Bladex, Inc. Class E

Good morning ladies and gentlemen and welcome to BLADEX's second quarter 2025 earnings conference call. A slight presentation is a company today's webcast and is also available on the investor section of the company's website .blaidex.com. There will be an opportunity for you to ask questions at the end of today's presentation. Please note today's conference call is being recorded. As a reminder, all participants will be in a listen only mode. I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead.

Good morning everyone and thank you for joining us today to discuss BLADEX's results for the second quarter of 2025. I will begin with the highlights of our performance during the quarter and then as usual Annette, our CFO, will walk you through the financials in more detail. After that, I will share a few thoughts on the macro environment and update you on the progress of BLADEX's transformation journey before we open the call for questions. The second quarter stands as one of the strongest quarters in our bank's history, not only because of the record bottom number but perhaps more importantly because of the earnings quality. Furthermore, it reaffirms the resilience and adaptability of our business model in the face of an increasingly complex macro environment in a particularly volatile trade environment. In the second quarter, we delivered record earnings, strong revenue growth propelled by fee income while maintaining pristine asset quality and robust capital levels. While the results include a meaningful contribution from a landmark structure transaction executing during the quarter, it is important to highlight that even without this transaction, the quarter would still have marked a record performance driven by well-diversified commercial activity and disciplined execution across all business lines. Our commercial portfolio grew to $10.8 billion that is up 1% quarter over quarter and 18% year over year. Growth was broad-based with strong momentum in Central America. As I said, credit quality remained exceptional with non-performing loans close to zero and over $197.97 of exposures classified as stage one. On the funding side, deposits increased to $6.4 billion, 10% above the prior quarter and 23% higher than a year ago. Deposits now represent 62% of our total funding. This is obviously key to keep our funding costs under control. The growth in deposits was driven by continuous strength in our long-standing institutional deposit base, including central banks, our class A shareholders, and a solid performance of our Yankee CD program, as well as a sustained increase in corporate client deposits, which have grown more than 30% in the last 12 months. Net interest income totaled nearly $68 million, up 4% from the previous quarter and 8% versus last year. Our net interest margin stood at 2.36%, slightly above expectations. Fee income deserves a special mention. Fee income stood at $20 million for the quarter, up 88% quarter over quarter and 59% year over year. A significant part of this increase was due to the structured syndicated deal I mentioned before. In such an interaction, Blacks acted as global coordinator and mandated leader ranger alongside a global bank and a multilateral institution. For a $1.6 billion senior-secured syndicated facility for its staff soleil, Suriname's national oil company and top contributor to the country's GDP. Suriname has been a class A shareholder of Blacks since 1997. The transaction received a strong reception from the market, attracting 18 financial institutions from all over the world. It is once again the proof of our ability to selectively execute high-impact deals that align with both our risk appetite and our mission. Blacks has a long-standing track record of supporting state-owned enterprises in strategic sectors such as oil and gas, and StatsOili, with a strong fundamentals and excellent governance, is a company we've followed closely for many, many years. While our loan book remains predominantly short-term, this facility with a weighted average life of approximately five years fits comfortably within our usual medium-term exposure limits and reflects our ability to support longer-dated wealth structure transactions when the risk return profile is attractive. But beyond this transaction, commercial activity remains strong, and our pipeline continues to be active and as strong as ever, particularly in the trade finance and structured lending. These dynamics give us the confidence in our ability to continue delivering, recurring in high-quality fee income. Operating expenses were stable -over-quarter, and our efficiency ratio improved to 23.1 percent, a 380 basis point gain versus the prior quarter, and comfortably within our full year guidance. Finally, net income reached a record of $64 million, up over 24 percent from the first quarter and 28 percent from a year ago. Return on equity stood at 18.5 percent, the highest quarterly ROE in over two decades, a clear reflection of the strength and scalability of our business model. Capital levels

were up to $12.2 billion, a total credit portfolio. Our total credit portfolio stood at $12.2 billion, up 18 percent -over-year, reflecting sustained growth in commercial activity across the region. The commercial portfolio, which includes loans and contingencies, reached $10.8 billion, up 1 percent -over-quarter, and 18 percent -over-year. Growth this quarter was primarily driven by our off-balance sheet business, which rose 11 percent -over-quarter and 25 percent -over-year, supported by higher demand across all segments that are credits, guarantees, and credit commitments. This helped us to deepen client engagement while preserving capital and enhancing risk-adjusted returns. The loan portfolio closed this quarter at $8.6 billion, up 16 percent -over-year. While -of-quarter balances were slightly below March levels, the average balances were higher than the ones in the first quarter, reflecting healthy origination. In a context of continued margin compression and elevated liquidity, we remained focused on sound underwriting and high-quality opportunities. VLADEX continued to grow its commercial portfolio by executing opportunities aligned with our strategic focus. High-value transactions, such as the Statsoli financing facility and other syndicated deals, demonstrated the strength of our origination and distribution capabilities, helping to upset tighter pricing and ample market liquidity. Many of these transactions were in the works for several quarters, highlighting the depth of our pipeline and consistency in execution. Our commercial exposure remains well diversified across sectors and geographies, with our main exposures in Brazil, Guatemala, and Mexico. This quarter, we also saw relative growth in Costa Rica, Paraguay, and Suriname. We continue to find opportunities across the region to strengthen client relationships, capitalize on market dislocations, and grow our presence in key markets. Looking ahead, we see strong momentum in the execution of medium-term structured transactions, which offer higher margins and better capital efficiency, complemented by short-term transactions that keep us agile and responsive to our client needs. Turning now to the investment portfolio, balances increase 8% -over-quarter and 20% -over-year, reaching just over $1.3 billion. The portfolio is short in duration, with an average duration around two years, and remains concentrated in investment-grade non-LATAM issuers, providing liquidity and credit diversification. Most of these securities are held through our New York agency and are eligible for the Fed discount window, reinforcing our already strong liquidity position by providing contingent access to a lender of last resort. Lastly, total assets reach $12.7 billion, up 2% -over-quarter and 16% -over-year, reflecting both commercial momentum and our flexible balance sheet strategy. We continue to grow with discipline, preserving capital, sustaining client activity, and reinforcing our balance sheet strength. Moving on to asset quality, credit performance remains strong in the second quarter and continues to reflect our disciplined and proactive approach to risk. As of June, non-performing loans, or stage 3, total $19 million, or just .2% of total exposure, with a robust reserve coverage of five times, while stage 2 exposures remain stable at $240 million, or 2% of total credit portfolio. In turn, nearly 98% of our portfolio is classified as stage 1, with no signs of deterioration or weakening credit strengths. Provisions for credit losses total $5 million this quarter. Most of it was tied to strengthening reserves for exposures in higher-risk credit profiles, primarily related to stage 2, rather than new impairments or downgrades. Overall, the credit portfolio remains in solid shape, backed by strong client performance and no material credit events or emerging risks. Let's now turn to funding. Deposits reach $6.4 billion at quarter end, up 10%, -over-quarter, and 23% -over-year. Beyond the increase in absolute terms, deposits have also continued in relative importance, now representing 62% of total funding, compared to 57% last quarter. This tendency highlights the growing strength of our client relationships and the central role deposits play in our funding strategy. This strong performance was supported by steady growth in bank and corporate deposits. As Jorge mentioned, corporate deposits grew over 30% -over-year, reflecting our ability to expand and diversify our funding base. In addition, Class A shareholder deposits, which remain a core pillar, accounted for 37% of total deposits at quarter end. Our Yanki CD program also continues to scale effectively. Balances reach $1.3 billion, representing 20% of total deposits, providing both granularity and duration to our deposit base. Outside deposits, short-term funding and repo balances remain stable, continuing to play a key role in supporting portfolio growth. Meanwhile, long-term funding totaled $2.5 billion or 24% of total financial liabilities. We are pleased to share that this past July, as part of our funding diversification strategy, we issue a local bond in the Mexican market for 4,000 million pesos. The transaction was very well received and oversubscribed, confirming strong demand from local investors and reinforcing our position as a recurring issuer in Mexico. The proceeds were swapped to US dollars at very attractive levels, providing cost-efficient funding to support portfolio growth. In short, we continue to develop a robust and stable funding base that is cost-effective, increasingly diversified, and aligned with the evolving requirements of our commercial strategy. In addition, at quarter end, liquid assets represented over 15% of total assets, providing a solid buffer and ample flexibility. We are building a funding base that gives us flexibility to support growth, respond to market shifts, and optimize our liability structure over time. Now, let's take a look at capital. Total equity reached $1.4 billion, about 3% quarter over quarter, and 12% year over year, reflecting the strength of our earnings generation and retained capital. Our Z1 ratio remains solid at 15%, while the total capital adequacy ratio improves to 13.9%, both in lines with internal targets and well above regulatory minimums. This reflects a balanced approach between supporting portfolio growth and preserving capital strength, while reinforcing our firm commitment to maintaining an investment-grade profile. In line with this performance, the board approved a quarterly dividend of .62.5 per share, unchanged from the prior quarter. This reflects the consistency of our financial results and our confidence in the durability of the bank's earnings. Our capital position remains robust, allowing us to grow, return capital, and defend our credit ratings with confidence. Let's move now to the top line, starting with the net interest income. Net interest income totals $67.7 million, up 4% quarter over quarter and 8% year over year, driven by increasing average loan balances and discipline pricing across the credit portfolio. Our net interest margin remains stable at 2.36%, and our net interest spread improves to 1.70%, up five basis points versus the first quarter. These results confirm that our margins have now stabilized at target levels, even in the face of falling interest rates. While origination remains pressured by tighter pricing and high liquidity across the region, we have successfully turned our funding strategy and discipline underwriting into solid and consistent earnings. Our growing and more diversified deposit base continues to lower our cost of funds and support margin stability. As a result, we remain confident in our full year NIEM guidance in the range of 2.30%, assuming no major changes in rate projections or portfolio mix. With spreads and NIEM holding steady, we are proving that strong origination and proactive asset liability management can sustain earnings, even in challenging trade environments. Turning now to free income. Non-interest income reached $19.9 million this quarter, nearly doubling from the prior quarter and making a record high for BLADEX. The standout performance was the closing of the transaction for SoutiNIME National Oil Company, STATSOLIN, a $1.6 billion syndicated loan in which BLADEX acted as a global bug runner. This has been the largest syndicated facility ever arranged by BLADEX in 46 years of history. As a result, syndicated transactions and recurring fees from our role as admin agent contributed $10 million during the quarter, reinforcing the strength of our structuring distribution franchise and our increased relevance in providing medium-term solutions. Credit commitment also added $2.8 million in fee income, demonstrating the importance of contingent lending within our product offering. That said, the record fee generation in the quarter wasn't solely driven by syndicated transactions. Recurrent activity across the other business lines remains strong. Fees from letter of credits rose to $7.8 million, up 17% quarter over quarter and 20% year over year, reflecting healthy volumes in our core trade finance flows. As we continue to roll out our new trade finance platform, we expect this revenue stream to grow further, supported by enhanced client experience and processing efficiency. While transactions like StatsOLI are not frequent, our fee generation reflects the steady growth of our structured and higher value-added trade finance businesses. Record fees this quarter reflect more than one big deal. They validate the depth, strength, and reach of our multi-line origination capabilities. Let's now turn to expenses and efficiency. Operating expenses totaled $20.8 million, essentially in line with both the previous quarter and our estimate for the period. This consistency reflects our disciplined approach to cost management as we advance in key strategic initiatives. During the quarter, we continue executing on our transformation agenda with a focus on technology and digital capabilities. This includes the deployment of our new trade finance platform, which is expected to be fully operational for the letter of credit products by the end of the third quarter. With the platform now live, we anticipate that the related depreciation expenses will begin to impact costs towards the end of the third quarter. That this will not impact our full year efficiency guidance. Importantly, we expect this investment to enhance client experience and unlock incremental fee income over time. Aside from project-related costs, the underlying expense base remains stable, with no material increases in personnel or overheads costs. As a result, our efficiency ratio improved to 23.1%, well above our full year target range. While this quarter's result was supported by elevated fee income, we continue to expect efficiency to remain below 30%, even as we sustain investment in growth and modernization. We continue to manage expenses with a long-term mindset, balancing strategic investment with cost discipline to enable scalable and profitable growth. Let me close with a look at earnings and returns. Net income for the second quarter reached $64.2 million, up 24% from the first quarter and 28% year over year, driven by strong top-line performance, stable credit provisions, and disciplined cost management. This marks the highest quarterly operating income in the bank's history and reflects the strength of our commercial model, the scalability of our platform, and the discipline execution of our strategy. Return on equity expanded to 18.5%, also a record in the last two decades. To put this in perspective, even after normalizing for the extraordinary fee from the Statsolid transaction, ROE would have remained well within our guidance range, demonstrating the strength of our underlying profitability. This performance reflects a combination of solid revenue growth, fee diversification, a more efficient funding base, and a strong cost control, all achieved without compromising our risk standards. In conclusion, even excluding the significant fee income from the Statsolid transaction, our core earnings would still rank among the strongest in recent years. This reinforces that our profitability is not driven by one-off transactions, but by a disciplined strategy that continues to deliver attractive and sustainable returns for our shareholders. With that, I will now turn the call back to Jorge for closing remarks. Thank you all.