Moody’s Lifts Bladex Rating

Moody’s has upgraded Bladex to Baa2 (stable) from Baa3 because of increasing core profitability, earnings diversification, and improving asset quality. It also likes the management’s strategy to broaden the bank’s activities in trade finance and securities business in the LatAm and the Caribbean. “The addition of value-added products such as factoring and leasing is expected to leverage management’s relationship, product and risk assessment capabilities and lead to increasing profitability over time,” says Moody’s. “The bank’s liquidity and funding structure has also been strengthened by growth and diversification in its deposit base and by increasing access to longer term funding from banks and official institutions,” it adds. Risks include high competition in core businesses and relatively thin margins and fees that reflect the bank’s emphasis on high quality names and the predominantly short term trade finance-related nature of its business. “Another important risk factor is the bank’s dependence on wholesale funding, though this risk is partly mitigated by its predominantly short term loan book and emphasis on liquidity management. In light of currently stressed financial conditions in the global markets, should these continue, Bladex could be subject to higher funding costs,” adds Moody’s.