Banco Latinoamericano de Comercio Exterior (NYSE:BLX), known as Bladex, reported record commercial portfolio and net interest income levels in the third quarter of 2026, supported by loan growth, expanding deposits and a $1 billion one-year sovereign transaction with Panama.
Net income totaled $63.2 million, up 15% from a year earlier, though down 5% from the second quarter. Chief Financial Officer Annette van Hoorde de Solís said the sequential decline reflected normalization in transaction-driven fee income, higher operating expenses and increased provisions, partly offset by higher net interest income.
Adjusted return on equity was 15% for the quarter, while return on average assets was 1.8%. For the first nine months of 2026, Bladex recorded net income of $186 million, up 9% year over year, with adjusted ROE of 15.2%.
Portfolio Growth Led by Panama Sovereign Loan
The commercial portfolio reached a record $15 billion at quarter-end, rising 15% from the preceding quarter and 38% from a year earlier. The increase included a $1 billion, one-year sovereign loan to the Republic of Panama to support the government’s liability management program.
Chief Executive Officer Jorge Salas said the Panama financing was a one-time opportunity that differed from the bank’s typical originations. He said the exposure is investment grade according to S&P and Moody’s, requires relatively low capital for its size and offers a spread above the sovereign bond curve.
Van Hoorde de Solís said the Panama transaction accounted for about half of the commercial portfolio’s quarterly growth. It was largely funded through short-term facilities from Bladex’s correspondent banking network and has flexibility for early repayment. While the loan is expected to dilute reported net interest margin, management said it makes a meaningful contribution to absolute net interest income and carries an attractive risk-adjusted return on capital.
Excluding the Panama transaction, the commercial portfolio grew 7% from the second quarter and 29% from a year earlier. Total loans rose 18% sequentially and 41% year over year to $12.3 billion. Growth was concentrated in short-term lending, including financing tied to higher oil prices and regional trade flows, while medium-term lending benefited from acquisition financing and energy-sector transactions.
Salas said Bladex did not ease underwriting standards to produce the growth, adding that much of the expansion came from higher-grade segments. Panama became the bank’s largest country exposure at 17% of the portfolio; excluding the sovereign transaction, Panama would have represented nearly 10%, comparable with Colombia and Brazil.
Net Interest Income Reaches Record as Margin Outlook Softens
Third-quarter net interest income rose 9% sequentially and 18% year over year to a record $79.8 million. Net interest margin increased 6 basis points from the prior quarter to 2.30%, while net interest spread reached 1.73%.
The CFO attributed the margin improvement to accelerated recognition of deferred fees after early repayments of certain medium-term loans, improved funding spreads from deposit growth and liquidity management. She cautioned that the benefit from prepayments was temporary, noting that prepayments during the quarter ran about two to three times higher than in earlier periods.
Management said lending spreads remain under pressure as competition for high-quality Latin American assets persists. The Panama loan, which closed in the second half of September, had only a limited third-quarter impact on margin but is expected to create more noticeable dilution in the fourth quarter because of its full-quarter effect.
Bladex expects to end 2026 with net interest margin around 2.25%, implying about 5 basis points of compression for the year. Salas said management’s focus is on attractive risk-adjusted returns and sustainable earnings rather than maximizing NIM alone.
During the question-and-answer session, Chief Commercial Officer Samuel Canineu said the bank has weighted growth toward shorter-term exposures amid what he called “exuberance” in Latin American credit markets, where spreads may not reflect risks. He said the bank is seeing trade-finance demand linked to oil prices, as well as demand for project finance, event-driven transactions and mergers-and-acquisitions financing.
Deposits, Fee Income and Credit Metrics
Average deposits increased 6% from the second quarter and 22% from a year earlier. Deposits at quarter-end stood at $7.9 billion, up 16% year over year. The bank expects average deposit growth of roughly 20% for the full year.
Non-interest income was $19 million in the third quarter, up 15% from a year earlier, and represented 19% of total revenue. Fees and commissions totaled $16.3 million. Letters of credit and guarantees generated a record $9.6 million, while credit commitments contributed $3.6 million, primarily from project finance and medium-term facilities.
- Bladex completed four structuring and syndication transactions during the quarter, mobilizing $470 million and retaining $365 million.
- For the first nine months, the bank completed 13 such transactions and mobilized approximately $2.7 billion.
- Client derivatives income doubled to $2.6 million, mainly from interest-rate hedges linked to project finance transactions.
Credit quality remained stable as the portfolio expanded. Stage 1 exposures represented 99% of total credit exposure, or $16.4 billion, at quarter-end. Stage 2 exposure declined to $82 million, or 0.5% of the portfolio, from $162 million in the second quarter, while stage 3 exposure remained stable at $75 million.
Credit provisions rose to $10.4 million from $8.6 million in the second quarter, primarily due to higher reserve coverage on existing stage 3 exposures and growth in the portfolio. Reserve coverage of impaired credits increased to 1.4 times from 1.25 times.
Guidance and Strategic Priorities
Bladex raised its full-year commercial portfolio growth outlook to around 35%, or approximately 25% excluding the Panama transaction. That compares with the bank’s original guidance of 13% to 15% growth.
The company reaffirmed guidance for adjusted ROE of 14% to 15% and a Tier 1 operating range of 15% to 16%. Its Basel III Tier 1 ratio ended the quarter at 16.2%, down from 16.6% in the second quarter. The board also approved a quarterly cash dividend of $0.6875 per share.
Salas said the bank does not expect growth at this year’s pace to recur, particularly given the one-off Panama loan, though it expects to maintain the larger commercial portfolio as transactions mature. He said growth of between 13% and 15% for 2027 appeared reasonable, while noting that formal guidance would be provided during the next earnings call.
The company is also advancing transactional banking initiatives. Salas said nearly a dozen corporate clients have expressed interest in its cash-management pilot, with onboarding expected to begin in stages early next year. In correspondent banking for cross-border payments, Bladex is nearing completion of onboarding for its second client and has three more institutions in process. The company remains on track to finish 2026 with three to five correspondent banking clients.
About Banco Latinoamericano de Comercio Exterior (NYSE:BLX)
Banco Latinoamericano de Comercio Exterior, SA, commonly known as Bladex, is a multilateral bank that supports international trade and economic integration across Latin America and the Caribbean. Headquartered in Panama, the bank provides financing and related services to financial institutions, corporations and other eligible counterparties engaged in regional and international commerce.
Bladex offers trade finance, commercial lending, structured financing, letters of credit, guarantees and treasury-related services.
