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
Short
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
P.O. Box
0819-08730
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__.)
BLADEX
REPORTS FULL YEAR NET INCOME OF $55.1 MILLION; $1.51 PER SHARE.
ACCOUNTING
CLASSIFICATION OF CERTAIN SECURITIES FINANCING (REPOS) AS SALES RESULTS IN
FOURTH QUARTER LOSS OF $4.3 MILLION; ACCOUNTING TREATMENT DOES NOT DECREASE
CAPITAL, NOR IMPACT CASH FLOW, LIQUIDITY, OR ASSET QUALITY.
PANAMA CITY, February 13, 2009
– Banco Latinoamericano de Exportaciones (NYSE: BLX, “Bladex” or “the Bank”)
today reported net income of $55.1 million and diluted earnings per share of
$1.51 for the year ended December 31, 2008. These results include the impact of
classifying certain securities financings (repos) as outright sales. The Bank
reported diluted earnings per share of $1.98 for the year ended December 31,
2007.
Excluding
the impact of the sales-accounting treatment, required by the application of
Financial Accounting Standards Board (“FASB”) Statement No. 140, as well as the
positive impact of (“FASB”) Statement No. 157 during a particularly volatile
fourth quarter, the Bank’s net income for 2008 would have been $67.8 million, or
$1.86 per share, and its fourth quarter income would have amounted to $8.4
million, or $0.23 per share. See “Non-GAAP Disclosures and
Reconciliation” in Exhibit XIII for the reconciliation between the Bank’s
non-GAAP and GAAP reported income.
The Bank
has regularly entered into repo arrangements as part of its financing
activities. Accounting for the repo transactions as sales did not
decrease net stockholders’ equity, and had no impact on the Bank’s cash flow,
liquidity, or asset quality. Based on the structure of its new repos,
the Bank does not expect the need for any further sales-accounting treatments in
the future.
Annual
Business Highlights
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Commercial Division’s net
operating income(1) for 2008 was $58.3 million, the
highest in the last five years, representing an increase of 37% compared
to 2007, mainly due to increased average loan balances during the first
three quarters of the year, as well as increased lending
margins.
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Asset
Management Division’s net operating income for 2008 was $12.3 million
compared to $18.5 million in 2007, representing a return of 12.2% on
assets under management.
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Liquidity
(2)
as of December 31, 2008 was $826 million, compared to $396 million as of
December 31, 2007.
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The
Bank’s Tier 1 capital ratio as of December 31, 2008 was 20.4%, compared to
20.9% as of December 31, 2007. The Bank’s leverage on these dates was 7.6x
and 7.7x, respectively. The Bank’s equity consists entirely of common
shares.
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As
of December 31, 2008, the Bank reported zero past due credits in its
portfolio, as has been the case since 2006. The ratio of the
allowance for credit losses to the commercial portfolio was 2.8%, compared
to 2.0% in September 30, 2008, and to 1.9% as of December 31,
2007.
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After
three quarters of growth, the Bank reduced its credit portfolio by $1.3
billion in the fourth quarter, as it built liquidity, collected vulnerable
exposures, and/or concentrations, and preserved its strong capitalization
in response to deteriorating macroeconomic
conditions.
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Treasury
Division reported a net operating loss of $16.3 million in 2008, compared
to net income of $10.0 million in 2007. The 2008 results were
driven by the accounting treatment related to certain securities-based
financing transactions (repos), which were recorded as
sales. The Bank has routinely entered into repo transactions as
part of its normal business operations, accounting for the repos as
financing transactions. However, a particularly tight interbank market
caused the Bank to contract some repos under new terms that resulted in
the Bank receiving less cash for the value of the underlying securities
(“repo haircuts” or “haircuts”) than it had under normal market
conditions. Based on the application of FASB Statement No. 140
and related guidance, the Bank determined that the repo transactions
contracted under the new terms should be treated as sales of the
underlying securities, rather than as financings
(borrowings).
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While the
Bank fully expects to unwind the repo transactions at maturity and repurchase
the underlying securities in March, 2009, the sales-accounting treatment of the
repo transactions involved, resulted in a $25.0 million non-cash charge to
earnings.
Given
that the Bank accounted for changes in the fair value of both the securities
portfolio and the corresponding Interest Rate Swap hedges through unrealized
gains and losses in the Other Comprehensive Income account (“OCI”), the charge
to earnings had no detrimental impact on the Bank’s USGAAP
capital. Furthermore, the non-cash nature of the accounting treatment
signifies that liquidity was unaffected. Finally, with the underlying
securities current as to interest and principal, the Bank’s asset quality also
remained unaffected. The Bank may reverse part or all of the
accounting-related charge in future reporting periods if it sells the securities
at a gain, or through the maturity of the instruments.
The Bank
has changed the structure of its securities financing (repos) to avoid the need
for sale treatment in the future.
CEO's
Comments
Mr. Jaime
Rivera, Bladex’s Chief Executive Officer, stated the following regarding the
Bank's results, “Working within a challenging financial environment, Bladex
achieved solid results for the year, and maintained the Bank’s strong
fundamentals. While Bladex’s performance during the first nine months
of the year was strong, a deteriorating economic environment during the fourth
quarter compelled us to respond decisively. We took action by
collecting on loans to vulnerable sectors and building record levels of
liquidity in anticipation of a year-end crunch that thankfully did not
materialize.
As part
of Bladex’s efforts to strengthen liquidity, the Bank extended the tenor of its
repo financings. Given the extraordinarily tight market liquidity
conditions that prevailed during the period, the extended tenors implied
discounts from fair market value (“repo haircuts”) that required some of these
transactions to be accounted as outright sales. The resulting charge
did not decrease the Bank’s capital and had no impact on the Bank’s liquidity,
cash flow, asset quality, or any of the fundamentals underpinning the strength
of our Company.
Going
forward in 2009, despite a global economy undergoing significant stress, Bladex
continues to generate solid business opportunities. The Bank is
leveraging its position as the premier provider of trade finance services within
a less competitive environment, continuing to widen intermediation margins. In
addition, Bladex’s Asset Management Division is boosting the Bank’s
profitability through its consistent ability to generate positive results under
a variety of market conditions.
2
The Bank
is aware of the limitations imposed on growth by the tight liquidity conditions
in the interbank markets and of the strains imposed on the portfolio by a global
economic crisis that does not appear to have reached bottom yet, and that is
likely to persist for some time. Until this challenging environment
begins to improve, we will continue to manage the Bank being especially mindful
of the need to carefully balance risks and opportunities to best protect the
interests of our shareholders and the value of Bladex’s franchise.
"
3
CONSOLIDATED
RESULTS OF OPERATIONS
KEY
FINANCIAL FIGURES AND RATIOS
4
Footnotes:
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(1)
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Net
Operating Income (Loss) refers to net interest income plus non-interest
operating income, minus operating
expenses.
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(2)
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Liquidity
ratio refers to liquid assets as a percentage of total
assets. Liquid assets consist of investment-grade ‘A’
securities, and cash and due from banks, excluding pledged
deposits.
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(3)
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Net
Income per Share calculations are based on the average number of shares
outstanding during each
period.
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(4)
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Operating
ROE: Annualized net operating income divided by average stockholders’
equity.
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(5)
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Efficiency
ratio refers to consolidated operating expenses as a percentage of net
operating revenues.
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(6)
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Tier
1 Capital is calculated according to the US Federal Reserve Board, and
Basel I capital adequacy guidelines, and is equivalent to stockholders’
equity excluding the OCI effect of the available for sale
portfolio. Tier 1 Capital ratio is calculated as a percentage
of risk weighted assets. Risk-weighted assets are, in turn,
also calculated based on US Federal Reserve Board, and Basel I capital
adequacy guidelines.
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(7)
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Total
Capital refers to Tier 1 Capital plus Tier 2 Capital, based on US Federal
Reserve Board, and Basel I capital adequacy guidelines. Total
Capital ratio refers to Total Capital as a percentage of risk weighted
assets.
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(8)
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Leverage
corresponds to assets divided by stockholders’
equity.
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SAFE
HARBOR STATEMENT
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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 growth of the credit portfolio, including the trade
portfolio, the increase in the number of the Bank’s corporate clients, the
positive trend of lending spreads, the increase in activities engaged in
by the Bank that are derived from the Bank’s client base, anticipated
operating income and return on equity in future periods, including income
derived from the Treasury Division and Asset Management Division, the
improvement in the financial and performance strength of the Bank and the
progress the Bank is making. 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: the anticipated growth of the Bank’s credit portfolio; the
continuation of the Bank’s preferred creditor status; the impact of
increasing/decreasing interest rates and of improving macroeconomic
environment in the Region on the Bank’s financial condition; the execution
of the Bank’s strategies and initiatives, including its revenue
diversification strategy; the adequacy of the Bank’s allowance for credit
losses; the need for additional provisions for credit losses; the Bank’s
ability to achieve future growth, to reduce its liquidity levels and
increase its leverage; the Bank’s ability to maintain its investment-grade
credit ratings; the availability and mix of future sources of funding for
the Bank’s lending operations; potential trading losses; the possibility
of fraud; and the adequacy of the Bank’s sources of liquidity to replace
large deposit
withdrawals.
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5
Non-GAAP
Disclosures and Reconciliation
This
press release contains non-GAAP financial information relating to the Bank's
income. The Bank believes that the presentation of non-GAAP financial
information provides important supplementary information to investors regarding
financial and business trends relating to the Bank's financial condition and
results of operations. The non-GAAP financial measures disclosed by the Bank
should not be considered a substitute for, or superior to, financial measures
calculated differently from, and therefore may not be comparable to, similarly
titles measures used by other companies.
The
non-GAAP financial information excludes the accounting classification of certain
securities financings (repos) as outright sales required by accounting rule FASB
Statement No. 140, as well as the positive impact of FASB Statement No.
157. The Bank believes that the presentation of the non-GAAP
net income excluding these accounting impacts may enhance the comparability of
the Bank's net income for the year ended December 31, 2008 with that of other
periods because (1) the FASB Statement No. 140 accounting treatment does not
decrease the Bank’s capital, nor impact the Bank’s cash flow, liquidity, or
asset quality, (2) the non-GAAP information reflects the manner in which the
Bank accounted for repos under historically prevalent market conditions, and (3)
the non-GAAP information excludes the positive impact of FASB Statement No. 157
during an extraordinarily volatile fourth quarter 2008.
We have
provided for your reference in Exhibit XIV supplemental financial disclosure for
the non-GAAP financial measure of net income described above, including the most
directly comparable GAAP financial measure and an associated
reconciliation. (Please refer to the long version of the fourth
quarter and year 2008 results Press Release in our company’s
website).
About
Bladex
Bladex is
a supranational bank originally established by the Central Banks of Latin
American and Caribbean countries to support 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, along with institutional and retail
investors. Through December 31, 2008, Bladex had disbursed
accumulated credits of over $158 billion.
Conference
Call Information
There
will be a conference call to discuss the Bank’s quarterly results on Friday,
February 13, 2009 at 11:00 a.m. New York City time (Eastern Time). For
those interested in participating, please dial (800) 311-9401 in the United
States or, if outside the United States, (334) 323-7224. Participants
should use conference ID# 8034, and dial in five minutes before the call is set
to begin. There will also be a live audio web cast of the conference at
www.bladex.com.
The
conference call will become available for review on Conference Replay one hour
after its conclusion, and will remain available through April 13,
2009. Please dial (877) 919-4059 or (334) 323-7226, and follow the
instructions. The Conference ID# for the replayed call is
71407734.
For more
information, please access www.bladex.com
or contact:
Mr. Jaime
Celorio
Chief
Financial Officer
Bladex
Calle 50
y Aquilino de la Guardia
P.O. Box:
0819-08730
Panama
City, Panama
Tel:
(507) 210-8630
Fax:
(507) 269-6333
E-mail
address: jcelorio@bladex.com
Investor
Relations Firm:
i-advize
Corporate Communications, Inc.
Mrs.
Melanie Carpenter / Mr. Peter Majeski
82 Wall
Street, Suite 805
New York,
NY 10005
Tel:
(212) 406-3690
E-mail
address: bladex@i-advize.com
6
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.
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February
17, 2009
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Banco
Latinoamericano de Exportaciones, S.A.
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By:
/s/ Pedro Toll
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Name:
Pedro Toll
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Title: Deputy
Manager
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