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BancoLatinoamericano de Exportaciones SA (NYSE:BLX)

Q3 2007 Earnings Call

October 22, 2007 11:00 a.m. ET

Executives

Melanie Carpenter - Managing Partner, i-advize CorporateCommunications

JaimeRivera - CEO

Carlos Yap- CFO

Analysts

Juan Partida - JP Morgan

Titolo Barlow - Deutsche Bank

Anurag Bhagwanji

Operator

Good morning, and welcome to the Bladex's Conference Call.My name is Melissa, and I'll be your conference operator. All lines have beenplaced on mute to prevent any background noise. After the speaker's remarksthere will be a question-and-answer period. At this time, it is my pleasure toturn the floor over to Ms. Melanie Carpenter of i-advize CorporateCommunications. Ms. Carpenter, you may begin.

Melanie Carpenter

Thank you. Good morning everyone, and welcome to theBladex's third quarter 2007 conference call. This is October 22 of 2007. Thiscall is for investors only and if you remember the media is invited tolisten-only, but remember, if you have any questions just follow-up withi-advize after the call.

Joining us today from Panama City, is Mr. Jaime Rivera, the CEO of Bladex and Mr. CarlosYap, the CFO of Bladex. Their comments are based on the earnings release thatwe issued this morning. A copy of the long version is available on the website atblx.com in the investor relations section. But if you have any question todayplease call i-advize in New Yorkat 212-406-3692.

Any comment that management makes today may includeforward-looking statements as defined by the Private Securities LitigationReform Act of 1995. It's based on information and data that's currentlyavailable. However, the actual performance may differ due to various factors,and they are cited in the Safe Harbor statement and thepress release, so please refer to that for guidance. And with that, I will turnit over to Mr. Jaime Rivera for the presentation. Please go ahead Jaime?

Jaime Rivera

Thank you, Melanie. Good morning, ladies and gentlemen andwelcome once more to our quarterly conference call and thank you, once more forallocating your valuable time to listening about our company.

In regards to the purpose of our call, we would like tochange it somewhat this time, particularly as it comes to the distribution orallocation of time. Well, it’s because of the events that have taken place orthe so-called turbulence that has taken place in the market recently, I wouldlike to spend some time concentrating or focusing a good portion of ourcomments on the conference on telling you about how the environment havebehaved in Latin America and how that so-called turbulence has impacted ourbusiness. And we would like to do that because I hope we will convince you thatthe impact of the turbulence, that is being experienced in another parts of theworld. Its quiet different and in fact, it's at the same level as for Bladex.

As usual, following my comments, Mr. Carlos Yap will take usthrough some of the details behind the figures for the quarter and then we willfollow it up with your questions and answer whatever details you are interestedin about the quarter.

So to the point then, let me start by stating the obviousand I would like to make it very clear because from what I understand and, infact, I know there were many questions about this. Bladex does not have, never had,and is never going to have any exposure to US mortgage or subprime type of risk.Whatever is going on in the market has no bearing on the activities of Bladex.This is not the type of risk we take. We have known, we never will have any ofthis risk on our books.

So, having made that point clear, I thought I would stepback a bit and go from painting a general picture of our market to slowlyconcentrate and focus on the details of each of our industry line as theyrelate or not to what's going on in the market.

Let me start by talking about macro-economythere, the macro-economy in Latin America. Asregardless of what's going on in the market, countries in the region are doingrelative well and you know this and it's well known, inflation while on the up tickin most countries, and at least throughout the world are still under control.Inflation therefore, is down, the fiscal accounts reasonably healthy. They areample and growing in reserves of foreign exchange, which is quite a change, adramatic change if you compare it to the situation from years ago when CentralBanks were concerned about low levels of reserves. Banco's has turned it nowjust the opposite, which is of course, having [another impacted strength], Imean their current. Growth for the whole remains healthy. The people that knowabout these things tell us that growth for this year will slow somewhat in thelast quarter and that for next year will slow even a bit further. And to tell youfrankly, I haven’t felt it, I haven’t seen in the street, and our businesshasn’t felt it either, even if growth is also down, there is a lot of cushiontoo, built in just to allow our business to continue growing. Trade flowscontinue unabated.

Latin Americacontinued selling its product. They are in demand in the US and in the European Union and especially in Asia. And Latin Americans continue buying as consumercredit in general has improved and purchasing power of the population hasimproved as well.

For macro-economy, it issomething that we keep an eye on. But it's not something that I think is goingto be determinant for the bank in the near future.

The second macro issue pertainsto politics. And politics in Latin America, Iguess this is like everywhere. Rather like everywhere, the best I can say aboutpolitics is that in the region, as in the rest of the world, they are no worsethan usual. Call it, stable and again not an issue. This is an environment thatwe can work with. It is not something that constitutes a primary concern forus.

So then, with that macro view outof the way, let me concentrate on something a bit more particular and that isto comment on our markets and particularly about the market segment, we workwith. There are two main market segments we work with, the financial industrymainly banks and the corporations. Let me comment on each. The banks in theregion are doing very well. For the most part, they are isolated from what’sgoing on in other parts of the world.

The credit portfolio remainedstrong. Credit demand particularly on the consumer side is increasing. Priceremained high. Credit quality remained stable. In general, they werecapitalized, well regulated. The situations of the bank were stable and mostlikely better than it was a year ago.

Importantly, liquidity in theregion which has been a concern in other parts of the world has been less of aconcern in Latin America because of a coupleof reasons. Firstly, in the last decade, have seen the emergence of a fairlysolid market of [fiber institutions, pension funds and the like], which provideadditional liquidity in local currency.

Secondly, most banks aresupported by funding in their retail branches and in the foremost eitherdollars, many of the banking systems in Latin Americahave a large realization percentage or in local currencies that are strong andthat people have confidence in.

So therefore, again, bank is notan issue. I would not be surprised if a couple of them will have negative newsto report on the trading operations during August, but nothing that will causemore than of a temporary stumble life on business as we go on further.

So, the second segment that wework with is corporations. And in the year ago, let's talk first aboutexporters. Exporters as I alluded before are benefiting from continued demandfor the products that the region produces. Prices remained in general veryhigh. Some of them are at historical peak. Profitability has become somewhat ofan issue because of the strengthening local currencies has made their localcurrency cash flow more limited. But yes, they are so strongly capitalized andthe margins are so wide that the companies are perfectly able to withstand itsstrength in their local currency.

Importantly as well, because mostcountries are suffering the same effect, the relative competitiveness ofcompanies, say in Chile andcompanies in Peruare remaining largely unchanged. Everyone is facing the same problem that is anappreciating local currency. Again, very wide margins on sales are keeping themprofitable and well-capitalized.

The other segment of the industryin Latin America that caters to the localmarket is doing very well as well. Couple of reasons, firstly, a couple of themajor countries in the region particularly Brazil, have done a very good jobimproving the purchasing power of their people. Higher purchasing power hasbeen translated well into purchases. And as a result, companies catered tolocal markets are doing well as well. These results are being fueled byextending and expanding credit penetration in the market.

Banking penetration in LatinAmerica in general with couple of exceptions Panamaand Chileprobably, is still very low. So, there is still a lot of room for banks toexpand. They are doing that and as they do that, they've fueled the purchasingpower on the part of the public and as a result, companies have catered to thelocal markets that are doing well. So, the corporations in general, not anissue as well, credit quality, demand for credit is remaining stable andhealthy.

So, within this picture what issues that I see as potentialsources of trouble, trouble that could impact us. Firstly, I am worried aboutoil prices, I guess almost all of the oil prices are heading in only one directionand this might have a negative impact for those countries in the regions thatproduce no oil. The Congress of course will do what it takes for the countriesthat are oil exporters and this will become an issue and it might slow thegrowth in some of these countries down a bit.

Fortunately, the countries which are most at risk, are thosein Central America in particular are befitting or starting to benefit stronglyfrom inflows that followed from the Free Trade Agreement that has been signed,which to an extent, although not fully, are mitigating the impact of higherenergy prices. But this might be an issue, noting that will spell a day andnight difference for our business but it could be an issue.

The second thought of concern, certainly from my point ofview is the possibility of slowdown that many people keep talking about in the United States and in the European Union and Asia. If this does in fact happen, and I quite frankly, Idon't know about the United Statesand I don't know about the European Union but given what I saw in Asia just a month and a half ago, I just don't see thathappening. But if I am in entirely wrong and things do slow down then economicgrowth in the region might fall from say 5%, 5.25% to 4%, 4.5%, still strongenough to support our business. I would be worried because slower growth from-- for the region would represent a loss of market share internationally. Butthat is a subject for another, more geopolitical type of debate.

Regarding the opportunities that business brought about forus and those are the threats but, well there are opportunities. Well a coupleof things have gone our way, capital market -- local capital markets have been under strong pressure although theyare coming back and some of the providers -- foreign providers of credit havewithdrawn. What this has meant is there has been a relative decrease incompetition and which has resulted in a general improvement in the pricing ofour loans, something that we started to feel in earnest only during the secondpart of August. Apart from that perspective though this is, a welcome changeparticularly in -- because as I just said in our portfolio our quality remainsvery strong.

So now we have spoken about the region, we have spoken aboutindustries and we have spoken about some of the opportunities and some of thethreats. Let me be a bit -- even a bit more specific, and tell you about theimpact of all of this on each of our business lines. And I'll do so and fromthe perspective that we manage the business. We manage the business thinking ofthree different books. We have a loan book. We have a securities book that isin essence is available for [statement portfolio] and we have an assetmanagement book. Each of these has behaved differently as to regards to what'sbeing happening in the market.

The loan book, and keep in mind by the nature the loan bookis the slowest to react to changes in the direction of the winds. Still we'refacing growing credit demands following again as a result of continued growthin [trade growth] and lesser competition. And therefore, margins have beenimproving. Importantly, I want to emphasize that credit quality remains strongin my opinion not only does credit quality remain strong it's probably strongerthan it was a year before. We're having other than continuous credit demands orsolid credit demand and improving margins. Our leasing operation has beengrowing quite nicely.

Remember, not too long ago we had no leasing operations, wenow have over a $100 million in these type of assets and it's growing fairlyquickly, and we're working on with this initiative that we announced lastquarter having to do with establishing a factoring network in Latin Americawhich we think will start playing a role in our intermediation activities nextyear. So from a point of view of our loan book, I would say that the wind isout on our back and the best part about it is that, we're capturing the windwith more sales. We now have a larger foothold, we have more clients. We canemploy our resources and make use of higher margins and increased credit demandacross a wider number of clients.

The loan book will grow therefore we'll grow particularly interms of a profitability more so than CSI, more so than we've been doing sofar. We're now being very stringent about pricing and keeping an eye on loanrate and in the end return on equity.

Regarding the associated sustainability of all of this thatis, I believe that the question how long will prices continue to rise and howlong will bank credit demand continue to improve, something I wouldn't dare. Idon't have enough information to provide with yet.

I believe that towards the end ofthis quarter, we will have a better idea of whether we will be able to actuallyreprice the entire portfolio, if these things holds on, if these trend holds onfor another couple or even three quarters, our whole portfolio, most of ourshort-term portfolio will have reprice at substantially higher spread whichwill make a big difference in our results for next year.

The second, we deal with, wemanaged the securities book which is available for sale portfolio. In the yearswhere we applied the skill that result a very high of what we do and what weknow how to do. We reengage credit risk and to benefit from overreaction fromthe part of the market side. It's been the case. It’s always the case thatbecause of our different circumstances the market react by dropping the pricesof credit that we believe are in fact very solid and given the volatility oflast couple of months, this type of behavior has become even more pronounced. Ithink I read somewhere that the market is behaving like and I have got lessonand actually I think it is.

It's actually behaving like, weare saying or joking around here. It's actually behaving like adolescence afterit has invested some amount of highly illegal substances. And as a result, themarket has become very erratic, something, shown very good credit. We have gotand achieved and when the adolescence market realizes that we have made a mistakeand all then comes back because it always comes back, we sell and realize thegain. To this extent, the volatility in the market, actually works in our favorand of course, just as there is a case with the loan book, I expect thesecurities activity of the bank has to grow our loan with the loan book.

And the third book that we manageis the proprietary asset management book, and here is where we bring what weknow about the Latin America on a macro basisto there, of course relating to things like country risk, currency risk etcetera. We make calls based on our feeling, on our knowledge of trends in thecountry on a macro level. Something that again, we believe we are very wellpositioned to do because we know the region quite well. It becomes excitinglately, you can imagine it was an exciting quarter not clearly because thecorrelation between Latin America and market risk and market risk in the USstrengthen and it made more difficult for us to make best on Latin America andmarket risk without having at the same time, take on some US market risk wherewe know we have very little to add.

And as a result, we did what wethought was a prudent thing to do, we decreased the amount of our possessions,which still did okay, it’s a good business. We always knew it was going to bevolatile; it's been profitable now for four quarters in a row and it provides agood complement to our loan book which is volatile and slower to react tomarket changes. Again, the three lines, loan book, the available for sale bookand proprietary asset management operation make use of the core competency ofthe bank, our ability to gauge risk and trends in the region.

The asset management operationwill also grow. It will grow not only because our net asset value is growing, andthis is important, we have now received regulatory approval to take this tothird party. So, when we do so, we plan to do so shortly, we hope to leveragethat intellectual capital into management fees or third party management feeswhich will help the bottom-line of the bank.

So again, three books will grow.The environment, as it exists today, is actually playing in our favor. It’s agood picture overall and my concerns within the picture I just described aretwo. The number one concern that I have is that, as I just mentioned, I am notsure yet as to how fast, how high and how long will the repricing of our loanbooks continue. I’ll have a better idea about it and will be able to give youguidance from the subject by the end of this month. What I can tell you is thatas of yesterday, that trend, that is continued improvement in pricing remain inplace.

And my second concern is not so much a concern perhaps it isour frustration. I'm frustrated at the inability of the market to discriminateBladex from other financial stocks. If you take a look at our the behavior ofour stock price and compare it to the behavior of financials in general thecorrelation has been very close when in fact the dynamics of our business arevery different to the dynamics of 99% of the other players in the financialindex. While the reasons, why the other financials are under pressure might begood, none of them apply to Bladex, which makes us into a good investmentopportunity and my frustration is that we haven't yet been recognized as suchand this is one of the reason why I'm spending this time laying these stocksout for you.

For you to think about it, verify that what I'm saying isactually a fact and if so feel good about the investment. I'm going to repeatthis result and expand on our situation on November the 12th, when we havescheduled a Bladex Day and a conference at the New York Stock Exchange. I hopeyou'll accompany us because we'll be able to go much deeper into both thestructural and strategic elements of what we're doing. So, again, in thecurrent environment I explained to Bladex's strength, and I'm looking forwardto continuation of what has been a solid and steady progress over the lastcouple of years.

With that ladies and gentlemen, I'll turn the conversationover to Carlos for him to give you the details of the number third quarter andthen again we'll be happy to take up your questions. Thanks a lot. Carlos,please.

Carlos Yap

Thank you Jaime and good morning everyone. Let me brieflywalk you through the financial results that were contained in this morning'spress release, which reflected a strong performance from our business area.

Interest income for the third quarter was $17.6 million, up5% from the previous quarter and have increased 32% year-over-year. This 5%quarterly increase was driven by higher volumes and increased lending marginsfrom the Commercial Division.

The average loan portfolio grew 3% as a result of increasein trade demand and expanded client-based particularly in the corporate sector.This strategy of focusing on growing corporate lending has generated positiveresults in the last two years. The average loan portfolio grew 25% during thelast year.

Lending margins increased 6 basis points as a result ofincrease in trade demand, coupled with macro-volatility and less competition.Also, this increase reflects the change in mix of the portfolio as corporatelending yields better spreads than lending to banks.

On the other side of the balance sheet borrowings marginsdeclined 1 basis point, mostly due to the 5% increase in the profits, which isour chief resource of funding.

The net interest margin declined 5 basis points to 1.65%have increased, mainly margins were offset by the current cost of higher cashbalances as part of our plan to strengthen liquidity at the time of marketturbulence.

Going forward, there are several factors that should affectnet interest margins. Higher lending spreads or loan disbursement in the latterpart of the third quarter will have a positive effect on the following quartersas Jaime stated.

How sustainable these current higher lending spreads levelsare will depend on market conditions.

Liquidity levels which had an impact on the net interestmargin during this quarter would also depends on market conditions. Where wecan lower them then the net interest margin will benefit. On the other hand,factors that would have a negative effect on the net interest margin goingforward are higher leveraging of the balance sheets require more borrowing, andin this scenario, it’s lower interest rates because this would generate lowerdeals on the cash balances.

The declining fees income issues reflect mostly our decisionto reduce our net asset productivity in riskier markets, which also had animpact in lower provisions. We expect to offset this decline in the letters ofcredit fees by year-end and when we hope to benefit from the more stable marketenvironment and [efficient loan] increase in credit flows.

In terms of treasury revenues, after a very strong secondquarter, trading gains and gains available for sale securities declined to morethan the life levels of about $5 million for the quarter.

Operating expenses for the third quarter were $8.7 million,or 36% of operating use compared to 45% a year ago. The bank efficiency ratioof 36% continues improved and is well below the average of the industry of 50%to 60%

Operating expenses for the quarter declined $1.6 milliondriven by $1.4 million reduction in the variable compensation provision relatedto the asset management activities and in line with this performance during thequarter.

In addition, legal expensesincreased as the bank continues to invest in business initiatives in thecommercial division.

On a year-to-date basis,operating expenses increased $6.5 million of which $2.7 million correspond tothe deferred valuable compensation related to the asset management activities.The risk is related to salary expenses associated with the development of thecorporate business and treasury activity, additional performance variablecompensation and stock-based compensation expenses, as well as depreciationexpenses related investment in new technological platform and legal expensesrelated to new business initiatives.

In order to further align the interestof the board, restricted stocks allocated to the board will increase at 100%and their cash compensation also increased 30% based on any independent marketsurvey. Going forward, inflation is becoming an issue not only in Panama and New York,but also in Mexico, Brazil and in Argentina where the local iscurrency strengthening, which will impact our cost base a lot dramatically.

As a result of these mentionedfactors, operating income from the commercial division rose 7% on a sequentialquarterly basis, as operating revenues grew 4% and expenses declined 1%.Year-to-date operating income from the commercial division was $30.8 million up23% from a year ago.

Operating income for the TreasuryDivision declined from $16.1 million to a more normalized level of $4.5 milliondriving the bank consolidated operating income for the quarter to $15.2 millionfrom $26.1 million in the previous quarter.

On a year-to-date basis,operating income reached $55 million, up 120% from a year ago which againreflects a bulk in client base diversification strategy established two yearsago. The bank has achieved these operating earnings with a more diversifiedrevenue base. A year ago, net interest income represented 94% of totaloperating revenues compared to 63% during this year.

Provisions for loan losses forthe second quarter were $3.4 million driven by 2% growth in the loan portfolio.The bank reverse provisions for losses on off-balance sheet credits for $3million, back to earnings reflecting changes in the country mix ofcontingencies. The net effect was an increasing result of $0.4 million for thequarter compared to $1.4 million reversal in the second quarter.

As a result, net income amountedto $15 million or 10% internal equity for the third quarter and 13%year-to-date.

Operating income year-to-date was12.3% compared to almost half 5.8% a year ago. This profitability levels wereachieved by maintaining a strong capitalization of 21.6% Tier 1 capital ratio,still strong but lower than the 27% a year ago. We intend to continue usingcapital as we grow our books and profits.

Now let's turn briefly to ourbalance sheet. We ended up with $4.5 billion in total assets, a 4% increaseover the previous quarter and up 26% from a year ago mostly driven by the growthin our loan portfolio. During the quarter, the bank strengthened its liquidityposition. It consists mostly of cash and deposit with high quality banksoutside the region and representing 7% of total assets and 22% of totaldeposits.

In addition, every month maturearound $450 million in loans, which provide additional liquidity, as ourportfolio continues to be short-term in nature. 70% of our commercial portfoliomatures within one year and duration of this portfolio is 0.3 years. If risklevels continue improving, we may see maintaining of payments going forward.

As mentioned, deposits increased5% during the quarter and 31% from a year ago, this increase in deposits mostlycome from Central Banks, our shareholders.

In terms of asset quality, the bankhad no credits in non-accruing or past-due status of September 30, 2007, as ithas been the case in the last three quarters.

That concludes my financialupdate. Let me now turn it over Jaime.

Jaime Rivera

Thank you, Carlos. Ladies andgentlemen, we will be glad to take up any questions you might have.

Question-and-Answer Session

Operator

Thank you. (OperatorInstructions). We will pause for just a moment to compile the Q&A roster.Thank you, your first question is coming from Juan Partida with JP Morgan.

Juan Partida - JP Morgan

Hi, good morning Jaime and Carlos. My question is related tothe composition of your loan portfolio on a geographical basis. We saw thatduring this quarter the exposure to Brazilincreased substantially well that of Peruand Mexico declined -- I amsorry -- yes, and Mexicodeclined. So, I wanted to see if this was a part of the strategy, or that'sjust the places where you saw that demand, you could elaborate a little bit onthat? Thank you.

Jaime Rivera

Juan, good morning. No strategy at all. In fact, in both, Peru and Mexico our strategy to grow and Ithink you will see a significant growth in both markets in the coming quarters.The reason why the balance has decreased in both cases were the same and we hadclients, one large exposure in Peruwith a client where the pricing was very low, we are being strict, even morecareful about the way we price our assets. We did not agree on pricing and wesimply refused to renew the operation. We are replacing that asset with someother.

And in Mexico,the exact same thing happened. We had a subsidiary of one of the major statecompanies who had a substantial maturity. We did not agree on pricing and wethought we have and in fact, we do better uses for those capital and we againrefused to renew it.

In Brazil,on the other hand, most of the renewal of that payment for negotiations agreedto meet our higher pricing standards and that's why you saw Brazil grow in relative terms more than either Peru or Mexico. If that quarter is to go byanything, I don't think it represents a trend at all.

Juan Partida - JP Morgan

Okay, thank you very much. That's usual, just in the othercategory which increased a lot, can you give us an idea what countries areincluded there, it went from 5 to 104?

Jaime Rivera

That represent -- it's actually other means the United Statesat the end of arguing the quarter and starting the quarter before we have beenusing insurance coverage to manage the portfolio and most of that insurancecoverage represents US. We have been doing some transactions where thestructure calls for litigation of risks and the cheapest things we have -- thecheapest way we have found to do that is through short-term insurance. Peopleknow us they give us very good rates and of course that will -- that shift isthe risk for U.S.

Juan Partida - JP Morgan

I see, thank you.

Jaime Rivera

Thank you.

Operator

Thank you. Your next question is coming from [Titolo Barlow]with Deutsche Bank.

Titolo Barlow - DeutscheBank

Hi good morning. Just two question under the last quarter'sconference call you mentioned your normalized level of trading gains of around$3 million and a little bit high this quarter, but just kind of want get usthrough that just still a normalized level that you expect going forward? Andthen the second question, even the decline in fee income is that also you knowwhat the current expectations are going forward on that? Thank you.

Jaime Rivera

I will stick to the $3 million -- to the $3 million figure,this year of course we've been substantially above that. It's a volatilebusiness. Our own market is placed on $3 million, third quarter. If it turnsout that as time proceeds and we achieve -- become more confident in ourability to upgrade higher level say $5 million, we will let you know, but justto let to know we are using $3 million in our budget. We aim of course toconsistently -- consistently beat that figure, but for your projections if youwant to be conservative use $3 million.

The fee income again we're currently taking steps toincrease our -- fair activity in some of the markets we drew from duringAugust. Christmas is coming demand is increasing, so with new products we arealready coming back to the levels of the second quarter, first and second quarterin the fourth quarter. Fees will improve next year and they will do so steadilyand markedly to the extent that we deploy the third party asset managementoperations successfully and we have a [variation] to believe that we'll be ableto so. It's certainly based upon the level of interest that has being generatedon solicited interest that has been generated from people in the market.

Titolo Barlow - DeutscheBank

It was very helpful. Thank you.

Jaime Rivera

Sure, Titolo.

Operator

(Operator Instructions). Your next question is coming from[Anurag Bhagwanji with Porto Orlin]. Please, go ahead.

Anurag Bhagwanji

Good morning, Jaime. Good morning, Carlos.

Jaime Rivera

Hello.

Anurag Bhagwanji

Congratulations on the good numbers. My question was, youmentioned asset management side of the business. Can you talk about what arethe assets under management currently? And how do you see that growing?

Jaime Rivera

Our net asset value is in the order of $120 million, that'sour proprietary book. We only see it growing to the profits. The major growthis going to come from again investments by third party institutions orindividuals, and I think that by the end of the fourth quarter we'll able togive you a better idea of how our large our book will grow. But clearly ourinvestment, our proprietary investments, the level of funds we placed with our New York operation, willremain where it is, $120 million plus accrued profit.

Anurag Bhagwanji

Okay. Thanks a lot Jaime and looking forward to meeting you inNew York on the12thof November.

Jaime Rivera

Thank you Anurag and please give my regards to Alice please.

Anurag Bhagwanji

Will do.

Operator

Thank you. (Operator Instructions). There appear to be nofurther questions. I would like to turn the floor back over to management forany closing remarks.

Jaime Rivera

Well, ladies and gentlemen again, I believe this quarter hasonce more proved of the soundness of our business model and our ability toupgrade on the strong, stable conditions which we did for a good year and ahalf and on the very unstable conditions which we did during last quarter, wehave continued and steadily improved along all indicators, financial indicatorsand upgrading indicators.

We are moving in the direction that we promised you wewould. Nearly three years ago when we announced what we were going to do, mostof the activities that or business lines that we told you we're going todeploy. We have deployed. The numbers that we told you we are going to achieveare being sort of achieved. We have doubled ROE our levels in one year,basically from our low base. Apart from this standard we intent to continuewith this pace as this will turn out to be an even better investment than ithas turned out to be so far.

I know a number of you have been with us for sometime andhave done well with return capital, with increased dividend and price haveimproved accordingly. So, I want to thank you for your confidence and let youknow that from my perspective, since I took this job the current environment atpresent itself is the one that most benefits the company, and again unlike evena year and a half ago, we now have many much sails out there with which tocatch the wind.

So, hope to see you all on November, the 12th in New York. If you can'tmake it then we will be providing a web conference so you can listen to it. Weintend to go deeper into what we've done and our strategy from hereon as wecomplete the 2010 strategic plan and in the meantime, as usual again, I thankyou again and wish you all success within what is for all of us an excitingmarket.

Thank you very much to all.

Operator

Thank you. This does conclude today's Bladex conferencecall. You may now disconnect.

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