Moody's, S&P: Bladex ratings unaffected by new capital management program

International credit rating agencies Moody's and Standard & Poor's see trade finance bank Bladex's (NYSE: BLX) announced capital management plan as having no impact on their ratings or outlooks. Bladex unveiled on Thursday a three-year stock repurchase plan, a special dividend, and an increase in the quarterly dividend as part of a capital management plan aimed at returning excess liquidity to shareholders. At the end of March, Bladex reported total capital of US$611mn and a capital ratio of 39%. Moody's affirmed Bladex's D- bank financial strength rating and Baa3 and Prime-3 long- and short-term deposit and debt ratings, with a stable outlook. The agency noted that the capital management plan is supported by the bank's current cash flow, liquidity and capital resources. While the plan would reduce the bank's Tier One capital ratio, Moody's said that the ratio would remain consistent with Bladex' growth plans and present risk profile. "They have a high Tier 1 capital ratio for the amount of trade finance business they are in. When they carried out a capital increase last year they took in more than they expected. They've also managed to liquefy a lot of their portfolio, make collections [on past due loans], and building an increasingly short-term portfolio," Moody's analyst Jeanne Del Casino told BNamericas. Bladex raised US$147mn last year through a right-offering after taking big losses in Argentina. The figure far exceeded its U$100mn target. S&P said the capital management plan would not impact the outstanding credit ratings or outlook on the bank "While it's true that the business outlook isn't very good right now, Bladex did have a high level of capitalization. The bank raised its capitalization level because of risks in Argentina, which have now subsided," S&P analyst Angelica Bala said. "At this time they have enough capital to pursue their business. The main challenge for Bladex is to build up their loan portfolio," Bala said. Bladex's business activities are focused on providing trade financing and services to banks and strategic corporations in Latin America. Loans fell 21.1% year-on-year to US$2.71bn at the end of the first quarter. "The lending market is still quite lackluster throughout the region. While on the consumer side we are seeing some interesting numbers, on the corporate side it's less robust and that is the area Bladex specializes in," Del Casino said. Panama City-based Bladex is a multinational bank originally established by the Central Banks of Latin American and Caribbean countries with the mission to provide trade financing in the region.