A Summary Presentation & Update
September, 2005
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The Company ......................... 3
Business Strategy ................. 12
Financial Results ................... 23
Capital Management ............... 32
Investment Considerations .... 38
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This presentation 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 presentation refer to the growth of the trade portfolio, the increase in the number of the Bank’s clients, the increase in activities engaged in by the Bank that are derived from the Bank’s trade finance client base, anticipated operating income in future periods, the improvement in the financial 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 possibility that the Bank will need to renegotiate, restructure or write-off certain of its Argentine loans; the possibility of pre-payments; the anticipated growth of the Bank’s trade finance portfolio; the continuation of the Bank’s preferred creditor status; the effects of increased interest rates on the Bank’s financial condition; the implementation of the Bank’s strategies and initiatives, including its revenue diversification strategy; the pending applications in the United States to open a representative office in Miami, Florida; the adequacy of the Bank’s allowance for credit losses to address the likely impact of the Argentine crisis and other credit risks on the Bank’s loan portfolio; the necessity of making 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; and the adequacy of the Bank’s sources of liquidity to cover large deposit withdrawals.
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The Company
Business Strategy
Financial Results
Capital Management
Investment Considerations
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• Bladex is a supranational bank established in 1975 by Central Banks in Latin America and the Caribbean, to finance and promote trade in the Region
• Incorporated and headquartered in Panama, it started operations in 1979
• Shareholders include Central Banks and state entities in 23 countries in the Region, as well as local, regional, and international banks, along with private investors
The Company
Background
6
The Company
Company Highlights
• First Latin American bank listed in NYSE (1992)
• First Latin American bank rated “Investment Grade”
• Current credit ratings:
Credit Ratings as of June 30, 2005
Rating Agencies Short Term Long Term OutlookMoody's P-3 Baa3 StableStandard & Poor's A-3 BBB- Stable
7
Eight Directors are independent; one is part of Management
Eight Directors are independent; one is part of Management
The Company
Ownership and Board Composition
Board of Directors Composition:
Shareholder CompositionJune 30, 2005
75.1%
16.4%
8.5%
Class "A" Class "B" Class "E"
Class No. of Directors
Class "A" 3
Class "E" 5
All Classes 2
Total 10 *
Class “A” – Central Banks or designees (16.4%)Class “B” – Commercial Banks (8.5%)Class “E” – Investors “NYSE” (75.1%)
Class “A” – Central Banks or designees (16.4%)Class “B” – Commercial Banks (8.5%)Class “E” – Investors “NYSE” (75.1%)
8
The Company
Bladex: A Unique Company
By definition and vocation Focus on, and commitment to, Latin America
Knowledge of the Region More than 25 years of operation in 23 countries
Client franchise Strong customer loyalty, sterling client list
Shareholder mix State and private interests combined in a seamless fashion
Efficient operations A small team (159 people), with a wide reach and influence
9
The Company
Bladex: A Unique Company
World class Corporate Governance standards
Among the most international of Latin American companies
Recognized as key institution by the international financial community
World Bank, IDB, FMO, DEG, etc. have supported the company
Preferred creditor status
An investment-gate into the Region Among the very few Latin American brands recognized internationally
10
Jaime Rivera CEO
Rubens Amaral CCO
Ernesto Bruggia COO
Gregory Testerman SVP Treasury
The Company
Management Team
• 24 years in Bank of America in various capacities throughout the Region and in the U.S.
NameName TitleTitle ExperienceExperience Joined BLXJoined BLX
• Mar’02: COO• Jan’04: CEO
• General Manager of Banco do Brasil, New York Branch and Managing Director for North America since 2000
• Mar’04
• General Manager of Banco de la Provincia de Buenos Aires since 1999
• General Manager of Grupo BAPRO (holding company of BPBA), since November 1998
• Jul’04
• 17 years in Banco Santander Central Hispano in various capacities. Worked in Europe, Japan and U.S.
• Jan’05
Miguel A. Kerbes SVP Risk Mgmt.• Assistant Credit Director for the
Southern Cone Area of Banco Santander-Chile (1995-2000)
• Head of Credit Division at Banco Boston-Chile (1992-1995)
• 2000: VP• Jul’02: SVP
11
Carlos Yap SVP Finance
Miguel Moreno SVP Controller(Reports to the Audit Committee of the Board)
Ana María de Arias SVP - HHRR & Corp. Oper.
Joaquín UribeSVP Processes Eng. & IT
The Company
Management Team (cont.)
• 25 years working at Bladex in various capacities
NameName TitleTitle ExperienceExperience Joined BLXJoined BLX
• 1980• 1993: VP• Jul’02: SVP
• Partner and IT Consulting Manager for PwC, Bogotá, Colombia (1988-2001)
• VP of IT & Operations for Banco de Credito, Bogotá, Colombia (1987-1988)
• Sep’01
• VP of HHRR of Banco General, one of the most important banks in Panama (2000-2004) and as VPA (1999-2000)
• Panama Canal Commission in various capacities (1990-1999)
• Jun’04
• Citibank Colombia in various capacities (1997- 2001)
• Information Services Manager for System Integration and Project Quality Office at UNISYS Corporation, Colombia(1987- 1997)
• Sep’01: VP• Jul’02: SVP
12
The Company
Corporate Governance Highlights
• Internal controls designed and tested to be SOX 404 compliant— In March 2005, the SEC extended for one year the deadline for foreign private
issuers
• Directors’ independence definition, as well as Board Committee
structure and composition, meet NYSE standards
• Disclosure Committee operating at Bank level
• Ethics Committee and Code of Ethics in place
• “Whistleblower” program in place
• No AML or other regulatory issues outstanding
• Transparency:
Regulatory reporting Conference calls Prompt news
releases
Analyst reports Road shows
Rating agencies reports Website
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The Company
Business Strategy
Financial Results
Capital Management
Investment Considerations
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• Trade is the engine of economic growth in the Region – 20% plus p.a.
• Historically attractive risk/reward relationship for Bladex
• Four key success factors:
Business Strategy
Business Focus: Trade Finance Services
High VolumeLow financial
& operting cost
Pristine credit quality
Right capitalstructure
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Business Strategy
A Growing Market
Source:
'1990 to 2003 data: CEPAL (Comisión Económica para América Latina y el Caribe)
'2004 to 2005 trade growth projections: based on data from UBS Publication (Latin American Economic Perspectives, 20-August-2004).
Source:
'1990 to 2003 data: CEPAL (Comisión Económica para América Latina y el Caribe)
'2004 to 2005 trade growth projections: based on data from UBS Publication (Latin American Economic Perspectives, 20-August-2004).
Trade Flows - Latin America
0
100
200
300
400
500
600
700
800
900
1,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004F 2005F
US
$ b
illio
n
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Business Strategy
A Growing Market
Source:
'1990 to 2002 data: CEPAL (Comisión Económica para América Latina y el Caribe)
‘2003 data: World Trade Organization
Source:
'1990 to 2002 data: CEPAL (Comisión Económica para América Latina y el Caribe)
‘2003 data: World Trade Organization
Intra-Regional Trade Flows - Latin America (Based on exports FOB)
0
10
20
30
40
50
60
70
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
US
$ b
illi
on
Bladex’s Special Competitive Advantage
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Business Strategy
Strategic Approach
Client Focus
• Bladex is the Bank of banks in
the Region
• In addition, Bladex provides
trade services to corporations
through co-financing, syndicated
transactions, and bilateral
relationships
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Business Strategy
Earnings Model – Strategic View
Core BusinessFinancial
Intermediation
Oth
erRelated
P/B
Relatively low
Relatively high
Services
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Business Strategy
Earnings Model – Strategic View
Capital
Human Resources
Processes & Technology
Working Capital
Trade Finance - Corporate
OthersU.S.
Origination
Trade Finance -
Banks
Core- Financial Intermediation
E-learningPaymentsDigital Identity
InvestmentPortfolio
Distribution
LAECA Others
New Products and Initiatives
C
L
I
E
N
T
S
Bra
nd
Clie
nt F
ranc
hise
Gov
t. S
har
ehol
der
s
Kno
wle
dge
of
the
Reg
ion
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Business Strategy
Earnings Model – Capital View
Capital Capital IntensiveIntensiveCapital Capital
IntensiveIntensive
Non CapitalNon CapitalIntensiveIntensive
Non CapitalNon CapitalIntensiveIntensive
Core Core Financial Financial
IntermediationIntermediation
Core Core Financial Financial
IntermediationIntermediation
OtherOtherOtherOther
15% - 20% p.a. growth
Margins stable at relatively thin levels
Eximbank structures
Country Risk Guarantees
L/C’s
Guarantees
U.S. Origination / Distribution
Payments
Digital Identity
E-learning
RevenueRevenueRevenueRevenue
10%ROE
15%ROE
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Our intermediation business has strengthened:
• The trade portfolio grew 58% in the last two years (as of June 30, 2005).
Growth with banks in the trade portfolio alone in last year was 20%
• 19 new clients during the first six months of 2005 (out of a base of 161).
• Our liability borrowings margin decreased by 4 b.p. (18%) in the last year,
allowing us to be more competitive in more markets
Business Strategy
Financial Intermediation
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Business Strategy
New Initiatives
1. Digital Identity / Certification:• Digital certification that will guarantee the security and trust in the
electronic transactions performed between clients and their trading partners, assuring the identity of the transaction originator.
2. Payments:• Bladex entered into a strategic alliance with Bank of America, to provide
our regional customers with world class electronic payments processing. • Focus is primarily on the processing of commercial and treasury payments
in US dollars.
3. U.S. Origination / Vendor Financing:• Strategic product for high volume exporters that mitigates foreign
exposure and increase trade flows with buyers overseas.
4. Investment Portfolio /Trading Desk:
• Investment, distribution and trading.
5. E-learning: • Educational on-line products with topics oriented to the banking industry.
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Business Strategy
Competition
Competition – Financial Intermediation
• New entrants are a reality. Impact primarily on pricing, not volume yet
• Major competitors in traditional trade finance: Wachovia, Bank of New York, American Express, Bank of America (partner) HSBC, RBS, Standard Chartered, a few German banks
• Major competitors in structured trade finance: Hypo V., Calyon, Standard Bank, Santander (partner)
• Bladex competes successfully based on its unique features: client loyalty, commitment to the Region, preferred creditor status, market knowledge, and privileged access
Competition – New Initiatives
• In areas where it exists (payments), we work with very strong partners (i.e. Bank of America)
• In other areas: no significant competition (by design)
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The Company
Business Strategy
Financial Results
Capital Management
Investment Considerations
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Financial Results
Track Record
-
1
2
3
4
5
6
7
8
9
10
1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 200430JUN05
US$ billion
(300)
(250)
(200)
(150)
(100)
(50)
-
50
100
150
US$ million
Assets Net Income
LATIN AMERICAN DEBT CRISIS
TEQUILA CRISIS
EMERGING MARKETS CRISIS
ARGENTINE CRISIS
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Financial Results
Balance Sheet
(In US$ millions) 31-Dec-04 31-Mar-05 30-Jun-05 ASSETS
Cash and interest-bearing deposits with banks $155 $247 $164 Securities available for sale 165 147 58 Securities held to maturity 28 28 27
Loans 2,442 2,312 2,244 Allowance for loan losses (106) (82) (76) Unearned income (7) (5) (4) Loans, net $2,328 $2,225 $2,164
Other assets 57 127 87 TOTAL ASSETS $2,733 $2,774 $2,501
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 864 823 905 Short-term borrowings 705 751 522 Medium and long-term borrowings and placements 404 389 341 Total deposits, short-term, medium and long-term borrowings and placements $1,972 $1,963 $1,768 Other liabilities 104 203 127 TOTAL LIABILITIES $2,077 $2,167 $1,895 TOTAL STOCKHOLDERS' EQUITY $656 $607 $605
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,733 $2,774 $2,501
At the end of,
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Financial Results
Profit & Loss Statement
For the six months ended
(In US$ millions) DEC 31/03 DEC 31/04 MAR 31/05 JUN 30/05 JUN 30/05
INCOME STATEMENT DATA: NET INTEREST INCOME 54 42 11 10 21
Reversal of provision for loan losses 70 111 20 6 26 NET INTEREST INCOME AFTER REVERSAL OF PROVISION
FOR LOAN LOSSES 123 153 31 16 47
OTHER INCOME (EXPENSE):
Commission income, net 7 6 2 1 3 Reversal (provision) for losses on off-balance sheet credit risk (11) 1 3 (3) (0)Derivatives and hedging activities (8) 0 0 0 0Impairment (loss) on securities - Recovery (1) 0 10 0 10 Gain on the sale of securities available for sale 22 3 0 0 0 NET OTHER INCOME (EXPENSE) 11 10 15 (2) 13
TOTAL OPERATING EXPENSES (23) (21) (6) (6) (11)
NET INCOME $111 $142 $40 $8 $48
- - - -
Selected Financial RatiosNet income per share (EPS) $3.88 $3.61 $1.03 $0.21 $1.24 Return on average assets (ROA) 4.24% 5.83% 6.06% 1.29% 3.75%Return on average stockholder's equity (ROE) 23.91% 22.75% 24.43% 5.30% 15.25%Net interest margin (NIM) 1.87% 1.65% 1.66% 1.60% 1.63%Book value (period end) $14.84 $16.87 $15.62 $15.68 $15.68 Tier 1 capital to risk-weighted assets 35.4% 42.8% 41.6% 46.5% 46.5%
For the year ended For the quarter ended
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Financial Results
Strong Trade Portfolio Growth
• Strong trade portfolio growth
• In our opinion, faster growth rates would not be prudent
under current risk environment
• Strong trade portfolio growth
• In our opinion, faster growth rates would not be prudent
under current risk environment
Credit Portfolio Outstanding (1)
1,719 1,7401,854 1,871
2,149 2,222 2,287646 524
511 418
506542 522482
446403
369
289 130 115
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05
(US$ million)
Trade Non-Trade Non-Accrual
2,710
2,944
2,768 2,658
(1) Credit portfolio includes book value of loans, fair value of investment securities, securities purchased under agreements to resell, acceptances and contingencies (including confirmed letters of credit, stand-by letters of credit, reimbursement undertakings and guarantees covering commercial and country risks and credit commitments).
2,894
3%
15%
23%
7%
1%
2,847
1%
2,925
3%
29
Financial Results
Loan Growth Perspectives
Loan growth focused on:
Country exposure allocation criteria:
GDP Business opportunities
Risk Levels Economic and political analysis
Portfolio management approach
Growth Growth Segment 1Segment 1
Growth Growth Segment 1Segment 1
MexicoColombiaChileEl Salvador
Growth Growth Segment 2Segment 2
Growth Growth Segment 2Segment 2
BrazilPeruPanamaCosta Rica
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Financial Results
Portfolio Concentration
Country Credit Portfolio(US$ million, except percentages)
Other$752 - 26%
Colombia$172- 6%
Mexico$231 - 8%
Chile$354 - 12%
Brazil$1,325 - 45%
Argentina $91 - 3%
CREDIT PORTFOLIO DISTRIBUTION BY COUNTRY
As of June 30, 2005
US$MM %
BRAZIL................................................................................................................................. $1,325 45.3%
CHILE................................................................................................................................... 354 12.1%
MEXICO........................................................................................................................... 231 7.9%
COLOMBIA...................................................................................................................... 172 5.9%
ECUADOR.......................................................................................................................... 125 4.3%
DOMINICAN REPUBLIC................................................................................................. 106 3.6%
ARGENTINA.......................................................................................................................... 91 3.1%
PANAMA..................................................................................................................................... 87 3.0%
EL SALVADOR............................................................................................................... 79 2.7%
PERU.................................................................................................................................................... 77 2.6%
COSTA RICA................................................................................................................... 71 2.4%
TRINIDAD & TOBAGO.................................................................................................. 59 2.0%
JAMAICA......................................................................................................................... 52 1.8%
GUATEMALA................................................................................................................ 44 1.5%
VENEZUELA...................................................................................................................... 22 0.7%
HONDURAS................................................................................................................... 18 0.6%
OTHER................................................................................................................................ 8 0.3%
NICARAGUA.................................................................................................................... 3 0.1%
TOTAL CREDIT PORTFOLIO .................................................................................. $2,925 100.0%
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Financial Results
Exposure in Brazil
• Our largest exposure activity reflects the relative size of th economy,
growth and client franchise
• Target exposure is 40% - 50% of total portfolio.
• Accruing Brazilian credit portfolio:
• Average tenor of the loan portfolio: 413 days as of June 30, 2005
• Two non-accrual loans, one of which is current. Total $36 million
Brazil Dec-04 Mar-05 Jun-05
Client TypeFinancial Entities 87% 83% 81%Non-Financial Entities 13% 17% 19%
Transaction TypeTrade 94% 91% 91%Non-Trade 6% 9% 10%
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Financial Results
Argentine Credit Portfolio
960878 846
774 758
584
452 435399
360327
240
828
494 462394 401
350272 240 222
178 156
4691
1,114
10241
1,002
202
13%
17%
49% 50%53%
51%
43%40%
45% 45% 45% 46%
36%
55% 55%
-
200
400
600
800
1,000
1,200
Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05
0%
10%
20%
30%
40%
50%
60%
Credit PortfolioNet Exposure (1)Reserve and fair value adjustments of investments as a % of nominal value
US$ million
(1) Exposure net of specif ic allow ances for credit losses and net of fair value adjustments on investment securities (impairment loss).
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The Company
Business Strategy
Financial Results
Capital Management
Investment Considerations
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Capital Management
Equity Levels Drivers
Capital
Basel II
Regulatory Capital Requirements
Rating agencies & creditors
perception
Future growth requirements
Economic capital (internal model)
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Capital Management
Capital Management Guidelines
• Bladex seeks to balance risk and return considerations in order to:
– Withstand market volatility
– Maintain stable access to funding sources
– Provide a solid base to finance growth
– Promote share ownership by long-term investors
– Generate competitive returns on Shareholders’ Equity
• Capital management decisions follow from continued appraisal of above
considerations
• October 7, 2004 and April 11, 2005 payments of extraordinary dividends of
US$1.00 per common share and US$2.00 per common share, respectively,
and a US$50 million stock repurchase program, reflect above approach.
Since January 2004, have returned capital for a total of US$163 million
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Capital Management
April through December, 2005
• Much of the Argentine recoveries originally scheduled for 2005 and 2006
have been realized in advance
• With the collection of the high-margin loans involved, core profitability
will come under pressure while the new portfolio and fee income
initiatives are built
• Critical success factor: inexpensive funding – for which a very strong
balance sheet will be required until profit & loss strengthens
• Number one priority: growth and improved profitability. Capital
Management actions will follow
• Doing the reverse could put the company in a difficult cycle
Weaker balance sheet
Smaller profit
Higher cost of funds
Even higher cost of funds
Smaller growth
…….
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Capital Management
Historical Tier 1 – Basel I & II
Tier 1 Evolution
31%
28%26%
21%19%
17%20%
25%
18%16% 15%
35%
43%
46%
9%7% 8% 9% 8% 8% 9%
12% 11%9%
11%
23% 24% 24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 30-Jun-05
Tier 1 Ratio - Basel I
Tier 1 Ratio - Basel II *
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Capital Management
Historical ROE
• Our business model has historically yielded ROE between 12% to 17%, even
in times of high competition.
• Our business model has historically yielded ROE between 12% to 17%, even
in times of high competition.
17.8% 17.6%
15.4%
12.2%
15.7%14.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1995 1996 1997 1998 1999 2000
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The Company
Business Strategy
Financial Results
Capital Management
Investment Considerations
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Investment Considerations
Why Bladex?
• Trade is the primary engine of growth in Latin America
• Preferred creditor status
• Transparency, world-class Corporate Governance standards
• Explicit support from multilateral agencies and shareholder governments
• Solid financials, investment grade
• US GAAP reporting
• Multiple regulators: SEC, Fed, NYSBC, Panamanian banking authorities
• Expanded research coverage
• Increasing market liquidity (47% increase in average daily volume in last year to 156 thousand shares/day)
• Regional play
• Defensive play
41
Thank you!!