Moody’s Considers Bladex Upgrade

Moody’s is looking into an upgrade for Banco Latinoamericano de Exportaciones’ (Bladex) Baa3 deposit, debt, and issuer ratings and its D+ bank financial strength rating. The agency lauds the bank’s “track record of increasing core profitability, earnings diversification, and improving asset quality, as well as management’s new strategy to broaden its activities in trade finance and securities business in the Latin American and Caribbean regions.” It adds that the addition of factoring, leasing, and structured trade finance should leverage management’s strong relationship, product and risk assessment capabilities and lead to increasing profitability over time. Liquidity and the funding structure has also been strengthened by growth and diversification in Bladex’s deposit base, and by increasing access to longer term funding from banks and official institutions. Challenges include high competition in core business areas and relatively thin margins, reflecting the bank’s emphasis on high quality names in the region and the predominantly short term trade-related nature of its business. Bladex reported total assets of $4.5bn and equity of $614m as of September 30.