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No. of Recommendations: 5
'With the stock currently trading $4.50 (or 24%) below book value, BLX is still attractive (and that 4.2% yield doesn't hurt).'

Hi Nate – those two factors certainly make BLX quite attractive as a 'lower risk' defensive play. However, the other leg of the thesis is 'high growth', which isn't looking too likely, going by “management is preparing the market for a slow 2010 recovery” and the uphill task of reversing a 24% contraction in trade flows any time soon.

Does Bladex have any kind of priority access to Latin America's trade financing needs by virtue of its pan-regional structure? Is it a key regional deal maker, or vying for a slice of the pie with country financial institutions ?

According to the CEO, “A number of Bladex’s competitors are still in the process of reorganizing their approach to Latin America, or have exited the market altogether.” If so, shouldn't BLX be grabbing a significantly higher share of whatever growth there is to be had?

Or, is it competing directly with the trade financing arms of, say, China, who, backed by Beijing's blank checks, could disintermediate them at will?

With management focusing on lower margin loans, NIM is getting razor thin. Your thesis factored in 'a slight decline in NIM over the next 10 years as competitors enter this high growth market'. Given significant NIM erosion and declining competition, would it make sense to significantly jack up your margin of safety for a bank that is, arguably, over capitalized relative to its foreseeable loan growth opportunity?
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GG Home Fool
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