Estimates have come down after disappointing fourth quarter results, sending this Latin American bank to a Zacks Rank # 5 (Strong Sell) last month.
About the Company
Headquartered in Panama, Banco Latinoamericano de Comercio Exterior or Bladex (BLX) is a supranational bank established by the Central Banks of Latin American and Caribbean countries to promote trade finance in the region.
Its shareholders include central banks and state-owned entities, American and international commercial banks as well as institutional and retail investors.
Disappointing Fourth Quarter Results
BLX reported its 4Q 2013 results on February 14, 2014. Net income for the quarter came was $23.9 million or $0.62 per share, down from $24.6 million in prior-year quarter. The results were short of the Zacks Consensus Estimate of $0.69 per share—BLX’s third quarterly miss for last year.
The bank reported decline in net interest income and margins in the quarter as both lending rates and market-based rates were lower. Average portfolio balances were also lower due to slower origination. While average funding costs declined slightly it was not enough to offset lower lending rates.
Downward Revisions
After disappointing results, estimates for the company have moved downwards. Zacks Consensus Estimates for the current quarter and current year are now $0.63 per share and $2.79 per share respectively, down from $0.71 per share and $2.86 per share, 60 days back.
The Bottom Line
The outlook for BLX remains cloudy due to challenging economic environment for Latin America, resulting from QE tapering as well as slow-down in China.
BLX is currently Zacks Rank # 5 (Strong Sell) stock and as such investors would like to avoid this stock until there are clear signs of improvement in its performance.
Better Play?
Investors seeking exposure to the Foreign Banks could look at Shinhan Financial Group (SHG), a Zacks Rank #1 (Strong Buy) stock.
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