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A Summary Presentation & Update September, 2005. I II III IV V Index The Company......................... 3 Business Strategy................. 12 Financial.

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Presentation on theme: "A Summary Presentation & Update September, 2005. I II III IV V Index The Company......................... 3 Business Strategy................. 12 Financial."— Presentation transcript:

1 A Summary Presentation & Update September, 2005

2 I II III IV V Index The Company......................... 3 Business Strategy................. 12 Financial Results................... 23 Capital Management............... 32 Investment Considerations.... 38 Page

3 2 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 Banks clients, the increase in activities engaged in by the Bank that are derived from the Banks 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 Banks 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 Banks 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 Banks trade finance portfolio; the continuation of the Banks preferred creditor status; the effects of increased interest rates on the Banks financial condition; the implementation of the Banks 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 Banks allowance for credit losses to address the likely impact of the Argentine crisis and other credit risks on the Banks loan portfolio; the necessity of making additional provisions for credit losses; the Banks ability to achieve future growth, to reduce its liquidity levels and increase its leverage; the Banks ability to maintain its investment-grade credit ratings; the availability and mix of future sources of funding for the Banks lending operations; and the adequacy of the Banks sources of liquidity to cover large deposit withdrawals.

4 I II III IV V Index The Company Business Strategy Financial Results Capital Management Investment Considerations

5 4 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 5 The Company Company Highlights First Latin American bank listed in NYSE (1992) First Latin American bank rated Investment Grade Current credit ratings:

7 6 Eight Directors are independent; one is part of Management The Company Ownership and Board Composition Board of Directors Composition: 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 7 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 franchiseStrong 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 8 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 9 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. Name Title Experience Joined BLX Mar02: COO Jan04: CEO General Manager of Banco do Brasil, New York Branch and Managing Director for North America since 2000 Mar04 General Manager of Banco de la Provincia de Buenos Aires since 1999 General Manager of Grupo BAPRO (holding company of BPBA), since November 1998 Jul04 17 years in Banco Santander Central Hispano in various capacities. Worked in Europe, Japan and U.S. Jan05 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 Jul02: SVP

11 10 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 Uribe SVP Processes Eng. & IT The Company Management Team (cont.) 25 years working at Bladex in various capacities Name Title Experience Joined BLX 1980 1993: VP Jul02: SVP Partner and IT Consulting Manager for PwC, Bogotá, Colombia (1988-2001) VP of IT & Operations for Banco de Credito, Bogotá, Colombia (1987-1988) Sep01 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) Jun04 Citibank Colombia in various capacities (1997- 2001) Information Services Manager for System Integration and Project Quality Office at UNISYS Corporation, Colombia(1987- 1997) Sep01: VP Jul02: SVP

12 11 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

13 I II III IV V Index The Company Business Strategy Financial Results Capital Management Investment Considerations

14 13 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 Volume Low financial & operting cost Pristine credit quality Right capital structure

15 14 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

16 15 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 Bladexs Special Competitive Advantage

17 16 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

18 17 Business Strategy Earnings Model – Strategic View Core Business Financial Intermediation Other Related P/B Relatively low Relatively high Services

19 18 Business Strategy Earnings Model – Strategic View Capital Human Resources Processes & Technology Working Capital Trade Finance - Corporate Others U.S. Origination Trade Finance - Banks Core- Financial Intermediation E-learning Payments Digital Identity Investment Portfolio Distribution LAECAOthers New Products and Initiatives C L I E N T S Brand Client Franchise Govt. Shareholders Knowledge of the Region

20 19 Business Strategy Earnings Model – Capital View CapitalIntensiveCapitalIntensive Non Capital Intensive Intensive CoreFinancialIntermediation Other 15% - 20% p.a. growth Margins stable at relatively thin levels Eximbank structures Country Risk Guarantees L/Cs Guarantees U.S. Origination / Distribution Payments Digital Identity E-learning RevenueRevenue 10% ROE 15% ROE

21 20 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

22 21 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.

23 22 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)

24 I II III IV V Index The Company Business Strategy Financial Results Capital Management Investment Considerations

25 24 Financial Results Track Record

26 25 Financial Results Balance Sheet

27 26 Financial Results Profit & Loss Statement

28 27 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

29 28 Financial Results Loan Growth Perspectives Loan growth focused on: Country exposure allocation criteria: GDPBusiness opportunities Risk LevelsEconomic and political analysis Portfolio management approach Growth Segment 1 Growth Mexico Colombia Chile El Salvador Growth Segment 2 Growth Brazil Peru Panama Costa Rica

30 29 Financial Results Portfolio Concentration

31 30 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

32 31 Financial Results Argentine Credit Portfolio

33 I II III IV V Index The Company Business Strategy Financial Results Capital Management Investment Considerations

34 33 Capital Management Equity Levels Drivers Capital Basel II Regulatory Capital Requirements Rating agencies & creditors perception Future growth requirements Economic capital (internal model)

35 34 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

36 35 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 …….

37 36 Capital Management Historical Tier 1 – Basel I & II

38 37 Capital Management Historical ROE Our business model has historically yielded ROE between 12% to 17%, even in times of high competition.

39 I II III IV V Index The Company Business Strategy Financial Results Capital Management Investment Considerations

40 39 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 40 Thank you!!


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