Banco Latinoamericano de Comercio Exterior SA Bladex (NYSE:BLX) Q3 2019 Earnings Conference Call - Final Transcript

Oct 18, 2019 • 11:00 am ET

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Banco Latinoamericano de Comercio Exterior SA Bladex (NYSE:BLX) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
N. Gabriel Tolchinsky

continue to find good opportunities to deploy our capital.

If it's okay, we should open it up for more questions, if there are any.

Analyst
Robert Tate

Thank you.

Operator
Operator

Thank you very much. [Operator Instructions]. Our next question will come from Robert Maltbie, Singular Research.

Analyst
Robert Maltbie

So Gabriel, I'm here for Jim Marrone today. Wanted to ask a little bit about the impact of the rate cuts in the U.S. short-term Fed funds etcetera and the trends there, and how you see that impacting your forward margins?

Executive
N. Gabriel Tolchinsky

Thank you, Robert. That is a very good question. And let me start with saying that, of course, lower U.S. dollar interest rate will have an impact on our margins. That said, we believe that we will be able to maintain our margins with incremental origination exposure on a go-forward basis, and be able to counteract that. Now for a more granular perspective, let me turn it over to Ana Graciela to answer.

Executive
Ana Graciela de Mendez

Thank you, Gabriel. Hi Robert. Yes, as we have mentioned before --- hello. With respect to our interest rate gap position, like I mentioned, in this particular quarter, we were negatively impacted because of the decrease in rate environment. But that should correct, because we are usually able to -- I mean, we have a very short tenure book, both in our asset and liability side. So with respect to the repricing, we don't see a continuous deterioration there. On the contrary, we should benefit from also lowering rates on our funding side, which eventually -- what happened in this particular quarter is that, because the way we were positioned, our lending book repriced a little quicker. But that should correct itself in the coming quarters. So with that, prospectively in the overall, even in increasing or decreasing rate environments, the bank is able to reprice its assets and liabilities within a short period of time.

And yes, I mean the lower rates at the end of the day, with the high capital balance that we have, obviously, has an impact on the return of that capital invested in our assets.

Analyst
Robert Maltbie

Thank you. A follow-up question on operating expenses. Looks like you've done a very good job of reducing your operating expenses, and I'm wondering, in terms of that trend over the next 12 months, do you see that ability to continue or remain about even, or just a little bit of color on that?

Executive
Ana Graciela de Mendez

Well, Gaby mentioned, we don't necessarily give prospects of our figures. Going forward, what I can tell you is, we are seeing the average trend in the recent quarters at about $10.2 million, $10.5 million, and that is what we call today, the run rate of expenses, understanding that during the fourth quarter, we may see some cyclical impact on expenses. But if you see the year overall, we should be around $10.5 million in quarterly expenses on average.

Analyst
Robert Maltbie

Thank you.

Operator
Operator

Thank you very much. [Operator Instructions]. At this time, we have no further questions in the queue. So