Hello, everyone, and welcome to the Bladex Second Quarter 2013 Conference Call on today, the 19th of July 2013. This call is being recorded and is for investors and analysts only. If you're a member of the media, you're invited to listen only. Bladex has prepared a PowerPoint presentation to accompany their discussion. It is available through the webcast and on the bank's corporate website at www.bladex.com. Joining us today are Mr. Rubens Amaral, Chief Executive Officer of Bladex; and Mr. Christopher Schech, Chief Financial Officer. Their comments will be based on the earnings release, which was issued yesterday. A copy of the long version is available on the corporate website. Any comments made by the executive officers today may include forward-looking statements. These are defined by the Private Securities Litigation Reform Act of 1995. They are based on information and data that is currently available. However, the actual performance may differ due to various factors, which are cited in the Safe Harbor statement in the press release. And with that, I am pleased to turn over the call to Mr. Rubens Amaral for his presentation.

Thank you, Kay. Good morning to everyone, and thanks for taking the time to attend call today. My comments will cover the Slides #3 and 4 in the presentation we have made available to you for this call. In my initial remarks last quarter, I mentioned that we were positive above the prospects for 2013, although the results for the first quarter, as I'm sure you remember, came in slightly lower than I would have liked. Today, I am confident about the results for the year as our region continues to show resilience in spite of the recent volatility in financial markets and reduced prospects for world growth. The results for the second quarter came in stronger, with an increase of 33% over last quarter, as we continue to reach new record levels of disbursements, $4 billion this quarter. Our net interest margin, NIM, continues to expand, as we have been successful in deploying more medium-term transactions and have managed to reduce our overall cost of funds. In addition, we continue to build on our syndications platform, with 4 deals closed so far this year and with a promising pipeline of new deals for the second half of the year. Christopher will provide more color about the fee income later on. Now there is soft economic outlook, the scenario is indicating a further slowdown in growth. As commodity prices continue to fall, domestic demand shows signals of contraction, and China's prospects are not as bright as they have been in the recent past. On the other hand, there's still plenty of liquidity in the financial markets, but the destination of these funds is shifting towards the U.S. dollar and the U.S.A. that the Federal Reserve Bank signals the possibility of tapering its fiscal stimulus program. In this regard, we do…

Thank you, Rubens. Hello and good morning, everyone. Thank you for joining us on the call and the webcast today. In discussing our second quarter results, I will focus on the main aspects that have impacted our results, and I will base myself off the presentation that we have uploaded to our website, together with the earnings release, which is being webcast as we are speaking. So let's start with a quick recap on Page 5 of this presentation of the key financial highlights and drivers for the quarter, which closed with net income to Bladex's shareholders of $21.7 million compared to $16.3 million in the previous quarter and compared to $23.2 million in the second quarter of 2012. The bank's net interest income grew quarter-on-quarter and year-on-year by $3.4 million or 13% to $29.4 million, as the result of increased interest income from higher average loan balances and lower interest expense, mainly brought about by the decision to prepay medium-term debt obligations, which were in the last remaining year of tenor. We will talk more about this in a few minutes as we provide more detail to this and some of the following points. Noninterest income more than doubled to $10.5 million this quarter compared to $4 million in the first quarter of 2013 and compared to $15.9 million in the second quarter of 2012, with higher commission income from our letters of credit business that saw increased levels of activity and from 3 successfully completed syndication transactions this quarter. Here, I should point out the fact that last year's quarterly results were significantly impacted by nearly $6 million in gains from the sale of our previous corporate offices here in Panama. Also, last year, at this point, we had been net sellers of bonds realizing substantial gains on…

Thank you, Chris. So ladies and gentlemen, in conclusion, in a market environment, which is going through some turbulence, Bladex is well-positioned to grow in the short and medium term -- tenors. We have remained focused in maintaining good credit quality, a key characteristic of the way we manage this organization, but we continue to work to keep the NIM expansion, as demonstrated in this quarter. As you heard from Christopher, we're placing a very important eye on the generation of fee income from our contingency book and our syndications activity. Last but not least, we have remained focused to improve our efficiency ratio so we can keep the downward trend in our expenses. That's why I mentioned before, I remain optimistic about the results and our performance in the second half of this year. We are now ready for the session -- Q&A session, I'm sorry. So Katy, please.

[Operator Instructions] Our first question comes from Tito Labarta from Deutsche Bank.

My question -- just looking at the growth in your loan portfolio this quarter, we saw like some strong growth in Argentina, also Brazil was kind of strong. Meanwhile, in Mexico and Peru, we saw loans fall. I'm just trying to get a sense of what you're seeing in those countries, or anything specific that kind of lead -- or drove your loan growth this quarter?

Thank, Tito. I -- do you mean the -- your question, I got I think the gist of it, and because the connection was not that good, but I understand that you're questioning about the portfolio in Argentina and Peru mainly. And basically, in Argentina, we continue to do what we have mentioned before as the business of supporting the confirmation of letters of credit that will allow Argentina to continue to import oil as they needed to continue in that trend. Peru, it's a very active market. We are seeing a good pipeline of deals there. Although, more recently, the projections for growth in Peru have been adjusted down, still it's well above the average of the region. So Peru will be growing this year. Instead of 6.1% that they did last year, they will grow 5.4%, which is not negligible at all by the standards of Latin America. So we expect to see our portfolio growing in Peru. And the movements you might have seen in different countries eventually were caused by some prepayments we have had in our portfolio, which we don't expect to be the case in the second half of the year, as we see spreads in interest rates going up a bit. I don't know if I answered your question.

[Operator Instructions] Our next question comes from Frank DiLorenzo from Singular Research.

Just a follow-up to the last call, could you also provide us a little detail on what you're seeing on the ground in Brazil and Mexico?

Okay. Well, I think, as I alluded to in my initial remarks, Frank, Mexico and Brazil, the 2 most important economies of the region, definitely we're keeping an eye in what's going on there. Mexico, although you saw a reduction in our balances this quarter, in fact, we had a very good solid pipeline of transactions that we expect to be closing this first 2 weeks of the month of July, which will put Mexico also in an important position in our portfolio. As we see more business opportunities in Mexico, with the actions taken by the central bank and by the government in pursuing these reforms. And of course, as we know, Mexico is still very dependent on the U.S., and the U.S. doing better, Mexico definitely will do better. But one thing that we're seeing different now this time in Mexico is that Mexico is looking to Latin America in a more strong way. So we see more Mexican companies seeking to invest in Latin America and other Latin American companies seeking to invest in Mexico. So we think we are well-positioned to capture this new flow of business between Mexico and the rest of Latin America. In terms of Brazil, definitely -- I'm Brazilian by the way, so I have a vested interest in knowing what's going on in my country. And for the first time and just an [indiscernible] comment, I was there on this -- when these manifestations started, and I was impressed to see even in my hometown people going to the streets and demanding more transparency from the politicians, demanding more understanding about how the money is being spent in Brazil. So I think this is a legitimate type of movement that's happening in the country and then eventually, will lead to elections…

Okay. Just a real quick follow-up. I think you had mentioned that your overall forecast for economic growth in the region is approximately 3%. Is that a figure that -- maybe it's too early, but for 2014, is that a figure that you think is sustainable going into 2014, that 3%?

Yes, in our projections that we discussed recently with the board looking to 2014, we expect the growth to be over 3% in 2014. I would say it's going to be between 3% and 3.5%. But we expect to be slightly higher than the 3% we have seen this year.

[Operator Instructions] Our next question comes from David Ross from Chevy Chase Trust.

I have 3 questions for you. What could we expect in terms of the future funding cost declines and kind of what the amortization effect is going forward? Second question, regarding your leverage ratio, how much higher are you comfortable taking it? And the third question, in terms of your fee income target, can you provide some color as to what you're expecting that to be in either dollar or percentage of revenue terms?

David, this is Christopher. Allow me to take the first question, and I'll have Rubens answer the last set of questions that you have. In regards to the interest expense, we isolated in our press release and in the webcast material the effects of the acceleration of commission expense that we had to accelerate this second quarter because we prepaid some loans, and that amounted to $2.6 million this quarter. Of course, that is an interest expense that will not repeat in subsequent months and quarters. And so NIM -- so it definitely benefits from that alone. And then we had another element that we've been carrying on our shoulders for a series of quarters now, which was the amortization of standalone financial instruments that we started in the third quarter of last year and we're just finalizing now this year. We said a year ago or almost a year ago that this was going to be an amortization totaling around $8 million. We said we would amortize $5 million of that in 2012 and the rest this year, and we're done basically. And so this quarter, we showed, I think, $0.7 million of interest expense coming from these amortizations. And as I mentioned in my comments, those instruments are finally rolling off our balance sheet this month, and there's only a couple of -- $10,000 or $20,000 of amortization that's been recorded so far this month, and that will be the end of it. And so with that, we have an interest expense, which is inflated in the second quarter by more than $3 million. And so, if you deduct that, you should get a better idea as to what our true trend of average funding cost is going to be for the remainder of the year. Of course, we're watching very carefully debt capital markets. If we need more medium-term funding, we certainly will not hesitate to go out again and make an issuance. But it is already clear to us that it won't be in the size like we did last year when we placed more than $700 million in medium-term debt. We don't foresee a requirement of that size this year. And we also will make that decision depending on how well we're doing in terms of deploying or originating medium-term loans.

Yes, I think, Dave, in terms of the question about the leverage ratio, you see, it -- that goes hand-in-hand with our Q1 capital, we were around 16%. We have always said that we like to work around 15% of Tier 1, give or take, so this is according to Basel I still. Basel II, we have indicated in the past that eventually and when we implement Basel III that would cost 2 additional percentage points in our Tier 1. So we will continue to feel very comfortable in that regard. So leverage ratio should -- shouldn't increase much more than what it is right now. I would say 9, 9.5x max. That's where we've planned to be. And what we want to do and we have stated before is we want to continue to grow the level of our business, but not necessarily increase our balance sheet. That's why we have a discussed in the previous call, implemented what we call an active credit portfolio management so we can continue to grow, but we can really keep in our books what makes sense for us to keep in our books around this 9.5x leverage in our Tier 1 ratio that is around 14%, 15% Basel I standards. And there's fee -- the fee income target, we have this year a target of achieving at least $5 million coming from the syndication business. We are moving in that direction in an important way. And we have a target of having at least in terms of our budget, of course, $12 million in fees coming from the letter of credit business. So that will get us very close to almost 50% coverage ratio when you compare the fee income to our operating expenses. So we are pursuing to increase the fee income so we can continue to improve this coverage ratio within the bank.

[Operator Instructions] Our next question comes from Saul Martinez from JPMorgan. Saul Martinez - JP Morgan Chase & Co, Research Division: Just a follow-up on -- Rubens, on your comment to the -- in your response to the last question, I should say, what it means for your dividend policy. You mentioned that you don't have much more room to increase your leverage ratios, does that have any implications in terms of how you may figure dividend policy going forward? And I ask that because you're going your loan book mid-teen range, your ROEs are moving up, but they're still not much above 10% and you're paying 50% payout on core earnings, which would imply that you would be increasing your leverage ratios. So just kind of surprised that you feel that there's not much more room to increase leverage from here. So just kind of walk me through the math a little bit in terms of how what you said might or might not impact your dividend policy going forward, or if I'm misunderstanding what you said earlier.

Thanks, Saul, for your question, and I'll try to clarify. I didn't mean to say that there is no room for more leverage. I just said that Bladex has always been a very conservative bank when it comes down to managing its Tier 1 ratio because this is also critical for the type of bank that we are in keeping with the ratings that we have. And we are working with the rating agencies in diversifying our revenue stream so we can really also get some upgrades. So that is to the point that we look very carefully in terms of how far down we want to get with that Tier 1 ratio, and that has a definite impact on our leverage ratio. But I mentioned that it doesn't mean that we do not want to increase our business. We want to increase our business, but not necessarily to book everything in our books. So that's why we're investing in an important way on our distribution platform so we can continue to grow our business, but we adjust the growth of our portfolio through this overall guidelines. Having said that, Bladex has been a bank that consistently has paid dividends, and you have asked me before and we have had so many questions before about dividend policy and the policy of the bank is to pay dividends. We work around this 50% guideline, and we expect to continue to do so as we expect that our fee income from both the active credit portfolio management and our syndications business will continue to grow in an important way, and together the conservative growth of our portfolio will enable us to continue to pay dividends around these guidelines. Saul Martinez - JP Morgan Chase & Co, Research Division: Do you still see 50%? Because I'm kind of struggling with the math because we have seen the regulatory capital stream from very high levels, but if you're -- given your current ROE and given -- I mean, obviously you can adjust your growth, but given the growth of your portfolio and expected growth in risk weighted assets, it would seem to me that 50% capital ratio -- 50% payout ratio would be consistent even if you expand your ROEs with additional capital stream.

Saul, let me try it. I'll take a stab at answering that question. It's true, of course, that the futures -- project forwards current growth rates of our book of business and which up to this point, what we have originated, everything has been booked in our books, and it's to create larger scale. We always said over the last several years that we felt we didn't have enough scale. We wanted to get to scale. Well now, we're starting to see and prepare ourselves for a new Bladex, if you want to call it that, that is arguably at scale once we achieve a solid and sustainable core ROE of 12% in our core business and has a path towards achieving the 15% that we've always talked about in the medium run. And so that means that while we don't want to sacrifice our origination capacity, which as you saw in this first half of the year has been quite good, and I think going forward, we will make more of an effort to only retain on our books what is compatible with our risk appetite, with our need to maintain a sustainable return that satisfies shareholders. And the rest, we would start placing in the secondary market, either by doing it in the primary markets inviting others to participate in the syndications that we arrange and/or selling our originating into the secondary markets. Of course, there is not a huge need to do that at this point in time, but going forward, we do see the need to establish ourselves and with the distribution platform that Rubens talked about, and we are making great strides in establishing that capability. So going forward, you should not just assume that our growth rate will be 15%. Our origination growth that may be that as a function of the dynamics in the region, but our portfolio growth -- on-book portfolio growth should be a subset of that, not necessarily the same level of our origination growth. And with that, we believe that our capacity to continue to pay attractive dividends will not be damaged.

And also, the 50% remainder in our capital that we don't distribute, in our view, would be enough to help us to continue to grow in an important way in terms of what we expect to be our exposure in the books. So I think it's a good combination. But what we're trying to be is more efficient in the generation of revenues as well. So it's a combination. I don't know, Saul, if it's -- we're answering your question the way you expect it. Saul Martinez - JP Morgan Chase & Co, Research Division: No, I think that it's become a bit clear.

[Operator Instructions] At this time, we have no questions in the queue. Mr. Amaral, I'll turn it back over to you for closing remarks.

Thank you very much, Katy. Thank you, everyone. This conference for us is always an interesting moment of sharing with you the results. This quarter, we are happy with the results. And as you heard from Christopher in the reviewing of the numbers, we feel very confident we're going to have a stronger third quarter as well, and that's what we're here for. We're working to continue to deliver in what we're committed with you, our shareholders, to increase your returns. Thank you very much. We wish you a happy weekend.

Thank you, ladies and gentlemen. This now concludes today's conference. You may now disconnect.