What is Bladex?
Bladex is a multinational bank originally established by the central banks of Latin-American and Caribbean countries, to promote foreign trade finance and economic integration in the Region. Blades’x shareholders include central banks, state-owned banks and entities representing 23 Latin American countries, as well as commercial banks and financial institutions, and institutional and retail investors through its public listing.
The Bank, headquartered in Panama, has offices in Argentina, Brazil, Colombia, Mexico, Peru and the United States of America, to support the expansion and servicing of its client base, which includes financial institutions and corporations.
When was Bladex founded?
The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Governors of central banks in the Region, which recommended the creation of a multinational organization to increase foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially began operations on January 2, 1979. Panama was selected as the location of the Bank’s headquarters because of the country’s importance as a banking center in the Region, the benefits of a fully U.S. dollar-based economy, the absence of foreign exchange controls, its geographic location, and the quality of its communications facilities. Under a contract-law signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxes in Panama.
What is Bladex’s ownership structure and privileges?
The Bank’s common stock is divided into four categories:
- Class A corresponds to shares only issued to Latin American Central Banks or banks in which the state or other government agency is the majority shareholder.
- Class B corresponds to shares only issued to banks or financial institutions.
- Class E corresponds to shares issued to any person whether a natural person or a legal entity.
- Class F corresponds to shares only issued to state entities and agencies of non-Latin American countries, including, among others, central banks and majority state-owned banks in those countries, and multilateral financial institutions either international or regional institutions.
All common shares have the same rights and privileges regardless of their class, except that:
- the affirmative vote of three-quarters (3/4) of the issued and outstanding Class A shares is required (A) to dissolve and liquidate the Bank, (B) to amend certain material provisions of the Articles of Incorporation, (C) to merge or consolidate the Bank with another entity and (D) to authorize the Bank to engage in activities other than those described in its Articles of Incorporation;
- the Class E shares are freely transferable without restriction to any person, while the Class A shares, Class B shares and Class F shares can only be transferred to qualified holders of each class;
- the Class B shares and Class F shares may be converted into Class E shares;
- the holders of Class A shares, Class B shares and Class F shares benefit from pre-emptive rights in respect of shares of the same class of shares owned by them that may be issued by virtue of a capital increase, in proportion to the shares of the class owned by them, but the holders of Class E shares do not; and
- all classes vote separately for their respective directors, and the rights, preferences, privileges and obligations of the preferred shares are determined by the Board at the time of their issuance in a certificate of designation.
The holders of the Class A common shares have the right to elect three (3) Directors; the holders of the Class E common shares can elect five (5) Directors; and the holders of the Class F common shares have the right to elect one (1) Director, so long as the number of issued and outstanding Class F common shares is equal to or greater than fifteen per cent (15%) of the total number of issued and outstanding common shares of the corporation.
What are Bladex’s competitive advantages?
As a multinational bank, Bladex is a truly regional, cross-border bank operating in 23 countries that leverages a strong trade finance focus with an unrivaled commitment to Latin America. The Bank possesses extensive knowledge of business practices, risk and regulatory environments, accumulated over decades of doing business throughout the entire Region. Its network of correspondent banking institutions and access to capital markets spans the globe. Bladex provides foreign commerce solutions to a select client base of premier Latin-American financial institutions and corporations. With its unique institutional backing, strong capitalization and prudent risk management, Bladex is recognized by counterparties in many jurisdictions as a bank with preferred creditor status.
What is Bladex’s business overview?
The Bank’s mission is to provide financial solutions of excellence to financial institutions, companies and investors doing business in Latin America, supporting trade and regional integration across the Region. Bladex's business model focuses on providing products and services along the entire trade finance value chain. Its target client base comprises the corporations that are active in foreign commerce, both on the import-side as well as on the export-side, and the domestic financial institutions that cater to these corporations with broad-based banking services.
The Bank does not provide retail banking services to the general public, such as retail savings accounts or checking accounts, and does not take retail deposits.
Bladex participates in the financial and capital markets throughout the Region, through two business segments.
Commercial Division is responsible for the Bank’s core business of financial intermediation and fee generation activities relating to the Commercial Portfolio. The Commercial Division’s portfolio includes the loan portfolio (bilateral and syndicated trade and non-trade finance lending, short and medium term loans), selected deposits placed, customers’ liabilities under acceptances (“acceptances”), and contingencies (including confirmed and stand-by letters of credit, guarantees covering commercial risk and credit commitments). The majority of the Bank’s loans are extended in connection with specifically identified foreign trade transactions. Through its revenue diversification strategy, the Bank’s Commercial Division has introduced a broader range of products, services and solutions associated with foreign trade, including co-financing arrangements, underwriting of syndicated credit facilities, structured trade financing (in the form of factoring and vendor financing), and financial leasing.
Treasury Division is responsible for the Bank’s funding and liquidity management, along with the management of its activities in investment securities, which comprise trading assets, securities available-for-sale, and securities held-to-maturity, as well as the management of the Bank’s interest rate, liquidity, price and currency risks.
How does Bladex obtain its funding?
The Bank’s principal sources of funds are deposits, borrowed funds and floating and fixed rate placements of securities. While these sources are expected to continue providing the majority of the funds required by the Bank in the future, the exact composition of the Bank’s funding sources, as well as the possible use of other sources of funds, will depend upon future economic and market conditions.
The Bank’s short- and medium-term borrowings mainly come from international correspondent banks from the United States, Europe and Asia. They are important funding sources for the Bank’s loan portfolio because they allow the Bank to diversify its funding sources outside the Region, and because the Bank uses these borrowings and placements, which generally have longer maturities than deposits, to manage its asset and liability positions.
How does Bladex manage its liquidity?
For Bladex, effective liquidity management is a top priority. Liquidity refers to the Bank’s ability to maintain adequate cash flows to fund operations and meet obligations and other commitments on a timely basis. The Bank maintains its liquid assets mainly in demand deposits, overnight funds and time deposits with well-known international banks. These liquid assets are adequate to cover 24-hour deposits from customers, which theoretically could be withdrawn on the same day.
As established by the Bank’s liquidity policy, the Bank’s liquid assets are held in the form of interbank deposits with reputable international banks that have A1, P1, or F1 ratings from two of the major internationally – recognized rating agencies and are primarily located outside of the Region. These banks must have a correspondent relationship with the Bank. In addition, the Bank’s liquidity policy allows for investing in negotiable money market instruments, including Euro certificates of deposit, commercial paper, bankers’ acceptances and other liquid instruments with maturities of up to three years. These instruments must be of investment grade quality A or better and must have a liquid secondary market.
The Bank performs daily reviews, controls and periodic stress tests on its liquidity position, including the application of a series of limits to restrict its overall liquidity risk and to monitor the liquidity level according to the macroeconomic environment. The Bank determines the level of liquid assets to be held on a daily basis, adopting a Liquidity Coverage Ratio methodology referencing the Basel Committee guidelines. Additionally, specific limits have been established to control (1) cumulative maturity “gaps” between assets and liabilities, for each maturity classification presented in the Bank’s internal liquidity reports, and (2) concentrations of deposits taken from any client or economic group maturing in one day and total maximum deposits maturing in one day.
The Bank follows a Contingent Liquidity Plan. The plan contemplates the regular monitoring of several quantified internal and external reference benchmarks (such as deposit level, quality of assets, Emerging Markets Bonds Index Plus, cost of funds, LIBOR-OIS spread and market interest rates), which in cases of high volatility would trigger implementation of a series of precautionary measures to reinforce the Bank’s liquidity position. In the Bank’s opinion, its liquidity position is adequate for the Bank’s present requirements.
What is Bladex’s value proposition to shareholders and investors?
As a well-recognized market leader in the Latin-American foreign commerce space, Bladex provides a unique window into the entire Latin-American Region by virtue of doing business in nearly all its countries. Its risk profile is well balanced, with a focus on trade finance, a low risk asset class, and with the vast majority of its exposures concentrated in investment-grade countries. Bladex conducts its business on the long-held basis of professional expertise and financial solidity, catering to reputable market participants. These elements, together with an attractive valuation, sustained business growth and profitability, and an attractive dividend yield make BLX a compelling investment.
What is Bladex’s dividend policy?
The Board’s policy is to declare and distribute quarterly cash dividends on the Bank’s common stock. Dividends are declared at the Board’s discretion and, from time to time, the Bank has declared special dividends.
Where are Bladex’s shares traded, and what is the ticker symbol?
Bladex is listed on the NYSE-Euronext in the United States of America (ticker symbol: BLX).
How do I purchase Bladex stock?
If you are not a registered shareholder, you must purchase shares of Bladex stock through a stock broker or investment advisor. If you wish to hold your shares in registered form, you must notify the broker to arrange the issuance of your shares. Many brokers charge a fee for this service.