Hello, everyone, and welcome to the Bladex first quarter 2017 on today, the 21st of April, 2017. 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 today. 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 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 statements in the press release. And with that, I’m pleased to turn the call over to Mr. Rubens Amaral for his presentation.

Thanks, Katie. Good morning, everyone. Thanks for joining us today. We just released the results for the first quarter of 2017. I am pleased to report improved financial performance quarter-over-quarter with a slight improvement of ROE to 9.4%, with net income reaching $23.5 million, which represents earnings per share of $0.60 of a dollar. Let me comment about some key components of our activity in the quarter, which are reflected in slides three and four of the presentation being webcasted. So, let me start with loan growth. This quarter reflects the seasonality we experience every year due to the slow economic activity in Latin America during this period. There was an abundance of liquidity available to Latin America, which led to less demand for US dollar-denominated transactions and, not less important, prepayments of existing exposures, repeating what we saw in the fourth quarter of the 2016, thus hindering our ability to increase our balances in the quarter. Nevertheless, I'd like to emphasize that total disbursements increased year-over-year by $1 billion, reflecting our approach of back to basics, meaning more short-term trade finance is working. As far as fee income generation is concerned, we're off to a good start in terms of the letters of credit business. As we have built momentum, as anticipated last quarter, posting an increasing revenues of 31% year-over-year. The pipeline of syndicated loans is solid and we anticipate closing some transactions in the coming weeks, which will add to our fee income generation. Moving to funding, we continue to strengthen our funding base with deposits reaching $3.2 billion by the end of March. These deposits have proven to be sticky over time and has helped the bank to exhibit a competitive cost of funds. Then we move on to margins. So, from funding to margins, we…

Thank you, Rubens. Hello and good morning, everyone. Thank you for joining us on this call today. In discussing our first quarter 2017, I will focus on the main aspects that have impacted our results and I will make reference to the earnings call presentation that we have uploaded to our website, together with the earnings release, and which is being webcast, as we speak. So, Rubens already gave you an account of our performance in the first quarter of 2017 on pages three and four. So, let's dive right in to a more detailed recap of the numbers, starting on page five. The first quarter of 2017 closed with profit of $23.5 million compared to $13.3 million in the previous quarter and compared to $23.4 million in the first quarter of 2016. In our profit walk on this page five, we summarize the main drivers of our business performance in the first quarter of 2017 before we highlight further aspects in the following pages. As you heard from Rubens, the economic and political environment remained relatively volatile in the region during the first months of the year, adding to the seasonal slowdown in business activity that we usually see during this time of the year, especially in Southern Cone countries. We also continued implementing measures to de-risk our exposure profile, prioritizing pure trade and short-term transactions, while taking a hard look at country, sector and client concentrations. The combined effects of these elements made it very difficult to produce asset growth during this quarter. And net interest income declined quarter-over-quarter and year-on-year as a consequence. Just as we believe key LatAm economies are showing signs of bottoming out, we also believe that our internal de-risking efforts have neared their end, leaving us well positioned for growth going forward. Fee…

Thanks, Christopher. Ladies and gentlemen, we are ready for your questions.

Thank you, sir. [Operator Instructions] Our first question comes from Tito Labarta from Deutsche Bank.

Hi. Good morning, Rubens and Christopher. Thanks for the call. Couple of questions. I guess, first on provisions, if I understood correctly, you said about $5 million in provisions for ongoing restructuring. Do you expect to have more provisions for these ongoing restructuring going forward or when should that end? And once it does, what’s a more recurring level of provisions? Given the decline in growth in the quarter, it looks like, excluding that, the provision would have actually been negative. So, just want to get a sense of how you see that evolving through the rest of the year? And then, my second question on margins, you mentioned the shift in mix towards lower risk loans impacted margins a bit. But you now have higher interest rates in general. So, how do you see that evolving as well? Could there be some more pressure on margins from the mix or can you start to see some increases in the margin going forward? Thanks.

Thank you, Tito. Good morning. I’ll respond to your questions and Christopher will complement with more details for you. In terms of the provisions, the evolution that you're seeking for the year, as I tell you all the time when we talk about this subject, my expectation is to adjust provisions up as the portfolio grows. So, that is my primary focus. The growth of the portfolio and the necessary new provisions that comes with it. But, as you know well, we have transactions in this non-performing category that are requiring us to go through a negotiation process that is taking much longer because majority of these credits are in Brazil and things in Brazil, although improving a bit, continue to be very challenging. So, the length of time that we’re taking really to reach the negotiations with the companies forces us as we have adopted, as Christopher mentioned in his initial remarks, IFRS 9 to adjust these provisions accordingly. So, we expect – I mentioned in my comments as well – that we resolved basically two outstanding issues that we had in the problematic category. One of them is in Brazil. So, we expect that really to have a positive impact. But there remains a few other ones still open that might be the subject of some adjustments, but they might be, if any, minor in our view moving forward. In terms of margins, naturally, we are focusing on, what I called, back to basics. And that really puts pressure in terms of NIM. You saw a slight reduction, but we are keeping still over 2%. But as we have alluded before in our calls in previous quarters, you might prepare yourself eventually for some adjustment in these margins. So, Christopher, please, you can complement with more color to Tito.

Going back to the provision question, Tito, if you look at the page 12 of the earnings presentation, here you can see in this allowance walk, the $5 million that you mentioned in regards to increases in the stage 3, the NPLs. And that compares to a reduction in reserving requirements in stage 1, the new business that’s being brought on the book. And as Rubens mentioned, our expectation is that the stage 3 pressure is going to diminish over the course of the next few quarters. And depending on asset growth, reserve requirements will start to increase on the stage 1, which is a new business that we’ll bring on the books. Net-net, we think it should be overall lower levels of provisions compared to the ones we're seeing right now, but there will certainly not be zero provisions or even releases of provisions. That you should not expect. And moving on to the other question regarding net margins, I mentioned in my comments that we were actually even anticipating a more – a faster decline in NIM, given the pace of portfolio shift, mix shift towards the shorter end, towards the trade finance business transactions. And actually, this has been quite mitigated by two things. One, pricing discipline, as mentioned before, and secondly, the fact that LIBOR rates, the underlying base rates, have continued to increase gradually and continuously. And that has helped us mitigate the impact and we don't foresee a change in that overall environment. We don’t foresee a change in pricing discipline. We do not foresee a change in expected rises in the underlying market rate. So, there will be some pressure on NIM, yes, but it will not be precipitous. It will be very gradual declines, in the few basis points, quarter-over-quarter. That is our expectation. I hope that helped.

Yeah. No, it’s very helpful. So, if I understood correctly on the margins, no room for improvement, but kind of stable, maybe very small declines, given the shift in mix.

I think that sums it up. And to the extent this mix shift has run its course and we are starting to be more confident in the progress of the economies in the region and we can start looking at more medium-term transactions, we may be able to revert that trend again, but that remains to be seen.

Okay, very helpful. Thank you.

[Operator Instructions]. Our next question comes from Greg Eisen from Singular Research.

Thank you and good morning. Going back to the shorter-term trade finance activity within your loan book, I believe the chart on the slide deck showed – it reached 62% of loans outstanding for this quarter. And you said earlier that you’re slowing down the transition to that category. Is there a target you want to commit to as to how big a percentage of the portfolio you'd like to see short-term trade finance get to this year?

Greg, good morning. How are you?

Doing good.

Yeah. Okay. Thanks for your question. In our view, we work with a 65/35 type of group, and you see that we’re very close to that. And it’s a sweet spot for us in terms of our book of business because we continue to have an important portfolio with financial institutions. And for financial institutions, it’s where we really look at eventually developing this non-trade transactions. So, this category, also it's important to us, financial institutions, because this is a very liquid asset because they are also short-term in nature and allows the bank really to have access to readily available liquidity if we need eventually as we had in the past to resort to any type of reduction in our portfolio, to strengthen liquidity. So, 65 to 35, it's a sweet spot that we look at. And this might have a slight variation up and down, depending on how well we develop the portfolio of financial institutions. But I would work with 65/35.

Got it, got it. Okay. Let me move on. Going back to the loss provision and the loans that are being protracted and getting to resolution on restructuring, was there any deterioration in the overall quality of the recoverability of those loans? Or are you seeing – is it more a case, essentially, the overall – how do I say it – just the time cost of money before you’ll resolve it causing the increase in provision? I’m trying to understand, can this situation with those particular loans then get add to provision next quarter or the quarter after that? What's to stop it, I guess, is my question.

And I think the answer to your question, Greg – and then allow me please to take your question – is the latter taking into consideration the time factor because indeed the collateral will not get better if it takes longer to market that collateral. And so, that is taken into consideration. And that is the primary reason why reserves would need to be adjusted upwards. It’s not a deterioration of the situation itself. It just takes longer to get to the final conclusion, which is to get to the recoveries that are expected. And so, essentially, it’s the time factor. And to the extent that these proceedings, most legally in courts of justice and so forth, if they continue to experience delays, that will be the primary driver of further adjustments. But other than that, the economic environment is certainly not deteriorating any further. There is growing concern for these clients of ours, no question. And so, any pressure in regards to provision requirement would essentially come from the time factor.

Understood, understood. Okay, I'll let someone else go. Thanks.

Thank you.

Thank you.

[Operator Instructions]. At this time, I’m showing no further questions in the queue. I would now turn it back over to Mr. Amaral.

Thank you, Katie. Ladies and gentlemen, thank you for your attention today and we’re looking forward to talking to you next quarter. Have a good day.

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