Hello, everyone, and welcome to Bladex’s Fourth Quarter 2015 Conference Call on today, the 19th of February 2016. 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 line 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 the call over to Mr. Rubens Amaral for his presentation.

Thanks, Shelshy. Good morning, everyone and thanks for attending our earnings call for the fourth quarter and full year review of 2015. Yesterday, we released our results for the fourth quarter as well as the full year 2015. I am very pleased with the overall performance of the bank in a very challenging year, confirming the softness of our operations and the resilience of our earnings generation. Although my primary focus on the first call for the year has always been on the performance of the previous year, I realize that there is uncertainty about the performance of financial institutions, in light of a prolonged cycle of low interest rates and possible credit problems, given the backdrop of a sluggish growth of world economies and the reality of a continued reduction in commodity prices and its impact in the ability of companies to generate cash flows on a sustainable way. On the other hand, there is concern about how emerging markets will behave, most notably China and in our region, Brazil and of particular importance to Bladex, the lackluster growth in trade flows. So it’s not surprising that investors exhibit certain degree of concern about the performance and prospects of our company in the near future. Therefore, please allow me to make some initial remarks about how you’re seeing the current environment and why we remain confident about Bladex capacity to continue to deliver in a prolonged downturn cycle. Let me start with our review on Brazil and the Latin American economies. The country has traditionally been the biggest market for Bladex. Although in terms of relative portfolio weight, you have observed a downward trend since 2009. This long economic downturn in the country requires that we continue to monitor and adjust our relative exposure to Brazil. Our exposure is…

All right. Thank you, Rubens. Hello, and good morning, everyone. Thank you for joining us on the call today. And in discussing our fourth quarter and full year results for 2015, I will as usual focus 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 now let’s discuss first our transition to International Financial Reporting Standards IFRS. As in the conference, you will rarely get a chance to do something like that. So I am pretty excited to talk about this, and so bear with me for just a couple of minutes. We completed that transition at the year-end of 2015. The transition to IFRS follows a mandate established by the Panamanian regulators Rubens already mentioned, and that is the mandate for all fully licensed financial institutions [indiscernible]. We began our work in early 2014 and based on our initial diagnostic analysis, we determined that any significant changes in our financial results arising from this transition will be quite unlikely. And this expectation has basically proven true, even though quite a bit of time and work was put in to accomplish that transition. The main reason for this relatively smooth transition is of course that Bladex is not normally a big or complex institution. It has a focused business model, a book of business that is high credit quality and with short average tenures, both of which helped us to simulate fairly well the early adoption of rule IFRS 9 financial instruments, which represented the by far biggest departure from the concept we applied while under our previous accounting standard that’s GAAP. The adoption of the reserve model, which incorporates…

Thanks, Christopher. We realize that today, we took a little longer in our initial remarks. To all of you, as we believed, we had a lot of information to share with you, mainly the change from US GAAP to IFRS and to provide you color about our environment as we see it. But now we’re ready for your questions. Ladies and gentlemen, please.

[Operator Instructions] Our first question will come from Ali Mogharabi with Singular Research.

Hi, guys. Your lower exposure to Brazil is certainly good news. And in terms of where the best opportunities maybe you mentioned basically the central region, Mexico, Peru and so forth. So good seeing you guys make those adjustments. But going back to Brazil, when do you expect to see improvements? Asking this because, it looks like your exposure will still be around a fifth of your portfolio by the end of this year.

Ali, nice talking to you. Thanks for your question. You know, I am a little biased because I am Brazilian, so as a Brazilian, I really expect Brazil to improve sooner rather than later. But we know that the situation in the country unfortunately continues to deteriorate. Just two days ago, S&P downgraded further notch, Brazil and companies are really having a difficult time, we see a lot of companies now on the process of discussing restructuring of credits as they need more liquidity because their local markets are – domestic markets not growing, and exports although a little benefited by the devaluation, the overall demand is very low as you know. So we – our exposure is short-term. So in terms of our credit as I alluded in my initial comments and Christopher in his presentation, we are very comfortable as we have still space to reduce our exposure there and we continue to do so. I mentioned to you that our prospect is that Brazil gets down to 20% and that might go even lower than that if the situation continues to be the case. We have several transactions that are material and the clients are paying. Still, there is liquidity in Brazil. The local banks are providing that liquidity. But unfortunately it’s very difficult at this stage to predict how soon Brazil can get better, because there are so many components involved and the most important one is the lack of political consensus in which way to guide the country. So we are very concerned, but rest assured that our exposure there, it’s a good quality and our intention is to continue to adjust the portfolio as the conditions require.

Thanks, I appreciate that, that’s positive and you guys have certainly proven that. And then my last question, somewhat similar, I mean, it looks like your exposure to oil and gas is also less, just your own opinion from a macro level, what are your thoughts on the oil and gas industry going forward, not just in your region, but worldwide?

Well, that’s a tough one. Definitely, this is interesting. I was talking to our Chief Economist the other day and I said to him, I remember quite well, the last oil crisis and it was a crisis where oil prices went up and interest rates went up and emerging markets defaulted. So today, we have a crisis where prices are coming down, emerging markets are much better positioned to weather this storm and we see a big impact on the company overall. So it is really a situation totally different from what we have seen in the past. In our case, we’re very fortunate, because we focus our attention on the downstream and the integrated side of the business and reducing the upstream where the problems are more focused, but it’s a situation that in our view, in our assessment, oil prices will continue to face a difficult scenario ahead. The projections are that oil prices can go to around to the 40s by year-end, but it’s very, very unlikely, because all these discussions in OPEC about whether or not to reduce the production. Russia and Saudi Arabia agreed to freezing production, but what that means, they’re freezing production at very high levels. And if Iran still really continues to bump oil, so you see that the natural prices going down, there is lot of discussions about traders benefiting now of storing oil. There is an article of interest in Bloomberg today about this, if I’m not mistaken Contango type of opportunity for traders to store oil, expecting that oil prices might rise, but overall, it’s a very difficult scenario. We focus on the countries where we’re more challenged and in our case, is Columbia where we have more challenges, but our exposure there, it’s well covered in terms of reserves as I alluded to before. So overall, very difficult to predict. In our side of business, we’re benefiting in a sense because our clients are benefiting, except for the upstream that we will continue to monitor. I’m sorry to not to have any more details or it’s just my personal opinion as you asked.

That’s very helpful. I appreciate it. Thanks.

Welcome.

Okay. Our next question will come from Tito Labarta with Deutsche Bank.

Hi. Good morning, Rubens and Christopher. Thanks for the call. Just a couple of questions. We saw in the quarter, your margin expanded a little bit, I imagine protecting margins with lower growth. I mean, is this something you think you can continue to improve the margins for the rest of the year, just want to get a little bit of more color on the outlook for that? And then the second question in terms of asset quality, I know we saw some deterioration in the quarter though, it looks like it came back. In January, but just given the situation in Latin America, there is full growth, you’re doing I think your best to protect the portfolio, but what do you think about the trends for asset quality for this year. I mean, is it going to be like volatility as we saw at the end of the year or was that just a one-time blip, do you expect any areas where you’re really concerned or where you can see some deterioration for the rest of the year. Thank you.

Thank you, Tito. Nice talking to you. In terms of margins, as I mentioned before, we had net pickup for December and January, a rate of 20 basis points in terms of overall average margins, which is really signaling that the possibility of increasing margins will be a reality for the year 2016. We have overall, in all of our transactions, pushed for higher margins and it’s very, very certain with the clients not accepting increasing of margins. So it is across the board, it’s in different countries. So to answer initial questions, yes, we are working with the scenario of increasing, widening of margins throughout the year, unless something that really happens that would bring margins down, but we don’t expect that, although you might argue that one way or the other, this negative interest rates that we see in developed markets, this continued quantitative easing by some central banks will force this liquidity to go somewhere, but as we’re seeing now, this liquidity is going to the US, it’s flat to quality, they are widely in the emerging markets for time being and we don’t see any major impact coming from this pressure in the margins. And in terms of competition, there is great deal of risk aversion in terms of international banks, and the local banks are very concerned with the local markets. So in terms of the business that we do, the trade financial business that we do, we see ourselves well positioned to capture those increasing in margins. In terms of asset quality, it is really very difficult to predict in my previous answer to Ali, he asked me about Brazil and what might happen in Brazil. This is a very difficult environment and we are seeing companies and companies facing more challenges. And the…

Great. Thank you very much. That’s very helpful.

Thank you, Tito.

[Operator Instructions] Our next question will come from Luis Adaime with Newfoundland Capital Management.

Yes, hi, thank you very much for the discloser and the color that you gave on the gas exposure on page 12. But just further question on that, can you – and I am not sure if you are – if you would be able to disclose that. But that NPL deterioration that we signed in the quarter, does it comes from the oil and gas exposure or oil and gas sector. And also, you mentioned I think on the release that there has been somewhat of an improvement in the NPL ratio in the beginning of this year. But can you maybe give me – give us some color, specifically on the oil and gas exposure credit-wise in the beginning of this year, if you’ve seen an improvement or deterioration in that sector in the beginning of this year? Thank you.

Allow me to take your question and yes indeed the main moves in the NLP ratio and also arguably in our overall reserve coverage has to do with the oil and gas sector. And so there is there is clearly a link there. And again, we highlighted on that pace the fact that we think that we have done as much as we can do at this point in time to solidify our position in that particular exposure to the oil and gas sector by receiving prepayments from our disbursed loans which is good news in our view. And the fact that 50% of exposure is contingent in nature only and so that is a significant element to consider in that exposure profile. And finally, we do also see that not all the clients in that segment are in the same difficult position, others have been able to diversify their business focus not only on oil but moving into gas and that has elevated a lot of the problems for them. And so we're not necessarily with the same level of concern for all of our client base which is not many to speak off in the first place but anyway, so it's fairly an isolated exposure that we’re really worried about and we believe that to the extent we know and we can foresee over the lifetime of what we have on our books, we think we are adequately positioned. I don't know if that answers your question.

And some of the exposure in the upstream also is associated with gas not oil, so which is in a better position than the oil producers which again mitigates the impact on our portfolio. So overall, as Christopher said we're very comfortable except for this exposure that we alluded to before.

Excellent that's very helpful. And just one more question if you allowed to disclose, is it one specific company or is it a generalized credit deterioration for the upstream sector?

We can't disclose names, we have the bank privacy law here in Panama but it is a single exposure.

Single exposure, okay. That's helpful. Thank you very much.

Okay. Our next question will come from Huong Le with Great Lakes Advisors.

I just wanted a little bit more color on the impairment of $4.7 million impairment in the treasury business is that in the fund?

No, we had two impacts this quarter as I mentioned, one is the performance of the participation in funds which had a swing of $9 million from $7 million plus last quarter and then $2 million minus this quarter. So that was impactful for sure but the impairment loss, it has to do with the exposures in our investment portfolio which is the securities, the bonds basically that we have, we have a small bond portfolio. And we do have issuers from all parts of the region and a couple of them are of course in sectors that are more exposed at this point in time. And so given the fact that standard IFRS 9 also requires setting up reserves, so expected losses on your bond portfolio, so we had to show an impact there. And so you can see on page 12 in the oil and gas deep dive page that we do have a small portion of securities included in the overall portfolio exposure to that sector and those of course where the bonds that were most impacted by what I'm talking about. So the impairment loss is not a realized loss but it’s a mark to market of these securities and that per IFRS rules it has to be shown in the P&L and that's what we did.

Okay. And finally the fund, just remind me it is - I think it expires in March, is that correct that you are going to be out of the fund?

You’re correct. You’re correct; our commitment with the fund expires April 1 to be precise.

[Operator Instructions] Our next question will come again from Luis Adaime with Newfoundland Capital Management.

Yes. Just are you able to disclose how much you are redeeming from the hedge fund from the fund in April?

Again I will take that question if you allow me. That’s pretty easy. Just go into the balance sheet and then look at the position of investments and that is the amount that will be redeemed.

It’s 53 million, as of the year-end balances of course, at 31st of December.

Great. Thanks.

Thank you.

All right, there are no further questions in the queue, so at this time I would like to pass it back over to Mr. Amaral.

Thank you, Chelsea. I would like to thank you for your time today and for your confidence on our ability to deliver solid results through more or less challenging business environments. Thanks also for the patient today because it took a lot longer for Christopher and I to go into the details and we will appreciate all of your questions. But rest assured, our bank is stronger than ever. We are doing very well in a difficult region, but we know how to do it. So thanks for trusting us. I look forward to talking to you for the first quarter of 2016 when we meet again in April. Have a good day.

Thank you, ladies and gentlemen. This concludes today’s teleconference and you may now disconnect.