Hello, everyone, and welcome to Bladex’s Third Quarter 2015 Conference Call. On today, the 15th of October 2015. This call is being recorded and is for investors and analysts only. If you are a member of the media, you are 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 be 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, it is my pleasure to turn the call over to Mr. Rubens Amaral for his presentation. Sir, please begin.

Thank you, Kenny. Good morning, everyone, and thanks for joining us today for our third quarter 2015 earnings call. Our performance this quarter demonstrates the quality of our earnings and our commitment to position the Bank to do well in a more challenging economic environment without compromise the credit quality of our portfolio. In my comments today, I will touch on a number of important elements to explain how we achieved these results. I’ll start with the highlights of the third quarter results, and then I will share our views on credit demand, fee income, how we are in terms of credit quality, the objectives we have set for the fourth quarter, outlook for Latin America and how it impacts our business, review on Brazil, and a final comment on liquidity management. So let me start with the highlights of our financial results in Q3. Average balances increased by almost $100 million. Margin on loans increased by 9 basis points, as a result of pricing discipline for more medium-term transactions. Total fee income increased by 121%, first of all, our contingency and syndication businesses performed very well this quarter. The return on equity reached 13.9%. The efficiency ratio improved to 26%. We have added 22 new clients to our client base, which led us to have increased the net income of 66% quarter-on-quarter, 26% year-on-year, a quite successful performance overall. Let me move onto credit demand. It is important to emphasize that we continue to see demand in the markets we service. The total credit disbursements for the quarter amounted to $3.3 billion. Although the majority of disbursements was related to transaction move up to one year, the medium-term portfolio continues to grow. This quarter alone medium-term disbursements to our traditional clients reached $513 million, which as a consequence contributed…

Thank you, Rubens. Hello, and good morning, everyone. Thank you for joining us on the call today. In discussing our third quarter results, I will focus as usual on the main aspects that have impacted our results, and I’ll make reference to the earnings call presentation that we have uploaded through our website together with the earnings release and which is being webcast as we speak. So before we go into more detail, let’s start at recap on pages 3 and 4 with a click one down of the key financial highlights and drivers that shape this quarter. So the third quarter 2015 closed with net income to Bladex shareholders of $33.6 million, compared to $20.2 million in the previous quarter, and $26.6 million in the third quarter of 2014. In order to accurately present performance in our recurring business activities, we focus on business net income, which is recurring net income derived from our principal business activities, our financial intermediation, which generate net interest, commission, and fee income and also other income. We also referred to it as core income or income for core activities. Consolidated business net income reached $29.2 million in the third quarter, up 30%, compared to the second quarter, mainly as commission income caught up with expectations, as structuring deals were finalized in the quarter, the other with increased net interest income driven mostly from higher lending margins. Business net income was up 12% from $26.0 million in the third part of 2014, mainly due to increased net interest income from higher average commercial portfolio balances. The quarterly net interest margin was 4 basis points higher than previous quarter levels, as lending margins improved or trailed to level seen in the third quarter of a year ago, mainly on account of higher average liquidity balances.…

Thank you, Christopher. Ladies and gentlemen, we’re ready for the Q&A session. Kenny, please?

Yes, sir. At this time we’ll open the floor for questions. [Operator Instructions]. Our first question will come from Jeremy Hellman from Singular Research.

Hi. Good morning, guys.

Good morning, Jeremy. How are you?

I’m good. I wanted to dig into the syndication pipeline a little bit, couple of questions there. First off, congrats on the number and I’m curious, is that figure in line with what where you expect it to be as of our call a quarter ago? And then secondly, just looking at that Slide 12, of your joint lead arrange on three of the transactions noted, were those the other joint arrangers local regional banks or they multinational type banks?

Okay, thank you, Jeremy, for the question. The pipeline of syndications, as I alluded in my initial comments remains solid, as we’re seeing several opportunities coming from our clients, mostly in the liquidity and working capital management needs that they have. We have been working in the pipeline, there was – when we mentioned in the second quarter there was about 9 to 10 transactions. We secured six mandates. And as I said four have been executed to in execution, one of them is already executed, another one is in the process. And we have some good disposition from the clients where we need the pipeline to have at least to perform more in this quarter. Of course, that will always be dependent on the clients and students to make. But the information that we have so far and what we’re seeing leads us to be very confident about another good performance for the fourth quarter. As far as distribution goes, I think that’s one of the points I tried to highlight in my comments as well. It is quite remarkable that we are working with both local banks, regional banks, and international banks. If you see the four transactions, we will see that the transaction in Peru, we did with an international bank well known in the marketplace, that was Banco Santander, another transaction grew will be the Chinese bank, that was ICBC. In transaction in Honduras, we did with a SMO, a regional multilateral bank from the Netherlands and the transaction in Ecuador, we did with several local banks. So it provides you a good flavor about how important is the network of distribution we have with different players in the marketplace.

Okay. Thanks, that’s some great granularity there. And then just one follow-up. Just looking at – you mentioned two to four more deals this quarter, and even kind of looking over the horizon that 2016, our deal sizes likely to be consistent with those that you closed in Q3, kind of that 25, 40, 60, 102. I know in the past the target market, I had in my head was kind of 50 to 250, so I’m wondering, if you see any potentiality start moving up into the nine figure deal space?

That one of the interesting things about this business for Bladex is that, our Swiss thought is different from the big banks. So we are in the range of deals that vary from $50 million to $200 million. So although we have in our pipelines of few deals, there are very close to $100 million, $150 million. You will continue to see deal sizes around this figure. I would say around $ 80 million – $70 million to $80 million, that is where we see majority of this deal is coming, but you are going to see one or two or three deals that go over the three digits figure. And we are well positioned that there is one important deal that is going on right now and the deal altogether, it’s close to $300 million and few other deals that are smaller. There is one of, if I’m not mistaken $15 million to $30 million, and one that we just closed was $100 million. And so I would say that, you can expect few transactions, there are over $100 million, but we’re going to be around this deal size of $80 million to $100 million in the majority of the deals.

Great. All right. Well, I appreciate that and best wishes for the balance of the year.

Thank you.

Thank you. Next question we have it from Claudia Velicia from BT Volaris. Claudia, your line is now open.

Well, thanks for taking the call, the question. Could you guys comment on the off balance sheet provision changes over the last quarter, please? [Multiple Speakers]

Okay. I’ll take that question. Thanks very much for the question. Well, provision changes are a function of – of course, our reserve methodology, which as you know is, focus is both on funded transaction, meaning the loan portfolio and also the unfunded transactions, which is our contingency letters of credit business. We view both exposures basically in the same fashion, in terms of risk exposure. And so, we apply the reserve methodology equally to both funded and unfunded transaction. Of course, the unfunded transactions are a little bit more volatile, letters of credits are used in sparingly in the majority of the countries that we operate in and, of course, are more widely used in countries that represent somewhat higher risk. And so, we have quite a bit of volatility in that in the contingency business in terms of balances, and also in terms of reserve requirements, given the fact that depending on the countries that we issued, that we confront on those LCs. And so, our own approach generally is to balance out these – the higher degrees of volatility on the unfunded side. And so if you look at our portfolios, you see quite a bit of provision increase on the funded side, which had a lesser degree of decline in balances, and also represented a greater shift in terms of our country and client exposures. We talked about reducing our exposures in Brazil, but that business in Brazil is mainly trade, so it has good risk quality, that is taken into consideration by our risk methodology, the reserve methodology. And so I’ll be compensated for that the declining balances in places like Central America, which inherently have a lower country risk rating than other places, although the decrease balances, such as Mexico and Brazil and Chile. And so as a reflection of that our funded portfolio did require more reserves and our unfunded portfolio required less reserves. The balance of it really enhanced that generic reserves levels but non-specific reserves remained stable over the course of the quarter. And the only increase actually in absolute reserve levels came from allocating more provisions through these non-recurring balances that we have the $20 million that we have in non-recurring and where we are reflecting the current status of restructuring negotiations. I don’t know if this gives you enough color.

Yes. That sounds pretty good. And another question about -- regarding the hedge fund, I know that you guys plan to wrapping it up in the near future, but just to have an idea of how that might impact earnings in the next couple of quarters. Like what is the hedge fund actually invested in, what’s the strategy, because the returns have been quite volatile one quarter up, one quarter down, I mean four, four is quite a lot. I don’t know if you could give some more insight into that, please?

Well let me tell you that first of all that we remain committed to exit the investment in the fund and by April 2016 as we have announced since we decided to sell the asset management company. We continue to redeem over the course of the year. So our exposure is being reduced gradually as the fund provides us with returns. The fund -- it is primarily invested in strategies in Latin America but they have some strategies also to hedge elsewhere, but the primary objective is macro strategy in Latin America. We are passive investors as of now. So, for us -- we were just hoping that the fund continues to perform well. But as I said and that’s the very reason we decided to exit this activity. This is very volatile and we can have a very good quarter as this quarter was and another quarter that might be not as good, but so far, what we have seen is that the fund continues to have a good performance in this initial weeks of the months. But this is very difficult for us to predict. For me what matters and it’s what we are demonstrating to you is the core that’s strong, resilient, and we are well positioned, really to continue to deliver stable 12% ROE, that’s our target for this business.

Could you comment please on the attributions of why the fund was up so much this past quarter, just to have an idea of like what -- where within the macro strategies of Latin America they might find themselves?

Well, the devaluation of the currencies of course play an important role. But I would prefer not to be commenting on the results of the fund other than say that it was a good quarter. They have demonstrated what they did in the past. If you remember, and follow Bladex well, you remember that in the small volatile times this fund always performed well, and had a stellar performance. So I think it is basically what they have being doing all along and that’s what we had in this quarter. But you can see that the volatility that we have experienced in Latin America, thus they have benefited quite a bit and got a very interesting return for us.

Sounds good. Thanks for the responses.

Thank you very much.

Thank you [Operator Instructions] Our next question comes from Ryan [indiscernible]. it seems like he has taken himself out of queue. [Operator Instructions] Our next question Jordan Hymowitz from Philadelphia Financial.

Hey, guys, congrats on a good quarter. Well, I have two questions. One, what do you think is the expected level of fee income on a – next year on a quarterly basis or an annual basis, forgetting by quarter that is somewhat lumpy, is there a range syndication fee income specifically?

Well, Jordan, nice to talk to you again. We are in the process of preparing our budget for 2016. What we have seen so far indicates that we – it’s going to be a very challenging year. As you have seen this year, the reduction in syndicated loan facilities was very important overall in the markets. But we positioned ourselves very well to be at level similar to last year, which for us is quite an achievement. This is an important source of diversification of income to us, and we continue to do. So I’ll be able to give you more color about this, when we meet next time for the fourth quarter conference call.

Okay. Next question is loan growth fell and partially, because you cut that exposure to Brazil. As the banks in Brazil itself are now shrinking on a real basis after inflation, do you think your Brazil loan book will grow next year in particular or said another way will growth in the portfolio if it occurs next be a result of diversification?

Well, thank you for the question. I think you saw in our presentation that we have provided you with information about our exposure in Brazil and how it evolved on the course of the last 10 years. We did see an important diversification that we have applied and we continue to do so in terms of our portfolio. We’re very cognizant of the challenges we have in Brazil, but we’re also very cognizant of the futilities we have in Brazil that we will not let pass if they are within the guidelines that our risk area has defined for us to presume that specific country. So what we’re going to see is that, we’ll continue our efforts of diversification. There are markets where we can see more important growth, such as Mexico. Mexico, it’s an important market for us very, very competitive. But we expect to see more growth in that market, as Columbia really picks up, its investment infrastructure, we might see more opportunities in Colombia to grow our portfolio and then we’ll grow there. And as Chile also, although very competitive presents now with all the change we’re seeing because of this headwind market in Latin America is experiencing we’re seeing opportunities also to diversify into Chile, not less important Peru. So in these countries we are going to see Bladex making an effort to continue to grow in an important way. Central America or Honduras also presents very good opportunities, as this continue to improve its economic outlook. These countries will benefit from these and then we might have more opportunities there. So overall, we’re working, as I said to you on the previous question and our budget for 2016, it’s going to be another challenging year. Growth has been revised down, as we discussed already and we make very well. But we expect the growth to come from different countries and we’ll not let pass the good opportunities we might see in Brazil, because there are still very good opportunities there.

Okay. So final question, so said in another way, the growth next year in earnings, if there is growth will basically be from the fee income in the diversification side, most likely and not from the core banks?

Well, the growth next year will come from a different type of mix of our portfolio. And mostly that, I think it’s important to highlight, and thanks for asking this question is that margins have been adjusted up. So we expect also our net interest income to improve in the important way, because margins have been adjusted up and you saw that we really have been able to increase 9 basis points in the net interest margin, that means that our margins on loans increased quite a bit for us to achieve this amount in an increasing mean. And that’s going to be a reality. So next year you might expect that in terms of expenses we’ll remain very committed to efficiency. And in terms of fee income, we will continue to invest in this platform of our syndications, but we will benefit from the widening of margins in our traditional book of business. So it’s a combination of the tree and we feel very comfortable with what we saw in this very challenging Q3. There might be a proxy for what is coming next year in 2016.

Got it. Thank you.

Thank you, Jordan. Nice talking to you.

Thank you.

Thank you. [Operator Instructions] At this time, I’m showing no further question. If you have any closing remarks before you wrap up?

That’s all. Thank you, Kenny. I’d like to thank you all for stepping into call today. We’re very satisfied with our performance in Q3. And as we have told you all along, the Bank is well-positioned to capture good opportunities and good times and not so good times, and that’s exactly what we’re doing playing to our strengths. And we’re looking forward to meeting with you next year when we talk about the full-year performance of Bladex. So thank you very much for your time today and for your confidence in our company. Bye-bye.

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