In This Article:
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Commercial Portfolio Growth: Increased by 18%, reaching $10 billion.
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Non-Performing Loans: Close to 0%.
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Deposits Growth: Increased by 23% for year-end closing balances and 33% in average balances.
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Tier One Capital Ratio: 15.5%.
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Net Interest Margin: Stable at 2.47% for the year.
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Fee Income Growth: Increased by 37% compared to the previous year.
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Efficiency Ratio: Below 27%.
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Annual Net Income: $206 million, a 24% increase from the previous year.
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Return on Equity: 16.2%, up 153 basis points from 2023.
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Total Credit Portfolio: $11.2 billion, an 18% increase from the prior year.
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Net Interest Income: $259 million, an 11% increase from the prior year.
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Fee-Based Revenue: $44 million for the year, a 37% annual growth.
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Non-Performing Loans Ratio: 0.2% of total exposure.
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Total Expenses: $80.5 million, an 11% annual increase.
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Quarterly Dividend Increase: From $0.50 to $0.625 per share.
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Banco Latinoamericano de Comercio Exterior SA (NYSE:BLX) achieved a record-breaking year in 2024, with net income reaching $206 million, marking a 24% increase from the previous year.
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The commercial portfolio grew by 18%, reaching a record of $10 billion, with strong growth in Brazil, the Dominican Republic, and Guatemala.
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Non-performing loans remained minimal, close to 0%, highlighting strong risk management practices.
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Deposits increased significantly by 23% for year-end closing balances and 33% in average balances, surpassing the guidance of 30% growth.
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The efficiency ratio improved to 26.5% in 2024, compared to 27.2% in 2023, despite investments in transformation.
Negative Points
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Net income in the fourth quarter was down 3% compared to the previous quarter, primarily due to higher expenses related to ongoing strategic initiatives.
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The net interest margin is expected to compress in 2025 due to tighter lending spreads and anticipated rate cuts by the Federal Reserve.
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There is potential risk from US foreign trade policies, particularly tariffs, which could impact the economic trajectory in Latin America.
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The seasonal factors led to slightly lower deposit levels at the end of December compared to the third quarter.
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Higher expenses were reported in 2024, driven by increased headcount and ongoing investments in technology and business initiatives.
Q & A Highlights
Q: Can you comment on the factors driving the net interest margin (NIM) contraction estimate for 2025 and the potential impact of the new trade finance platform on fee income? A: Ana Mendez, CFO: We observed tighter lending spreads due to a competitive market environment and increased access to US dollar financing. Our guidance assumes lending spreads remain at current levels and includes a 100 basis points reduction in Fed rates. Jorge Salas, CEO: We expect fee income to increase by around 10% in 2025, driven by the new trade finance platform and continued growth in letters of credit fees.