And we continue to build that new layer of business, and to build more optionality with everything that we do. So, we’re not dependent on let’s say the legacy business or the business or the business as usual, that we always been doing. I think that that is building well. And I think we’re right on course, with what we the plan that we presented last year. Thank you.
Operator: We have a follow-up question from Andrea. How do you expect commissions and fees to behave in 2023 for syndication letters of credit business? What is your expectation of growth on this front?
Jorge Salas: Those traditions because they have, they’re very different in nature. The letters of credit business, again, is part of the strategy that we’ve been doing. First of all, adding new clients that are specifically doing more this type of business. So, a lot of the clients that we onboarded last year, they were clients specifically for the letter of credit business as well as we’ve been focusing on cross-selling letters of credit business to clients that are only doing lending. And we’ve been more and more successful on that. So, I think that direction for that business in particular is to continue to grow. Of course, we depend on the market letter of credit is very tied to trade in the region. And if the trade flows reduced of course the business suffers, but that should be compensated a new or more clients that we’re adding both existing clients in terms of cross sell as well as new clients.
So for the syndication business, that is a completely different business and that is a business that it’s really to grow the business more substantially, it takes time. Bladex where we have a quite strong captive base of investors that come along with us in the most transactions that we do. But we’re also very careful on what we sell to the market. So, it’s a business that we are — we have not been more aggressive. We continue to do as we did in the past, creating solutions to clients that are willing to pay an extra fee for us to fundraise for them, that also is a business buy to M&A activity when they require certainty of funds. And we do. I mean, the market has been slower this year. What we added that is new is a project finance business that should also generate more structure or structure and fees.
So, I expect this year to be very much in line with last year, hopefully, looking to increase the number, because we think we can increase the number, but we depend on market conditions for the syndication business.
Operator: Our next question comes from Michael Rockman from GBR Consulting. How is the management and the board of directors thinking about capital allocation with dividend being more than three times covered and the stock at a substantial discount to book value?
Jorge Salas: Capital allocation, dividends and all the alternatives. I mean, including buybacks, potential hybrid instrument, that’s an ongoing discussion. At the board level, we just reported a 15.3 common equity Tier 1 ratio, which is at the lower end of the range that we have established. We want to operate the banquet ranges between 15 and 16. As I mentioned, we are committed to a sound capital position. It’s a pillar of our business model, and it’s a pillar of our investment grade rating. I can say we’re focused on optimizing the bank capital allocation to support the growth of our long-term five year plan. And that will take the bank to between $10 billion and $11 billion commercial portfolio. So, if we’re focused on the long-term target, more than the short-term.
Operator: I’m seeing no further questions at this point. I will now be passing the line back to the management team for the concluding remarks.
Jorge Salas: No, I just want to thank your questions and everybody for joining this call. As I mentioned before, we see 2023 as a year of transition in the region. We committed to profitability and perhaps not so aggressive growth this year, underwriting standards will not change and will focus on profitability going forward. That’s what I have to say for now and thank you everybody for connecting.
Operator: Thank you very much. This concludes today’s conference call. We’ll now be closing all the lines. Thank you and have a great day. Goodbye.
