IN THE VAULT

Panama 2014 | FINANCE | INTERVIEW

TBY talks to Rubens V. Amaral Jr., Director of the Board & CEO of Banco Latinoamericano de Comercio Exterior (Bladex), on transitioning to being the largest corporate bank in Latin America, and leveraging the bank's reputation.

Rubens V. Amaral Jr.
BIOGRAPHY
Rubens V. Amaral Jr. has served as a Director of the Board and Chief Executive Officer since August 2012. Prior to his appointment as the Chief Executive Officer, Amaral was Executive Vice-President, Chief Commercial Officer of the Bank, and the alternate to the Chief Executive Officer since April 2004. He previously served as General Manager and Managing Director for North America at Banco do Brazil, New York Branch, and a Director of the Board of Bladex from 2000 to 2004. Amaral served in various capacities within Banco do Brazil since 1975, holding the positions of Managing Director of the International Division and membership on the board of directors, among other positions.

What have been the major milestones for Bladex since you joined the institution?

I joined Bladex in 2004 as the Chief Commercial Officer. At that time Bladex was a bank to other banks with no corporate clients. The major milestone was the transformation of Bladex into a leading corporate bank in Latin America. This transformation was not achieved overnight as we needed to develop new products and services, besides increasing our client base. I feel very pleased that today we have a portfolio that is primarily comprised of companies from big corporations to SMEs. The total exposure to the segment has increased from zero in 2004 to 62% in 2014, and the number of clients from 160 to 500 clients.

Bladex was founded to finance international trade. Why was the bank established in Panama?

The reason for establishing the bank in Panama was really quite simple: first, the idea came from an illustrious Panamanian, Nicolas Ardito Barletta, former President of the country, and an important supporter of making Panama a regional finance center; second, Panama's privileged geography and its vocation for foreign trade because of the Panama Canal and the Free Zone of Colón, and third, because Panama was a successful dollarized economy, and the new bank needed to have the US dollar as its functional currency.

What are Bladex's main strengths?

Bladex's strengths are undoubtedly its knowledge of Latin America, and its strong and unique capital base, which combines shareholders, the central banks of the region, and the investors on the New York Stock Exchange. This powerful combination brings discipline and strong corporate governance standards, and a focus on efficiency and increasing results. Another important strength of Bladex is its credit rating. Bladex was the first Latin American bank to receive an investment grade rating, in 1992. Currently, we are rated “BBB" by S&P and Moody's, and “BBB+" by Fitch. Another key feature of our organization is the “preferred creditor status" recognized by the central banks in Latin America. It means that, if there is a debt crisis in any given country in the region our exposure to that particular country will not be subject to foreign exchange controls. Thus, if the borrower has the funds to service the debt, the payment can be made without having to get approval from the respective central bank. Therefore, Bladex is a unique bank with a clear mandate to focus on the region, rather than individual countries, identifying ways to support the regional expansion of the companies and to foster intraregional trade within Latin America.

Which country is the most important to Bladex's activities, and what are your plans for future growth?

In terms of the composition of our portfolio, the largest exposure is to Brazil, which makes sense as the country is the largest economy in the region. When I joined the bank in 2004 our exposure to Brazil was 45%. Today, that exposure has dropped to 28% because of the diversification we implemented in our lending activity to other countries throughout Latin America. The second largest exposure is to Central America and Panama, which reached 25% of the total portfolio. We are forecasting a growth of 10% to 13%, in 2014. This projection is based on the underlying growth of the economies in Latin America, which on average are expected to post a GDP growth of 3% in 2014. Normally, the trade flows grow a multiple of 3x to 4x the GDP growth, hence our projections for 2014.