19.

Financial instruments with off-balance sheet credit risk

In the normal course of business, to meet the financing needs of its customers, the Bank is party to financial instruments with off-balance sheet credit risk. These financial instruments involve, to varying degrees, elements of credit and market risk in excess of the amount recognized in the consolidated balance sheet. Credit risk represents the possibility of loss resulting from the failure of a customer to perform in accordance with the terms of a contract.

The Bank’s outstanding financial instruments with off-balance sheet credit risk were as follows:

	December 31,
	2014		2013
Confirmed letters of credit		89,752		221,963
Stand-by letters of credit and guaranteed – Commercial risk		137,817		137,285
Credit commitments		158,549		121,175
		386,118		480,423

As of Decembet 31, 2014, the remaining maturity profile of the Bank’s outstanding financial instruments with off-balance sheet credit risk is as follows:

Maturities	Amount
Within 1 year		292,720
From 1 to 2 years		41,269
From 2 to 5 years		51,551
More than 5 years		578
		386,118

As of December 31, 2014 and 2013 the breakdown of the Bank’s off-balance sheet exposure by country risk is as follows:

	December 31,
	2014		2013
Country:
Argentina		-		295
Bolivia		-		80
Brazil		19,698		22,567
Chile		27,802		-
Colombia		53,874		38,545
Costa Rica		-		897
Dominican Republic		14,806		108
Ecuador		86,436		153,072
El Salvador		25		25
Guatemala		37,988		43,548
Honduras		412		412
Jamaica		415		338
Mexico		64,324		20,969
Netherlands		-		17,833
Panama		20,675		96,943
Paraguay		418		2
Peru		16,225		41,063
Switzerland		1,000		1,000
United Kingdom		-		70
Uruguay		40,946		40,946
Venezuela		1,074		1,710
		386,118		480,423

Letters of credit and guarantees

The Bank, on behalf of its client base, advises and confirms letters of credit to facilitate foreign trade transactions. When confirming letters of credit, the Bank adds its own unqualified assurance that the issuing bank will pay and that if the issuing bank does not honor drafts drawn on the credit, the Bank will. The Bank provides stand-by letters of credit and guarantees, which are issued on behalf of institutional customers in connection with financing between its customers and third parties. The Bank applies the same credit policies used in its lending process, and once issued the commitment is irrevocable and remains valid until its expiration. Credit risk arises from the Bank's obligation to make payment in the event of a customer’s contractual default to a third party. Risks associated with stand-by letters of credit and guarantees are included in the evaluation of the Bank’s overall credit risk.

Credit commitments

Commitments to extend credit are binding legal agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and require payment of a fee to the Bank. As some commitments expire without being drawn down, the total commitment amounts do not necessarily represent future cash requirements.