adjustments on investment securities (impairment loss).
As of June 30, 2004, the Bank's US$202 million exposure in Argentina, net of the
allowance for credit losses, represented 32% of the total stockholders' equity
of the Bank, compared to 36% as of March 31, 2004, and 64% as of June 30, 2003.
The Bank's exposure in Argentina is denominated in U.S. dollars (93%) and Euros
(7%). The Bank's Argentine credit exposure at the dates indicated is presented
in the following table:
8
(In US$ million)
-------------------------------------------------------------------------------------------------------------
Securities
purchased under
Investment Acceptances and agreements to
Loans Securities Contingencies Total resell
-------------------------------------------------------------------------------------------------------------
Nominal Value ("gross portfolio") $323.7 $9.6 $31.1 $364.4 $112.4
Impairment loss on securities n.a. (4.3) n.a. (4.3) 0
------ ----- ----- ------ -------
Credit Portfolio at June 30, 2004 323.7 5.3 31.1 360.1 112.4
Specific allowance for credit
losses (138.5) n.a. (19.7) (158.2) 0
Collateral (U.S. Treasury Strips) 0 0 0 0 (112.4)
------ ----- ----- ------ -------
-------------------------------------------------------------------------------------------------------------
Net Exposure at June 30, 2004 $185.2 $5.3 $11.4 $201.9 $0
====== ===== ===== ====== =======
-------------------------------------------------------------------------------------------------------------
Net Exposure at March 31, 2004 $205.5 $5.4 $11.3 $222.2 $0
====== ===== ===== ====== =======
-------------------------------------------------------------------------------------------------------------
Net Exposure at June 30, 2003 $313.5 $20.5 $16.4 $350.4 $0
====== ===== ===== ====== =======
-------------------------------------------------------------------------------------------------------------
As of June 30, 2004, the Bank's credit portfolio in Argentina amounted to US$360
million, a reduction of US$39 million, or 10%, since March 31, 2004, and US$224
million, or 38%, since June 30, 2003. (Please refer to Exhibit VIII).
The US$39 million reduction in the second quarter of 2004 was mainly due to: i)
scheduled repayments of Argentine restructured and performing loans of US$19
million, representing a 100% of the amounts due and payable during the quarter,
and ii) principal loan prepayments of US$20 million.
The reduction in the Bank's credit portfolio in Argentina of US$224 million, or
38%, from June 30, 2003 to June 30, 2004, was mainly due to the following
factors: i) the sale of Argentine assets of US$138 million, (equivalent to
US$105 million net of fair value adjustments of investment securities) that
occurred during the second half of 2003, ii) payments and prepayments of US$42
million and US$74 million during the second half of 2003 and the first half of
2004, respectively, iii) changes in fair value adjustments of investment
securities for (US$4 million) and US$262 thousand during the second half of 2003
and the first half of 2004, respectively, and iv) Euro currency revaluation of
US$2 million and (US$1 million) during the second half of 2003 and the first
half of 2004, respectively.
9
The Argentine credit portfolio distribution by industry type as of June 30, 2004
was as follows:
(In US$ million, except percentages)
------------------------------------ ------------------------- ----------
Claims (Credit Portfolio)
Industry As of June 30/04 %
------------------------------------ ------------------------- ----------
Non-Financial Entities
Beverage $20 6%
Telecommunications 4 1%
Food production 14 4%
Mining and oil and gas
extraction 43 12%
Primary metal manufacturing 3 1%
Utilities 43 12%
----
------------------------------------ ------------------------- ----------
Total Non-Financial Entities $127 35%
------------------------------------ ------------------------- ----------
Financial Entities
Controlled subsidiaries of
major US and European Banks $43 12%
State owned banks guaranteed
by third party paper 60 17%
State-owned banks 130 36%
----
------------------------------------ ------------------------- ----------
Total Financial Entities $233 65%
------------------------------------ ------------------------- ----------
Total $360 100%
====
------------------------------------ ------------------------- ----------
Interest payments on Argentine credits (loans and investment securities) are
recorded on a cash basis. The Bank collected interest from Argentine borrowers
of approximately US$4 million during the second quarter of 2004, compared to
US$5 million during the first quarter of 2004, and compared to US$6 million
during the second quarter of 2003. The decline in interest income from Argentine
borrowers was mainly due to smaller average balances, which resulted in a
reduction in the amount of scheduled interest payment maturities. The ratio of
interest collected from Argentine borrowers to total interest payments due and
payable from these borrowers during the second quarter of 2004 was 97%, compared
to 98% during the first quarter 2004, and 81% during the second quarter of 2003.
Although significant amounts of interest have been received on a consistent
basis from most of the Bank's borrowers in the country, the ultimate collection
of principal on these credits is evaluated separately.
The composition and maturity profile of the remaining Bank's Argentine credit
portfolio in terms of restructured loans as of June 30, 2004 was as follows:
(In US$ million, except percentages)
-------------------------------------------------------------------------------------------------------------------------
Outstanding Repayment Schedule
As of ---------------------------------------------------
Status June 30, 2004 % 2004 2005 2006 2007-2010 Past Due
-------------------------------------------------------------------------------------------------------------------------
Performing under original terms $26 7% $1 $11 $12 $2 $0
Restructured and performing under renegotiated
terms 300 83% 35 60 76 130 0
Not yet restructured and not paying interest (1) 34 9% 3 8 0 0 23
---- --- --- --- --- ---- ---
-------------------------------------------------------------------------------------------------------------------------
Total $360 100% $40 $78 $87 $132 $23
==== === === === === ==== ===
-------------------------------------------------------------------------------------------------------------------------
(1) As of June 30, 2004, these credits had a specific allowance for credit
losses of US$27 million.
10
The portfolio of restructured and performing loans, under the renegotiated
terms, has an average life of approximately 2 years. None of the restructurings
have involved reduction of the face amount of the debt. Assets not yet
restructured and not paying interest consist of obligations from four companies
in the utilities sector.
ASSET QUALITY
The following table sets forth changes in the Bank's allowance for credit losses
for the quarters ended on the dates set forth below:
(In US$ million)
-------------------------------------------------------------------------------------------------------------------
31-MAR-03 30-JUN-03 30-SEP-03 31-DEC-03 31-MAR-04 30-JUN-04
-------------------------------------------------------------------------------------------------------------------
Allowance for credit losses
At beginning of period $453.1 $445.6 $322.8 $272.3 $258.3 $236.9
Provisions (reversals) charged to
expense (1) 0.3 (44.6) (5.1) (9.4) (21.4) (17.4)
Credit recoveries 0.0 0.0 2.0 0.0 0.0 1.3 (2)
Credits written-off against the
allowance (7.8) (78.2) (47.4) (4.6) 0.0 0.0
------ ------ ------ ------ ------ ------
------------------------------------------------------------------------------------------------------------------
Balance at end of period $445.6 $322.8 $272.3 $258.3 $236.9 $220.8
====== ====== ====== ====== ====== ======
------------------------------------------------------------------------------------------------------------------
(1) Includes reversals in the provision for loan losses of US$44.1 million,
US$9.9 million and US$8.7 million during the 2Q03, 3Q03 and 4Q03,
respectively, as a result of the sale of Argentine loans.
(2) Principal recovery of an Argentine loan previously charged-off against the
allowance.
The US$16 million decrease in the allowance for credit losses in the second
quarter of 2004 was principally due to: i) a US$18 million reduction in specific
reserves for Argentine credits as a result of principal payments and
prepayments; ii) a US$2 million reduction in specific reserves relating to a
Brazilian non-accruing loan; iii) a US$2 million reduction in general reserves
for to Venezuela due to a reduction in the Bank's credit exposure in the
country; and iv) a US$6 million increase in general reserves, mainly in Brazil
and Ecuador, due to increased credit exposure in these countries.
As of June 30, 2004, the allowance for credit losses and net exposure on a per
country basis was as follows:
(In US$ million)
-----------------------------------------------------------------------------------------------------------------------------
Change
At March 31, 2004 At June 30, 2004 (Jun. 30, 2004 vs. Mar. 31, 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 $393 $(176) $355 $(158) $(38) $18
Brazil 1,058 (33) 1,239 (34) 181 (1)
Other Countries 1,180 (27) 1,102 (28) (79) (1)
------ ----- ------ ----- --- ---
-----------------------------------------------------------------------------------------------------------------------------
Total $2,631 $(237) $2,696 $(221) $64 $16
====== ===== ====== ===== === ===
-----------------------------------------------------------------------------------------------------------------------------
11
As of June 30, 2004, the Bank's credit portfolio outside Argentina had no past
due principal or interest amounts.
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-JUN-03 31-MAR-04 30-JUN-04
--------------------------------------------------------------------------
Net cash position (1) / balance sheet 15.8% 7.6% 8.9%
Net cash position (1) / deposits 82.5% 25.6% 26.5%
--------------------------------------------------------------------------
(1) The Bank's net cash position is determined as follows: cash due from
banks, plus interest- bearing deposits with banks, less pledge
certificates of deposit.
As of June 30, 2004, the Bank's deposits increased by 17% or US$122 million to
US$841 million since March 31, 2004, and 64% or US$328 million, from a year ago,
primarily reflecting new deposits from central and commercial banks in the
Region.
PERFORMANCE AND CAPITAL RATIOS
At June 30, 2004 the number of common shares outstanding was 39.4 million, an
amount unchanged since June 30, 2003.
--------------------------------------------------------------------------
2Q03 1Q04 2Q04
--------------------------------------------------------------------------
ROE (return on average stockholders' equity) 70.25% 20.20% 15.81%
ROA (return on average assets) 9.79% 4.71% 3.97%
--------------------------------------------------------------------------
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 June
30, 2004 would have been 41.1% and 42.3%, respectively. Equivalent figures for
March 31, 2004, would have been 37.9% and 39.2%, respectively, and 32.2% and
33.5%, respectively, for June 30, 2003.
RECENT EVENTS
o Capital Management Program - On August 5, 2004, Bladex announced a capital
management program consisting of an increase in quarterly dividends from
US$0.10 to US$0.15 per common share, a special dividend of US$1.00 per
share payable on October 7, 2004, and a three-year stock repurchase
program under which Bladex may repurchase up to an aggregate amount of
US$50
12
million of common stock. These three elements are designed to preserve the
Bank's solid capitalization and ability to withstand volatility in its
markets, as well as to allow for the execution of its business plan.
o Launch of New Brand and Corporate Image - On July 6, 2004, Bladex launched
a new corporate identity in an event held in Panama City. The branding
strategy seeks to capitalize on the value of Bladex's unique name in Latin
America.
o Chief Operations Officer - On July 1, 2004, Mr. Ernesto Bruggia joined
Bladex as the new Chief Operations Officer, responsible for Human
Resources, Technology, Operations, and Accounting.
o Master Agreement with Ex-Im Bank - A Master Guarantee Agreement (MGA) with
the Export-Import Bank of the United States (Ex-Im Bank) was signed on
June 15, of 2004, to provide medium-term loans for U.S. exports to Latin
America and the Caribbean, supported by guarantees from Ex-Im Bank.
ABOUT Bladex
Bladex is a multinational 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, Latin American and international commercial
banks, and institutional and retail investors. Through June 30, 2004, over its
25 years of operations, Bladex had disbursed accumulated credits of over US$126
billion in Latin America.
Note: Various numbers and percentages set out in this press release have been
rounded, and accordingly, may not total exactly.
--------------------------------------------------------------------------------
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 the environment in which Bladex is working
playing to Bladex's strengths, the ability of Bladex to do business under
specific market conditions, the improving liquidity of Bladex's clients in
Argentina and the ability of Bladex to withstand volatility in its markets.
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 August 18,
2004 at 11:00 a.m. New York City time. For those interested in participating,
please call (888) 208-1814 in the United States or, if outside the United
States, please dial (719) 457-2655. All participants should give the conference
ID#816466 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 August 19, 2004. Please dial (888) 203-1112 or (719) 457-0820 and follow
the instructions. The Conference ID#, for the call that will be replayed is
816466.
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) (C) - (A)
Jun. 30, Mar. 31, Jun. 30,
2003 2004 2004 CHANGE % CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
ASSETS
Cash and due from banks ............ $1,190 $2,565 $747 ($1,819) (71)% ($443) (37)%
Interest-bearing deposits
with banks (1) ................... 423,861 183,800 224,501 40,701 22 (199,360) (47)
Securities purchased under
agreements to resell ............. 132,022 132,022 112,433 (19,589) (15) (19,589) (15)
Securities available for sale ...... 120,669 48,858 43,273 (5,585) (11) (77,396) (64)
Securities held to maturity ........ 10,979 29,087 28,722 (365) (1) 17,743 162
Loans .............................. 2,235,236 2,181,538 2,209,417 27,879 1 (25,819) (1)
Less:
Allowance for loan losses ...... (298,963) (206,010) (186,624) 19,385 (9) 112,338 (38)
Unearned income ................ (5,545) (2,711) (1,863) 849 (31) 3,682 (66)
---------- ---------- ---------- ------- ---------
Loans, net ......................... 1,930,728 1,972,817 2,020,930 48,113 2 90,202 5
Premises and equipment ............. 4,474 3,886 3,726 (161) (4) (748) (17)
Customers' liabilities
under acceptances ................ 27,513 40,516 50,356 9,840 24 22,842 83
Accrued interest receivable ........ 13,907 10,585 11,218 633 6 (2,689) (19)
Derivatives financial
instruments - assets ............. 3,004 2,366 0 (2,366) (100) (3,004) (100)
Other assets ....................... 9,041 5,495 6,397 902 16 (2,644) (29)
---------- ---------- ---------- ------- ---------
TOTAL ASSETS ....................... $2,677,388 $2,431,997 $2,502,301 $70,304 3% ($175,087) (7)%
========== ========== ========== ======= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing
- Demand ....................... $36,293 $21,101 $16,426 ($4,675) (22)% ($19,867) (55)%
Interest-bearing - Time .......... 476,351 698,011 824,625 126,614 18 348,273 73
---------- ---------- ---------- ------- ---------
Total Deposits ..................... 512,645 719,112 841,051 121,939 17 328,406 64
Short-term borrowings
and placements ................... 642,329 575,627 510,417 (65,210) (11) (131,912) (21)
Medium and long-term
borrowings and placements ........ 867,855 416,305 405,007 (11,298) (3) (462,848) (53)
Acceptances outstanding ............ 27,513 40,516 50,356 9,840 24 22,842 83
Accrued interest payable ........... 7,848 5,778 5,602 (176) (3) (2,246) (29)
Derivatives financial
instruments - liabilities ........ 16,874 8,271 4,876 (3,395) (41) (11,997) (71)
Reserve for losses on
off-balance sheet credit
risk ............................. 23,803 30,922 34,134 3,212 10 10,331 43
Other liabilities .................. 17,859 24,185 21,090 (3,095) (13) 3,232 18
---------- ---------- ---------- ------- ---------
TOTAL LIABILITIES .................. $2,116,726 $1,820,717 $1,872,533 $51,817 3% ($244,192) (12)%
---------- ---------- ---------- ------- ---------
REDEEMABLE PREFERRED
STOCK (2) ........................ $10,809 $0 $0 $0 0% ($10,809) (100)%
---------- ---------- ---------- ------- ---------
STOCKHOLDERS' EQUITY
Common stock, no par value ......... 279,968 279,978 279,978
Common stock subscribed ............ 8 0 0
Treasury stock ..................... (85,634) (85,570) (85,570)
Capital surplus .................... 133,684 133,817 133,817
Capital reserves ................... 95,210 95,210 95,210
Accumulated other
comprehensive income ............. 8,905 10,933 9,094
Retained earnings .................. 117,713 176,912 197,239
---------- ---------- ----------
TOTAL STOCKHOLDERS'
EQUITY ......................... $549,854 $611,280 $629,768 $18,488 3% $79,914 15%
---------- ---------- ---------- ------- ---------
TOTAL LIABILITIES,
REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS'
EQUITY ......................... $2,677,388 $2,431,997 $2,502,301 $70,304 3% ($175,087) (7)%
========== ========== ========== ======= =========
------------------------------------------------------------------------------------------------------------------------------------
(1) Interest-bearing deposits with banks include pledged certificate of
deposit of US$2.2 million at June 30, 2004, at March 31, 2004, and at June
30, 2003.
(2) SFAS 150 regarding the inclusion of reedemable preferred stock as part of
"liabilities" line item was effective as of July 1, 2003.
CONSOLIDATED STATEMENT OF INCOME EXHIBIT II
------------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED
----------------------------------
(A) (B) (C) C) - (B) (C) - (A)
Jun. 30, Mar. 31, Jun. 30,
2003 2004 2004 CHANGE % CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages and per share amounts)
INCOME STATEMENT DATA:
Interest income ......................... $26,265 $19,508 $17,687 ($1,822) (9)% ($8,578) (33)%
Interest expense ........................ (12,748) (8,186) (6,632) 1,554 (19) 6,115 (48)
------- ------- ------- ------- --------
NET INTEREST INCOME ..................... 13,517 11,322 11,054 (268) (2) (2,463) (18)
Reversal of provision for
loan losses ........................... 37,429 18,338 20,638 2,300 13 (16,791) (45)
------- ------- ------- ------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN
LOSSES ................................ 50,946 29,660 31,692 2,032 7 (19,254) (38)
OTHER INCOME (EXPENSE):
Commission income, net .................. 1,835 1,686 1,471 (215) (13) (363) (20)
Provision for losses on
off-balance sheet credit
risk .................................. 7,209 3,051 (3,212) (6,263) (205) (10,421) (145)
Derivatives and hedging
activities ............................ (320) 113 (89) (203) (179) 231 (72)
Impairment loss on
securities ............................ (875) 0 0 0 n.a. 875 (100)(*)
Gain on early extinguishment
of debt ............................... 789 6 0 (6) (100) (789) (100)
Gain on the sale of
securities available
for sale .............................. 13,351 0 332 332 n.a. (13,019) (98)(*)
Loss on foreign
currency exchange ..................... (534) (1) (205) (205) n.s 329 (62)(*)
Net other income ........................ 93 2 1 (2) (63) (92) (99)
------- ------- ------- ------- --------
NET OTHER INCOME (EXPENSE) .............. 21,547 4,858 (1,702) (6,560) (135) (23,250) (108)
OPERATING EXPENSES:
Salaries and other
employee expenses ..................... (2,441) (2,377) (2,493) (117) 5 (53) 2
Depreciation of premises
and equipment ......................... (377) (359) (338) 21 (6) 39 (10)
Professional services ................... (1,043) (507) (870) (363) 72 173 (17)
Maintenance and repairs ................. (324) (256) (349) (93) 36 (25) 8
Other operating expenses ................ (1,225) (1,190) (1,676) (486) 41 (451) 37
------- ------- ------- ------- --------
TOTAL OPERATING EXPENSES ................ (5,410) (4,689) (5,727) (1,038) 22 (317) 6
NET INCOME .............................. $67,084 $29,830 $24,263 ($5,567) (19) ($42,821) (64)
======= ======= ======= ======= ========
NET INCOME AVAILABLE FOR
COMMON STOCKHOLDERS ................... $66,899 $29,830 $24,263 ($5,567) (19)% ($42,636) (64)%
PER COMMON SHARE DATA:
Net income, after Preferred
Stock dividend ........................ 3.65 0.76 0.62
Diluted earnings per share .............. 3.62 0.76 0.62
COMMON SHARES OUTSTANDING:
Period average .......................... 18,310 39,353 39,353
PERFORMANCE RATIOS:
Return on average assets ................ 9.79% 4.71% 3.97%
Return on average
stockholders' equity .................. 70.25% 20.20% 15.81%
Net interest margin ..................... 1.78% 1.69% 1.72%
Net interest spread ..................... 1.18% 1.11% 1.19%
Total operating expenses
to total average assets ............... 0.79% 0.74% 0.94%
------------------------------------------------------------------------------------------------------------------------------------
(*) The meanings of the abbreviations "n.a." and "n.s", for the percentage
change of periods presented mean: not applicable and not significant,
respectively.
SUMMARY CONSOLIDATED FINANCIAL DATA
(Consolidated Statements of Income, Balance Sheet,
and Selected Financial Ratios) EXHIBIT III
---------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------
2003 2004
---------------------------------------------------------------------------------------------------------------
(In US$ thousands, except per share amounts & ratios)
INCOME STATEMENT DATA:
Net interest income .................................................... $27,287 $22,377
Reversal of provision for loan losses
and off-balance sheet credit risk .................................... 44,321 38,815
Commission income, net ................................................. 4,264 3,157
Derivatives and hedging activities ..................................... (1,122) 24
Impairment loss on securities .......................................... (878) 0
Gain on early extinguishment of debt ................................... 789 6
Gain on the sale of securities
available for sale ................................................... 13,351 332
Loss on foreign currency exchange ...................................... (561) (206)
Net other income ....................................................... 2 3
Operating expenses ..................................................... (9,994) (10,415)
--------- ---------
NET INCOME ............................................................. $77,460 $54,093
========= =========
NET INCOME AVAILABLE FOR COMMON
STOCKHOLDERS ......................................................... $77,093 $54,093
BALANCE SHEET DATA:
Securities purchased under agreements
to resell ............................................................ 132,022 112,433
Investment securities .................................................. 131,648 71,995
Loans, net ............................................................. 1,930,728 2,020,930
Total assets ........................................................... 2,677,388 2,502,301
Deposits ............................................................... 512,645 841,051
Short-term borrowings and placements ................................... 642,329 510,417
Medium and long-term borrowings and
placements ........................................................... 867,855 405,007
Total liabilities ...................................................... 2,116,726 1,872,533
Redeemable preferred stock (1) ......................................... 10,809 0
Stockholders' equity ................................................... 549,854 629,768
PER COMMON SHARE DATA:
Net income, after Preferred Stock
dividend ............................................................. 4.32 1.37
Diluted earnings per share ............................................. 4.29 1.37
Book value (period average) ............................................ 20.17 15.39
Book value (period end) ................................................ 13.97 16.00
COMMON SHARES OUTSTANDING:
Period average ......................................................... 17,829 39,353
Period end ............................................................. 39,343 39,353
SELECTED FINANCIAL RATIOS:
PERFORMANCE RATIOS:
Return on average assets ............................................... 5.55% 4.34%
Return on average stockholders'
equity ............................................................... 43.16% 17.97%
Net interest margin .................................................... 1.76% 1.70%
Net interest spread .................................................... 1.15% 1.15%
Total operating expenses to total
average assets ....................................................... 0.72% 0.84%
ASSET QUALITY RATIOS:
Non-accruing loans and investments
to total loan and investment portfolio ............................... 24.15% 15.54%
Net charge offs to total loan and
investment portfolio ................................................. 3.45% 0.05%
Allowance for loan losses to
total loans .......................................................... 13.41% 8.45%
Allowance for loan losses to
non-accruing loans ................................................... 51.39% 50.92%
Allowance for losses on off-balance
sheet credit risk to total
contingencies ........................................................ 5.35% 9.13%
CAPITAL RATIOS:
Stockholders' equity to total assets ................................... 20.54% 25.17%
Tier 1 capital to risk-weighted
assets ............................................................... 32.21% 41.08%
Total capital to risk-weighted
assets ............................................................... 33.46% 42.33%
---------------------------------------------------------------------------------------------------------------
(1) SFAS 150 regarding the inclusion of reedemable preferred stock as part of
"liabilities" line item was effective as of July 1, 2003.
CONSOLIDATED STATEMENT OF INCOME EXHIBIT IV
------------------------------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS
ENDED JUNE 30,
------------------------
2003 2004 CHANGE %
------------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
INCOME STATEMENT DATA:
Interest income ................................................... $54,104 $37,195 ($16,909) (31)%
Interest expense .................................................. (26,817) (14,818) 11,998 (45)
-------- -------- --------
NET INTEREST INCOME ............................................... 27,287 22,377 (4,911) (18)
Reversal of provision for loan losses ............................. 44,754 38,976 (5,778) (13)
-------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ............... 72,042 61,353 (10,689) (15)
OTHER INCOME (EXPENSE):
Commission income, net ............................................ 4,264 3,157 (1,107) (26)
Provision for losses on off-balance sheet credit risk ............. (433) (161) 272 (63)
Derivatives and hedging activities ................................ (1,122) 24 1,146 (102)
Impairment loss on securities ..................................... (878) 0 878 (100)
Gain on early extinguishment of debt .............................. 789 6 (783) (99)
Gain on the sale of securities available for sale ................. 13,351 332 (13,019) (98)
Loss on foreign currency exchange ................................. (561) (206) 355 (63)
Net other income .................................................. 2 3 1 40
-------- -------- --------
NET OTHER INCOME (EXPENSE) ........................................ 15,413 3,156 (12,257) (80)
OPERATING EXPENSES:
Salaries and other employee expenses .............................. (4,990) (4,870) 120 (2)
Depreciation of premises and equipment ............................ (753) (697) 55 (7)
Professional services ............................................. (1,531) (1,376) 154 (10)
Maintenance and repairs ........................................... (538) (605) (67) 12
Other operating expenses .......................................... (2,183) (2,867) (684) 31
-------- -------- --------
TOTAL OPERATING EXPENSES .......................................... (9,994) (10,415) (421) 4
NET INCOME ........................................................ $77,460 $54,093 ($23,367) (30)
======== ======== ========
------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES EXHIBIT V
-----------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED,
----------------------------------------------------------------------------------
June 30, 2003 March 31, 2004
-------------------------------------- --------------------------------------
AVERAGE AVG. AVERAGE AVG.
BALANCE INTEREST RATE BALANCE INTEREST RATE
--------------------------------------------------------------------------------------- --------------------------------------
(In US$ thousands, except percentages)
INTEREST EARNING ASSETS
Interest-bearing deposits with banks .......... $457,738 $1,421 1.23% $268,117 $637 0.94%
Securities purchased under agreements to resell 132,022 672 2.01 132,022 617 1.85
Loans, net of discount ........................ 1,701,826 16,556 3.85 1,797,936 11,326 2.49
Impaired loans ................................ 607,651 5,615 3.66 425,624 5,499 5.11
Investment securities ......................... 140,034 2,001 5.65 77,513 1,429 7.30
-------------------------------------- --------------------------------------
TOTAL INTEREST EARNING ASSETS ................. $3,039,270 $26,265 3.42% $2,701,212 $19,508 2.86%
-------------------------------------- --------------------------------------
Non interest earning assets ................... 55,606 57,149
Allowance for loan losses ..................... (364,817) (217,696)
Other assets .................................. 19,503 8,453
----------- -----------
TOTAL ASSETS .................................. $2,749,563 $2,549,117
----------- -----------
INTEREST BEARING LIABILITITES
Deposits ...................................... $535,993 $1,795 1.32% $709,712 $2,093 1.17%
Short-term borrowings and placements .......... 691,639 3,607 2.06 652,615 2,406 1.46
Medium and long-term borrowings and placements 1,020,313 7,345 2.85 487,696 3,687 2.99
-------------------------------------- --------------------------------------
TOTAL INTEREST BEARING LIABILITIES ............ $2,247,944 $12,748 2.24% $1,850,023 $8,186 1.75%
-------------------------------------- --------------------------------------
Non interest bearing liabilities and other
liabilities ................................. $108,007 $105,177
TOTAL LIABILITIES ............................. 2,355,951 1,955,200
REDEEMABLE PREFERRED STOCK .................... 11,658 0
STOCKHOLDERS' EQUITY .......................... 381,954 593,917
TOTAL LIABILITIES, REDEEMABLE PREFERRED
----------- -----------
STOCK AND STOCKHOLDERS' EQUITY ............... $2,749,563 $2,549,117
----------- -----------
NET INTEREST SPREAD ........................... 1.18% 1.11%
--------- ----------
NET INTEREST INCOME AND NET
INTEREST MARGIN ............................. $13,517 1.78% $11,322 1.69%
------------------------ ------------------------
-----------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED,
------------------------------------------
June 30, 2004
------------------------------------------
AVERAGE AVG.
BALANCE INTEREST RATE
-----------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
INTEREST EARNING ASSETS
Interest-bearing deposits with banks .......... $201,083 $516 1.02%
Securities purchased under agreements to resell 129,374 590 1.80
Loans, net of discount ........................ 1,797,147 10,791 2.38
Impaired loans ................................ 387,236 4,599 4.70
Investment securities ......................... 75,224 1,190 6.26
------------------------------------------
TOTAL INTEREST EARNING ASSETS ................. $2,590,064 $17,687 2.70%
------------------------------------------
Non interest earning assets ................... 61,884
Allowance for loan losses ..................... (201,514)
Other assets .................................. 7,670
-----------
TOTAL ASSETS .................................. $2,458,103
-----------
INTEREST BEARING LIABILITITES
Deposits ...................................... $773,165 $2,309 1.18%
Short-term borrowings and placements .......... 546,876 2,058 1.49
Medium and long-term borrowings and placements 417,305 2,266 2.15
------------------------------------------
TOTAL INTEREST BEARING LIABILITIES ............ $1,737,346 $6,632 1.51%
------------------------------------------
Non interest bearing liabilities and other
liabilities ................................. $103,512
TOTAL LIABILITIES ............................. 1,840,858
REDEEMABLE PREFERRED STOCK .................... 0
STOCKHOLDERS' EQUITY .......................... 617,246
TOTAL LIABILITIES, REDEEMABLE PREFERRED
-----------
STOCK AND STOCKHOLDERS' EQUITY ............... $2,458,103
-----------
NET INTEREST SPREAD ........................... 1.19%
-----------
NET INTEREST INCOME AND NET
INTEREST MARGIN ............................. $11,054 1.72%
--------------------------
CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES EXHIBIT VI
-------------------------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------
2003 2004
---------------------------------------- ----------------------------------------
AVERAGE AVG. AVERAGE AVG.
BALANCE INTEREST RATE BALANCE INTEREST RATE
-------------------------------------------------------------------------------------------------------------------------------
(In US$ thousands, except percentages)
INTEREST EARNING ASSETS
Interest-bearing deposits with banks ... $494,334 $3,077 1.24% $234,564 $1,153 0.97%
Securities purchased under agreements to
resell ............................... 132,022 1,353 2.04 130,698 1,207 1.83
Loans, net of discount ................. 1,711,152 33,290 3.87 1,797,542 22,117 2.43
Impaired loans ......................... 642,767 11,722 3.63 406,430 10,099 4.91
Investment securities .................. 149,203 4,663 6.22 76,368 2,619 6.78
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INTEREST EARNING ASSETS .......... $3,129,479 $54,104 3.44% $2,645,601 $37,195 2.78%
----------- ----------- ----------- ----------- ----------- -----------
Non interest earning assets ............ 56,371 59,517
Allowance for loan losses .............. (393,669) (209,567)
Other assets ........................... 20,420 8,060
----------- -----------
TOTAL ASSETS ........................... $2,812,601 $2,503,611
----------- -----------
INTEREST BEARING LIABILITITES
Deposits ............................... $548,662 $3,796 1.38% $741,422 $4,402 1.17%
Short-term borrowings and placements ... 669,832 7,117 2.11 599,753 4,464 1.47
Medium and long-term borrowings and
placements ........................... 1,114,840 15,904 2.84 452,500 5,953 2.60
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INTEREST BEARING LIABILITIES ..... $2,333,333 $26,817 2.29% $1,793,676 $14,818 1.63%
----------- ----------- ----------- ----------- ----------- -----------
Non interest bearing liabilities and
other liabilities .................... 107,040 104,455
TOTAL LIABILITIES ...................... 2,440,373 1,898,131
REDEEMABLE PREFERRED STOCK ............. 12,063 0
STOCKHOLDERS' EQUITY ................... 360,165 605,481
----------- -----------
TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY ........ $2,812,601 $2,503,611
----------- -----------
NET INTEREST SPREAD .................... 1.15% 1.15%
----------- -----------
NET INTEREST INCOME AND NET
INTEREST MARGIN ...................... $27,287 1.76% $22,377 1.70%
----------- ----------- ----------- -----------
CONSOLIDATED STATEMENT OF INCOME
(In US$ thousands, except percentages & ratios) EXHIBIT VII
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS FOR THE THREE MONTHS ENDED SIX MONTHS
ENDED -------------------------------------------------------------- ENDED
JUN 30/03 JUN 30/03 SEP 30/03 DEC 31/03 MAR 31/04 JUN 30/04 JUN 30/04
-----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA:
Interest income .......................... $54,104 $26,265 $22,769 $21,522 $19,508 $17,687 $37,195
Interest expense ......................... (26,817) (12,748) (9,339) (8,253) (8,186) (6,632) (14,818)
--------------------------------------------------------------------------------------
NET INTEREST INCOME ...................... 27,287 13,517 13,430 13,270 11,322 11,054 22,377
Reversal of provision for loan losses .... 44,754 37,429 10,093 14,661 18,338 20,638 38,976
--------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES .......................... 72,042 50,946 23,523 27,930 29,660 31,692 61,353
OTHER INCOME (EXPENSE):
Commission income, net ................... 4,264 1,835 1,782 1,400 1,686 1,471 3,157
Provision for losses on off-balance
sheet credit risk ..................... (433) 7,209 (5,043) (5,127) 3,051 (3,212) (161)
Derivatives and hedging activities ....... (1,122) (320) (6,667) (199) 113 (89) 24
Impairment loss on securities ............ (878) (875) (75) 0 0 0 0
Gain on early extinguishment of debt ..... 789 789 0 0 6 0 6
Gain on the sale of securities
available for sale .................... 13,351 13,351 8,860 0 0 332 332
Gain (loss) on foreign currency exchange . (561) (534) 176 3 (1) (205) (206)
Net other income ......................... 2 93 2 38 2 1 3
--------------------------------------------------------------------------------------
NET OTHER INCOME (EXPENSE) ............... 15,413 21,547 (965) (3,886) 4,858 (1,702) 3,156
TOTAL OPERATING EXPENSES ................. (9,994) (5,410) (4,755) (7,812) (4,689) (5,727) (10,415)
--------------------------------------------------------------------------------------
NET INCOME ............................... $77,460 $67,084 $17,803 $16,233 $29,830 $24,263 $54,093
======== ======== ======== ======== ======== ======== ========
NET INCOME AVAILABLE FOR
COMMON STOCKHOLDERS .................... $77,093 $66,899 $17,803 $16,233 $29,830 $24,263 $54,093
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SELECTED FINANCIAL DATA
PER COMMON SHARE DATA
Net income after preferred stock dividend $4.32 $3.65 $0.45 $0.41 $0.76 $0.62 $1.37
PERFORMANCE RATIOS
Return on average assets ................. 5.55% 9.79% 2.83% 2.71% 4.71% 3.97% 4.34%
Return on average stockholders' equity ... 43.16% 70.25% 12.65% 11.15% 20.20% 15.81% 17.97%
Net interest margin ...................... 1.76% 1.78% 1.96% 2.07% 1.69% 1.72% 1.70%
Net interest spread ...................... 1.15% 1.18% 1.31% 1.41% 1.11% 1.19% 1.15%
Total operating expenses to average assets 0.72% 0.79% 0.76% 1.31% 0.74% 0.94% 0.84%
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EXHIBIT VIII
CREDIT PORTFOLIO
DISTRIBUTION BY COUNTRY
(In US$ millions)
-------------------------------------------------------------------------------------
(A) (B) (C)
COUNTRY 30JUN03 31MAR04 30JUN04 (C) - (B) (C) - (A)
------------------------------------------------------
ARGENTINA .................. $584 $399 $360 (39) (224)
BOLIVIA .................... 9 0 0 0 (9)
BRAZIL ..................... 1,123 1,074 1,254 180 130
CHILE ...................... 79 137 122 (15) 43
COLOMBIA ................... 63 81 110 29 48
COSTA RICA ................. 22 51 59 7 37
DOMINICAN REPUBLIC ......... 166 25 28 3 (138)
ECUADOR .................... 62 77 95 17 33
EL SALVADOR ................ 15 34 42 8 27
GUATEMALA .................. 31 36 28 (7) (3)
HONDURAS ................... 0 1 2 1 2
JAMAICA .................... 11 22 23 0 12
MEXICO ..................... 266 333 251 (82) (16)
NICARAGUA .................. 13 11 9 (2) (4)
PANAMA ..................... 36 51 65 14 29
PARAGUAY ................... 1 0 0 0 (1)
PERU ....................... 101 105 108 4 7
TRINIDAD & TOBAGO .......... 95 86 55 (31) (40)
VENEZUELA .................. 129 48 34 (14) (95)
OTHER (1) .................. 136 139 124 (15) (12)
------- ------- ------- ------- -------
TOTAL CREDIT PORTFOLIO (2) . $2,944 $2,710 $2,768 $58 ($176)
------- ------- ------- ------- -------
UNEARNED INCOME (3) ........ ($6) ($3) ($2) $1 $4
------- ------- ------- ------- -------
TOTAL CREDIT PORTFOLIO,
NET OF UNEARNED INCOME .. $2,938 $2,707 $2,766 $59 ($172)
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(1) Includes: (i) securities purchased under agreements to resell with
Argentine counterparties of US$112 million at June 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 at
June 30, 2004 to a Multilateral Bank in Honduras with shareholder
composition of 16% in Guatemala, Costa Rica, El Salvador, Honduras,
Nicaragua, 11% in Taiwan, and 9% in Mexico, and iii) a US$4 million letter
of credit confirmed for a corporation in the Cayman Islands.
(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 guarantees covering commercial and country risks. Includes
credit commitments of US$28 million at June 30, 2004, which includes US$16
million in Brazil, US$8 million in El Salvador and US$5 million in Mexico;
US$39 million at March 31, 2004 and US$112 million at June 30, 2003.
(3) Represents unearned income for loans.