Hello, everyone, and welcome to Bladex Second Quarter 2018 Conference Call on this 20th day of July, 2018. 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. Gabriel Tolchinsky, Chief Executive Officer; and Mrs. Ana Graciela de Méndez, 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 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 on the Safe Harbor statement in the press release. And with that, I am pleased to turn the call over to Mr. Tolchinsky for his presentation.

Thanks, Jonathan. Good morning, everyone and thank you for joining us today. Before Ana Graciela delves into key aspects of our earnings results for the second quarter, I would like to discuss some of the important developments that took place during the quarter and our expectations for the remainder of 2018 for the Latin American economic and business environment, and how this may impact our perception of risk and financial results. The second quarter was actually a tale of two quarters. During the first half of the quarter, expectations for economic growth and trade in the region were optimistic. Low perception of credit risk, tight lending spreads, resulting primarily from abundant liquidity in key markets were the norm and a relatively benign environment prevailed. In early May, the IMF issued a report declaring that growth in Latin America and the Caribbean is picking up, thanks to stronger demand at home and a favorable global environment, helped also by rebounding commodity prices. Furthermore, they predicted that growth in South America, led by the end of the recession in Argentina, Brazil and Ecuador, higher commodity prices and a moderation of inflation has provided space for monetary easing. And in the near term, Mexico, Central America and parts of the Caribbean are benefiting from stronger growth in the United States. They did however caution that heightened economic risk externally notably has shifted toward more protectionist policies, and a sudden tightening of global financial conditions could weigh heavily on growth prospects. The IMF report had good reason to urge caution. In May, the Argentine currency started depreciating, leading to a $50 billion IMF rescue package. On May 21st, a trucker strike in Brazil, protesting rising petrol prices brought the resignation of Petrobras CEO, Pedro Parente by June 1st. In Mexico, Presidential candidate, Andrés Manuel…

Thank you, Ana Graciela, and I leave it up to you Jonathan to open it for the Q&A.

Thank you. At this time we’ll open the floor for questions. [Operator Instructions] We’ll take our first question from Yuri Fernandes with J.P. Morgan.

Thank you, Ana Graciela, Gabriel, for an opportunity of taking questions. I have the first questions on impairments. My question is, how recurring are those items? My understanding is, this is related probably from past vintage that were like some recoveries of loans, things like this. So, I am not sure if we should continue to see such high impairments going on. So, that’s my first question, the recurrence of those items. And my second question is about volumes in Argentina. We saw it was a great quarter for Argentina, it was one of the main drivers of the growth. But, given the crisis in Argentina today, how do you see the prospect of growth there? I understand that maybe, given the higher effect in Argentina that may be actually good for you for exporting in the country. But, just to have a better glance on how that may be -- I don’t know, challenging for future growth for Bladex. Thank you.

Thank you, Yuri. Thank you for your question. Let me start addressing first the impairments question. I think that we are cognizant that the environment has turned, the context has turned a bit more challenging overall in Latin America. And as such, we want to monitor our credit risk exposure and make sure that the exposure we have goes along with the context and it’s able to withstand what could be a little bit stronger negative when coming out of the three major economies, meaning Mexico, Brazil, and to some extent Argentina as well. I think that your comment about these impairments being related to previous restructurings or problem loan positions, that comment is correct. Now, we want to be cognizant of the fact that this is the more challenging environment. So, we will be monitoring our exposure and correcting things accordingly. With respect to your question about Argentina, it’s important to understand that transactions get worked over a period of time. And these -- some of these transactions have been -- we’ve been working on that for quite some time. These are very good names, all with U.S. dollar generators. And as you correctly pointed out, when the waters get a bit more turbulent, that turns into an opportunity for us. We focus on what we consider very good credit names and U.S. dollar hard currency generators, and we’re comfortable with the exposure that we’ve gotten and the growth that we had so far.

Okay. So, just a follow-up on the first point, on let’s say cost of risk sustainability. So, it’s fair to assume some worsening going on, maybe as the Graciela was talking about, maybe share gain, or you may see maybe the cost of risk running at higher levels than the first and the second quarter, right?

I think, it’s a question of how -- for how long we have to -- we will experience this environment. If it persists, if the Brazilian economy because of political uncertainties gets into a more protracted downward trend, that will increase our perception of credit. I think, Brazil is a good example in terms of the prevailing framework that we were working with, a little bit of a decoupling between the political side and the economic side. We started seeing the Brazilian economy truly recovering at the beginning of the year. We had growth expectations north of 2%, somewhere between 2% and 2.4%. And I think that trucker strike clearly showed us that politics and economics in Brazil have not completely decoupled. We’re entering the final stretch of the election. We see the kind of the two extremes of choices being at the top of the list, both on the right and the left. So, it’s important to be cognizant of that context and understand that if the Brazilian economy is not able to recover, that will naturally flow through into higher cost for credit in Brazil, same with the election of AMLO, Andrés Manuel López Obrador, in Mexico. We are very open to hear and see what he is going to do, how NAFTA negotiations are going to move forward with his election. These are all kind of too early to tell situations. And as they evolve, we will act accordingly.

Thank you. Our next question comes from Greg Eisen with Singular Research.

I want to go back to Argentina, if I may, and ask, could you tell us what the average tenor of the loan book that you have in Argentina at quarter end was, what was the average tenor then? Ana Graciela de Méndez: It was 10 months. That’s the average tenor of the portfolio.

And I was going to ask if the loans themselves are dollar based loans as opposed to being paid -- repaid in Argentinean currency, what -- generally speaking… Ana Graciela de Méndez: Yes.

You said that the companies are -- the lenders -- borrowers are dollar generators but are the loans themselves dollar based? Ana Graciela de Méndez: Yes. All of our credit exposure is U.S. dollar based, or most of it, or either -- and it is the same as our funding. Our book is basically dollar based.

We have small exposure in Mexican pesos, but no exposure whatsoever to the Argentinean peso. Ana Graciela de Méndez: Or any other Latin American currency.

Right, okay. But just moving on, given the stress on the local economy in Argentina of the devaluation, can you talk about how you view the risk to your outstanding loans there and then just the risk of developing any new business there, given this devaluation? How do you see it playing out with your customers? Are you more worried than you were before because of this?

Well, first of all, thank you for your questions, Greg. And I think that we actually feel very good about it. Argentina is a very interesting place in terms of how devaluation is going to flow through to the cost structure of corporations and how they flow through the economy in general. I believe Argentina is one of the countries that for not being dollarized, the flows through to inflation is around 0.7, so meaning for every dollar equivalent of devaluation of the currency $0.70 will flow through to the inflation. So, it has a very quick impact. That being said, the fact that the cost structure of these exporters that we focus on have been in pesos, and they sell in dollar. The credit profile of our average Argentine borrower actually improves under depreciation of the currency environment. So, we feel very good about it. Let me just say one more thing that I neglected to say with respect to our Mexican peso exposure. Whatever we do in Mexican peso is much funded also in Mexican pesos or hedged. So, the resulting net exposure is dollar exposure. So, for all intents and purposes, the Bank has no foreign currency exposure in its book.

That’s great news. I appreciate you telling us that. If I could ask another question, could be unrelated to that, regarding the syndication business. You had a good quarter in syndication revenue in the fee income line. Could you talk about the size of the pipeline in terms of the dollar value size of potential syndications. Are we looking at under $100 million in the pipeline or $100 million to $200 million, or give us a range so we have some idea if there is going to be some kind of continued fee income in the next couple of quarters from this syndication side of the business? Ana Graciela de Méndez: Sure, Greg. Thank you, again for your question. Yes. The pipeline, as you saw this last quarter, we closed two transactions and in total, they represented $268 million in assets. So, as I mentioned, we already have two more being executed at the time. And the range usually is -- are similar levels. We would say, it’s between a 150 million to $700 million in pipeline that we’re looking -- transactions that we’re looking, not necessarily these ones that we’re working on right now. I cannot disclose the exact amount, but I can give you a range. The size of the transactions that we usually do is between a 100 and a [$150] transaction and we have already two in the process and we look forward to a strong pipeline of several transactions being negotiated at the time.

Thank you. [Operator Instructions] Mr. Tolchinsky, at this time, I am showing -- my apologies, there’s one question from Arthur Byrnes with Deltec Asset Management.

I am sorry to being so late on this. But, can you tell me going forward, is the focus still on trade finance or are you doing things that are longer term and less trade finance oriented? And if so, what’s the breakdown of the portfolio, the way you would like to see it?

Understood. Thank you, and very, very good question. We see Bladex’s mission as going in two directions. One is trade for Latin America and the other one is regional integration in Latin America. And those are two of our main focus for origination, both on our short-term as well as our medium term exposure. We really have almost no longer term -- long-term exposure in the book. We very often function as let’s call it the reference bank for a Colombian corporation that wants to do business in Mexico but does not have established banking relationships there and we know them and have been doing business with them in Colombia. We understand their business and are able to be there for them as the bank of reference when they start their operation in Mexico. So, view us in that context. In terms of portfolio allocation, trade will always represent somewhere between 54%, 55%, and let’s call it 65% of our book. That’s what it’s been historically, and you should expect that to continue to be the case. The remaining part of the portfolio, which is more with what we call multi-Latinas that are entities that have business interests and exposures throughout the region and represents the remainder of that exposure.

And what typically is that loan for? Is it a construction loan to open a factory somewhere else and therefore longer term, or what is the other 40% meant to look like in terms of type of loan? I know it’s multi-Latino and all that. But, what really is it?

It’s generally related to lending to eventually get them to have production capacity for export-related businesses and also expansions that financial institutions do in Latin America. We have significant exposure to banks mostly and other forms of financial institutions, but very often they expand beyond their borders, and we’re often there for them.

And the tenor of that kind of loan is, average?

On average it’s about three years, and three -- I would say three to five years, three years should be the kind of average…

Adjustable rate?

Absolutely.

Very good. I appreciate your answer. Good luck.

Thank you.

Thank you. [Operator Instructions] We’ll take a follow-up question from Greg Eisen with Singular Research.

I just had a question about your capital ratios. And specifically, given that the Company’s earning what we call it mid single-digit return on equity right now, most stock analysts would describe your balance sheet as probably having excess capital at this time. Given your current outlook and the Board’s attitude to the situation, is the Company and the Board predisposed to reducing the capital to improve returns, or do you want to hold on to the existing excess capital in order to, number one, fund future growth which you think the future will be a lot better than the recent past; and number two, provide a cushion for the inevitable rainy day when the next recession comes?

Greg, thank you very much for your question. That is a very good question. I would say that the answer is both. We view our strong capitalization as a solution for what is turbulent region, and we’re very happy that we have that. At the same time that turbulence is what creates opportunity for us. While local players get thrown off by the changing environment in the countries every time that crisis ensues and the big financial players, international players shy away from emerging markets and the region whenever there are these type of uncertainties, Bladex is always there and can spot the opportunity and act accordingly. So, having the strong capitalization enables us to both weather the storm or the bad weather, whatever -- in whatever form it comes, and it also allows us to capitalize on the opportunity that is created from a higher-margin, lower-liquidity environment. And that is what should ultimately fuel our growth and our capacity to deliver significantly higher earnings.

[Operator Instructions] At this time, I’m showing no further questions in the queue. I would like to turn the floor back over to Mr. Tolchinsky for closing remarks.

Thank you, Jonathan, and thanks everyone for participating in this call. And thank you for your support of Bladex and the name of the Board of Directors, the employees of Bladex and my name. I look forward to talking to you on our next quarter conference call. And we’re always open to dialogue with whoever would like to contact us and talk to us in the meantime. Thank you.

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