Foreign Trade Bank of Latin America Inc (BLX) 2009 Q3 法說會逐字稿

Good day everyone. Welcome to the Bladex conference call. As a reminder, today's call is being recorded. At this time, I will now turn the conference over to Ms. Melanie Carpenter. Ma'am, you may begin the conference.

Thank you. Hello everyone. Thanks for joining the Bladex third quarter 2009 conference call on this the 30th of October, 2009. This call is for investors and analysts only. If you are a member of the media, you are invited to listen-only. But if you have any questions, please follow up with i-advize after the call.

It's my pleasure to introduce our speakers. Joining us today from Panama City are Mr. Jaime Rivera, the CEO, and Mr. Christopher Schech, the Chief Financial Officer.

Their comments will be based in the earnings release issued yesterday. A copy of the long version is available at the website at www.bladex.com.

Any comments that management makes today may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Their comments are based on information and data that is currently available. However, the actual performance may due -- may differ due to various factors, and these are cited in the safe harbor statement in the press release.

If you have any questions, or need to speak with anyone in -- at i-advize, New York please call (212)406-3695.

And with that I'll turn it over to Mr. Jaime Rivera for the presentation. Please go ahead, Jaime.

Thank you, Melanie. Good morning ladies and gentlemen. We welcome you all to our conference call. And thank you for the time you're allocating to Bladex once again.

Most of you have -- who have been with us for a while are by now familiar with the format of our conference calls. Following my opening remark, I will ask our new CFO, Mr. Christopher Schech, to walk us through the details of the quarter. And then we'll be glad to take up your questions and provide you with our answers.

So please allow me to begin my comments by adding some color to some of the information provided in the press release of yesterday. Given the uncertainty that still prevails in the world as a whole, I thought I would start by providing our view of the markets as they impact of what we do in Bladex.

First of course there is a question of Asia, and the way it's behaving and their economies are moving, with China, and increasingly India in particular being important. Judging from what conventional wisdom thinks, and my recent conversations with four CEOs of important companies of both China and India, it is our conclusion that the recovery in Asia is in fact real. And most importantly it's probably sustainable.

And what this means to Latin America in general and to Bladex in particular is that commodity prices are probably sustainable at their current levels as well.

What this in fact -- what -- in turn what this means is that for the many companies and the many countries in the region that depends on commodity flow, they ought to see cash flows, their cash flows, over the coming months continue to ease. So this is important for Bladex, both from a credit demand point of view and from a credit quality point of view.

The second point that I'd like to make regarding our market is about the United States and the European Union. Conventional wisdom there as opposed to conventional wisdom regarding Asia, is settling on the recovery in both the US and in Europe, probably taking longer than we had all expected. And what this means is that the demand for manufactured goods out of companies dedicated in this segment of the industry in Latin America, and out of countries principally oriented to manufacturing in Latin America is probably going to lag. And this has an impact on credit demand on -- out of countries like Mexico for instance in the case of Bladex; credit demand out of Mexico is lagging the rest of the region, and will probably continue to do so for a while.

Certainly, another important market for us is the intra-regional flow of trades in Latin America. As a result of the crisis, companies throughout the region have decided to diversify their operations to become less dependent on purchasers or clients in the United States and the European Union, and have begun exploring opportunities within Latin America.

To the extent that this trend continues, and we think it's irreversible, it plays perfectly into Bladex's ability to provide regional trade services on a -- in a coordinated manner. This is actually something we are quite excited about.

So, in summary, the gradual improvement that we have seen in credit demand will probably prove sustainable, and will slowly accelerate, and this will be reflected in our results as we move forward over the coming quarters.

Two other market aspects that I thought you might be interested in hearing about, firstly funding. Funding, which as you might remember, was a constraint for us, even still three months ago, has eased. The funding situation for Bladex is now no longer a constraint. The market has recognized that Bladex is a very strong credit risk in an industry, banking, where this, as you know, is not the norm.

And as a result, we have been able to tap new markets successfully such as Asia, for instance, where only a year-and-a-half ago we had very little exposure, and continue to tap other markets. You will soon hear news out of, for instance, the capital market in Latin America. Funding again is no longer an issue for Bladex. It's widely available. And the market has differentiated us and has realized that Bladex is a different animal with -- within an industry, international banking, where credit risk is still quite high. Not so the case with Bladex.

Competition is an issue that -- question that is often asked. And the answer here is somewhat -- a bit more complex. There is competition, and we do face competition around business from the large and well-known names in the region of banks and companies.

When it comes to the so-called or so-perceived fail-safe names, there is a lot of competition around them, because working with one of the very large banks in Brazil, for instance, takes very little in the way of the ability to analyze their case.

When it comes, however, it comes to analyzing the risk of banks or companies that require local and industry knowledge, which is what we know how to do well, our competition is much less, and therefore our ability to price is much stronger. The limitation or the main limitation that we face in such cases has to do with our prudent approach to credit risk.

Again, competition, there are two aspects to it, heavy competition around the large names, large or fail-safe names, a much easier situation for us. It's names that are not widely known but that we know how to analyze and price well.

So, all in all, if you combine the trends in the market, funding and competition, we believe that the situation as it stands, and particularly as it's developing, plays more than ever to our strength. We are, because this is a fact, we are uniquely positioned to provide regional trade services as they are being demanded more and more by the market.

The -- providing regional trade services, we believe, is the model of the future in wholesale banking in the region, and are therefore looking forward to what is going to happen to the Company and our leverage -- ability to re-leverage the bank over the coming quarters.

We have, in this regard we -- ability to funding, we have the clients, and especially, we have the skills, the people, and the capital to make most of this potential for growth. And while speaking about capital, I'm sure you noticed from the press release, our tier 1 ratio is now 25%, actually at least 25%.

In times like this I think we proved quite clearly that a strong capitalization is a guarantee, it's probably the only guarantee of resiliency. We operated throughout the crisis in a very resilient manner. By the way, we make -- we still made over 9% ROE this quarter, which again based on our capitalization of 25% is the way we look at the industry, a very good resort.

Over the coming quarters as we build up the portfolio again in response to healthy and real demand and re-lever the balance sheet, ROE levels should just about naturally increase, increase almost by default. This is something that will happen. And it will happen because we have the capital, and we have -- and because we have no credit problems.

This brings me to another point I wanted to make, credit quality. As you noticed from the figures over the last year or so, we have increased reserve coverage from our traditional 2% or so of the commercial portfolio to well over 3%. This is always in percentage terms. This is an increase of 60%. It was quite significant. And we believe that given where we are and the trends that we see in the market this is adequate and sufficient.

The very few specific problems that arose during the last year or so, we're working out, and we're working the way we've always worked out problems in the past. This is something we have experience in. This is something that we -- we will simply do and go on with our life.

Market risks, and our market risk operations which is -- are contributing something like 25% of our revenue these days, had another good quarter, both in Treasury and in our asset management subsidiary. Most importantly for me, however, as we look at it from our strategic perspective, our market risk operations did what they were supposed to do in a downmarket for our intermediation activities. This is why we created the market-risk business with the bank, made sure to have an option in case our intermediation activities came under pressure for some reason or another as they did during the last year.

Part of the reason where we showed resiliency and part of the reason why we are able to continue operations with little or no strain over the last year is because -- precisely because we now have a diversified business model consisting of activities that we know well, and risks that we know how to control and manage. Again, as has been proven during the last year.

And so lastly just to summarize for this quarter, for the fourth quarter of this year, my expectations are for a continuation of the trend that we saw last quarter, nothing major changing or happening. Over the next coming quarters, however, we do see some significant changes as the economic recovery becomes established and credit demand picks up inherently. We are, as I mentioned before, excited at the prospect, our ability to re-leverage the balance sheet, and with it increase profitability of the bank significantly.

It's not going to be easy. While there is no longer a hurricane out there, we're still, the waters are still not at peace, and -- but as difficult as it might be, something that we ought to be able to do quite naturally, intermediation and growing is something we know how to do. We have the clients, we have the presence, the people et cetera. The -- actually quite excited about the prospect of the bank over the coming quarters.

So with this, ladies and gentlemen, I will ask Mr. Christopher Schech to take us through the figures for the quarter and provide you some more details on how we did, and why we did what we did during the quarter from a purely quantitative perspective.

Christopher, welcome to your first conference call. And take it from here, please.

Thanks very much. Thank you, Jaime.

Hello and good morning everybody. Thank you for joining us on the call today. My comments will focus on highlighting some of the key aspects that have impacted our results in the third quarter, and how they have contributed to strengthening core profitability, the quality of our portfolio, and the reserves level associated with it, but also our capitalization at the book -- the bank's book value continues to increase.

Well, the bank's net income was $15.8 million in the third quarter. As you know, we look at our business in three distinct segments, the Commercial Division, the Treasury Division, and the Bladex Asset Management business, and all of them delivered positive net income this quarter.

Now, let me share some details regarding the performance and results of each business segment before discussing other aspects of the bank's financial performance. So let's start with the Commercial Division, where net income rose to $11.8 million in the third quarter, representing 75% of the bank's net results.

Net operating income, and by that I mean net income before provisions for loan losses, improved quarter-to-quarter as commission income rose due to pickup in our letters of credit business. Even as net interest income showed a small decrease driven by slightly lower average lending portfolio balances.

Average total portfolio balances which include acceptances and contingencies actually grew for the first time this year for the period, and portfolio balances also grew quarter-on-quarter to reach $2.9 billion. And the same is true for our average lending spreads which showed another substantial increase this quarter, reaching 277 basis points as a result of the re-pricing of our loans over the past quarters.

Credit disbursements reached close to $1.1 billion, and so they continue on an upward trend. The commercial portfolio remains short-term, and trade-related in nature; 67% of the portfolio will mature within one year. And 60% of the portfolio is trade finance, while 40% is non-trade.

The portfolio composition continues to be well diversified. Brazil, Mexico, and Colombia continue to be a substantial part of our portfolio, but we have seen credit disbursements increase in other parts of the region as well in third quarter. 59% of the portfolio is corporate, versus 38% being lending to banks, and 3% of sovereign risk making up the difference.

Regarding our exposure to specific industry sectors, not more than 12% of the corporate portfolio is concentrated in a single industry. As regards to credit quality of our commercial portfolio, the amount of provisions recorded during the third quarter was $1.2 million, versus the $9.1 million that we recorded in the previous quarter. We added $2 million to specific reserves during the quarter for loans in the process of renegotiation. And that was mostly offset by a change in the portfolio's mix in regard to country and client exposure that reduced the general reserve requirement.

Overall portfolio growth drove another $1 million of additional general reserves, and that was essentially the driver for the overall $1.2 million increase in provisions this quarter.

During the last call we talked about the range of total nominal amount of restructured loans for which specific reserves have been created, and we talked about a $25 million to $34 million range, and that range has really not changed a whole lot this quarter either.

Now, let me move on to the Treasury Division, which contributed $1.2 million for the bank's bottom line this quarter. Compared to the previous quarter, gains from trading securities were lower, primarily driven by the trading portfolio, while the division's net interest income rose on lower average funding costs.

The Treasury Division has started to adjust its liquidity position downwards as market conditions are starting to show some signs of improvement. We also reduced our trading portfolio balance this quarter, and we trimmed our portfolio of securities available for sale to lock-in gain.

We discussed the mark-to-market effects on the securities portfolio already in some detail last quarter, on the last call. This quarter these net effects together of course with the impact of realized gains on the securities that we sold helped further reduce our unrealized losses that we record in the Other Comprehensive Income account. And the reduction this quarter was by more than half compared to the previous quarter.

(Technical difficulty) currently stands at $9 million of unrealized losses. The securities portfolio continue to consist of high quality liquid Latin American securities. 75% of the portfolio is sovereign and/or state-owned risk in nature.

On the funding side, and Jaime made some comments on that already, the division actively managed the bank's borrowings to reduce funding costs, letting more expensive bank lines expire by placing new borrowings on a selective basis. And a good example of that is the bank's first syndicated loan in Asia for $100 million which allowed us to further diversify our sources of funding, and at the same time allowed us to tap into a highly liquid market.

Our asset management division again delivered a solid quarter. The division has contributed $2.8 million of net income, and so they continue the track record of positive results. Net asset value reached a $189 million, a 14% increase over the previous quarter, and that was driven by the profits generated by the fund itself but also, and most importantly, by the inflows of third-party funds. Third parties now own nearly 15% of the fund. And you can see the impact of that -- its impact on the bank in the minority interest lines, both on the balance sheet and also the P&L.

Now, to wrap up, let me briefly comment on the bank's general performance. We continue to see net interest income grow mainly on the back of strong margins, at an overall level of a 176 basis points. The net interest margin has reached a level that we haven't seen over a number of quarters.

So fees and commission income has also started to come back from what we saw, fairly depressed levels early in the year. And that we take as another signal that external trade flows are starting to show some sign of improvement. Provisions increased moderately as we just talked about, and mainly driven by this portfolio growth itself.

Operating expenses in the third quarter were well under control, just below the levels of the previous quarter as we continue to keep the lid on discretionary spending. There haven't really been any meaningful shifts within or between the expense categories over the course of the quarter.

Before I hand it back to Jaime, just a few comments on the bank's book value, which increased by roughly 4% to $18.23 a share. Return on assets and return on equity also improved quarter-to-quarter even as the leverage declined to 5.6 times versus a 6.3 times we saw last quarter.

Tier 1 capital reached almost 25%. And with that we believe that overall the bank is emerging from the financial turmoil of the recent quarters, quite well capitalized with a healthy portfolio that is poised for growth, well diversified funding, and with a reduced cost base.

So with that I hand it back to Jaime for his closing remarks. Thank you.

Thank you, Christopher.

Ladies and gentlemen, we would be quite happy to take up your questions. Please go ahead. Let's engage in a discussion.

Thank you. (Operator Instructions) Our first question is from Saul Martinez with JPMorgan

Hi, good morning guys. Couple of questions. First on the balance sheet. I hear what you're saying about trade flows coming back, and you guys are expecting some growth, but we've also had now about three consecutive quarters where the balance sheet has been pretty stable after really falling off in the second half of last year. When do you start to see -- when do you guys think you will start to see the balance sheet start to grow again in a meaningful fashion? And then I have a couple of follow-ups as well.

The balance sheet will expand in a meaningful fashion once the trade flow starts growing again in a meaningful way. Anecdotal evidence over the last months really indicates to me or makes me feel as if that is going to start happening probably towards the latter half of this quarter and at the beginning of next year. You know the Company well, so you know that the first quarter of every year for this Company tends to be particularly strong.

I would expect the fourth quarter, to tell you frankly, marginally better than the third. And real growth will start taking place at the beginning of next year. That's my best shot, based on conversations with clients and the pipeline that we see being generated.

How much have trade flows fallen? I don't know if you have specific figures, but in general, how much have -- do you think trade flows have fallen? And do you have a sense for the global economy, and comes back, how quick, what -- how much trade flows in percentage terms can increase, say next year? I don't want to put you on the spot with a specific figure per se, but do -- can you give us a feel for what extent you think a normalization of economic conditions would be to in terms of growth and trade flows?

So, well, actually, I can answer the first part of your question fairly definitely.

Okay.

Depending on the country that you're looking at, trade flow has been down anywhere from 15%, some of the countries that were not severely impacted, to as much as 30% or 33% in some of the countries that were more severely impacted.

I think that trade flows regarding that flow around commodities will probably come back. It's -- my conversation with the Chinese CEOs that I held during the last couple of days turn out -- their projections turn out to be accurate. I think commodity-related trade flows will probably pick up fairly fast.

On the other hand, I think we're going to have to be patient regarding the trade flows that are geared around manufactured goods, which fortunately for Bladex are the minority or the smaller share of our business. I would say that in general terms manufacturing-related trade flows make up around 25% of our business.

So the rest of the business which comprises commodities and oils, and oil as of late has been increasing in price as well, should start picking up relatively fast. Again I would expect at the beginning of next year.

Okay, great. And on capital, obviously you do expect some growth. But your capital ratios are at excess of 25%, or tier 1, 25% more or less. Given economic conditions normalize a bit, do you think it might make sense to reinstate the dividend to where it was at some point?

Absolutely. My answer to that is absolutely. As soon -- we've been consistent with this. As soon as we re-lever the bank, and our earnings stabilize at a higher level than we've been operating at, I am sure that consistent with our -- what we did in the past, just as we lower the dividend when things go tough, we would like to reinstate the dividend at some higher level, and gradually as things improve. I have no doubt about that, it will improve.

Okay. And just a final question on hedge fund. It seems like you raised some third-party funds in the quarter. Could you give us an update on how you're thinking about that business?

I have to be careful in my answer, because, as you know, we have a number of US regulations that do not allow us to market the fund outside the United States. But I will tell you that things in the fund from that perspective has been going well. And because of the track record, another arrangement that they have made, we expect that trend to at least sustain itself or most likely accelerate over the coming quarters.

Do you plan on raising more funds (multiple speakers)?

That was -- this is public information. That was the reason why we established the fund in the place -- in the first place two years ago. We established it with the ultimate purpose of making it an asset management division. That's why we called it the asset management division.

Our ultimate goal within Bladex is to have the asset management division, most of its contribution come in the form of stable asset management fees. It has taken us some time. And it will probably still take us some time. But we are now, we believe, on the way to get there.

Okay great. Thanks a lot.

Cheers, Saul.

Thank you. Our next question is from Tito Labarta with Deutsche Bank.

Hi, good morning, Jaime and Christopher. Sort of question on terms of your margin, it was noted over the last year, lending spreads have increased quite a bit even though, but your margin had only increased marginally. Now, that competition is sort of returning, that you mentioned, do you think this is going to put pressure on spreads? And then also your margin, so what kind of impact do you see on the margin? If you can give us an outlook for that? Thanks.

Sure. Good morning. The short answer to your question is, yes. There will be pressure on spreads. That's unavoidably so, particularly in the segment involving large banks and large -- again, so-called fail-safe corporations.

On the other hand, we have been quite successful at maintaining spreads at a relatively attractive level, well relatively absolutely attractive levels, working with companies where we can exercise our advantages in terms of our ability to analyze local risk and local economies in ways that other major international banks that are working with the large companies cannot. I think that competitiveness we will sustain.

And we will -- you will probably see us over the next coming quarters literally make a shift from some of the larger names we operate with to names where we have a competitive advantage analyzing risk and providing services regionally.

I am not particularly worried about margins because at the same time just as margins might be coming down and in fact will be coming down in some segments, we have all -- every reason to believe that our cost of funds will continue dropping as it has. We are currently working on yet another syndication that is going to be cheaper still than the last one. And this is something that I believe will continue. So from margin perspective the coming year looks much better than 2006 and 2007.

So just to follow, should -- I take that to mean then your margin should remain relatively stable over the next year?

They would probably come down marginally. But that's fine, we don't need the huge margins of today to operate profitably providing we leverage the bank, which we think we're going to be able to do.

Okay great. Thanks a lot.

Yes.

Thank you. Our next question is from Fred Searby with EverKey Global.

Hi, Jaime, it's Fred Searby from EverKey Global. A couple of questions for you. First, it sounds like you're seeing recovery in demand of credit on the trade side related to commodities. So as you grow the loan book again, the loan portfolio and redeploy capital, on a next 12 months basis on that -- just on the core business, the commercial bank, what do you think an achievable ROE is over the next 12 months? What would be your target that's a reasonable and somewhat optimistic ROE?

It's a difficult call to make, and we have always been quite reluctant to make projections of this sort. But let me just say that we have always believed that the bank ought to be run with an ROE in the mid teens and that remains our goal. An ROE in the mid teens for the bank as a whole on the average over several quarters.

And that means that the core business, the intermediation business, plus the market risk activities. Reaching the mid teens remains our goal, and that's what we are aiming for. Actually we are aiming to beat that goal. But that's the minimum that we are expected to operate at.

Okay, second question. It wasn't clear to me. I went through the press release. But can you give me the precise number. What is the -- of the fund, what percent is third-party funds today? Just can you update us on the year-to-date return?

And some sort of sharp ratio or relative to risk, or that what volatility? Can you give us some sort of more color on the fund? I'm sure you have this in your marketing book, so it is public information. So I would expect you to reveal that.

And finally, could you also -- you're suggesting you're going to raise the dividend, restore the dividend that was cut, and that would be appreciated, but can you just say what is the time frame for that. I know it's a board decision. But is this six months, twelve months? At what point do we see some return of capital to shareholders? Thank you.

I'll take up the latter questions first, and will -- I will ask Christopher to answer, provide some information on the fund.

Regarding the dividend decision, this is something, Fred, that we look at very carefully every quarter literally. Every quarter we analyze the amount of the dividend, the level of the dividend, the trends in the Company's operating earnings and made decisions based on that.

If the market comes back quickly, and if we are able to re-leverage the bank within the next -- in the first couple of quarters of the next -- of next year, I would expect that decision to be taken then. If things don't happen as quickly as we think they're going to happen then it'll take a bit longer.

But again, if you go back to our record, you will notice that once a new level of profitability has been established, it only takes us about a quarter at most to make a decision regarding the dividend.

Things will become clear, I think, over the next two quarters. By the end of the first quarter of next year we should know how quickly we are going to be able to re-leverage the bank, and will be in a better position to make a new decision regarding dividend.

With that let me ask Christopher then to give you some flavor or some color on the information regarding the fund. And again, please keep in mind that because of regulatory limitations that we of course respect there is little that -- we cannot be as open about the funds as we can about our -- the rest of our activities, because we cannot be seen, or we don't want to be seen, as doing marketing for the fund in the United States.

Go ahead, Christopher, please.

Yes. I just wanted to highlight some information that we do actually contain in the exhibits, and that is the attributable net income to the Bladex Asset Management Division is $11.1 million year-to-date. And if you apply that to an average of interest-earning assets of about $133 million, you would arrive at around 11% return.

But that's after accruing for some sort of compensation to the traders?

Absolutely, that's included, yes.

Yes. So then -- and then can you tell us what the third party, what the level of third-party money is in the fund?

Well, the percentage that is owned by third parties is close to 15%, 14.5% as of September 30th.

And is the level of dollars that's invested in the fund similar to that percent?

Yes, yes, that's correct.

Okay. All right. Thank you.

Yes.

Thank you. Our next question is from Pablo Ramos with Armada Capital.

Hello, Christopher and Jaime. Thank you for the call. Actually most of my questions have been answered. I just want to talk to you about NPLs. We see they rised a bit to 1.4%. How much is this done due to the fact that you are trying to capture more business, willing to take more risk? And what levels are you -- will you be comfortable coming forward with an NPL?

The NPL or the problems that are reflected in our NPL portfolio reflects mostly event risk on a macro level, changes in foreign exchange rates that took place in a couple of countries that we are involved. And so it's basically the result of credit deflation in the normal course of business. Actually, one of the reasons why our NPLs are not more than what they are is because we were very careful in expanding during the good old days, and we were extremely swift in collecting once the crisis set in.

As you might remember, we collected more than $1 billion dollars in loans to industries that we thought might run into trouble before they did so. How -- where do we feel comfortable? Traditionally, you know that for more than two years we had zero NPLs in the portfolio. We always thought that was an aberration. We always ran the bank with a reserve coverage of about 2% of the commercial portfolio which always proved to be adequate.

I would expect that as the orders come back to normal in the market over the next year or year-and-a-half, we will be going back to such reserve coverage. My impression is that the levels where we are currently running the bank at are probably going to represent the peak of reserve coverage that we will need. I don't know, Pablo, if this answers your question.

Yes. It's great. Thank you.

Sure.

And our next question is from Jeremy Hellman with Divine Capital.

Hi, good morning gentlemen.

Jeremy, good morning.

Okay. Two questions, one kind of granular and then one high level, the granular one first. What was the average loan spread on new disbursements in the quarter?

The average loan spread was 297 basis points.

297 basis points, okay, thanks. And then kind of speaking more of a high level, there's been in my mind some saber-rattling in terms of protectionist trade actions between the US and China. In speaking with your contacts in Asia what sense do you get in terms of protectionist fears, and how is that helping or hurting trade flows with respect to the Latin region and Asia?

I am not worried about it to the extent that there is, and the fact is there has been some saber-rattling between not only China, not only the US, but also the European Union. Those conversations generally involve manufactured goods. There's very little flow in terms of manufactured goods between China and Latin America. It's not an issue, in fact to the extent that there is an interest in China, in Latin America.

What China needs and what China is trying to do is make sure that Latin America produces more commodities because even though China has recently established a program to promote and expand their own agriculture production, they know that Latin America is the only region in the world that -- with ability and capacity to very quickly expand production of both food and minerals. So I just don't see that as an issue, fortunately.

Okay. Great. Thanks a lot guys. And congrats, good to hear you guys are having some optimistic commentary going forward.

Thank you. No, I think it's optimistic, but it's also quite realistic. We are feeling good about it.

Great.

Thank you. (Operator Instructions) Okay, at this time I'm showing no more questions. Do you have any closing remarks?

Yes, please. Ladies and gentlemen, a year ago we told you that, and we promised you actually, that we'd be concentrating on protecting your bank while sustaining profitability as long as the storm continued. And I think that the record shows that we fulfilled that promise. Going forward, we are slowly shifting gears, we are slowly shifting gears to gradually re-leverage the bank, to increase the size of the bank, the scale of the bank and with it profitability and returns.

Based on our record of execution, I think this is something we can believe in, we will bring this about. We have great competitive advantages in what we're trying to do. This is not something new for us. This is something that we know how to do. We have a great reputation in the market as to our ability to fill credit demands on the part of clients on a regional basis. We see this as a great opportunity.

As we mentioned during the last few minutes, we don't know whether this is going to take three, or six, or nine months before it really kicks in. But we know it will. And when it does the result on the bank will be quite significant and gratifying to us all.

So I want to thank you for your confidence over what's a very difficult year, and I look forward to being able to, as a company, reward your confidence over the next year. So with that, I wish you all success. Thank you for your attention. And I look forward to our next call. Thank you very much.

Thank you everyone. This now concludes today's conference. You may disconnect.