Good morning everyone and thanks for joining our Fourth Quarter 2022 Earnings Call. Before we begin our presentation, allow me to remind that certain statements made during the course of this discussion may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to materially differ, including factors that may be beyond the Company's control. For a description of these risks, please refer to our filings with the U.S. Securities and Exchange Commission and our earnings release. Speaking on today's call is our CEO, Jorge Salas; and our CFO, Ana Mendez. Also joining us today are some of my colleagues from the executive team that will be available for Q&A. With this, let me turn the call to Jorge. Please go ahead.

Thank you, Carlos. Hello everyone and thank you for joining. Today, we will discuss our fourth quarter results and take the opportunity to summarize the progress on the execution of our first year, of our five year strategic plan. Let me start by reviewing the highlights of 2022 and then I will turn the call to Ana, our CFO who will explain the fourth quarter results in detail. Finally, I'll make some closing comments related to the outlook for 2023, how we're navigating the current environment and provide some guidance. Let me go straight to Slide 3 please. Amid geopolitical tensions, record high inflation and a global slowdown Bladex delivered very strong results. In 2022, we managed to grow our loan book as much as 18% during the year, increase our margins and maintain a very robust asset a quality. Our NII was up 71% year-on-year, net interest margin increased almost 40 basis points. And fees, both syndication and letter of credit fees were up 8% year-on-year. The results, net income for the year is almost 50% higher than last year, return on equity is almost 300 basis points higher than last year and perhaps more importantly the trend as we will see now is very positive. Behind these results, there is a renewed management team that is carefully executing a well thought out strategy designed to capitalize the strong upside potential of our unique business model while taking advantage of the current macro scenario. Economic activity in Latin America exceeded our expectations and remained resilient last year. The region grew almost 4% and foreign trade flows reached record high. The anticipated and decisive action of Latin American Central Banks, our Class A shareholders allowed a gradual absorption of global shocks. There is no doubt that the economic activity in…

Thanks, Jorge. Good morning, everyone. I am pleased to present our quarterly and annual results starting on Slide 5 with a $31 million profit for the fourth quarter of 2022, reaching a total of $92 million for the year denoting a 47% annual increase. In turn, annualized quarterly ROE has also been increasing, reaching a level of 11.6% in the fourth quarter positioning the bank for sustained two digit ROE. Actual ROE for the year 2022 reach close to 9%, up by 284 basis points from the previous year. In the next few slides, I will give you more color on the main drivers sustaining the positive trends that flow to the bar bottom-line and increased profitability. Turning to Slide 6. Total assets increased by 15% on an annual basis to $9.3 billion. On the back of strong 18% growth in the loan portfolio, reaching $6.8 billion at year-end. Including another $0.9 billion in contingencies, mainly consisting of the issuance and confirmation of letters of credit Bladex commercial portfolio closed at $7.7 billion, an 18% increase from the previous year. This strong growth in Bladex core business reflects its focus on enhancing cross-selling and expanding the customer base, while taking advantage of the macro environment in LATAM with increased economic and trade flows activity. The bank's commercial business is complemented by an investment portfolio, allowing for further diversification of exposures by country, with a balance of over $1 billion at year-end. In addition, the bank's cash and due from banks mostly placed with the New York Federal Reserve stood at 13% of total assets at year-end. Following a prudent liquidity management under Basel III standards, as required by Panama's banking regulator. Turning to Slide 7, you can see the high turnover of our commercial portfolio with maturities exceeding 60% of…

Thank you very much Annie. The macro economic and financial outlook for Latin America is far from being settled in balance. We see 2023 of the year of transition, transition towards lower growth, transition towards lower interest rates and transition towards a slightly lower inflation rate, but still above the target. Clearly, inflation is likely to be more persistent than many expected not so long ago. The space and timing for turning point interest rate is the big question mark. Our expectation is that this will happen towards the end of 2023. Key for the region and for Bladex is the fact that point trade flows that are currently at record levels will grow an additional 2% reaching almost $3 trillion by the end of 2023. That is 37% higher than pre-pandemic 2019 levels. There is no doubt that the surge in commodity prices exacerbated by the Russian invasion of Ukraine is the main driver of this positive trade shock for Latin America and particularly for South America. Having said that, while commodity price increases are favorable, clearly mediocre GDP growth and high inflation is not favorable for the region. In this context, during 2023, we will focus more on profitability and less on growth. Moving on to Slide 17, let me mentioned a few words on management's focus for the year. Unlike last year, we grew 18%. In 2023, we aim at single-digit growth, 3% to 4% consistent with a macro trend. We plan to maintain discipline credit underwriting standards, as the current high interest rate environment poses clear risks, particularly for over leveraged companies, especially if we coupled that with a demand shock. Thirdly, as Annie mentioned earlier, we see a positive trend in margins going forward. The bank is currently positioned as asset sensitive in anticipation of…

[Operator Instructions] We'll start with the first text question from Patrick Brown. First of all excellent results and congratulations. I have two questions. My first question is, given the recent supply chain disruptions, and particularly with China, there's a lot of talk that Mexico has benefited from near-shoring. What are you seeing on the ground? Has this represented any opportunities for Bladex? And then the second question, revenue growth during 2022 has helped to compensate the material increase in expenses. But part of this revenue growth is due to markets. How are you preparing the bank for potentially lower market scenario to sustain current cost to income ratio?

Thank you, Mr. Brown for your question. Let me start tackling the second question first. As we have mentioned, the main objective of our strategic plan is to make sure that the bank has sustainable returns. As we stated on Investor Day, the target is mid teens, returns by 2026. And we're clearly on track as you can see. Bladex share wallet with most clients is improving but there's still clearly a big upside, but a product offering is also limited in as I said, we're working hard on that. We are developing new products that will generate additional spreads and fees and that will compensate for sure for potential decrease in rates. This includes scaling our letter of credit business, project payments fees, revenues from treasury products, expanding in our deposit base. That will for sure compensate a decrease in rates as we make progress. And the bank gain scale we were for sure, maintain our efficiency and potentially improve it. I have to say having said all this that we do not see pre-pandemic interest rate levels in the near future for sure not a 0% where we that was you know, when everything started. In regards to the second question about near-shoring, short answer is yes, we are starting to see some business opportunities that we believe are the result of the first phases of near-shoring, particularly in Mexico, we're seeing companies developing industrial parks, mainly in the automotive and telecommunications as a matter of fact, I saw today an announcement that Tesla is considering opening manufacturing production in Mexico near-shoring for sure will strongly benefit large Latin conglomerates that our clients, most of our clients have us. Many of those clients are asking for capital for their investments. So, the short answer is yes, this should ultimately lead to increased trade flows between the U.S. and in Mexico. And that's the core of our business so inevitably will benefit blacks in the long run.

Okay, thank you very much for that answer. Our next question comes from Mr. Ricardo Vallarino, Individual Investor. You commented on the Investor Day that you set a target size with commercial portfolio of $10 billion to $11 billion for the year 2026. Recently, you have commented that you expect portfolio growth to slow down to 2023. Can you give us a roadmap on how you see Bladex reaching the investor target?

The pace of our growth is dependent in large part because of the dynamics of the region. So, we grew more than expected the first year and then we're slowing down a little bit this year, basically, because of the headwinds and the economics of the region that we're seeing now. So, the $10 billion to $11 billion target on our commercial portfolio is we're way on track. And again, the pace of the growth will depend largely in the dynamics of the region, but also to the extent that we have additional products and a larger customer base as we are getting now.

The next question is also text question. This is from Mr. Jeffrey Auto from Jeffrey Auto CPA. Congratulations on your fourth quarter and full year 2022 results. I had high expectations and you have exceeded them. I do have a concern about your NPLs. In the fourth quarter, they grew from 11 million to 35 million with the bank largely involved in trade finance. Generally short-term, I'll like to have some color on this. Is this result of the bank's changing lending criteria, a mistaken oversight on the Company, industry or country lending activity? Is this a level we should expect to see with the volume in the bank is doing?

Thank you for your question. First of all, credit underwriting standards have not changed and will not change. We will remain very conservative. We did have an uptick on NPLs and it's mainly due to one exposure in particular, is a non-banking financial institution in Mexico. That represents less than 0.3% of our loan book and it's largely reserved by the end of 2022. We have materially increased the coverage after the Company announced Chapter 11 in Mexico last November. So, we're really not concerned about our exposures in non-bank financial institutions. That is one of case in Mexico in our non-bank financial institutions do not represent more than 3% of our portfolio, and it's mainly regulated companies or affiliates of financial institutions, and it's mainly in Chile. So, we are we are not concerned and not changing our credit risk appetite.

Our next question comes from Andrea Atuesta from Bancolombia. I would like to have more color about what you were expecting in NIM and profitability in the rates begins to decrease but the expenses are stable. What will the strategy to maintain solid margins be?

Let me turn the call to, the question to Annie. Do you want to comment on rates?

Sure. Thank you. Yes, our expectations as Jorge already mentioned with respect to the NIM, what we see is, we still have to see all the re-pricing of interest rate increases in our assets and liabilities. So, in the very short-term, we expect net interest margin to continue expanding. Jorge mentioned between 2.2%, 2.4% that depends on a future fed actions and the re-pricing that we see in our balance sheet. After rate increases, hope they come to a stop. Like Jorge just mentioned in the previous answer, we are in the process of developing new structure products and tailor-based solutions that will enhance spreads and that's precisely what our five year plan is about. So, we do expect is to that to be able to compensate rate increases. And also as Jorge mentioned, we do not anticipate that interest rates are going to go back to 0% that we saw at the beginning of the pandemic. So more than normalize interest rates of around 2.5% to 3% the fed fund rates should remain constant. So, in our projections for ROE target of meetings, that is definitely contemplated. So margin expansion, new fee generating products and interest rates that in a normalized level should be about 2.5%.

I think Sam, our Chief Commercial Officer, wants to say if you're worried about that, too.

Yes, I'd just like to reinforce that, even though might not be so noticeable within the numbers, but a big part of the increasing profitability that we face, we then facing quarter after quarter comes from, well, I would say this new layer of business that Bladex has been building that is a core part of our new strategy that comes from, if you heard our Investor Day to the various types of arbitrage that we were doing, both in terms of clients, financing different countries as well as all the structure trade finance, parts, supply chain, finance receivable, discounts. And this and that layer of business have been increasing quarter after quarter. And that comes with the higher margin. Same as new clients, new clients that we've been onboarding, and I think you have the numbers for last year, we did increase that substantially. And we continue to build that new layer of business, and to build more optionality with everything that we do. So, we're not dependent on let's say the legacy business or the business or the business as usual, that we always been doing. I think that that is building well. And I think we're right on course, with what we the plan that we presented last year. Thank you.

We have a follow-up question from Andrea. How do you expect commissions and fees to behave in 2023 for syndication letters of credit business? What is your expectation of growth on this front?

Those traditions because they have, they're very different in nature. The letters of credit business, again, is part of the strategy that we've been doing. First of all, adding new clients that are specifically doing more this type of business. So, a lot of the clients that we onboarded last year, they were clients specifically for the letter of credit business as well as we've been focusing on cross-selling letters of credit business to clients that are only doing lending. And we've been more and more successful on that. So, I think that direction for that business in particular is to continue to grow. Of course, we depend on the market letter of credit is very tied to trade in the region. And if the trade flows reduced of course the business suffers, but that should be compensated a new or more clients that we're adding both existing clients in terms of cross sell as well as new clients. So for the syndication business, that is a completely different business and that is a business that it's really to grow the business more substantially, it takes time. Bladex where we have a quite strong captive base of investors that come along with us in the most transactions that we do. But we're also very careful on what we sell to the market. So, it's a business that we are -- we have not been more aggressive. We continue to do as we did in the past, creating solutions to clients that are willing to pay an extra fee for us to fundraise for them, that also is a business buy to M&A activity when they require certainty of funds. And we do. I mean, the market has been slower this year. What we added that is new is a project finance business that should also generate more structure or structure and fees. So, I expect this year to be very much in line with last year, hopefully, looking to increase the number, because we think we can increase the number, but we depend on market conditions for the syndication business.

Our next question comes from Michael Rockman from GBR Consulting. How is the management and the board of directors thinking about capital allocation with dividend being more than three times covered and the stock at a substantial discount to book value?

Capital allocation, dividends and all the alternatives. I mean, including buybacks, potential hybrid instrument, that's an ongoing discussion. At the board level, we just reported a 15.3 common equity Tier 1 ratio, which is at the lower end of the range that we have established. We want to operate the banquet ranges between 15 and 16. As I mentioned, we are committed to a sound capital position. It's a pillar of our business model, and it's a pillar of our investment grade rating. I can say we're focused on optimizing the bank capital allocation to support the growth of our long-term five year plan. And that will take the bank to between $10 billion and $11 billion commercial portfolio. So, if we're focused on the long-term target, more than the short-term.

I'm seeing no further questions at this point. I will now be passing the line back to the management team for the concluding remarks.

No, I just want to thank your questions and everybody for joining this call. As I mentioned before, we see 2023 as a year of transition in the region. We committed to profitability and perhaps not so aggressive growth this year, underwriting standards will not change and will focus on profitability going forward. That's what I have to say for now and thank you everybody for connecting.

Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and have a great day. Goodbye.