Banco Latinoamericano de Comercio Exterior (BLX) Q2 2024 earnings summary

Executive summary

• Net income reached $50.1 million in 2Q24, up 35% year-over-year, with ROE at 16.2% and record deposit growth of 29% YoY to $5.3 billion.

• Commercial portfolio grew 13% YoY to a record $9.2 billion, with 6% growth quarter-over-quarter, driven by unfunded business and broad-based demand.

• Asset quality remained strong, with 94.5–95% of exposure in low-risk Stage 1, NPLs at 0.1–0.14%, and allowance coverage at 7.5x or 752%.

• Fee income rose 32% quarter-over-quarter and 93% year-over-year to $12.5 million, led by record syndications, structuring, and letters of credit.

• Deposits now represent 58% of total funding, up from 45% two years ago, supporting a stable funding base.

Financial highlights

• Net interest income was $62.8 million in 2Q24, up 15% YoY, with net interest margin steady at 2.43%.

• Efficiency ratio improved to 24.3% in 2Q24, with operating expenses stable at $18.2 million.

• Total assets increased 8% YoY to $10.9 billion; total equity rose 12% YoY to $1.26 billion.

• Board declared a $0.50 per share quarterly dividend, unchanged from the prior quarter, payable August 20, 2024.

• Weighted average funding cost was 5.71% in 2Q24, up 51 bps YoY.

Outlook and guidance

• Management expects continued growth in the commercial portfolio and further improvement in deposit mix, supported by strong capitalization and asset quality.

• Fee income momentum is expected to continue, supported by a strong pipeline in syndications and structuring.

• Net interest margin is expected to remain around 2.5% for the year.

• Efficiency ratio may end the year below the projected 30%, despite planned operational investments.

• The bank highlights ongoing execution of its revenue diversification strategy and prudent liquidity management.