Q3 2026 Banco Latinoamericano de Comercio Exterior SA Earnings Call

October 27, 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Bladex Third Quarter 2026 Earnings Conference Call. A slide presentation is accompanying today's webcast and is also available on the investor section of the company's website, www.bladex.com. There will be an opportunity for you to ask questions at the end of today's presentation. Please note today's conference call is being recorded. As a reminder, all participants will be in a listen-only mode. I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead.

Speaker #2: Good morning. Ladies and gentlemen, and welcome to the BLADEX third-quarter 2026 earnings conference call. As light presentation is accompanied today's webcast and is also available on investor section of the company's website, www.bladx.com, there will be an opportunity for you to ask questions at the end of today's presentation.

Speaker #2: Please note today's conference call is being recorded. As a reminder, all participants will be in a listen-only mode. I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer.

Speaker #2: Sir, please go ahead.

Jorge Salas: Good morning, everyone, and thank you for joining us today to discuss Bladex's results for Q3 2026. I will begin with the key highlights. Annette, our CFO, will then take the call to walk you through the financial results in more detail. After that, I will return with an update on strategy and our outlook for the rest of the year. Finally, we will open the call for questions. This was an outstanding quarter for Bladex. Our commercial portfolio and net interest income both reached new record levels. Also, net interest income grew significantly from a year ago, and we delivered strong earnings. We did this while maintaining strong credit quality, further improving the portfolio's risk profile as Stage 2 exposures decline, and preserve a strong capital position. It is an encouraging combination of financial KPIs as we enter the final part of the year.

Jorge Salas: Good morning, everyone, and thank you for joining us today to discuss Bladex's results for Q3 2026. I will begin with the key highlights. Annette, our CFO, will then take the call to walk you through the financial results in more detail. After that, I will return with an update on strategy and our outlook for the rest of the year. Finally, we will open the call for questions. This was an outstanding quarter for Bladex. Our commercial portfolio and net interest income both reached new record levels. Also, net interest income grew significantly from a year ago, and we delivered strong earnings. We did this while maintaining strong credit quality, further improving the portfolio's risk profile as stage two exposures decline, and preserve a strong capital position. It is an encouraging combination of financial KPIs as we enter the final part of the year.

Speaker #3: Good morning, everyone, and thank you for joining us today to discuss BLADEX's results for the third quarter of 2026. I will begin with a key highlights: Annette, our CFO, will then take the call to walk you through the financial results in more detail.

Speaker #3: After that, I will return with an update on strategy and our outlook for the rest of the year. Finally, we will open the call for questions.

Speaker #3: This was an outstanding quarter for BLADEX. Our commercial portfolio and net interest income both reached new record levels. Also, net interest income grew significantly from a year ago and we delivered strong earnings.

Speaker #3: We did this while maintaining strong credit quality further improving the portfolio's risk profile as stage two exposures declined and preserve a strong capital position.

Speaker #3: It is an encouraging combination of financial KPIs as we enter the final part of the year. Our commercial portfolio reached a record of $15 billion.

Jorge Salas: Our commercial portfolio reached a record of $15 billion, up 15% from Q2 and 38% from a year ago. The quarter included a $1 billion 1-year sovereign loan to the Republic of Panama in support of the government's liability management program. This was a one-time opportunity distinct from the transactions we typically originate. It is a sovereign exposure to Panama, which S&P and Moody's rate investment grade with relatively low capital consumptions for its size and a spread well above the sovereign bond curve. This transaction clearly demonstrates our ability to execute at scale, supported by our funding flexibility. Even excluding that single Panama sovereign loan, loans grew 7% from Q2 and 29% from a year ago. That growth included trade and working capital financing with established clients, as well as medium-term financing for acquisitions and energy projects, mostly in Colombia and Argentina.

Jorge Salas: Our commercial portfolio reached a record of $15 billion, up 15% from Q2 and 38% from a year ago. The quarter included a $1 billion one-year sovereign loan to the Republic of Panama in support of the government's liability management program. This was a one-time opportunity distinct from the transactions we typically originate. It is a sovereign exposure to Panama, which S&P and Moody's rate investment grade with relatively low capital consumptions for its size and a spread well above the sovereign bond curve. This transaction clearly demonstrates our ability to execute at scale, supported by our funding flexibility. Even excluding that single Panama sovereign loan, loans grew 7% from Q2 and 29% from a year ago. That growth included trade and working capital financing with established clients, as well as medium-term financing for acquisitions and energy projects, mostly in Colombia and Argentina.

Speaker #3: Up 15% from the second quarter and 38% from a year ago. The quarter included a $1 billion one-year sovereign loan to the Republic of Panama in support of the government's liability management program.

Speaker #3: This was a one-time opportunity distinct from the transactions we typically originate. It is a sovereign exposure to Panama which S&P and Moody's rate investment grade with relatively low capital consumptions for its size, and the spread well above the sovereign bond curve.

Speaker #3: This transaction clearly demonstrates our ability to execute at scale supported by our funding flexibility. Even excluding that single Panama sovereign loan, loans grew 7% from the second quarter and $29% from a year ago.

Speaker #3: That growth included trade and working capital financing with established clients as well as medium-term financing for acquisitions and energy projects mostly in Colombia and Argentina.

Jorge Salas: Needless to say, we have not relaxed our underwriting standards to achieve this growth. Most of the growth this quarter came from the higher-grade segments where we found attractive arbitrage opportunities. We know the sponsors, we understand the exposures, and we know the risks. Competition for high-quality assets continues to pressure lending spreads across the region. Latin American assets continue to attract investors' interest, supported by the region's relative distance from major conflicts and its role as a supplier of energy and other commodities. Regional sovereign risk premiums remain near historical lows. Net interest income reached a record of $79.8 million, up 9% from the Q2, and net interest margin rose to 2.30%. It is worth mentioning, however, that this quarter's margin improvement reflected lower funding costs and a temporary benefit from loan prepayments, even as lending spreads remain under pressure. Annette will comment more on that shortly.

Speaker #3: Needless to say, we have not relaxed our underwriting standards to achieve this growth. Most of the growth this quarter came from the higher-grade segments, where we found attractive arbitrage opportunities.

Speaker #3: We know the sponsors we understand the exposures, and we know the risks. Competition for high-quality assets continued to pressure lending spreads across the region.

Speaker #3: Latin American assets continued to attract investors' interest supported by the region's relative distance from major conflicts and its role as a supplier of energy and other commodities.

Speaker #3: Regional sovereign risk premiums remained near historical lows. Net interest income reached a record of $79.8 million. Up 9% from the second quarter and net interest margin rose to 2.30%.

Speaker #3: It is worth mentioning, however, that this quarter's margin improvement reflected lower funding costs and a temporary benefit from loan prepayments even as lending spreads remained under pressure.

Speaker #3: Annette will comment more on that shortly. As planned, deposits continued to grow, average deposits increased 6% quarter over quarter and $22% year over year, helping lower our funding costs and supporting margins while the commercial portfolio expanded.

Jorge Salas: As planned, deposits continue to grow. Average deposits increased 6% quarter-over-quarter and 22% year-over-year, helping lower our funding costs and supporting margins while the commercial portfolio expanded. Our fee-generating businesses keep making good progress. Non-interest income reached $19.3 million, up 26% from a year ago. Letters of credit generated record quarterly income, supported by strong trade finance activity, particularly in the commodities sector. In addition, we completed four structured transactions, bringing our total to 13 for the first nine months of 2026. Our syndication and project finance teams continue to generate strong distribution fees while working closely with our client derivatives teams to provide hedges that help mitigate risk, improve cross-sell, and boost client profitability. Total revenues reached $99.1 million, nearly 20% higher than a year ago. Our efficiency ratio stood at 25.8% for the quarter.

Speaker #3: Our fee-generating businesses keep making good progress, non-interest income reached $19.3 million, up 26% from a year ago. Letters of credit generated record quarterly income supported by stronger trade finance activity, particularly in the commodity sector.

Speaker #3: In addition, we completed 4 structured transactions, bringing our total to $13 for the first 9 months of 2026. Our syndication and project finance teams continue to generate strong distribution fees while working closely with our client derivatives teams to provide edges that help mitigate risk, improve cross-sale, and boost client profitability.

Speaker #3: Total revenues reached $99.1 million nearly 20% higher than a year ago. Our efficiency ratios stood at 25.8% for the quarter. Revenue growth is allowing us to advance our strategic initiatives while maintaining cost discipline.

Jorge Salas: Revenue growth is allowing us to advance our strategic initiatives while maintaining cost discipline. With budgeted planned investments underway next quarter, we expect the full year efficiency ratio to move closer to our guidance of 27% for the year. Provision expense increased as a result of portfolio growth and additional reserve coverage on existing Stage 3 exposures, reinforcing our conservative approach to credit risk management. Credit performance remains solid. Net income reached $63.2 million, 15% higher than a year ago, and adjusted ROE was 15%. Our Tier 1 ratio ended the quarter at 16.2%. Both our ROE and our capital ratios are at the higher end of the range of our guidance for the year. In summary, we are pleased with the profitability we delivered this quarter as the business continues to grow, and we expect a solid business pipeline for the remainder of the year.

Jorge Salas: Revenue growth is allowing us to advance our strategic initiatives while maintaining cost discipline. With budgeted planned investments underway next quarter, we expect the full year efficiency ratio to move closer to our guidance of 27% for the year. Provision expense increased as a result of portfolio growth and additional reserve coverage on existing stage three exposures, reinforcing our conservative approach to credit risk management. Credit performance remains solid. Net income reached $63.2 million, 15% higher than a year ago, and adjusted ROE was 15%. Our Tier 1 ratio ended the quarter at 16.2%. Both our ROE and our capital ratios are at the higher end of the range of our guidance for the year. In summary, we are pleased with the profitability we delivered this quarter as the business continues to grow, and we expect a solid business pipeline for the remainder of the year.

Speaker #3: With budgeted planned investments underway, next quarter we expect the full-year efficiency ratio to move closer to our guidance of 27% for the year. Provision expense increased as a result of portfolio growth and additional reserve coverage on existing stage three exposures.

Speaker #3: Reinforcing our conservative approach, to credit risk management. Credit performance remains solid. Net income reached $63.2 million. 15% higher than a year ago and adjusted ROE was 15%.

Speaker #3: Our tier one ratio ended the quarter at 16.2%. Both our ROE and our capital ratios are at the higher end of the range of our guidance for the year.

Speaker #3: In summary, we are pleased with the profitability we delivered this quarter, as the business continues to grow and we expect a solid business pipeline for the remainder of the year.

Jorge Salas: With that overview, let me turn it over to Annette for a closer look at the financial results. Annette, over to you.

Speaker #3: With that overview, let me turn it over to Annette for a closer look at the financial results. Annette, over to you.

Annette van Hoorde de Solís: Thank you, Jorge, and good morning, everyone. As Jorge highlighted, Q3 was another strong quarter for BLADEX, demonstrating the strength of our balance sheet and our ability to execute at scale. Turning to our financial performance, net income reached $63.2 million, up 15% year over year. Compared with Q2, net income was 5% lower, mainly reflecting the normalization of transaction-driven fee income, higher operating expenses, and increased provisions, partially offset by higher net interest income. Return on average assets was 1.8%, and adjusted return on equity was 15%, in line with our full-year guidance. For the first nine months of the year, net income totaled $186 million, up 9% year over year, with a return on average assets of 1.9% and an adjusted return on equity of 15.2%. Let me now walk you through the key financial drivers behind these results, beginning with the commercial portfolio.

Annette van Hoorde de Solís: Thank you, Jorge, and good morning, everyone. As Jorge highlighted, Q3 was another strong quarter for Bladex, demonstrating the strength of our balance sheet and our ability to execute at scale. Turning to our financial performance, net income reached $63.2 million, up 15% year-over-year. Compared with Q2, net income was 5% lower, mainly reflecting the normalization of transaction-driven fee income, higher operating expenses, and increased provisions, partially offset by higher net interest income. Return on average assets was 1.8%, and adjusted return on equity was 15%, in line with our full-year guidance. For the first nine months of the year, net income totaled $186 million, up 9% year-over-year, with a return on average assets of 1.9% and an adjusted return on equity of 15.2%. Let me now walk you through the key financial drivers behind these results, beginning with the commercial portfolio.

Speaker #2: Thank you, Jorge, and good morning, everyone. As Jorge highlighted, the third quarter was another strong quarter for BLADEX. Demonstrating the strength of our balance sheet and our ability to execute at scale.

Speaker #2: Turning to our financial performance, net income reached $63.2 million, up 15% year over year. Compared with the second quarter, net income was 5% lower.

Speaker #2: Mainly reflecting the normalization of transaction-driven fee income, higher operating expenses, and increased provisions, partially offset by higher net interest income. Return on average assets was 1.8% and adjusted return on equity was 15%, in line with our full-year guidance.

Speaker #2: For the first 9 months of the year, net income totaled $186 million, up 9% year over year, with a return on average assets of 1.9% and an adjusted return on equity of 15.2%.

Speaker #2: Let me now walk you through the key financial drivers behind these results, beginning with the commercial portfolio. The commercial portfolio reached a record $15 billion at quarter end, up 15% from the second quarter and $38% year over year.

Annette van Hoorde de Solís: The commercial portfolio reached a record $15 billion at quarter end, up 15% from Q2 and 38% year over year. Two factors explain this growth: a landmark sovereign transaction and continued expansion with established top-tier clients in markets and sectors we know well. The Panama sovereign transaction accounted for around half of our commercial portfolio growth during the quarter and includes flexibility for early repayment. I want to highlight this transaction because it demonstrates five strengths of our business model. First, execution capacity: our ability to underwrite and execute large transactions, capturing significant market opportunities. Second, asset quality: a short-term exposure to an investment-grade sovereign consistent with our risk appetite. Third, capital efficiency: relatively low capital consumption under Basel III, generating a very attractive risk-adjusted return on capital. Fourth, funding flexibility.

Annette van Hoorde de Solís: The commercial portfolio reached a record $15 billion at quarter end, up 15% from Q2 and 38% year-over-year. Two factors explain this growth: a landmark sovereign transaction and continued expansion with established top-tier clients in markets and sectors we know well. The Panama sovereign transaction accounted for around half of our commercial portfolio growth during the quarter and includes flexibility for early repayment. I want to highlight this transaction because it demonstrates five strengths of our business model. First, execution capacity: our ability to underwrite and execute large transactions, capturing significant market opportunities. Second, asset quality: a short-term exposure to an investment-grade sovereign consistent with our risk appetite. Third, capital efficiency: relatively low capital consumption under Basel III, generating a very attractive risk-adjusted return on capital. Fourth, funding flexibility.

Speaker #2: Two factors explain this growth. A landmark sovereign transaction and continued expansion with established top-tier clients in markets and sectors we know well. The Panama Sovereign Transaction accounted for around half of our commercial portfolio growth during the quarter and includes flexibility for early repayment.

Speaker #2: I want to highlight this transaction because it demonstrates 5 strengths of our business model. First, execution capacity. Our ability to underwrite and execute large transactions capturing significant market opportunities.

Speaker #2: Second, asset quality. A short-term exposure to an investment-grade sovereign, consistent with our risk appetite. Third, capital efficiency. Relatively low capital consumption under Basel III, generating a very attractive risk-adjusted return on capital.

Speaker #2: Fourth, funding flexibility. Our ability to mobilize funding quickly through our correspondent banking network, aligned with the tenor of the transaction. And fifth, earnings. A positive contribution to absolute net interest income, despite temporarily diluting reported NIM.

Annette van Hoorde de Solís: Our ability to mobilize funding quickly through our correspondent banking network aligned with the tenor of the transaction. And fifth, earnings: a positive contribution to absolute net interest income despite temporarily diluting reported NIM. Beyond this transaction, the growth was broad-based across our loan portfolio. Total loans reached $12.3 billion, up 18% quarter over quarter and 41% year over year. Growth was concentrated primarily in short-term lending, including increased financing requirements associated with higher oil prices and regional trade flows. Medium-term lending also contributed, supported by acquisition financing and energy sector transactions with attractive risk-adjusted returns. Contingencies reached $2.5 billion, up 5% quarter over quarter and 16% year over year, supported by letter of credits and commitments, the latter related mainly to project finance and infrastructure. From a geographic perspective, Panama became our largest country exposure at 17%.

Annette van Hoorde de Solís: Our ability to mobilize funding quickly through our correspondent banking network aligned with the tenor of the transaction. And fifth, earnings: a positive contribution to absolute net interest income despite temporarily diluting reported NIM. Beyond this transaction, the growth was broad-based across our loan portfolio. Total loans reached $12.3 billion, up 18% quarter-over-quarter and 41% year-over-year. Growth was concentrated primarily in short-term lending, including increased financing requirements associated with higher oil prices and regional trade flows. Medium-term lending also contributed, supported by acquisition financing and energy sector transactions with attractive risk-adjusted returns. Contingencies reached $2.5 billion, up 5% quarter-over-quarter and 16% year-over-year, supported by letter of credits and commitments, the latter related mainly to project finance and infrastructure. From a geographic perspective, Panama became our largest country exposure at 17%.

Speaker #2: Beyond these transactions, the growth was broad-based across our loan portfolio. Total loans reached $12.3 billion, up 18% quarter over quarter and 41% year over year.

Speaker #2: Growth was concentrated primarily in short-term lending, including increased financing requirements associated with higher oil prices and regional trade flows. Medium-term lending also contributed, supported by acquisition financing and energy sector transactions with attractive risk-adjusted returns.

Speaker #2: Contingencies reached $2.5 billion, up 5% quarter over quarter and 16% year over year, supported by letter of credits and commitments, the latter related mainly to project finance and infrastructure.

Speaker #2: From a geographic perspective, Panama became our largest country exposure at 17%. Excluding the sovereign transaction, Panama would have represented nearly 10%, broadly in line with other major markets such as Colombia, and Brazil.

Annette van Hoorde de Solís: Excluding the sovereign transaction, Panama would have represented nearly 10%, broadly in line with other major markets such as Colombia and Brazil. Importantly, this growth has not come at the expense of credit quality. Our portfolio remains focused on financial institutions, top-tier corporations, and sovereign exposures, with 68% scheduled to mature within one year, preserving flexibility to reprice and redeploy capital. Looking ahead, excluding the Panama transaction, we expect our full-year commercial portfolio growth to be around 25%. Turning now to asset quality. Credit quality remains strong despite the significant expansion of our portfolio, reflecting our disciplined underwriting standards and proactive credit risk management. At quarter end, 99% of total credit exposure, or $16.4 billion, was classified as Stage 1, compared with 98.4% in the prior quarter.

Speaker #2: Importantly, this growth has not come at the expense of credit quality. Our portfolio remains focused on financial institutions, top-tier corporations, and sovereign exposures. With $68% scheduled to mature within one year, preserving flexibility to reprice and redeploy capital.

Speaker #2: Looking ahead, excluding the Panama transaction, we expect our full-year commercial portfolio growth to be around 25%. Turning now to asset quality. Credit quality remains strong.

Speaker #2: Despite the significant expansion of our portfolio, reflecting our discipline underwriting standards and proactive credit risk management. At quarter end, 99% of total credit exposure, or 16.4 billion, was classified as stage one.

Speaker #2: Compared with 98.4% in the prior quarter. Stage two exposure declined to $82 million, or just 0.5% of the portfolio, from $162 million in the second quarter.

Annette van Hoorde de Solís: Stage 2 exposure declined to $82 million, or just 0.5% of the portfolio, from $162 million in Q2, reflecting the sale of one exposure, the scheduled amortizations, and credit rating improvements. Importantly, exposures requiring closer monitoring continue to decline even as our portfolio expands, with no new exposure migrating to impaired status during the quarter. Additionally, Stage 3 exposure remains stable at $75 million, while their share of the credit portfolio declined to 0.4% as the portfolio expanded. Credit provisions for the quarter totaled $10.4 million, compared with $8.6 million in the prior quarter. The additional provisions primarily reflect increased reserve coverage on existing Stage 3 exposures rather than new credit deterioration, together with provisions associated with the portfolio growth. This is consistent with our proactive credit oversight and prudent provisioning approach.

Speaker #2: Reflecting the sale of one exposure, scheduled amortizations, and credit rating improvements. Importantly, exposures requiring closer monitoring continue to decline. Even as our portfolio expands.

Speaker #2: With no new exposure migrating to impair status, during the quarter. Additionally, stage three exposure remains stable at 75 million, while their share of the credit portfolio declined to 0.4% as the portfolio expanded.

Speaker #2: Credit provisions for the quarter totaled 10.4 million, compared with 8.6 million in the prior quarter. The additional provisions primarily reflect increased reserve coverage on existing stage three exposures.

Speaker #2: Rather than new credit deterioration, together with provisions associated with the portfolio growth. This is consistent with our proactive credit oversight and prudent provisioning approach.

Annette van Hoorde de Solís: As a result, total reserve coverage of impaired credits increased to 1.4 times compared with 1.25 times in the prior quarter. Overall, these results reinforce the strength of our credit portfolio and our proactive and prudent approach to credit risk management even as we continue to grow our business. Turning now to funding. This quarter clearly demonstrates the strength and flexibility of our funding platform. We expanded our balance sheet by $2 billion, supported by a diversified deposit franchise, broad access to international capital markets, and a deep network of long-standing correspondent banking relationships. Deposits remain a central pillar of our funding strategy. Average deposits grew 6% quarter over quarter and 22% year over year, supporting an improved funding mix and more competitive funding spreads. At quarter end, deposits stood at $7.9 billion, up 16% year over year. Our deposit base remains well-diversified.

Annette van Hoorde de Solís: As a result, total reserve coverage of impaired credits increased to 1.4 times compared with 1.25 times in the prior quarter. Overall, these results reinforce the strength of our credit portfolio and our proactive and prudent approach to credit risk management even as we continue to grow our business. Turning now to funding. This quarter clearly demonstrates the strength and flexibility of our funding platform. We expanded our balance sheet by $2 billion, supported by a diversified deposit franchise, broad access to international capital markets, and a deep network of long-standing correspondent banking relationships. Deposits remain a central pillar of our funding strategy. Average deposits grew 6% quarter-over-quarter and 22% year-over-year, supporting an improved funding mix and more competitive funding spreads. At quarter end, deposits stood at $7.9 billion, up 16% year-over-year. Our deposit base remains well-diversified.

Speaker #2: As a result, total reserve coverage of impair credits increased to 1.4 times compared with 1.25 times in the prior quarter. Overall, these results reinforce the strength of our credit portfolio and our proactive and prudent approach to credit risk management, even as we continue to grow our business.

Speaker #2: Turning now to funding. This quarter clearly demonstrates the strength and flexibility of our funding platform. We expanded our balance sheet by $2 billion, supported by a diversified deposit franchise, broad access to international capital markets, and a deep network of longstanding correspondent banking relationships.

Speaker #2: Deposits remain a central pillar of our funding strategy, average deposits grew 6% quarter over quarter and 22% year over year, supporting an improved funding mix and more competitive funding spreads.

Speaker #2: At quarter end, deposits stood at $7.9 billion, up 16% year over year. Our deposit base remains well diversified, central banks and class A shareholders accounted for 36% of deposits, corporations 26%, financial institutions 23%, brokers 13%, and multilaterals 2%.

Annette van Hoorde de Solís: Central banks and Class A shareholders accounted for 36% of deposits, corporations 26%, financial institutions 23%, brokers 13%, and multilaterals 2%. Yankee CDs continue to perform well, with average balances increasing 19% during the quarter, further supporting diversification and the depth of our deposit franchise. What distinguished this quarter, however, was our ability to leverage our broader funding platform to support significant balance sheet growth. The $1 billion Panama sovereign transaction was mostly funded through short-term facilities from our correspondent banking network, aligned with the tenor of the transaction. This demonstrates the depth of our strategic banking relationships and our ability to mobilize substantial funding efficiently. We also continue to diversify our medium-term funding, raising approximately $450 million across three debt programs: a public issuance in Mexico, public offerings in Panama, and private placements under our EMTN program.

Speaker #2: Gianchi's CDs continue to perform well, with average balances increasing 19% during the quarter, further supporting diversification and the depth of our deposit franchise. What distinguished this quarter, however, was our ability to leverage our broader funding platform to support significant balance sheet growth.

Speaker #2: The $1 billion Panama sovereign transactions was mostly funded through short-term facilities from our correspondent banking network, aligned with the tenor of the transaction. This demonstrated the depth of our strategic banking relationships and our ability to mobilize substantial funding efficiently.

Speaker #2: We also continue to diversify our medium-term funding, raising approximately $450 million across three debt programs. A public issuance in Mexico, public offerings in Panama, and private placements under our EMTM program.

Annette van Hoorde de Solís: The Mexican issuance also generated additional demand, allowing for a reopening executed during the quarter. Together, these funding capabilities provide diversification across products, maturities, geographies, and investor types, giving us the flexibility to support significant business opportunities while maintaining a prudent approach to liquidity and balance sheet management. Regarding liquidity, we maintain a solid and conservative position with nearly $2 billion in liquid assets, representing 12% of total assets, consistent with our internal liquidity risk appetite and regulatory requirements. Let me now turn to capital. The Basel III Tier 1 ratio ended the quarter at 16.2%, compared with 16.6% in Q2, remaining above our 15% to 16% operating range. The regulatory capital adequacy ratio under Panama's framework stood at 14.3%, well above the regulatory minimum and consistent with our internal risk appetite. What is important this quarter is what these ratios show.

Speaker #2: The Mexican issuance also generated additional demand, allowing for a reopening executed during the quarter. Together, this funding capabilities provide diversification across products, maturities, geographies, and investor types, giving us the flexibility to support significant business opportunities while maintaining a prudent approach to liquidity and balance sheet management.

Speaker #2: Regarding liquidity, we maintain a solid and conservative position, with nearly $2 billion in liquid assets, representing 12% of total assets, consistent with our internal liquidity risk appetite and regulatory requirements.

Speaker #2: Let me now turn to capital. The Basel III tier one ratio ended the quarter at 16.2%, compared with 16.6% in the second quarter, remaining above our 15 to 16% operating range.

Speaker #2: The regulatory capital adequacy ratio unders Panama's framework stood at 14.3%, well above the regulatory minimum and consistent with our internal risk appetite. What is important this quarter is what these ratios show.

Annette van Hoorde de Solís: Loan growth was supported by our available capital, with the Tier 1 ratio adjusting by less than 50 basis points. This is because most of the incremental growth came from investment-grade sovereigns and plus sovereign exposures, which carry a lower capital consumption under Basel III and do not compute under Panama's local methodology. This is consistent with the capital management strategy we outlined following our AT1 issuance, deploying capital selectively into attractive opportunities while preserving financial flexibility. Looking ahead, we expect our Tier 1 ratio to move towards our operating range, supporting continued business growth. Finally, reflecting our solid earnings performance, the board approved to maintain a quarterly cash dividend of $0.6875 per share, reinforcing our commitment to shareholder returns while retaining capital to support our growth and protect our investment-grade credit profile. Moving now to net interest income and margins.

Speaker #2: Loan growth was supported by our available capital, with the tier one ratio adjusting by less than 50 basis points. This is because most of the incremental growth came from investment-grade sovereigns and class A sovereign exposures, which carry a lower capital consumption under Basel III and do not compute under Panama's local methodology.

Speaker #2: This is consistent with the capital management strategy we outlined following our 81 issuance, deploying capital selectively into attractive opportunities while preserving financial flexibility. Looking ahead, we expect our tier one ratio to move towards our operating range supporting continued business growth.

Speaker #2: Finally, reflecting our solid earnings performance, the board approved to maintain a quarterly cash dividend of $68.75 per share, reinforcing our commitment to shareholder returns while retaining capital to support our growth and protect our investment-grade credit profile.

Speaker #2: Moving now to net interest income and margins. Net interest income reached a record of $79.8 million, in the third quarter, up 9% from the prior quarter and 18% year over year.

Annette van Hoorde de Solís: Net interest income reached a record of $79.8 million in Q3, up 9% from the prior quarter and 18% year over year. For the first nine months, NII totaled $223 million, up 11% compared with the same period last year. The main driver was volume. Average loan balances increased 8% during the quarter, more than offsetting continued pressure on underlying lending spreads. Net interest margin stood at 2.30% in the quarter, six basis points higher than in Q2, while net interest spreads improved to 1.73%. Three factors contributed to this improvement. First, the accelerated recognition of deferred fees following early repayments of certain medium-term loans, providing a temporary benefit to lending yields. Second, improved funding spreads supported by continued growth in average deposits and optimization of our funding mix. And third, efficient yet prudent liquidity management, maintaining adequate liquidity levels with our risk appetite.

Annette van Hoorde de Solís: Net interest income reached a record of $79.8 million in Q3, up 9% from the prior quarter and 18% year-over-year. For the first nine months, NII totaled $223 million, up 11% compared with the same period last year. The main driver was volume. Average loan balances increased 8% during the quarter, more than offsetting continued pressure on underlying lending spreads. Net interest margin stood at 2.30% in the quarter, six basis points higher than in Q2, while net interest spreads improved to 1.73%. Three factors contributed to this improvement. First, the accelerated recognition of deferred fees following early repayments of certain medium-term loans, providing a temporary benefit to lending yields. Second, improved funding spreads supported by continued growth in average deposits and optimization of our funding mix. And third, efficient yet prudent liquidity management, maintaining adequate liquidity levels with our risk appetite.

Speaker #2: For the first nine months, NII totaled $223 million, up 11% compared with the same period last year. The main driver was volume. Average loan balances increased 8% during the quarter, more than offsetting continued pressure on underlying lending spreads.

Speaker #2: Net interest margin stood at 2.30% in the quarter, 6 basis points higher than in the second quarter, while net interest spread improved to 1.73%.

Speaker #2: Three factors contributed to this improvement. First, the accelerated recognition of deferred fees following early repayments of certain medium-term loans providing a temporarily benefit to lending deals.

Speaker #2: Second, improved funding spreads supported by continued growth in average deposits and optimization of our funding mix. And third, efficient yet prudent liquidity management, maintaining adequate liquidity levels with our risk appetite.

Annette van Hoorde de Solís: Importantly, underlying lending spreads remain under pressure, particularly in the highly competitive market for high-quality assets. As for the Panama sovereign transaction, it was originated during H2 of September, so its impact on the Q3 NIM was limited. In Q4, its full quarter contribution is expected to temporarily dilute reported NIM while adding meaningfully to absolute NII. We are not managing our business to maximize NIM in isolation. Our focus remains on generating attractive risk-adjusted returns and sustainable earnings while maintaining strong asset quality. With the significant growth in average earning assets and our strong ending loan portfolio, we enter Q4 with a solid base to sustain strong net interest income generation, supported by our diversified and efficient funding platform. Let me now turn to non-interest income, which continues to be a key pillar of our revenue diversification strategy.

Speaker #2: Importantly, underlying lending spreads remain under pressure, particularly in the highly competitive market for high-quality assets. As for the Panama sovereign transaction, it was originated during the second half of September, so its impact on the third quarter name was limited.

Speaker #2: In the fourth quarter, its full quarter contribution is expected to temporarily dilute reported name, while adding meaningfully to absolute NII. We are not managing our business to maximize name in isolation.

Speaker #2: Our focus remains on generating attractive risk-adjusted returns and sustainable earnings while maintaining strong asset quality. With the significant growth in average earning assets, and our strong ending loan portfolio, we enter the fourth quarter with a solid base to sustain strong net interest income generation, supported by our diversified and efficient funding platform.

Speaker #2: Let me now turn to non-interest income, which continues to be a key pillar of our revenue diversification strategy. For the first nine months of the year, non-interest income excluding the impact of hedging derivative, which a record $57.6 million, up 19% year over year.

Annette van Hoorde de Solís: For the first nine months of the year, non-interest income, excluding the impact of hedging derivatives, reached a record $57.6 million, up 19% year over year. In Q3, non-interest income reached $19 million, up 15% year over year following an exceptionally strong Q2. Within this total, fees and commissions amounted to $16.3 million. Letter of credits and guarantees generated $9.6 million, their highest historical quarterly level, supported by a strong trade finance activity. Credit commitments contributed $3.6 million, primarily from project finance transactions and medium-term committed facilities, providing an additional source of stable fee income. Structuring and distribution generated $3.9 million in upfront structuring and syndication fees. During the quarter, we closed four transactions across the region, mobilizing $470 million, with Bladex retaining $365 million.

Annette van Hoorde de Solís: For the first nine months of the year, non-interest income, excluding the impact of hedging derivatives, reached a record $57.6 million, up 19% year-over-year. In Q3, non-interest income reached $19 million, up 15% year-over-year following an exceptionally strong Q2. Within this total, fees and commissions amounted to $16.3 million. Letter of credits and guarantees generated $9.6 million, their highest historical quarterly level, supported by a strong trade finance activity. Credit commitments contributed $3.6 million, primarily from project finance transactions and medium-term committed facilities, providing an additional source of stable fee income. Structuring and distribution generated $3.9 million in upfront structuring and syndication fees. During the quarter, we closed four transactions across the region, mobilizing $470 million, with Bladex retaining $365 million.

Speaker #2: In the third quarter, non-interest income reached $19 million, up 15% year over year, following an exceptionally strong second quarter. Within this total, fees and commissions amounted to $16.3 million.

Speaker #2: Letter of credits and guarantees generated $9.6 million. Their highest historical quarterly level. Supported by a strong trade finance activity. Credit commitments contributed $3.6 million, primarily from product finance transactions and medium-term committed facilities providing an additional source of stable fee income.

Speaker #2: Structuring and distribution generated $3.9 million, in upfront structuring and syndication fees. During the quarter, we closed four transactions across the region, mobilizing $470 million, with BLADEX retaining $365 million.

Annette van Hoorde de Solís: This financing also created opportunities for BLADEX to arrange and distribute longer-term takeout facilities, which we expect to execute between Q4 2026 and Q1 2027. Year to date, we have completed 13 transactions, mobilizing about $2.7 billion. Client derivatives doubled to $2.6 million in the quarter. These pilot transactions continue to perform well, mainly linked to interest rate hedges on project finance transactions, and provide a solid starting point as we prepare to launch our new treasury platform. Overall, non-interest income represented 19% of total revenues, reinforcing the growing contribution of these activities to our business. While these revenues are transactional in nature and may fluctuate between quarters, the breadth of contributions across business lines reflect continued progress in our revenue diversification strategy. For the full year, we expect non-interest income to be closer to 18% of total revenues.

Annette van Hoorde de Solís: This financing also created opportunities for Bladex to arrange and distribute longer-term takeout facilities, which we expect to execute between Q4 2026 and Q1 2027. Year to date, we have completed 13 transactions, mobilizing about $2.7 billion. Client derivatives doubled to $2.6 million in the quarter. These pilot transactions continue to perform well, mainly linked to interest rate hedges on project finance transactions, and provide a solid starting point as we prepare to launch our new treasury platform. Overall, non-interest income represented 19% of total revenues, reinforcing the growing contribution of these activities to our business. While these revenues are transactional in nature and may fluctuate between quarters, the breadth of contributions across business lines reflect continued progress in our revenue diversification strategy. For the full year, we expect non-interest income to be closer to 18% of total revenues.

Speaker #2: These financing also created opportunities for BLADEX to arrange and distribute longer-term takeout facilities, which we expect to execute between the fourth quarter of 2026 and the first quarter of 2027.

Speaker #2: Year to date, we have completed 13 transactions, mobilizing about $2.7 billion. Client derivative doubled to $2.6 million in the quarter. These pilot transactions continue to perform well, mainly linked to interest rate hedges on project finance transactions, and provide a solid starting point as we prepare to launch our new treasury platform.

Speaker #2: Overall, non-interest income represented 19% of total revenues. Reinforcing the growing contribution of this activities to our business. While this revenues are transactional in nature, I may fluctuate between quarters the breadth of contributions across business lines reflect continued progress in our revenue diversification strategy.

Speaker #2: And for the full year, we expect non-interest income to be closer to 18% of total revenues. Turning now to expenses and efficiency. Operating expenses total $26.6 million, up 7% from the prior quarter.

Annette van Hoorde de Solís: Turning now to expenses and efficiency. Operating expenses totaled $26.6 million, up 7% from the prior quarter. The increase was mainly driven by higher personnel expenses, including specialized talent to support our strategic initiatives and variable compensation reflecting the bank's performance. For the first nine months of the year, expenses total $71.4 million, with an efficiency ratio of 25.4%, while the Q3 ratio stood at 25.8% compared with 24.1% in Q2. Looking ahead, we expect operating expenses to increase in Q4, reflecting the usual seasonality of our business and the timing of planned strategic initiatives, which concentrates certain operating expenses at the year-end. Based on our year-to-date performance and expected Q4 expenses, we now anticipate a full-year efficiency ratio better than our original guidance. Before I hand the call back to Jorge, let me briefly sum up.

Speaker #2: The increase was mainly driven by higher personal expenses, including specialized talent to support our strategic initiatives and variable compensation reflecting the bank's performance. For the first nine months of the year, expenses total $71.4 million, with an efficiency ratio of 25.4, while the third quarter ratio stood at 25.8% compared with 24.1% in the second quarter.

Speaker #2: Looking ahead, we expect operating expenses to increase in the fourth quarter. Reflecting the usual seasonality of our business and the timing of planned strategic initiative.

Speaker #2: Which concentrates certain operating expenses adherent. Based on our year to date performance and expected four quarter expenses, we now anticipate a full year efficiency ratio better than our original guidance.

Speaker #2: Before I hand the call back to Jorge, let me briefly sum up. We entered the fourth quarter with a solid earning asset base, supporting continued strong net interest income generation.

Annette van Hoorde de Solís: We enter Q4 with a solid earning asset base supporting continued strong net interest income generation. Looking ahead, two variables would influence Q4 profitability, the timing of transaction-driven fee income, and seasonally higher operating expenses as we continue to execute on our strategic initiatives. As already mentioned, the main market challenge remains the continued pressure on lending spreads. Overall, this quarter shows that we can grow at scale while preserving the asset quality, capital strength, and returns that define BLADEX. With that, I will turn the call back to Jorge.

Annette van Hoorde de Solís: We enter Q4 with a solid earning asset base supporting continued strong net interest income generation. Looking ahead, two variables would influence Q4 profitability, the timing of transaction-driven fee income, and seasonally higher operating expenses as we continue to execute on our strategic initiatives. As already mentioned, the main market challenge remains the continued pressure on lending spreads. Overall, this quarter shows that we can grow at scale while preserving the asset quality, capital strength, and returns that define Bladex. With that, I will turn the call back to Jorge.

Speaker #2: Looking ahead to variables with influence fourth quarter profitability. The timing of transaction-driven fee income and seasonally higher operating expenses as we continue to execute on our strategic initiative.

Speaker #2: And as Jorge mentioned, the main market challenge remains the continued pressure on lending spreads. Overall, this quarter shows that we can grow at scale while preserving the asset quality capital strength and returns that define BLADEX.

Speaker #2: With that, I'll turn the call back to Jorge.

Jorge Salas: Thank you, Annette. Great job as always. Let me close with a few comments on strategy and execution and our outlook for the rest of the year. Growth in our commercial business and fee income show that two pillars of our plan are delivering results. The third pillar, as you all know, is improving funding costs through transactional services. Almost a dozen of important corporate clients have shown interest in being part of our cash management pilot and expect to onboard them in stages, beginning with basic capabilities early next year. In the transactional correspondent banking business for cross-border payments, we are close to completing onboarding of our second client, and three additional institutions have begun the process. We remain firmly on track to ending the year with three to five correspondent banking clients, consistent with a gradual ramp-up we presented at our Investor Day earlier this year.

Speaker #1: Thank you, Annette. Great job as always. Let me close with a few comments on strategy, and execution, and our outlook for the rest of the year.

Speaker #1: Growth in our commercial business and fee income showed that two pillars of our plan are delivering results. The third pillar, as you all know, is improving funding costs through transactional services.

Speaker #1: Almost a dozen of important corporate clients have shown interest in being part of our cash management pilot and expect to onboard them in stages, beginning with basic capabilities, early next year.

Speaker #1: In the transactional correspondent banking business, for cross-border payments, we are close to completing onboarding of our second client in three additional institutions have begun the process.

Speaker #1: We remain firmly on track to ending the year with three to five correspondent banking clients consistent with the gradual ramp-up represented at our investor day earlier this year.

Jorge Salas: As we have said, these services will ultimately enable us to capture more of the transactional flows we already finance, strengthening the relationship and activity associated with our existing businesses. Over time, this should also contribute to a more ample and stable funding base with lower costs. We are taking a measured approach to onboarding, ensuring that the necessary services and controls are in place as the business grows. Regarding guidance for the year, we expect commercial portfolio growth of around 35%. Excluding the government of Panama transaction, growth for the year will be around 25%, still significantly above our original guidance of 13% to 15%. Average deposit growth should end the year at around 20%, also above guidance.

Speaker #1: As we have said, this services will ultimately enable us to capture more of the transactional flows we already finance, strengthening the relationship and activity associated with our existing businesses.

Speaker #1: Over time, this should also contribute to a more ample and stable funding base with lower costs. We are taking a measured approach to onboarding, ensuring that the necessary services and controls are in place as the business grows.

Speaker #1: Now, regarding guidance for the year, we expect commercial portfolio growth of around 35%. Excluding the government of Panama transaction, growth for the year will be around 25%, still significantly above our original guidance of 13 to 15%.

Speaker #1: Average deposit growth should end the year at around 20%, also above guidance. As we mentioned earlier, because of ample liquidity and increased competition in the region, we expect net interest margins compression of around five basis points, with NIM ending the year at roughly 2.25%.

Jorge Salas: As we mentioned earlier, because of ample liquidity and increased competition in the region, we expect net interest margin compression of around 5 basis points, with NIM ending the year at roughly 2.25%. The efficiency ratio will be around 27%, slightly better than guidance. We reaffirm our adjusted return on equity guidance of 14% to 15% and our Tier 1 operating range of 15% to 16%. This year's growth pace is exceptional, especially given the one-off Panama transaction. We do not expect to repeat it. Having said that, we do expect to sustain the larger commercial portfolio we have built as individual transactions mature. Before I finish, let me briefly address our view on Brazil following Sunday's presidential election. The result has brought a pullback in equities and a weaker BRL following the gains ahead of the vote.

Speaker #1: The efficiency ratio will be around 27%, slightly better than guidance. We reaffirm our adjusted return on equity guidance of 14 to 15%, and our tier one operating range of 15 to 16%.

Speaker #1: This year's growth pace is exceptional, especially given the one-off Panama transaction. We do not expect to repeat it, having said that, we do expect to sustain the larger commercial portfolio we have built as individual transactions mature.

Speaker #1: Before I finish, let me briefly address our view on Brazil, following Sunday's presidential election. The result has brought a pullback in equities, and a weaker real.

Speaker #1: Following the gains ahead of the vote. Regardless of Sunday's election outcome, the key challenge for Brazil's next administration will be addressing the fiscal imbalance and put public debt on a sustainable trajectory.

Jorge Salas: Regardless of Sunday's election outcome, the key challenge for Brazil's next administration will be addressing the fiscal imbalance and put public debt on a sustainable trajectory. Achieving this will require credible fiscal consolidation while navigating a more fragmented Congress. Making consensus building and coalition management will be essential to advancing the necessary reforms. Brazil has a large, diversified economy and deep financial markets that provide important buffers during periods of uncertainty. In BLADEX, we remain comfortable with our exposures in Brazil for three main reasons. One, by design, our credits were underwritten to perform well irrespective of this election's outcome. Two, we have been even more cautious in the last few quarters given the sharp increase in corporate defaults in the country.

Jorge Salas: Regardless of Sunday's election outcome, the key challenge for Brazil's next administration will be addressing the fiscal imbalance and put public debt on a sustainable trajectory. Achieving this will require credible fiscal consolidation while navigating a more fragmented Congress. Making consensus building and coalition management will be essential to advancing the necessary reforms. Brazil has a large, diversified economy and deep financial markets that provide important buffers during periods of uncertainty. In Bladex, we remain comfortable with our exposures in Brazil for three main reasons. One, by design, our credits were underwritten to perform well irrespective of this election's outcome. Two, we have been even more cautious in the last few quarters given the sharp increase in corporate defaults in the country.

Speaker #1: Achieving this will require credible fiscal consolidation while navigating a more fragmented Congress. Making consensus building and coalition management will be essential to advancing the necessary reforms.

Speaker #1: Brazil has a large, diversified economy, and deep financial markets that provide important buffers during periods of uncertainty. In BLADEX, we remain comfortable with our exposures in Brazil, for three main reasons.

Speaker #1: One, by design, our credits were underwritten to perform well respective of this election's outcome. Two, we have been even more cautious in the last few quarters, given the sharp increase in corporate defaults in the country.

Jorge Salas: And three, since over 75% of the exposures in the country matures in less than 12 months, we believe we are well-positioned to capture any potential repricing upside or even to reduce exposures if market conditions deteriorate. We enter the final quarter with strong momentum. We will continue to pursue profitable growth, maintain our risk discipline, and advance the transactional services that will deepen our client relationships. That concludes our review of the Q3. Operator, please open the line for questions.

Speaker #1: And three, since over 75% of the exposures in the country matures in less than 12 months, we believe we are well positioned to capture any potential repricing upside or even to reduce exposures if market conditions deteriorate.

Speaker #1: We enter the final quarter with strong momentum. We will continue to pursue profitable growth, maintain our risk discipline, and advance the transactional services that will deepen our client relationships.

Speaker #1: That concludes our review of the third quarter operator. Please open the line for questions.

Operator: Thank you very much for the presentation. We will now begin the Q&A session for investors and analysts. If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking put hand down. There is also the possibility to ask questions through the Q&A icon at the bottom of the screen. You may select the icon and type your question with your name and company. Written questions that are not addressed during the current earnings call will be returned by the investor relations team. Our first question comes from Ricardo Buchpiguel with BTG Pactual. You can open a line, sir.

Speaker #2: Thank you very much for the presentation. We will now begin the Q&A session for investors and analysts. If you wish to ask a question, please click on raise hand.

Speaker #2: If you are questions has already been answered, you can leave the queue by click on put hand down. There is also the possibility to ask questions through the Q&A icon at the bottom of the screen.

Speaker #2: You may select the icon and type your question if your name and company. Written questions that are not addressed during the earnest call will be returning by the investor relations team.

Speaker #2: Our first question comes from Ricardo Fuchipigo with PTG Pactual. You can open the line, sir.

Ricardo Buchpiguel: Hi, everyone. Thank you for the opportunity of making questions. I wanted to ask about two topics here. We continue to see the acceleration in the portfolio growth now approaching 25% when you exclude the Panama loan. I understand what you mentioned, that this growth not necessarily should repeat itself. The 2030 guidance kind of points to a figure of around 10%, and the duration of the portfolio is low. But given the stronger activity we have been seeing so far, do you believe at least 15% in 2027 is something feasible to expect? To help on that, if you could explain in more details which loan products have been driving more of this pickup and comment why potentially these loans might not necessarily be renewed and the portfolio growth would decelerate.

Speaker #3: Hi everyone. Thank you for the opportunity of making questions. I wanted to ask about two topics here. So we continue to see the acceleration in the portfolio growth, now approaching 25% when we exclude the Panama loan.

Speaker #3: I understand what you mentioned, that this growth not necessarily should repeat itself. The 2030 guidance kind of point, okay, growth around like 10% and the duration of the portfolio is low.

Speaker #3: But given the stronger activity we have been seeing so far, do you believe at least like 15% in 2027 is something feasible to expect?

Speaker #3: And to help on that, if you could explain more in more details which loan products have been driving more of this pickup and comment why potentially these loans might not necessarily be renewed and the portfolio growth would decelerate.

Ricardo Buchpiguel: To my second question, you discussed here that one of the challenging aspects of the year was the spread compression we have been seeing given the strong activity on LatAm bonds capital markets. More recently, we have been seeing that global bond spreads has been widening around the world, and I believe we start to see some widening also in LatAm bonds, right, more towards the end of September. With that, do you believe it could be approaching some sort of inflection point on the spread side? Thank you.

Speaker #3: And to my second question, we discussed here that one of the challenging aspects of the year was the spread compression we have been seeing given the strong activity on Latin bonds capital markets.

Speaker #3: But more recently, we have been seeing that global bond spread has been widening around the world. And I believe we start to see some widening also in Latin bonds, right?

Speaker #3: More towards the end of September. So with that, do you believe it could be approaching some sort of inflection point on the spread side?

Speaker #3: Thank you.

Jorge Salas: Hi, Ricardo. Thank you for your two questions. Regarding growth in 2027, we are in the process of putting together our budget for next year. I am not ready to say what the growth for next year is going to be. Between 13% and 15% looks reasonable, but we will give guidance for next year during next quarter call. As far as the products that have been driving growth, I think they are pretty spread over all our product suite. But maybe, Sam, you can complement on which product has been responsible for growth this year.

Speaker #4: Hi Ricardo. Thank you for

Speaker #1: your two questions. Regarding growth in 2027, we are in the process of putting together our budget for next year. So I'm not ready to say what the growth for next year is going to be.

Speaker #1: I mean, between 13 and 15% looks reasonable, but we will give guidance for next year during next quarter call. As far as the products that have been driving growth, I think they're pretty spread over all our product suite, but maybe Sam, you can complement on which product has been responsible for growth this year.

Sam Canineu: Yep. Just quickly on the growth, I just want to make a comment that I think we have two levers, the spreads and the volumes, right? And which we play constantly depending on where the market is. I think our view, or my opinion at least, is that we are in a moment of exuberance in the credit markets in LatAm, all across, which we see that spreads are not necessarily reflecting the risk. In that scenario, I think this year we've been opting to weight more our growth towards short-term exposure, not to trap medium-term capital in low profitability transactions. And of course, meanwhile, we'll continue to deploy our higher value-added products or product initiatives, which helps us to alleviate some of the margin pressure.

Speaker #4: Yep. Just quickly on the growth, I just want to make a comment that I think we have two levers. The spreads and the volumes, right?

Speaker #4: And which we play constantly depending on where the market is. I think our view, or my opinion at least, is that we are in a moment of exuberance in the credit markets in Latin.

Speaker #4: All across, which we see that spreads are not necessarily reflecting the risk. In that scenario, I think this year we've been opting to wait more our growth towards short-term exposure, not to trap medium-term capital in low profitability transactions.

Speaker #4: And of course, meanwhile, we'll continue to deploy our higher value-added products or product initiatives, which helps us to alleviate some of the margin pressure.

Sam Canineu: We do note that although we haven't seen, let's say, a much change in demand for medium-term transactions, we've noticed what you mentioned, the slowdown in the DCM transactions, which clearly is a competitor to us, and a modest increase in the spreads. If that persists, I think this could be a positive for us, and we are positioned to take advantage of it. And most of the growth you're seeing is on short term exactly to gain time and to use our balance sheets, and not trap capital and have a good dry powder to absorb this repricing that you mentioned. We've, for example, start seeing possibilities of companies that have bond maturing mid or end of next year that not necessarily think is a good moment to go to the bond market.

Speaker #4: We do know that we are we see some though we haven't seen the, let's say, a much change in demand for medium-term transactions. We've noticed what you mentioned, the slowdown in the DCM transactions, which clearly is a competitor to us.

Speaker #4: And a modest increase in the spreads. If that persists, I think this could be a positive for us. And we are positioned to take advantage of it and most of the growth you're seeing is on short-term exactly to gain time and to use our balance sheet and not trapped capital and have a good dry powder to absorb this repricing that you mentioned.

Speaker #4: We, for example, start seeing possibilities of companies that have bond maturing mid or end of next year that not necessarily think is a good moment to go to the bond market.

Sam Canineu: Those we're talking about investment grade or quasi investment grade companies that have an open access that they just want to delay, and this is a perfect moment for us for bridge to bonds and give them more time. But of course, price accordingly or better than it would be if we would lend them directly in other circumstances. In terms of product, for example, given where the oil prices are, we're seeing very strong demand for trade finance. And we are definitely capturing that. That explains some of the growth in short term. We're also seeing still, I would say, good demand for project finance or event-driven transaction or M&A financing. But like Jorge Salas said, I think it's well spread across our various product initiatives.

Speaker #4: Those we're talking about investment grade or class investment grade companies that have an open access that they just want to delay and this is a perfect moment to for us for bridge to bonds and give them more time.

Speaker #4: But of course, price accordingly or better than it would be if we would lend them directly in other circumstances. In terms of product, we are for example, we're seeing giving where the oil prices are, we're seeing very strong demand for trade finance.

Speaker #4: And we are definitely capturing that. That explains some of the growth and short-term. We're also seeing still, I would say, good demand for project finance or event-driven transaction or M&A financing.

Speaker #4: And but like Jorge said, I think it's well spread across our various product initiatives.

Jorge Salas: I don't know if that is a sufficient answer for your first question. On spread compression, you're right. Spreads in the global bonds have been widening. It's not our base case that we're going to be conservative most likely going forward. As I said before, we do see a lot of demand for Latin American assets. So there could be upside in spreads in 2027. I think it's too early to predict what's going to happen.

Speaker #1: I don't know if that is a sufficient answer for your first question. On spread compression, you're right. I mean,

Speaker #4: spreads in the global bonds have been widening it's not our base case that we're going to be conservative most likely going forward. We do see a lot, as I said, in before we do see a lot of demand for Latin American assets.

Speaker #4: So it could there could be upside in spreads in 2027. I mean, it's I think it's too early to predict what's going to happen.

Ricardo Buchpiguel: That is super clear. One quick follow-up on your revised NIM estimate. Are you assuming any increase in the Fed fund rate, or this would be a kind of an upside risk for 2026?

Speaker #3: And that's super clear. One quick follow-up on your revised NIM estimates. Are you assuming any increase in the Fed fund rate or this would be a kind of an upside risk for 2026?

Jorge Salas: Annette?

Annette van Hoorde de Solís: Yeah. Hi, Ricardo. How are you doing? As you know, the bank maintains a relative neutral position in our interest rate gap. So we expect that, yes, the capital benefit that we receive from the interest rate hikes that already happened and might happen in the future will have a gradual effect in our balance sheet as we reprice both the asset and the liability side. However, in the short term, we will see an impact initially on the deposits that will be then partially offset at the beginning with the liquidity also repricing. But in the following weeks and months, then the loans will start to reprice, and then that impact will be neutral going forward. But as long as we keep a positive curve on interest rate, that should benefit the bank.

Speaker #1: Annette?

Speaker #2: Yeah. Hi Ricardo. How are you doing? As you know, we demand maintains a relative neutral position in our interest rate cap. So we expect that, yes, that the capital benefit that we receive from the interest rate hikes that already happened and might happen in the future will have a gradual effect in our balance sheet as we reprice both the asset and the liability side.

Speaker #2: However, in the short term, we'll see an impact initially on the deposits that will be then partially offset at the beginning with the liquidity also repricing.

Speaker #2: But as the in the following weeks and months, then the loans will start to reprice and then that impact will be neutral going forward.

Speaker #2: But as long as we keep a positive curve on interest rate, that should benefit the bank.

Ricardo Buchpiguel: Thank you very much.

Speaker #3: Thank you very much.

Operator: The next question comes from Daniel Mora with Credicorp Capital. You can open your microphone, sir.

Speaker #5: The next question comes from Daniel Mora with credit card capital. You can open your microphone, sir.

Daniel Mora: Hi, good morning, and thank you for the presentation. I have a couple of questions. The first one is related to the USD 1 billion 1-year transaction with the government of Panama. I would like to understand what is the transaction expected contribution to NII and NIM while it remains on the balance sheet. Also, to understand the impact on NIM, if it is related to the size of the operation of the transaction, the maturity, the deal, or if the impact is coming from the increase in the funding cost given the use of short-term borrowings. That is the first question. The second question is also a follow-up on margins. Given the ongoing pressure that you mentioned on USD lending spreads and the benefit from the accelerated deferred fee recognition this quarter, what do you consider to be a normalized NIM level excluding these benefits?

Speaker #6: Hi. Good morning and thank you for the presentation. I have a couple of questions. The first one is related to the $1 billion, one-year transaction with the government of Panama.

Speaker #6: I would like to understand what is the transaction expected contribution to net interest income and NIM while it remains on the balance sheet and also to understand the impact on NIM if it is related to the size of the operation of the transaction, the maturity, the yield, or if the impact is coming from the increase in the funding cost given the use of short-term borrowings.

Speaker #6: That's the first question. And the second question is also a follow-up on margins. Given the ongoing pressure that you mentioned on US dollar lending spreads and the benefit from the accelerated deferred fee recognition this quarter, what do you consider to be a normalized NIM level excluding these benefits?

Daniel Mora: Also, looking ahead, how sensitive is the NIM to the Fed rates? If we could see the benefits coming from a higher for longer interest rates come from the Fed. Thank you so much.

Speaker #6: And also looking ahead, how sensitive is the need to the fair rates and if we could see the benefits coming from a higher for longer interest rates come from the Fed?

Speaker #6: Thank you so much.

Jorge Salas: Let me just give a brief introduction to the first question on the Panama sovereign loan. It is more earnings contribution and capital efficiency than maximizing NIM. It is actually dilutive to our NIM ratio, but the RAROC on that loan is probably one of the best ones we have had this year. I do not know. Do you want to give more details, Annette, on.

Speaker #1: Let me just give a brief introduction to the first question on the Panama sovereign loan. I mean, it's more earnings contribution and capital efficiency than that maximizing NIM.

Speaker #1: It's actually diluted to our NIM ratio, but the risk-adjusted return on that loan is probably one of the best ones we've had this year.

Speaker #1: I don't know do you want to give more details, Annette, on.

Annette van Hoorde de Solís: I think it is clear. The transaction, it does have a very high RAROC in our own calculations. As you mentioned, it is due mainly to the fact that it is a short-term exposure to an investment-grade sovereign. Therefore, it consumes very low capital, and the credit cost associated with the transaction is very low. As you mentioned, it was funded very efficiently in a timely manner through our correspondent banking network. So this is a way of reflected in the RAROC that it represents. As we move forward to Q4, we do see an impact in the NIM. Since this transaction was closed towards the end of September, the impact that we see in the NIM this quarter was limited. So as we move forward to Q4, the impact will be a little bit higher, diluting the NIM a little bit.

Speaker #2: I think it's clear. The transaction does have a very high reroute in our own calculations. As you mentioned, it is due mainly to the fact this is a short-term exposure to an investment grade sovereign.

Speaker #2: Therefore, it sorry. It consumes very low capital and the credit cost associated with the transaction is very low. As you mentioned, it was funded very efficiently in a much thinner through our correspondent banking network.

Speaker #2: So it is this is a way of reflected in the reroute that it represents. And as we move forward, to the fourth quarter, we do see an impact in the NIM since this transaction was closed towards the end of September.

Speaker #2: The impact that we see in the NIM this quarter was limited. So as we move forward to this fourth quarter, the impact will be a little bit higher diluting the NIM a little bit.

Annette van Hoorde de Solís: However, the significant benefit that we will have in the NII will be important as well.

Speaker #2: However, the significant benefit that we will have in the NII, we will import that as well.

Jorge Salas: Regarding the second question on NIM, I think we are targeting 225. Today, we are at 230 NIM. We think we will close the year at 225 for the year. But we are seeing pressures on that interest margin. The way to go around is to simply gather more deposits. Deposits, as you saw, are growing substantially. I do not know, Annette, if you want to. We do expect it, obviously, as Annette said before, any potential rate hikes will benefit our net interest margin.

Speaker #1: And then regarding the second question on NIM, I think we already we're talking 225. So we're today we're at 230 NIM. We think we'll close the year at 225 for the year.

Speaker #1: But we are seeing we are seeing pressures on that interest margin. We'll I mean, the way to go around it is to simply gather more deposits.

Speaker #1: Deposits, as you saw, are growing substantially. I don't know, Annette, if you want to and we do expect that obviously, as Annette said before, any rate hikes, potential rate hikes will benefit our net interest margin.

Annette van Hoorde de Solís: I think we already provided the guidance for the growth of deposits. We do expect the growth of deposits to be around 20% this year. So we will be complementing or supporting the growth of the portfolio going forward. Although, the growth for the Q4 is a lot more normalized than the one that we saw during the Q3. This will be supported by a mix of different funding sources as we move forward.

Speaker #2: And I think we already provided the guidance for the growth of deposits. We do expect the growth of deposits to be around 20% this year.

Speaker #2: So we will complementing the or supporting the growth of the portfolio going forward, although I mean, the growth for the fourth quarter is a little bit a lot more normalized than the one that we saw during the third quarter.

Speaker #2: This will be supported by a mix of different funding sources as we move forward.

Daniel Mora: Perfect. Thanks so much. Very clear.

Speaker #6: Perfect. Thank you so much. Very clear.

Operator: Our next questions are written questions from Juan Soto, Bancolombia. What level of total allowances for losses on impaired credit do you expect to reach over the medium term? Given your intention to increase this ratio, should we expect a substantial increase in the impairment losses to achieve the target?

Speaker #5: Our next question is a reading question from Juan Soto, Bank Colombia. What level of total allowances for losses on impaired credit do you expect to reach over the median term?

Speaker #5: Given your intention to increase these ratios, should we expect substantial increase in the impairment losses to achieve the target?

Jorge Salas: Hi, Andres. No, our cost of risk has been very stable. It is probably, as you know, 20 basis points per year. We expect to project that going forward. So we are not expecting a substantial increase in impairment losses to achieve the target. It averages out. So it will be 20 basis points. That is our base case going forward. It will probably be what we are going to assume for next year's projections as well.

Speaker #1: Hi, Andrés. No, I mean, our cost of risk has been very stable. It's probably, as you know, 20 basis points per year. And we expect to project that going forward.

Speaker #1: So we are not expecting a substantial increase in impairment losses to achieve the target. I mean, it's I mean, it averages out, right? So it will be 20 basis points.

Speaker #1: That's our base case going forward. It will probably be the base what we're going to assume for next year's projections as well.

Operator: Next question comes from Andres Soto with Santander. Sir, you can open your microphone.

Speaker #5: Next question comes from Andrés Soto with Santander. Sir, you can open your microphone.

Andres Soto: Good morning, Jorge and team. Thank you for the presentation. I have a few questions. The first one is regarding your NIM evolution this quarter. In the release, you mentioned the six basis points expansion was held by some recognition of deferred fees from some prepayments. You have also mentioned that this Panama transaction is going to put pressure into NIM for Q4. So can you help us better understand what is going to be the trajectory going into Q4? How big is the compression considering the reversal of this one-off that you had in Q3 plus the NIM pressure that you are seeing coming from the Panama transaction?

Speaker #6: Good morning, Jorge and team. Thank you for the presentation. I have a few questions. The first one is regarding your NIM evolution this quarter.

Speaker #6: In the release, you mentioned the 6 base points expansion was held by some recognition of deferred fees from some repayments. You have also mentioned that these Panama transaction is going to put pressure into NIM for the fourth quarter.

Speaker #6: So can you help us better understand what is going to be the trajectory going into the fourth quarter? How big is the compression considering the reversal of this one-off that you had in the third quarter plus the pressure that you are seeing coming from the Panama transaction?

Jorge Salas: Okay. This is the prepayments and the accounting treatment under IFRS. I am going to let Annette explain, but we are seeing pressure, as I have said a couple times before. You want to-

Speaker #1: Okay. Yeah. So this is the prepayments and the accounting treatment under IFRS. I'm going to let Annette explain. But we are seeing pressure, as I've said, a couple of times before.

Annette van Hoorde de Solís: Sure. Hi, Andres. I think we partially answered this, but we will try to be as thorough as possible to address your question. As we mentioned during the call, there have been different factors that helped the NIM improve during Q3. An important one was the efficient management of our liquidity levels, keeping them within our internal risk appetite and obviously compliant with regulatory minimums. That was an important part of the improvement in the NIM. Also, a slight improvement in funding spreads, given that the average deposit balances were higher than Q2. That also helped the NIM in Q3. Another important factor was the acceleration of amortized fees. Under IFRS, the fact that you receive payments upfront doesn't mean that they are recognized upfront accounting-wise.

Speaker #1: You want to.

Speaker #2: Sure. Hi, Andrés. I think we partially answered this, but we'll try to be as thorough as possible to address your question. So as we mentioned during the call, there have been different factors that help the NIM improve during the third quarter.

Speaker #2: An important was once the efficient management of our liquidity levels keeping them within our internal risk appetite and obviously complying with regulatory minimum. That was an important part of the improvement in the NIM.

Speaker #2: Also, a slight improvement in funding spreads given that the average deposit balances were higher than the second quarter. That also helped the NIM in the third quarter.

Speaker #2: And another important factor was the acceleration of amortized fees. And under IFRS, when you the fact that you receive payments upfront doesn't mean that they are recognized upfront accounting-wise.

Annette van Hoorde de Solís: In general terms, when fees are associated with the origination of a loan that we retain solely in our balance sheet, these are paid upfront but amortized during the life of the transaction, recognized as part of the net interest income. When we carry a lead role or when we arrange or syndicate a transaction, that is when the fees can be recognized upfront. Once that service is completed, given that the transaction is completed, that is when we recognize. That is the kind of the difference. Some of the transactions that we have in the balance sheet have a combination of both. That is when some of these medium-term transactions that are prepaid, the remainder of the fees that are not yet amortized, those are the ones that are accelerated, providing a temporary increase in our net interest income.

Speaker #2: So when in general terms, when fees are associated with the origination of a loan that we retain solely in our balance sheet, these are paid upfront, but amortized during the life of the transaction, recognized as part of the net interest income.

Speaker #2: And when we carry a lead role when we arrange or syndicate a transaction, that's when the fees can be recognized upfront once that service is completed given the transaction is completed.

Speaker #2: That's when we recognize so that's the kind of the difference. And some of the transactions that we have in the balance sheet have a combination of both.

Speaker #2: And that's when some of these medium-term transactions that are prepaid, the remainder of the fees that are not yet amortized, those are the ones that are accelerated providing and temporary increase in our net interest income.

Annette van Hoorde de Solís: However, it is important to mention that the normal course of our loan portfolio does have recurring prepayments from our clients. This quarter, we did have an increase on prepayments that was about 2 to 3 times higher than what we have seen in prior periods. We decided to mention it in the call that the NIM was affected by 3 different factors, not only by liquidity and funding, as it usually is, and obviously tighter margins. That was the kind of the negative impact that we saw in the NIM. I do not know if I finished answering your question, Andres, or I do not know if I left something out.

Speaker #2: However, it is important to mention that the normal course of our loan portfolio does have recurrent prepayments from our clients. But this quarter, we did have an increase on prepayments that was about two to three times higher than what we have seen in prior periods.

Speaker #2: So that was we decided to mention it in the call that the NIM was affected by three different factors not only by liquidity and funding as it usually is.

Speaker #2: And obviously, tighter margins. That was the kind of the negative impact that we saw in the NIM. I don't know if I finished answering your question, Andrés, or I don't know if I left something out.

Andres Soto: No, thank you. I was just trying to get a sense of magnitude.

Speaker #6: No, thank you, Annette. I was just trying to get a sense of magnitude and.

Annette van Hoorde de Solís: I think you mentioned.

Andres Soto: basis points. Yeah.

Speaker #2: I think you mentioned.

Speaker #6: Basis points. Yeah.

Annette van Hoorde de Solís: Yeah. Like I said, most of the impact comes from liquidity. The prepayment does help the NIM. The prepayments were higher this quarter than in prior quarters, and we keep seeing pressure on margin. I think those are the main conclusions for Q3. Looking forward to Q4, as I mentioned before, the Panama transaction was closed towards the second half of September. It will have an important impact in the dilution of the NIM, but it will also have an important increase in our net interest income.

Speaker #2: Yeah. I mean, like I said, most of the impact comes from liquidity. The prepayment does help the NIM. The prepayments were higher this quarter than in prior quarters.

Speaker #2: And we keep seeing pressure in margins. So I think those are the main conclusions for the third quarter. Going looking forward to the fourth quarter, as I mentioned before, the Panama transaction was close towards the second half of September.

Speaker #2: It will have an important impact in the dilution of the NIM, but it will also have an important increase in our net interest income.

Andres Soto: Thank you.

Annette van Hoorde de Solís: That is already in our guidance for the year.

Speaker #2: And that's already. In our guidance for the year.

Jorge Salas: Probably worth mentioning that the Panama transaction allows for, it could be prepaid, and in that case, it will also accelerate the fees.

Speaker #1: It's probably worth mentioning that the Panama transaction allows for it could be prepaid, and in that case, it will also accelerate the fees.

Andres Soto: On that specific transaction, is there any tax implication? Because I understand the fact that you are tax exempt is for as long as you do not do business within Panama. Does this transaction change that?

Speaker #6: And on that specific transaction, is there any tax implication? Because I understand the fact that you are tax-exempt this for as long as you don't do business within Panama.

Speaker #6: Does this transaction changes that?

Annette van Hoorde de Solís: No, there are no tax implications for the transaction.

Speaker #2: No, there are no tax implications for that transaction.

Andres Soto: Perfect. Thank you very much.

Speaker #6: Perfect. Thank you very much.

Operator: Okay. Thank you very much. That is all the questions we have for today. I will pass the line back to the BLADEX team for their concluding remarks.

Operator: Okay. Thank you very much. That is all the questions we have for today. I will pass the line back to the Bladex team for their concluding remarks.

Speaker #5: Okay. Thank you very much. That's all the questions we have for today. I'll pass the line back to the BLADEX team for their concluding remarks.

Jorge Salas: Thank you everybody for connecting and for your questions. Looking forward to a strong end of 2026 and see you in the next call. Goodbye.

Speaker #1: All right. Thank you, everybody, for connecting and for your questions. Looking forward to a strong end of 2026. And see you in the next call.

Speaker #1: Goodbye.

Operator: This concludes today's conference call. You may now disconnect.

Speaker #5: This concludes today's conference call. You may now disconnect.

[Company Representative] (Bladex): Goodbye