Foreign Trade Bank of Latin America Inc (BLX) 2011 Q1 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 turn the conference over to Melanie Carpenter. Ma'am you may begin the conference.

Thank you operator. Hello everyone. Thank you for joining the Bladex First Quarter 2011 Conference Call. Today is April 28th, 2011. This call is for investors and analysts only. If you're a member of the media, you're invited to listen only but if you have any questions please follow-up with us after the call.

Joining us today are Mr. Jaime Rivera, Chief Executive Officer of Bladex and Mr. Christopher Schech, Chief Financial Officer. Their comments will be based on the earnings release issued yesterday. A copy of the long version is available on the website at Bladex.com.

Any comments that management makes today may include forward looking statements. They are defined in the Private Securities Litigation Reform Act of 1995. They are based on data that is currently available. However, the actual performance may differ due to various factors. These are cited in the Safe Harbor Statement in the press release. So please refer to that for guidance. And with that I will turn it over to Mr. Jaime Rivera for his comments. Please go ahead Jaime.

Well, thanks Melanie and good morning ladies and gentlemen and welcome to our first conference call of 2011. Allow me if I may to make a few general comments about our business and our plans, before asking Christopher Schech to walk us through the details of the quarter and then of course answering your questions.

So as I just said this is our first conference of 2011 and we're glad to see that we're being proven right in our assessment as to Latin America's ability to continue growing steadily in spite of uncertainty and really sluggish growth elsewhere.

In most of our region, as you know, sovereign, corporate and consumer debt levels remain low affording government and companies the space needed to address admittedly rising concerns about, for instance, gradually rising levels of inflation and currency application. Most importantly for our business trade flows continue to grow on the back of rising commodity prices and demand for minerals, energy, food, et cetera.

Admittedly, if you look at an individual country level, the strength of the economic recovery varies with different types of impacts from rising oil prices and pressures on some economies on account of the financial and, especially social cost of the war on drugs. But still the overall picture is good. Our region and our business are growing and managing risk at the individual country level is something that we know how to do well.

This favorable economic environment is typical for us because it is providing us with the foundation of the second year investment period that as you probably remember is designed to expand our geographic footprint, expand our client base and with it bring about higher levels of revenue.

Just to bring you up to date and importantly most of this investment plan has by now been executed. But we're still working on a couple of fronts which I thought I would share with you. As mentioned in our press release we still need to bring up our rep offices in Lima and Bogota, fully on stream. For instance -- but by now we have deployed excellent teams in both locations so that the hard part of the job has been done.

During the remainder of the year as well, we will strengthen our vendor financing unit, a business that is still small but has gained really tremendous traction. And we're also working on becoming more active in the loans syndication and distribution business, especially now that we have reached the scale and origination capacity that is needed to support the business. And finally among other things we are also installing a new web based platform to tap into the letter of credit needs of many of our new corporate clients.

So with this momentum in our market and our ability to capture it as our result for this quarter demonstrates, 2011 looks to us to be a good -- very good year for us. With our new infrastructure fully in place towards the end of the year, 2012 should result in a further step up in revenue generation and profitability.

From my general business environment perspective, the only significant questions that we're thinking hard about are the impact of higher oil prices on a micro level and the general level of dollar interest rates. On the former, rising oil prices, it turns out that depending on country, industry, balance sheet structure and demand elasticity, oil prices can be a boom to some and a limitation to others.

And sometimes the second order effects prove more significant than the rising energy prices themselves. So we're therefore spending time thinking hard about this in order to focus our marketing efforts accordingly. And regarding the second of our unanswered questions, the general level of dollar interest rates as you know is for a strongly capitalized bank like Bladex very important.

In this regard the low interest rate environment of the last few years has proven a limitation. But if interest rates do rise some time in 2012 our results could receive an additional and potentially significant boost. So now more specifically on the quarter and beyond the comments that Christopher will make in a minute I would like to make a couple of my own points.

First as you can see from the press release margins appear to have steadied. In general they are no longer rising. But that is fine with us. And it's fine with us because this is happening in the context of general risk levels that are improving so that the overall risk/return equation in our business is actually becoming more and more attractive.

Among other things, what this means in very practical terms is that we're being presented with an ideal scenario in which to grow while incurring reasonable provision expenses. And second, as Christopher will explain in a minute, and I just mentioned, our fee generation is driven by the letter of credit activities that underlies a good portion of the trade flows in the region.

Now even though rising oil prices alone should provide a boost to this business it has not kept pace with the expansion of our lending activity. So as I've mentioned a minute ago we intend to tap deeper into the growing letter of credit needs of many of our new corporate clients, i.e. really low hanging fruit that was not available before more and more of these companies became regional in nature.

So in summary ladies and gentlemen I think of the first quarter as one more important step in the execution of our plan to expand our business by, in essence, making the most out of our unique trade finance and regional expertise at a time when both are in very high demand.

As we leverage the balance sheet and increase revenues while keeping a careful watch on credit quality and expense levels profitability will continue improving allowing us to provide shareholders with an attractive dividend while making steady progress towards achieving the higher ROE levels that remain our primary financial goal. And so with this ladies and gentlemen I thank you and hand things over for -- to Christopher, rather for him to take us through the figures for the quarter. Christopher please.

Thank you very much Jaime. Hello and good morning everyone. Thank you for joining us on the call today. In discussing our first quarter results I will focus on the main aspects that have impacted our results, and I will put them in context with the previous quarter as well as the same quarter of a year ago.

And just to summarize the highlights and to start with the highlights, the bank again produced fairly solids results this quarter with the Commercial Division that continues to grow its scale at a good pace based on the approached that Jaime just described. The Division again provided the backbone to the Bank's financial performance this quarter.

The Treasury Division saw modest movement in its securities portfolios with little impact on results but continued successfully with its key objectives of maintaining safe liquidity levels and obtaining competitive funding to support our asset base. And after reevaluating its investment methodology and strategy, following what was its first year of negative performance in 2010, the Asset Management Unit has regained its stride and is focused on rebuilding its performance track record. And it is doing so successfully as you could appreciate in the first quarter results.

Our margins and spreads remain stable as low market rates persist. As Jaime mentioned our portfolio benefits from the positive trends in the region in terms of GDP growth rates, country ratings and so forth. And our portfolio quality and credit performance continues therefore to trend positively as our non-performing loan trends and reserve requirement levels demonstrate.

And even as our expenses continue to show annual increases on the basis of continued investment and the front end activities that Jaime mentioned as well, and allowing for some seasonal effects that impacted the fourth quarter of last year, our cost management continues to be prudent and continues with the aim of seeing revenues growth consistently outpace expense growth.

The first quarter 2011 closed with net income of $16.3 million, up 5% compared to the $15.5 million we posted in the previous quarter and up 61% compared to the $10.1 million figure in the first quarter of 2010. Let's go into more details regarding the performance and results of each business segment before discussing other aspects of the bank's financial performance.

And let's start as usual with the Commercial Division where net income was $13.6 million in the first quarter compared to $14.9 million in the fourth quarter of last year and compared to $14.3 million in the first quarter of 2010. The quarter-on-quarter variance in the net result was impacted mainly by the change in the provision for loan losses line with a small increase in provision this quarter as portfolio balances grew whereas last quarter we showed a small reversal.

Net operating income which excludes the effects of provisions for loan losses showed a quarter-to-quarter decrease as higher revenues derived from a growing commercial portfolio base were offset by lower revenues from ancillary sources such as loan commitments and loan prepayments. The commission income derived from letters of credit transactions which Jaime has alluded to in his initial comments remain stable compared to the previous quarter as did the underlying average contingency portfolio balances that drive these types of commissions.

Compared to the first quarter of 2010 the net result improved in qualitative terms as net interest income increased substantially, mainly on the basis of portfolio growth while reversals for loan losses, which made up a significant portion of the Q1 2010 result, were absent this year in this quarter. Average commercial portfolio balances, including acceptances and contingencies, grew 4% in the fourth quarter, while period end portfolio balances reached $4.8 billion, a 7% increase over the previous quarter and a 47% increase above the levels at the end of the first quarter of 2010, which is evidence of the success of our business plan to expand our footprint in the region.

Loan disbursements exceeded $1.8 billion in the first quarter of 2011, and that is up 8% versus the previous quarter, and up 102% versus the first quarter of 2010. Demand from large corporations and financial institutions continues to be strong and, this time, we did not see the seasonal post-year end slump that is fairly common to the financial institution segment, which posted to a fairly strong demand.

Origination growth in our new and middle market segment, in terms of loan balances and in terms of the numbers of clients acquired, continues at a reasonable pace as we consolidate the local teams in our new representative offices and ramp up our activities there. Average lending spreads remained fairly stable this quarter, as the portfolio mix stays bias towards large banks and corporations in a growing number of investment grade countries in the region.

Average US dollar intra-bank interest rates, and these are our base rates, continued to soften this quarter by a few basis points. The commercial portfolio remains short term and trade related in nature. 75% of the portfolio will mature within one year and 63% of the portfolio is trade finance related, while the remainder represents lending to banks and exporting companies.

We continue to maintain a diversified mix of country exposures that enhances the risk profile of our portfolio and it also underscores the bank's ability to support companies and banks nearly anywhere in the region. 57% of the commercial portfolio is corporations and sovereigns, 43% is lending to banks. Outside the banking sector, our exposure to industry sectors in the region is quite well diversified, with a strategic focus on those sectors where Latin America has a distinct competitive advantage as we have discussed before.

The portfolio risk profile continues to improve as non-performing loans remain stable at $29 million and continued their downward trend in relative terms compared to the size of the loan portfolio. The amount of loans in non-accrual status amounted to about 0.7% of our loan portfolio at the end of the first quarter of 2011 and that is down a few basis points compared to the previous quarter and down 61% from a year ago. At the end of the first quarter, only $1 million in loans were actually past due more than 90 days and that is the same level as in the previous quarter, while the rest of the non-accruing loans showed payment behavior which was in-line with the workout terms.

As mentioned before, the reduced reserve requirements, on the basis of improvements in both country and client risk levels, are mitigating the credit cost of our portfolio growth. We also said that we should, nevertheless, expect to see provisions increase, going forward, as reserves start keeping pace with the portfolio growth and that is essentially what happened this first quarter of 2011, even though the P&L effect of that effect was quite modest.

Now, let's move onto the Treasury Division, which posted a quarterly loss of $0.9 million in the first quarter, in the absence of a significant turnover in our securities portfolios and, therefore, lower levels of realized gains of sales in the process. The mark-to-market effects on the available for sale portfolio and related hedging instruments were the main factors driving a quarterly improvement of unrealized losses, which we record in the other comprehensive income account, which is a sub-capital account, which, at the end of this quarter, stood at $4 million compared to $6 million the previous quarter and compared to the same $6 million of the year ago.

The securities portfolios continue to consist of high quality and liquid Latin American securities. 68% of the security portfolios represents sovereign and state owned risk. We continue to monitor the liquidity levels closely to ensure they remain comfortably within -- given the current market conditions.

On the funding side, the division continues to manage an effective mix in our diversified funding portfolio, as average weighted funding costs were down 8 basis points versus the fourth quarter of 2010 and down 34 basis points versus the same quarter of the year ago. Deposits have, again, been an important factor in reducing overall funding costs and offsetting the costs of increased amounts of medium term funding. At the end of the first quarter, there were $1.9 billion in deposits, a new record level, up 5% versus the previous quarter and up 41% compared to a year ago.

As mentioned in our press release, we successfully accessed Asian markets again, with $130 million loan syndication early in the quarter. With that, we were able to further expand our network of correspondent banks as we continue to strive for diversified sources of funding, both in terms of tenors and counterparties.

Now, let's talk about our asset management unit, which contributed a net gain of $3.6 million in the first quarter compared to losses of $1.6 million in the previous quarter and $1.4 million in the quarter of the year ago. This quarter's result benefited from a much improved trading result in the investment fund, where investment strategy adjustments gained traction since their implementation early in the year.

The rebuilding of its track record is a very important basis for the fund to win back the third-party investors who have left over the course of the last few quarters and to attract new investors. As these efforts continue and gain momentum, the bank remains committed to its goal to gradually reduce its investment in the fund to the $100 million level by the end of the year.

Moving on from our segment review let me give you a brief summary of other financial highlights of the bank's performance in the first quarter of 2011. Net interest margin rose 2 basis points to 172 basis points in the first quarter. And that is up one basis point versus a year ago and that is despite the fact that average intra-bank interest rates were lower this quarter, as mentioned a couple of times already.

Net interest spreads widened 5 basis points versus the previous quarter and widened by 15 basis points compared to the quarter of the year ago. Operating expenses in the first quarter were down 6% compared to the previous quarter, mainly as a result of the one-off increase in the provisions for variable compensation and social benefit costs that impacted the fourth quarter of last year.

We continue to invest in fund and resources, expanding our average head count in the quarter, and executing our plan to have most of our additions completed in the first half of 2011, as Jaime already mentioned. Non-work related -- non-workforce related expenses remained stable compared to the previous quarter and compared to a year ago.

Now, before I hand it back to Jaime, just a brief comment on the bank's book value, which increased to $19.25 a share this quarter -- at the end of the quarter. Leverage, at the year-end -- at the end of this quarter of 2011 -- of the first quarter of 2011, is 7.5 times, up from 7.3 times at the end of last year and up from 5.8 times at the end of the first quarter of 2010.

Tier one capital remains strong, it stays -- it stands -- it stood -- is standing at 9% -- 19.3% at the end of the first quarter and that, we believe, is a comfortable base that enables us to grow and further deploy capital prudently. And, with that, I would like to hand it back to Jaime for the Q&A section. Thank you.

Thank you, Christopher. Ladies and gentlemen, I would be glad to take up any of your questions. Please, go ahead.

Thank you. At this time, the floor is open for questions. (Operator Instructions). Our first question will be from Tito Labarta with Deutsche Bank.

Hi, good morning, Jaime and Christopher. Just a couple of questions, . One, you mentioned rates rising next year and you could see, maybe, some improvement in the margin in your results. So, I just want to get a sense into -- so, does that mean you expect net interest margin to remain relatively stable this year and, if rates don't rise, it will continue to be stable?

And, then, a second question in terms of the loan growth, we've seen good growth the last few quarters. What will -- do you expect that trend to continue or when can we start to see, like, a slow down or if you say, what you expect from the loan growth for the full year? Thank you.

Tito, good morning, and, no, thanks for your questions. Regarding the margins, let me make a couple of general comments. Firstly, we believe that, on a per sector basis, margins are likely to remain stable for the rest of the year. What will happen to our portfolio, however, is that the mix between banks, corporations will change and as corporations grow at a faster rate and will our bank exposure, we will probably see an increase in our margin as we move forward. But, again, mostly as a result of the portfolio mix rather than our view on what is likely to happen to the market in general.

Regarding loan growth, we have generally maintained that we should be able to grow the bank at a multiple of four to five times the underlying growth rate of the region. That has now been revised to nearly 5% for the year, so I think you can count, with our loan growth, of four to five times that figure as your base scenario. Does this answer your questions or do you want any more details?

Helpful.

Okay, our next question will be from Jeremy Hellman with Divine Capital Markets.

Hi and good morning, everybody. Congratulations on the good quarter, guys.

Thank you, Jeremy.

I've got a few here. First off, just going back to the asset management business, a nice quarter there. Was there any change in strategy, personnel, anything in there that led to the strong result or just, simply, a function of the managers being right more than they were in prior quarters?

Hello, Jeremy, this is Christopher and I'd like to take your question. Well, certainly, a few things didn't go as well last year and we talked about that already in our previous calls. Just recalling the effects of the sovereign debt volatility that arose from outside of the region which have impacted valuations within the Latin American region, even though the underlying risk had nothing to do with the European exposures, for instance.

Those types of effects were clearly felt in our performance, especially in the second quarter of last year, and we believe that we have made the necessary corrections to avoid any potential spillover effects like then. So, that, of course, was a change in how we looked at protecting our book of business and, other than that, I think, given the choppiness of markets last year, which we believe or haven't really mitigated in terms of the up and down movements, day-to-day, week-to-week, and so forth.

It was evident that the trend following type of models weren't so successful and so, I think, where we have been successful, even in last year, was in our fundamental decision making in terms of assessing the credit risks that are inherent in the Latin American region, which is something that we've always been very good at. And I think the management team has refocused on that core ability that they have and I think that's the major change in investment approach.

Great, thanks for that answer. That's probably some of the best clarity we've ever had, I guess, on that business. Speaking of Europe, I was curious for your prospective of, either both of you guys, regarding what's going on in Europe right now. Sentiment seems to be shifting regarding bail outs. So, I'm kind of curious for your thoughts on that and what impact you see that having, on your business, if at all, at any point?

It will have a general impact. Of course, Europe still represents a significant commercial partner to Latin America, depending on the country involved, somewhere around 25% and the product involved, somewhere around 25% of the region's flows that have Europe as a counterparty. So, anything that happens in Europe, will certainly impact what goes on in Latin America.

That being said, from a macro perspective, the latest projections, which have Latin America growing at nearly 5% this year, already take into account the dampening effect of what's going on in Europe. There is a concern on our part of what the impact of a European problem might be on general liquidity levels and intra-bank funding availability. And, yet, we are in the market, as we speak, with a highly successful syndication that -- where we raise more money than we thought we would at the better prices than we thought we would be able to.

So, again, there's probably going to be applied to quality in the intra-bank market and, if that happens, that, we believe, will work to the benefit of the Bladex. Hopefully, Europe will do well in which case Latin America will grow more than what we're currently forecasting. But, our base case already takes into account the troubles that are likely to happen in Europe.

Okay, one last one from me and then I'll step out. The Brazilian factoring business that you've been pursuing, we've talked about the last couple of quarters, just curious where you are on that? If that's still something that you're actively pursuing?

Jeremy, allow me a pregnant pause and I need a pregnant pause because I want to make sure to a) answer your question, b) I don't want to raise expectations and, I don't want to dampen expectations unnecessarily. A couple of points, firstly, over the last couple of years that we've been working on the factoring concept, it's been clear that the market, as a whole, has now accepted the business of factoring as a key element in the trade finance chain.

And a business that is very likely to become organized and grow in Latin America as it has in places like Asia. So, our business case has been confirmed and that is good. Regarding the specifics of what we're working on, let me just say, because that -- this is all I can say, is that we are spending an increasing amount of time, trying to bring the matter to conclusion. And we have made progress and as soon, and if we have something concrete to announce, you will be the first ones to know.

Great. Thanks, guys.

Sure.

Our next question will come from William Jones with Singular Research.

Hi, guys.

William, good morning.

Hi.

A question, you mentioned leveraging up the balance sheet and -- as we can see in the quarter, leverage ratios at 7.5% versus times versus 5.8 last year. Could you give us some guidance or remind us where you see that going, perhaps, by the end of the year and 2012? And also, maybe some high-level balance sheet guidance on total assets?

I will speak in more general terms. Again, our growth rate for the year in the portfolio as a whole should be four to five times the overall growth rate in the region. You put that through your model and you will realize that towards the end of this year, we will be leveraged to somewhere around 8.5 to 9 times, if we go full steam.

Where we're going ultimately, and by 2012 and 2014, will in essence depend on risk levels in the region. If things continue improving, we will probably be operating at a leverage ratio that in 2014 is likely to exceed 10 times. Again, because risk levels will be low, if on the other hand, the situation changes and risk levels stabilize, or for some reason deteriorate, we will do what we have done in the past. We will delever the balance sheet, strengthen capitalization and wait for the storm to pass.

One of the benefits of our business model, as you know, is our ability to very quickly adjust the balance sheet. So in general terms, we're going to somewhere in the order of 9 to 11 times, depending on risk levels, and while maintaining a strong risk-weighted capitalization. That, if you work the numbers out, that gives us sufficient revenues to provide a steady meeting ROE, which is what we're after.

Okay. That's helpful. And then also, I was wondering, when do you expect or see the new office in Bogota to open?

We just got authority from the regulatory authorities in Bogota in the last couple of days to open the office. We already have the team in place and we have signed contracts with them this week. In general, it takes a couple of months for a unit to come up to speed.

Okay. Great. Thanks again, guys.

No, thank you.

Our next question will come from Gary Lenhoff with Wintrust Capital.

Thank you. Can you just clarify for me, when you talk about loan growth at 4 to 5 times the region's growth rate, what -- I'm just trying to think forward, what loan balance should I be using to look at those numbers? Is that year-over-year? I assume that's not necessarily every quarter, but if we look at a loan balance of roughly $4 billion at the end of 2010, should we be using that as the base to look forward?

Absolutely. Yes. Use the end-of-year balance, not of loans, but of the credit portfolio. Loans plus letters of credit. And multiply it by a factor of four to five times the underlying growth, the rate of the region and you will get a general idea of what our historical performance has been. We beat that handsomely last year, and we'll try to beat that again this year, but that's what we would recommend you use as your base case.

Okay. And that implies a pretty substantial growth in the portfolio continuing for the second half of this year, as you start to anniversary the very strong growth you've exhibited in the second half of 2010, correct?

The general answer is, in -- yes, always or traditionally proven the case that growth in the second half of the year is stronger than in the first half of the year. It's not a very good quarter for us. At 7%, if you annualize that.

Yes.

That's close to 30%. Let's see what happens in the second half, but, yes, we're looking forward to a good first half of the year and if things follow the usual trends, the second half should prove even better.

Great. Thank you so much and congratulations.

No, no, thank you.

Thank you. (Operator Instructions). Our next question will come from Patrick Brennan with RBO Asset Management.

Good morning. Just another question on asset management. I was just curious if you had any thoughts on the movement down to about a -- to $100 million by the end of the year. Do you think that's going to be in kind of a linear fashion between now and the end of the year? Or is that going to be weighted towards the fourth quarter?

And I guess I'm just sort of curious if you can -- whatever color you can provide as to how the marketing conversations with the asset management group are going right now? I appreciate that you're saying that you want to rebuild the track record, but when you pitch this to outside investors, how -- what are they saying as to how long do they want to see improved performance before they're interested again? Is it just they have to see the full results or 2011 first before they buy it? Or would you -- is the team expecting some new commitments in the second half of this year?

And then if you can just refresh our memory so when we get to the end of this year, at $100 million will the decision to go down beyond that be -- would that be something you're going to review on an annual basis? Or will -- quarter-by-quarter basis, will you be looking at it and if the performance is not there, we evaluate at that time? Thanks a lot.

Patrick, good morning. Let me take your questions sequentially. In practical terms, we have thought of a -- of bringing down our exposure in the fund in a linear fashion through year-end. It will not happen, however, because to the extent that we make money, as we did this quarter, we're going to be withdrawing our profit and in some quarters, you might see us take out more than we would otherwise have, to the extent that we are making profits in the sub.

The idea, however, remains a gradual base reduction, through $100 million, at the end of the year. That decision has not changed. And by the way, I will next address your third question. What are we going to do once we get there? We'll, of course, review it. We don't review this on a yearly basis. We actually review it on a quarterly basis, to make sure that the decision that we made continues to make sense.

At the end of the year, we will have to analyze the situation in terms of the actual performance of the fund, volatility, the interest on the part of third-parties, outlook for the market, et cetera. We'll decide, at that point, whether to keep it at $100 million or decrease it or increase it. It also depends, remember, on how the rest of the bank does.

Our ultimate goal is to make sure that regardless of the size of our investments in the fund, the volatility does not impact the overall results of the bank. And in that regard, the larger the rest of the business becomes, the larger investments we can afford to keep in the fund.

Your second question has to do with investor interest. As it turns out, there has never stopped to be investor -- third-party investor interest in the fund and there remains, as we speak, investor interest to become part of the fund. It offers some -- its offer is unique, to the extent that it's a fund managed by an organization that knows Latin America better than, if not everybody, then better than most everybody. And that proposition remains attractive.

Our people, who manage the fund, tell us that in order for that interest on the part of third-party investors, to transform itself into real and significant contributions into the fund, they will take -- it will take anywhere from two to three quarters of successful performance on the part of the fund for the track record to be rebuilt to the point where that interest will become actual investment. Did I answer you with reasonable clarity?

Yes, that's helpful. It is still really another way to say it was that it's probably realistic to think that, -- it probably be like at the very last quarter of this year is when we would really think that we're going to be able to get third-party investors with any significance into the fund. Is that fair?

That is fair. Of course, we're working to beat that goal, but that's a fair estimate for the purposes of your projections.

Okay. Thank you.

Thank you.

(Operator Instructions). Okay. At this time, I'm showing no further questions. I'll turn the call back over to Mr. Jaime Rivera.

Well, thank you. Well, ladies and gentlemen, again, thank you very much for joining us on the call. I will close by saying that, yes, this was a good quarter and we're all happy about it. But I am personally particularly excited, as I have been now for the last three quarters, with the way things are going in the Company, because regardless of the good results for the quarter, what we see is that everything that we've been doing and everything we've postulated as to the way the business was going to develop over the medium term is proving true.

Our business is expanding. Our customers are becoming very receptive to our value proposition. The leverage is improving. Credit quality is improving. The reputation and marketing presence of the Company is improving as well. The way things are going, we should have, as I said, a very good 2011 and even better 2012.

So thank you very much for your confidence and your patience. This is not a quarter-to-quarter change. It's gradual, but it's steady. But it's coming true. Again, thank you very much. Look forward to talking to you next quarter. Success in your business, do well and we'll talk then in three months. Thank you very much.