6-K 1 tm2131381d3_6k.htm FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2021

Commission File Number 1-11414

BANCO LATINOAMERICANO DE COMERCIO EXTERIOR, S.A.

(Exact name of Registrant as specified in its Charter)

FOREIGN TRADE BANK OF LATIN AMERICA, INC.

(Translation of Registrant’s name into English)

Business Park Torre V, Ave. La Rotonda, Costa del Este

P.O. Box 0819-08730

Panama City, Republic of Panama

(Address of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨ No x

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 1, 2021

	FOREIGN TRADE BANK OF LATIN AMERICA, INC.
	(Registrant)


	By:	/s/ Ana Graciela de Méndez

	Name:	Ana Graciela de Méndez
	Title:	CFO

Banco Latinoamericano de Comercio Exterior, S.A. and Subsidiaries

Unaudited condensed consolidated interim financial statements as of September 30, 2021, and for the three and nine months ended September 30, 2021 and 2020

Banco Latinoamericano de Comercio Exterior, S.A. and Subsidiaries

Contents

Unaudited condensed consolidated interim statement of financial position		3

Unaudited condensed consolidated interim statement of profit or loss		4

Unaudited condensed consolidated interim statement of comprehensive income		5

Unaudited condensed consolidated interim statement of changes in equity		6

Unaudited condensed consolidated interim statement of cash flows		7

Notes to the unaudited condensed consolidated interim financial statements		8

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Unaudited condensed consolidated interim statement of financial position

September 30, 2021 and December 31, 2020

(In thousands of US dollars)

	Notes	September 30, 2021 (Unaudited)			December 31, 2020 (Audit)
Assets

Cash and due from banks	4,5		663,975			863,812

Securities and other financial assets, net	3,4,6		772,957			398,068

Loans, net	3,4,7		5,268,827			4,896,647

Customers' liabilities under acceptances	3,4		239,544			74,366
Derivative financial instruments - assets	3,4,10		7,124			27,778
Equipment and leasehold improvements, net			15,294			16,213
Intangibles, net			1,658			1,984
Investment properties			2,050			3,214
Other assets	11		5,651			6,816
Total assets			6,977,080			6,288,898

Liabilities and Equity
Liabilities:
Demand deposits			431,874			170,660
Time deposits			2,946,944			2,968,240
	3,4,12		3,378,818			3,138,900
Interest payable			3,027			1,975
Total deposits			3,381,845			3,140,875

Securities sold under repurchase agreements	3,4,13		330,998			10,663
Borrowings and debt, net	4,14		1,960,699			1,985,070
Interest payable			9,813			9,175

Acceptance outstanding	3,4		239,544			74,366
Derivative financial instruments - liabilities	3,4,10		23,770			9,211
Allowance for loan commitments and financial guarantees contracts losses	3,4		3,654			2,904
Other liabilities	15		14,033			18,714
Total liabilities			5,964,356			5,250,978

Equity:
Common stock			279,980			279,980
Treasury stock			(84,366	)		(57,999	)
Additional paid-in capital in excess of value assigned to common stock			119,627			120,414
Capital reserves	21		95,210			95,210
Regulatory reserves	21		136,019			136,019
Retained earnings			477,109			464,088
Other comprehensive income (loss)			(10,855	)		208
Total equity			1,012,724			1,037,920
Total liabilities and equity			6,977,080			6,288,898

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Unaudited condensed consolidated interim statements of profit or loss

For the three and nine months ended September 30, 2021 and 2020

(In thousands of US dollars, except per share data and number of shares)

		For the three months ended September 30,						For the nine months ended September 30,
	Notes	2021			2020			2021			2020
Interest income:
Deposits			287			897			904			4,272
Securities			2,567			911			6,129			2,228
Loans			31,916			37,886			94,819			136,690
Total interest income	18		34,770			39,694			101,852			143,190
Interest expense:
Deposits			(3,093	)		(4,400	)		(10,034	)		(21,553	)
Borrowings and debt			(9,598	)		(12,686	)		(29,846	)		(51,506	)
Total interest expense	18		(12,691	)		(17,086	)		(39,880	)		(73,059	)

Net interest income			22,079			22,608			61,972			70,131

Other income (expense):
Fees and commissions, net	17		4,752			2,611			12,063			7,624
Gain (loss) on financial instruments, net	9		(112	)		(437	)		51			(4,744	)
Other income, net			111			407			295			838
Total other income, net	18		4,751			2,581			12,409			3,718

Total revenues			26,830			25,189			74,381			73,849

(Provision for) reversal of credit losses	3,18		(771	)		(1,543	)		(2,155	)		1,153
Gain (loss) on non-financial assets, net			-			140			-			-

Operating expenses:
Salaries and other employee expenses			(5,952	)		(4,626	)		(16,764	)		(15,804	)
Depreciation of investment properties, equipment and improvements			(622	)		(1,116	)		(2,132	)		(2,705	)
Amortization of intangible assets			(99	)		(185	)		(623	)		(562	)
Other expenses			(3,655	)		(2,415	)		(10,076	)		(8,079	)
Total operating expenses	18		(10,328	)		(8,342	)		(29,595	)		(27,150	)
Profit for the period			15,731			15,444			42,631			47,852

Per share data:
Basic earnings per share (in US dollars)	16		0.41			0.39			1.08			1.21
Diluted earnings per share (in US dollars)	16		0.41			0.39			1.08			1.21
Weighted average basic shares (in thousands of shares)	16		38,789			39,672			39,377			39,645
Weighted average diluted shares (in thousands of shares)	16		38,789			39,672			39,377			39,645

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Unaudited condensed consolidated interim statements of profit or loss and other comprehensive income

For the three and nine months ended September 30, 2021 and 2020

(In thousands of US dollars)

	For the three months ended September 30						For the nine months ended September 30
	2021			2020			2021			2020
Profit for the period		15,731			15,444			42,631			47,852

Other comprehensive income (loss):
Items that will not be reclassified subsequently to profit or loss:
Change in fair value on equity instrument at FVOCI, net of hedging		-			-			-			546

Items that are or may be reclassified subsequently to profit or loss:
Change in fair value on financial instruments, net of hedging		(2,205	)		(1,698	)		(11,555	)		(3,080	)
Reclassification of gains (losses) on financial instruments to the profit or loss		80			(261	)		44			(606	)
Exchange difference in conversion of foreign currency operation		-			(122	)		448			(793	)

Other comprehensive income (loss)		(2,125	)		(2,081	)		(11,063	)		(3,933	)

Total comprehensive income for the period		13,606			13,363			31,568			43,919

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Unaudited condensed consolidated interim statements of changes in equity

For the nine months ended September 30, 2021 and 2020

(In thousands of US dollars)

	Common stock		Treasury stock			Additional paid- in capital in excess of value assigned to common stock			Capital reserves		Regulatory reserves		Retained earnings			Other comprehensive income			Total equity
Balances at January 1, 2020		279,980		(59,669	)		120,362			95,210		136,019		446,083			(1,818	)		1,016,167
Profit for the period		-		-			-			-		-		47,852			-			47,852
Other comprehensive income (loss)		-		-			-			-		-		-			(4,535	)		(4,535	)
Transfer of fair value on equity instrument at FVOCI		-		-			-			-		-		(602	)		602			-
Compensation cost - stock options and stock units plans		-		-			1,291			-		-		-			-			1,291
Exercised options and stock units vested		-		280			(280	)		-		-		-			-			-
Dividends declared		-		-			-			-		-		(35,068	)		-			(35,068	)
Balances at September 30, 2020		279,980		(57,866	)		119,850			95,210		136,019		458,265			(5,751	)		1,025,707

Balances at January 1, 2021		279,980		(57,999	)		120,414			95,210		136,019		464,088			208			1,037,920
Profit for the period		-		-			-			-		-		42,631			-			42,631
Other comprehensive income (loss)		-		-			-			-		-		-			(11,063	)		(11,063	)
Transfer of fair value on equity instrument at FVOCI		-		-			-			-		-		-			-			-
Issuance of restricted stock		-		1,392			(1,392	)		-		-		-			-			-
Compensation cost - stock options and stock units plans		-		-			1,493			-		-		-			-			1,493
Exercised options and stock units vested		-		888			(888	)		-		-		-			-			-
Repurchase of "Class B" and "Class E" common stock		-		(28,647	)		-			-		-		-			-			(28,647	)
Dividends declared		-		-			-			-		-		(29,611	)		-			(29,611	)
Balances at September 30, 2021		279,980		(84,366	)		119,627			95,210		136,019		477,109			(10,855	)		1,012,724

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Unaudited condensed consolidated interim statements of cash flows

For the nine months ended September 30, 2021 and 2020

(In thousands of US dollars)

	2021			2020
Cash flows from operating activities
Profit for the period		42,631			47,852
Adjustments to reconcile profit for the period to net cash provided by (used in) operating activities:
Depreciation of equipment and leasehold improvements		2,132			2,705
Amortization of intangible assets		623			562
Provision for (reversal of) credit losses		2,155			(1,153	)
(Gain) unrealized loss on financial instruments at fair value through profit or loss		(172	)		2,986
Realized gain on financial instruments at fair value through profit or loss		-			(484	)
Gain net on sale of financial assets at fair value through OCI		(14	)		-
Gain on sale of financial instruments at amortized cost		(333	)		-
Compensation cost - share-based payment		1,493			1,291
Net changes in hedging position and foreign currency		(906	)		4,240
Loss for disposal of equipment and leasehold improvements		256			6
Interest income		(101,852	)		(143,190	)
Interest expense		39,880			73,059
Net decrease (increase) in operating assets:
Pledged deposits		(13,823	)		(23,952	)
Loans		(385,063	)		1,236,130
Other assets		1,179			2,602
Net increase (decrease) in operating liabilities:
Due to depositors		239,918			166,859
Other liabilities		(4,937	)		(2,587	)
Cash flows provided by operating activities		(176,833	)		1,366,926
Interest received		111,545			146,677
Interest paid		(38,915	)		(77,981	)
Net cash (used in) provided by operating activities		(104,203	)		1,435,622

Cash flows from investing activities:
Acquisition of equipment and leasehold improvements		(307	)		(601	)
Acquisition of intangible assets		(297	)		-
Proceeds from the redemption of securities at fair value through OCI		10,000			-
Proceeds from redemption of securities at amortized cost		81,116			44,577
Proceeds from the sale of securities at fair value through OCI		33,492			1,882
Proceeds from the sale of securities at amortized cost		16,369			-
Purchases of securities at fair value through OCI		(9,999	)		(103,600	)
Purchases of securities at amortized cost		(512,051	)		(89,182	)
Net cash provided by investing activities		(381,677	)		(146,924	)

Cash flows from financing activities:
Increase (decrease) in securities sold under repurchase agreements		320,336			(29,867	)
Net increase (decrease) in short-term borrowings and debt		37,222			(1,162,760	)
Proceeds from long-term borrowings and debt		167,675			386,096
Repayments of long-term borrowings and debt		(194,094	)		(246,982	)
Payments of leases liabilities		(916	)		(820	)
Dividends paid		(29,356	)		(34,818	)
Repurchase of common stock		(28,647	)		-
Net cash provided by (used in) financing activities		272,220			(1,089,151	)

(Decrease) increase net in cash and cash equivalents		(213,660	)		199,547
Cash and cash equivalents at beginning of the period		846,008			1,159,718
Cash and cash equivalents at end of the period		632,348			1,359,265

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

1.	Corporate information

Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized multinational bank established to support the financing of foreign trade and economic integration in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Governors of Central Banks in the Region, which recommended the creation of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and initiated operations on January 2, 1979. Under a contract law signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxes in Panama.

The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendence of Banks of Panama (the “SBP”).

In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the unique text of Law Decree No. 9 of February 26, 1998, modified by Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit, liquidity and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.

Bladex Head Office’s subsidiaries are the following:

Bladex Holdings Inc. is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. has ownership in Bladex Representaçao Ltda.

Bladex Representaçao Ltda, incorporated under the laws of Brazil on January 7, 2000, acts as the Bank’s representative office in Brazil. Bladex Representaçao Ltda. is 99.999% owned by Bladex Head Office and the remaining 0.001% is owned by Bladex Holdings Inc.

Bladex Development Corp. was incorporated under the laws of the Republic of Panama on June 5, 2014. Bladex Development Corp. is 100% owned by Bladex Head Office.

BLX Soluciones, S.A. de C.V., SOFOM, E.N.R. (“BLX Soluciones”) was incorporated under the laws of Mexico on June 13, 2014. BLX Soluciones is 99.9% owned by Bladex Head Office, and Bladex Development Corp. owns the remaining 0.1%. The company specializes in offering financial leasing and other financial products such as loans and factoring.

Bladex Head Office has an agency in New York City, USA (the “New York Agency”), which began operations on March 27, 1989. The New York Agency is principally engaged in financing transactions related to international trade, mostly the confirmation and financing of letters of credit for customers in the Region. The New York Agency also has authorization to book transactions through an International Banking Facility (“IBF”).

The Bank has representative offices in Buenos Aires, Argentina; in Mexico City, Mexico; and in Bogota, Colombia, and has a representative license in Lima, Peru.

These unaudited condensed consolidated interim financial statements were authorized for issue by the Board of Directors on October 19, 2021.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

2.	Basis of preparation of the consolidated financial statements

2.1

Statement of compliance

These condensed consolidated interim financial statements of Banco Latinoamericano de Comercio Exterior, S. A. and its subsidiaries have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) issued by the International Accounting Standards Board ("IASB"). As all the disclosures required by IFRS for annual period consolidated financial statements are not included herein, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2020, contained in the Bank’s annual audited consolidated financial statements. The condensed consolidated interim statements of profit or loss, other comprehensive income, changes in equity and cash flows for the periods presented are not necessarily indicative of results expected for any future period.

3.	Financial risk

This note presents information about the Bank’s exposure to financial risks and the Bank’s management of capital.

Credit risk

Credit quality analysis

The following tables set out information about the credit quality of financial assets measured at amortized cost, and securities at FVOCI. Unless specifically indicated, for financial assets the amounts in the table represent the outstanding balances. For loan commitments and financial guarantee contracts, the amounts in the table represent the amounts committed or guaranteed, respectively.

Loans at amortized cost

September 30, 2021
	PD Ranges	Stage 1			Stage 2			Stage 3			Total
Grades 1 - 4	0.03 - 0.74		2,652,930			-			-			2,652,930
Grades 5 - 6	0.75 - 3.80		2,306,667			94,099			-			2,400,766
Grades 7 - 8	3.81 - 34.51		133,108			94,993			10,593			238,694
			5,092,705			189,092			10,593			5,292,390
Loss allowance			(19,341	)		(17,000	)		(5,124	)		(41,465	)
Total			5,073,364			172,092			5,469			5,250,925

December 31, 2020
	PD Ranges	Stage 1			Stage 2			Stage 3			Total
Grades 1 - 4	0.03 - 0.74		2,582,794			-			-			2,582,794
Grades 5 - 6	0.75 - 3.95		1,928,142			167,996			-			2,096,138
Grades 7 - 8	3.96 - 30.67		102,532			119,340			10,593			232,465
Grades 9 - 10	30.68 - 100		-			-			-			-
			4,613,468			287,336			10,593			4,911,397
Loss allowance			(16,661	)		(19,916	)		(4,588	)		(41,165	)
Total			4,596,807			267,420			6,005			4,870,232

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Loan commitments, financial guarantees issued and customers’ liabilities under acceptances

September 30, 2021
	12-month PD Ranges	Stage 1			Stage 2			Stage 3		Total
Commitments and contingencies
Grades 1 - 4	0.03 - 0.74		353,107			-			-		353,107
Grades 5 - 6	0.75 - 3.80		218,102			19,486			-		237,588
Grades 7 - 8	3.81 - 34.51		64,961			-			-		64,961
			636,170			19,486			-		655,656

Customers' liabilities under acceptances
Grades 1 - 4	0.03 - 0.74		46,129			-			-		46,129
Grades 5 - 6	0.75 - 3.80		-			-			-		-
Grades 7 - 8	3.81 - 34.51		193,415			-			-		193,415
			239,544			-			-		239,544
			875,714			19,486			-		895,200
Loss allowance			(3,348	)		(306	)		-		(3,654	)
Total			872,366			19,180			-		891,546

December 31, 2020
	12-month PD Ranges	Stage 1			Stage 2			Stage 3		Total
Commitments and contingencies
Grades 1 - 4	0.03 - 0.74		245,927			-			-		245,927
Grades 5 - 6	0.75 - 3.95		198,638			38,446			-		237,084
Grades 7 - 8	3.96 - 30.67		81,887			-			-		81,887
			526,452			38,446			-		564,898

Customers' liabilities under acceptances
Grades 1 - 4	0.03 - 0.74		1,498			-			-		1,498
Grades 5 - 6	0.75 - 3.95		723			-			-		723
Grades 7 - 8	3.96 - 30.67		72,145			-			-		72,145
			74,366			-			-		74,366
			600,818			38,446			-		639,264
Loss allowance			(2,426	)		(478	)		-		(2,904	)
Total			598,392			37,968			-		636,360

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Securities at amortized cost

September 30, 2021
	12-month PD Ranges	Stage 1			Stage 2		Stage 3		Total
Grades 1 - 4	0.03 - 0.74		384,143			-		-		384,143
Grades 5 - 6	0.75 - 3.80		188,626			-		-		188,626
			572,769			-		-		572,769
Loss allowance			(1,777	)		-		-		(1,777	)
Total			570,992			-		-		570,992

December 31, 2020
	12-month PD Ranges	Stage 1			Stage 2			Stage 3		Total
Grades 1 - 4	0.03 - 0.74		108,505			-			-		108,505
Grades 5 - 6	0.75 - 3.95		50,562			5,007			-		55,569
			159,067			5,007			-		164,074
Loss allowance			(462	)		(33	)		-		(495	)
Total			158,605			4,974			-		163,579

Securities at fair value through other comprehensive income (FVOCI)

September 30, 2021
	12-month PD Ranges	Stage 1			Stage 2		Stage 3		Total
Grades 1 - 4	0.03 - 0.74		194,805			-		-		194,805
			194,805			-		-		194,805
Loss allowance			(26	)		-		-		(26	)
Total			194,779			-		-		194,779

December 31, 2020
	12-month PD Ranges	Stage 1			Stage 2		Stage 3		Total
Grades 1 - 4	0.03 - 0.74		231,348			-		-		231,348
			231,348			-		-		231,348
Loss allowance			(43	)		-		-		(43	)
Total			231,305			-		-		231,305

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

The following table presents information of the current and past due balances of loans at amortized cost in stages 1, 2 and 3:

	September 30, 2021
	Stage 1		Stage 2		Stage 3		Total
Current		5,092,705		189,092		10,593		5,292,390

	December 31, 2020
		Stage 1	Stage 2	Stage 3	Total
Current		4,613,468	287,336	10,593	4,911,397

As of September 30, 2021, and December 31, 2020, other financial assets were not past due nor impaired.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

The following table presents an analysis of counterparty credit exposures arising from derivative transactions. The Bank's derivative fair values are generally secured by cash.

	September 30, 2021
	Notional value USD		Derivative financial instruments - fair value asset		Derivative financial instruments - fair value liabilities
Interest rate swaps		60,000		1,095		(738	)
Cross-currency swaps		671,160		5,369		(23,032	)
Foreign exchange forwards		40,244		660		-
Total		771,404		7,124		(23,770	)

	December 31, 2020
	Notional value USD		Derivative financial instruments - fair value asset		Derivative financial instruments - fair value liabilities
Interest rate swaps		145,667		1,831		(1,774	)
Cross-currency swaps		565,997		25,947		(3,848	)
Foreign exchange forwards		71,353		-		(3,589	)
Total		783,017		27,778		(9,211	)

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

ii.

Loss allowances

The following tables show reconciliations from the opening to the closing balance of the loss allowance by class of financial instrument.

Loans at amortized cost

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		16,661			19,916			4,588		41,165
Transfer to lifetime expected credit losses		(158	)		158			-		-
Net effect of changes in allowance for expected credit losses		(545	)		(2,431	)		376		(2,600	)
Financial instruments that have been derecognized during the period		(10,934	)		(643	)		-		(11,577	)
New financial assets originated or purchased		14,317			-			-		14,317
Write-offs		-			-			-		-
Recoveries		-			-			160		160
Allowance for expected credit losses as of September 30, 2021		19,341			17,000			5,124		41,465

	Stage 1			Stage 2			Stage 3			Total
Allowance for expected credit losses as of December 31, 2019		28,892			15,842			54,573			99,307
Transfer to lifetime expected credit losses		(886	)		886			-			-
Transfer to credit-impaired financial instruments		-			(2,100	)		2,100			-
Net effect of changes in allowance for expected credit losses		134			13,443			(118	)		13,459
Financial instruments that have been derecognized during the year		(24,307	)		(3,729	)		-			(28,036	)
New financial assets originated or purchased		12,828			-			-			12,828
Write-offs		-			(4,426	)		(52,106	)		(56,532	)
Recoveries		-			-			139			139
Allowance for expected credit losses as of December 31, 2020		16,661			19,916			4,588			41,165

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Loan commitments, financial guarantee contracts and customers’ liabilities under acceptances

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		2,426			478			-		2,904
Transfer to lifetime expected credit losses		(53	)		53			-		-
Net effect of changes in reserve for expected credit losses		(27	)		(97	)		-		(124	)
Financial instruments that have been derecognized during the period		(1,470	)		(128	)		-		(1,598	)
New instruments originated or purchased		2,472			-			-		2,472
Allowance for expected credit losses as of September 30, 2021		3,348			306			-		3,654

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2019		2,683			361			-		3,044
Transfer to lifetime expected credit losses		(96	)		96			-		-
Net effect of changes in reserve for expected credit losses		37			42			-		79
Financial instruments that have been derecognized during the year		(1,864	)		(21	)		-		(1,885	)
New instruments originated or purchased		1,666			-			-		1,666
Allowance for expected credit losses as of December 31, 2020		2,426			478			-		2,904

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Securities at amortized cost

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		462			33			-		495
Net effect of changes in allowance for expected  credit losses		(19	)		-			-		(19	)
Financial instruments that have been derecognized during the period		(149	)		(33	)		-		(182	)
New financial assets originated or purchased		1,483			-			-		1,483
Allowance for expected credit losses as of September 30, 2021		1,777			-			-		1,777

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2019		103			10			-		113
Transfer to lifetime expected credit losses		(10	)		10			-		-
Net effect of changes in allowance for expected  credit losses		15			23			-		38
Financial instruments that have been derecognized during the year		(76	)		(10	)		-		(86	)
New financial assets originated or purchased		430			-			-		430
Allowance for expected credit losses as of December 31, 2020		462			33			-		495

Securities at fair value through other comprehensive income (FVOCI)

	Stage 1			Stage 2		Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		43			-		-		43
Financial instruments that have been derecognized during the period		(17	)		-		-		(17	)
Allowance for expected credit losses as of September 30, 2021		26			-		-		26

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Securities at fair value through other comprehensive income (FVOCI)

	Stage 1		Stage 2		Stage 3		Total
Allowance for expected credit losses as of December 31, 2019	-		-		-		-
Financial instruments that have been derecognized during the year		43		-		-		43
Allowance for expected credit losses as of December 31, 2020		43		-		-		43

The following table provides a reconciliation between:

Amounts shown in the previous tables reconciling opening and closing balances of loss allowance per class of financial instrument; and

The (reversal) provision for credit losses’ line item in the condensed consolidated interim statement of profit or loss and other comprehensive income.

							Securities
September 30, 2021	Loans at amortized cost			Loan commitments and financial guarantee contracts			At amortized cost			FVOCI			Total
Net effect of changes in allowance for expected credit losses		(2,600	)		(124	)		(19	)		-			(2,743	)
Financial instruments that have been derecognized during the year		(11,577	)		(1,598	)		(182	)		(17	)		(13,374	)
New financial assets originated or purchased		14,317			2,472			1,483			-			18,272
Total		140			750			1,282			(17	)		2,155

							Securities
September 30, 2020	Loans at amortized cost			Loan commitments and financial guarantee contracts			At amortized cost			FVOCI		Total
Net effect of changes in allowance for expected credit losses		10,196			(109	)		22			-		10,109
Financial instruments that have been derecognized during the year		(21,747	)		(1,797	)		(76	)		-		(23,620	)
New financial assets originated or purchased		11,151			950			242			15		12,358
Total		(400	)		(956	)		188			15		(1,153	)

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

iii.

Credit-impaired financial assets

The following table sets out a reconciliation of changes in the net carrying amount of allowance for credit losses for credit-impaired loans.

	September 30, 2021		December 31, 2020
Credit-impaired loans and advances at beginning of period		4,588		54,573
Classified as credit-impaired during the period		-		2,100
Change in allowance for expected credit losses		191		(744	)
Recoveries of amounts previously written off		160		139
Interest income		185		626
Write-offs		-		(52,106	)
Credit-impaired loans and advances at end of period		5,124		4,588

During the year ended December 31, 2020, the sale of the outstanding credit-impaired loan in Stage 3, classified at amortized cost, was made for $11.6 million. This sale resulted in a write off against the allowance for credit losses of $ 52.1 million.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

iv.

Concentrations of credit risk

The Bank monitors concentrations of credit risk by sector, industry and by country. An analysis of concentrations of credit risk from loans, loan commitments, financial guarantees and investment securities is as follows.

Concentration by sector and industry

									Securities
	Loans at amortized cost				Loan commitments and financial guarantee contracts				At amortized cost				FVOCI
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Carrying amount - principal		5,292,390		4,911,397		239,544		74,366		572,769		164,074		194,805		231,348
Amount committed/guaranteed		-		-		655,656		564,898		-		-		-		-

Concentration by sector
Corporations:
Private		1,888,788		1,425,929		478,017		276,249		337,396		56,979		59,530		60,403
State-owned		980,266		741,791		59,396		92,299		46,447		29,985		-		23,858
Financial institutions:				-
Private		1,962,252		2,231,742		76,288		65,434		111,184		33,715		-		-
State-owned		431,571		476,520		281,499		205,282		44,167		28,276		135,275		141,974
Sovereign		29,513		35,415		-		-		33,575		15,119		-		5,113
Total		5,292,390		4,911,397		895,200		639,264		572,769		164,074		194,805		231,348

Concentration by industry
Financial institutions		2,393,823		2,708,262		357,787		270,716		155,351		61,991		135,275		141,974
Manufacturing		1,188,192		760,985		323,860		173,493		183,082		66,053		44,922		45,654
Oil and petroleum derived products		932,026		586,030		107,286		98,189		60,433		20,911		14,608		38,607
Agricultural		307,661		336,715		-		-		-		-		-		-
Services		195,441		264,597		54,971		63,086		66,331		-		-		-
Mining		102,973		94,955		-		-		14,876		-		-		-
Sovereign		29,513		35,415		-		-		33,575		15,119		-		5,113
Other		142,761		124,438		51,296		33,780		59,121		-		-		-
Total		5,292,390		4,911,397		895,200		639,264		572,769		164,074		194,805		231,348

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Risk rating and concentration by country

									Securities
	Loans at amortized cost				Loan commitments and financial guarantee contracts				At amortized cost				FVOCI
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Carrying amount - principal		5,292,390		4,911,397		239,544		74,366		572,769		164,074		194,805		231,348
Amount committed/guaranteed		-		-		655,656		564,898		-		-		-		-

Rating
1-4		2,652,930		2,582,794		399,236		247,425		384,143		108,505		194,805		231,348
5-6		2,400,766		2,096,138		237,588		237,807		188,626		55,569		-		-
7-8		238,694		232,465		258,376		154,032		-		-		-		-
Total		5,292,390		4,911,397		895,200		639,264		572,769		164,074		194,805		231,348

Concentration by country
Argentina		97,087		130,944		-		-		-		-		-		-
Australia		-		-		-		-		9,968		-		-		-
Belgium		17,131		9,807		-		-		-		-		-		-
Bolivia		10,000		12,000		2,800		2,800		-		-		-		-
Brazil		1,061,704		971,652		80,000		50,000		98,049		41,128		-		-
Canada		-		-		-		-		4,987		-		-		-
Chile		592,924		533,945		20,684		7,911		100,438		11,992		-		28,972
Colombia		598,264		714,258		50,333		50,333		34,997		29,998		-		-
Costa Rica		163,475		146,200		29,794		56,876		3,972		-		-		-
Dominican Republic		270,162		202,433		16,500		16,500		4,977		-		-		-
Ecuador		31,365		45,511		261,896		165,275		-		-		-		-
El Salvador		81,500		40,000		4,333		1,087		-		-		-		-
France		109,169		150,810		57,904		84,862		-		-		-		-
Germany		-		-		7,000		-		-		-		-		-
Guatemala		347,284		281,485		64,995		43,845		3,080		-		-		-
Honduras		24,620		10,199		1,175		345		-		-		-		-
Hong Kong		6,000		1,800		-		-		-		-		-		-
Israel		-		-		-		-		4,989		-		-		-
Jamaica		36,988		23,274		-		-		-		-		-		-
Luxembourg		117,600		50,000		-		-		-		-		-		-
Mexico		860,838		607,099		4,298		4,995		46,262		43,910		-		-
Nicaragua		-		-		-		-		-		-		-		-
Panama		211,368		241,097		62,548		61,435		12,919		10,399		-		-
Paraguay		46,093		100,816		9,380		11,800		-		-		-		-
Peru		231,954		272,752		75,608		47,245		58,306		26,647		-		-
Singapore		121,336		75,095		-		-		-		-		-		-
Trinidad and Tobago		133,413		165,995		20,000		-		-		-		-		-
United States of America		45,000		113,816		-		-		189,825		-		88,759		89,794
United Kingdom		5,204		10,409		19,981		-		-		-		-		-
Uruguay		71,911		-		105,971		33,955		-		-		-		-
Multilateral		-		-		-		-		-		-		106,046		112,582
Total		5,292,390		4,911,397		895,200		639,264		572,769		164,074		194,805		231,349

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

3. Financial risk (continued)

Credit risk (continued)

Offsetting financial assets and liabilities

The following tables include financial assets and liabilities that are offset in the condensed consolidated interim financial statement or subject to an enforceable master netting arrangement:

Derivative financial instruments – assets

September 30, 2021
	Gross		Gross amounts offset in the consolidated statement of		Net amount of assets presented in the consolidated		Gross amounts not offset in the consolidated statement of financial position
Description	amounts of assets		financial position		statement of financial position		Financial instruments		Cash collateral received			Net Amount
Derivative financial instruments used for hedging		7,124		-		7,124		-		(4,990	)		2,134
Total		7,124		-		7,124		-		(4,990	)		2,134

December 31, 2020
	Gross		Gross amounts offset in the consolidated statement of		Net amount of assets presented in the consolidated		Gross amounts not offset in the consolidated statement of financial position
Description	amounts of assets		financial position		statement of financial position		Financial instruments		Cash collateral received			Net Amount
Derivative financial instruments used for hedging		27,778		-		27,778		-		(24,720	)		3,058
Total		27,778		-		27,778		-		(24,720	)		3,058

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Credit risk (continued)

Securities sold under repurchase agreements and derivative financial instruments – liabilities

September 30, 2021
				Gross amounts offset in the consolidated		Net amount of liabilities presented in the			Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of liabilities			statement of financial position		consolidated statement of financial position			Financial instruments		Cash collateral pledged		Net Amount
Securities sold under repurchase agreements		(330,998	)		-		(330,998	)		358,674		765		28,441
Derivative financial instruments used for hedging		(23,770	)		-		(23,770	)		-		20,862		(2,908	)
Total		(354,768	)		-		(354,768	)		358,674		21,627		25,533

December 31, 2020
				Gross amounts offset in the consolidated		Net amount of liabilities presented in the			Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of liabilities			statement of financial position		consolidated statement of financial position			Financial instruments		Cash collateral pledged		Net Amount
Securities sold under repurchase agreements		(10,663	)		-		(10,663	)		11,998		18		1,353
Derivative financial instruments used for hedging		(9,211	)		-		(9,211	)		-		7,786		(1,425	)
Total		(19,874	)		-		(19,874	)		11,998		7,804		(72	)

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Liquidity risk

Exposure to liquidity risk

The following table details the Bank's liquidity ratios, described in the previous paragraph, as of September 30, 2021, and December 31, 2020, respectively:

	September 30, 2021			December 31, 2020
At the end of the period		201.90	%		249.42	%
Period average		125.04	%		115.98	%
Maximum of the period		306.82	%		249.42	%
Minimum of the period		73.82	%		53.26	%

The following table includes the Bank’s liquid assets by geographical location:

	September 30, 2021						December 31, 2020
(in millions of USD dollars)	Cash and due from banks		Securities FVOCI		Total		Cash and due from banks		Securities FVOCI		Total
United State of America		568		41		609		740		90		830
Other O.E.C.D countries		-		19		19		100		-		100
Latin America		14		-		14		6		-		6
Other countries		50		-		50		-		-		-
Multilateral		-		135		135		-		112		112
Total		632		195		827		846		202		1,048

The following table includes the Bank’s demand deposits from customers and its ratio to total deposits from customers:

(in millions of USD dollars)	September 30, 2021			December 31, 2020
Demand liabilities and “overnight”		514			171
% Demand liabilities and "overnight" to total deposits		15.21	%		5.44	%

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Liquidity risk (continued)

The liquidity requirements resulting from the Bank’s demand deposits from customers is satisfied by the Bank’s liquid assets as follows:

(in millions of USD dollars)	September 30, 2021			December 31, 2020
Total liquid assets		827			1,048
% Total assets to total liabilities		24.48	%		33.40	%
% Total liquid assets in the Federal Reserve of the United States of America		68.53	%		65.68	%

Even though the average term of the Bank's assets exceeds the average term of its liabilities, the associated liquidity risk is diminished by the short-term nature of a significant portion of the loan portfolio, since the Bank is primarily engaged in financing foreign trade.

The following table includes the carrying amount for the Bank’s loans and securities short-term portfolio with maturity within one year based on their original contractual term together with its average remaining term:

(in millions of USD dollars)	September 30, 2021		December 31, 2020
Loan portfolio at amortized cost and securities portfolio less than/equal to 1 year according to its original terms		3,312		3,114
Average term (days)		186		195

The following table includes the carrying amount for the Bank’s loans and securities medium term portfolio with maturity over one year based on their original contractual terms together with their average remaining term:

(in millions of USD dollars)	September 30, 2021		December 31, 2020
Loan portfolio at amortized cost and securities portfolio greater than/equal to 1 year according to its original terms		2,748		2,193
Average term (days)		1,380		1,382

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

3. Financial risk (continued)

Liquidity risk (continued)

ii.

Maturity analysis for financial liabilities and financial assets

The following table details the future undiscounted cash flows of assets and liabilities grouped by their remaining maturity with respect to the contractual maturity:

	September 30, 2021
Description	Up to 3 months			3 to 6 months			6 months to 1 year			1 to 5 years			More than 5 years			Gross inflows (outflows)			Carrying amount
Assets
Cash and due from banks		663,986			-			-			-			-			663,986			663,975
Securities and other financial assets, net		21,316			38,950			131,241			607,933			-			799,440			772,957
Loans, net		2,262,094			1,056,656			683,660			1,377,733			144,594			5,524,737			5,268,827
Derivative financial instruments - assets		1,755			-			-			5,369			-			7,124			7,124
Total		2,949,151			1,095,606			814,901			1,991,035			144,594			6,995,287			6,712,883

Liabilities
Deposits		(3,202,832	)		(155,638	)		(15,473	)		(9,665	)		-			(3,383,608	)		(3,381,845	)
Securities sold under repurchase agreements		(146,615	)		(149,808	)		-			(35,515	)		-			(331,938	)		(330,998	)
Borrowings and debt, net		(252,445	)		(255,837	)		(450,242	)		(1,093,351	)		(30,138	)		(2,082,013	)		(1,970,512	)
Derivative financial instruments - liabilities		-			-			(11,323	)		(11,785	)		(662	)		(23,770	)		(23,770	)
Total		(3,601,892	)		(561,283	)		(477,038	)		(1,150,316	)		(30,800	)		(5,821,329	)		(5,707,125	)

Contingencies
Confirmed lettes of credit		206,155			46,783			3,367			-			-			256,305			256,305
Stand-by letters of credit and guarantees		8,440			58,588			120,026			12,178			-			199,232			199,232
Credit commitments		54,286			20,000			52,500			73,333			-			200,119			200,119
Total		268,881			125,371			175,893			85,511			-			655,656			655,656
Net position		(921,622	)		408,952			161,970			755,208			113,794			518,302			350,102

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Liquidity risk (continued)

ii.

Maturity analysis for financial liabilities and financial assets (continued)

	December 31, 2020
Description	Up to 3 months			3 to 6 months			6 months to 1 year			1 to 5 years			More than 5 years			Gross inflows (outflows)			Carrying amount
Assets
Cash and due from banks		863,831			-			-			-			-			863,831			863,812
Securities and other financial assets, net		11,541			20,961			60,311			312,027			-			404,840			398,068
Loans, net		1,712,049			998,923			1,255,069			293,489			1,156,625			5,416,155			4,896,647
Derivative financial instruments - assets		-			119			129			26,691			839			27,778			27,778
Total		2,587,421			1,020,003			1,315,509			632,207			1,157,464			6,712,604			6,186,305

Liabilities
Deposits		(2,678,292	)		(166,832	)		(293,306	)		(6,638	)		-			(3,145,068	)		(3,140,875	)
Securities sold under repurchase agreements		-			(5,784	)		(4,977	)		-			-			(10,761	)		(10,663	)
Borrowings and debt, net		(166,034	)		(60,816	)		(456,932	)		(1,425,806	)		(24,922	)		(2,134,510	)		(1,994,245	)
Derivative financial instruments - liabilities		(3,020	)		(1,081	)		(71	)		(5,039	)		-			(9,211	)		(9,211	)
Total		(2,847,346	)		(234,513	)		(755,286	)		(1,437,483	)		(24,922	)		(5,299,550	)		(5,154,994	)

Contingencies
Confirmed lettes of credit		167,301			29,466			20,015			-			-			216,782			216,782
Stand-by letters of credit and guarantees		35,041			106,943			55,963			12,550			-			210,497			210,497
Credit commitments		-			-			4,286			133,333			-			137,619			137,619
Total		202,342			136,409			80,264			145,883			-			564,898			564,898
Net position		(462,267	)		649,081			479,959			(951,159	)		1,132,542			848,156			466,413

The amounts in the tables above have been compiled as follows:

Type of financial instrument		Basis on which amounts are compiled
Financial assets and liabilities		Undiscounted cash flows, which include estimated interest payments.

Issued financial guarantee contracts, and loan commitments		Earliest possible contractual maturity. For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

Derivative financial liabilities and financial assets		Contractual undiscounted cash flows. The amounts shown are the gross nominal inflows and outflows for derivatives that simultaneously settle gross or net amounts.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Liquidity risk (continued)

iii.

Liquidity reserves

As part of the management of liquidity risk arising from financial liabilities, the Bank holds liquid assets comprising cash and cash equivalents.

The following table sets out the components of the Banks’s liquidity reserves:

	September 30,				December 31,
	2021				2020
	Amount		Fair Value		Amount		Fair Value
Balances with Federal Reserve of the United States of America		566,849		566,849		688,612		688,612
Cash and due from banks ⁽¹⁾		65,499		65,499		157,396		157,396
Total Liquidity reserves		632,348		632,348		846,008		846,008

⁽¹⁾

Excludes pledged deposits.

iv.

Financial assets available to support future funding

The following table sets out the Bank’s financial assets available to support future funding:

September 30, 2021
	Guaranteed		Available as collateral
Cash and due from banks		31,627		632,348
Notional of investment securities		338,081		393,460
Loans at amortized cost		-		5,292,390
Total assets		369,708		6,318,198

December 31, 2020
	Guaranteed		Available as collateral
Cash and due from banks		17,804		846,008
Notional of investment securities		11,450		371,900
Loans at amortized cost		-		4,911,397
Total assets		29,254		6,129,305

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Market risk

Interest rate risk

The following is a summary of the Bank’s interest rate gap position for the financial assets and liabilities based on their next repricing date:

	September 30, 2021
Description	Up to 3 months			3 to 6 months			6 months to 1 year			1 to 5 years			More than 5 years			Non interest rate risk			Total
Assets
Cash and due from banks		661,742			-			-			-			-			2,233			663,975
Securities and other financial assets, net		8,085			26,832			100,449			632,208			-			-			767,574
Loans		3,734,592			1,112,458			263,870			179,499			7,194			-			5,297,613
Total assets		4,404,419			1,139,290			364,319			811,707			7,194			2,233			6,729,162

Liabilities
Demand deposits and time deposits		(3,198,437	)		(155,164	)		(15,400	)		(9,500	)		-			(317	)		(3,378,818	)
Securities sold under repurchase agreements		(146,517	)		(149,453	)		-			(35,028	)		-			-			(330,998	)
Borrowings and debt, net		(933,228	)		(47	)		(106,466	)		(904,389	)		(16,569	)		-			(1,960,699	)
Total liabilities		(4,278,182	)		(304,664	)		(121,866	)		(948,917	)		(16,569	)		(317	)		(5,670,515	)
Net effect of derivative financial instruments held for interest risk management		1,095			-			(11,323	)		(6,415	)		(662	)		-			(17,306	)
Total interest rate sensitivity		127,332			834,626			231,130			(143,625	)		(10,037	)		1,916			1,041,341

	December 31, 2020
Description	Up to 3 months			3 to 6 months			6 months to 1 year			1 to 5 years			More than 5 years			Non interest rate risk			Total
Assets
Demand deposits and time deposits		859,481			-			-			-			-			4,331			863,812
Securities and other financial assets		9,554			9,139			55,960			320,769			-			-			395,422
Loans		3,468,477			895,794			434,813			117,262			-			-			4,916,346
Total assets		4,337,512			904,933			490,773			438,031			-			4,331			6,175,580

Liabilities
Demand deposits and time deposits		(2,675,867	)		(166,317	)		(290,000	)		(6,500	)		-			(216	)		(3,138,900	)
Securities sold under repurchase agreements		-			(5,728	)		(4,935	)		-			-			-			(10,663	)
Borrowings and debt		(1,103,703	)		(45,859	)		(16,511	)		(794,522	)		(24,475	)		-			(1,985,070	)
Total liabilities		(3,779,570	)		(217,904	)		(311,446	)		(801,022	)		(24,475	)		(216	)		(5,134,633	)
Net effect of derivative financial instruments held for interest risk management		(3	)		(373	)		58			15,982			839			-			16,503
Total interest rate sensitivity		557,939			686,656			179,385			(347,009	)		(23,636	)		4,115			1,057,450

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Market risk (continued)

Following is an analysis of the Bank’s sensitivity to the most likely increase or decrease in market interest rates at the reporting date, assuming no asymmetrical movements in yield curves and a constant financial position:

	Change in interest rate	Effect on profit or loss			Effect on equity
September 30, 2021	+50 bps		2,511			16,064
	-50 bps		(2,014	)		6,362

December 31, 2020	+50 bps		1,182			16,618
	-50 bps		(5,161	)		107

Interest rate movements affect reported equity in the following ways:

Retained earnings: increases or decreases in net interest income and in fair values of derivatives reported in profit or loss;

Fair value reserve: increases or decreases in fair values of financial assets at FVOCI reported directly in equity; and

Hedging reserve: increases or decreases in fair values of hedging instruments designated in qualifying cash flow hedge relationships.

This sensitivity provides a consideration of changes in interest rates, considering last period interest rate volatility.

ii.

Foreign exchange risk

The following table presents the maximum exposure amount in foreign currency of the Bank’s carrying amount of total assets and liabilities, excluding derivative financial assets and liabilities, based on their fair value.

	September 30, 2021
	Brazilian Real		European Euro		Japanese Yen		Colombian Peso		Mexican Peso			Other Currencies ⁽¹⁾		Total
Exchance rate		5.44		1.16		111.30		3,816.79		20.64
Assets
Cash and due from banks		-		8		1		26		10,994			143		11,172
Loans		-		-		-		-		151,030			-		151,030
Total Assets		-		8		1		26		162,024			143		162,202

Liabilities
Borrowings and debt		-		-		-		-		(161,940	)		-		(161,940	)
Total liabilities		-		-		-		-		(161,940	)		-		(161,940	)

Net currency position		-		8		1		26		84			143		262

⁽¹⁾ It includes other currencies such as: Argentine pesos, Australian dollar, Swiss franc, Sterling pound, Peruvian soles, and Chinese renminbi.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Financial risk (continued)

Market risk (continued)

ii.

Foreign exchange risk (continued)

	December 31, 2020
	Brazilian Real		European Euro		Japanese Yen		Colombian Peso		Mexican Peso			Other Currencies ⁽¹⁾		Total
Exchance rate		5.19		1.22		103.23		3,430.19		19.92
Assets
Cash and due from banks		81		13		1		20		1,615			80		1,810
Loans		-		-		-		-		182,395			-		182,395
Total Assets		81		13		1		20		184,010			80		184,205

Liabilities
Borrowings and debt		-		-		-		-		(183,863	)		-		(183,863	)
Total liabilities		-		-		-		-		(183,863	)		-		(183,863	)

Net currency position		81		13				20		147			80		342

⁽¹⁾ It includes other currencies such as: Argentine pesos, Australian dollar, Swiss franc, Sterling pound, Peruvian soles, and Chinese renminbi.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Fair value of financial instruments

Recurring valuation

Financial instruments measured at fair value on a recurring basis by caption on the condensed consolidated interim statement of financial position using the fair value hierarchy are described below:

	September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Securities and other financial assets:
Securities at FVOCI - Corporate debt		-		194,805		-		194,805
Securities at FVOCI - Sovereign debt		-		-		-		-
Loans at fair value through profit or loss		-		-		5,223		5,223
Total securities and other financial assets		-		194,805		5,223		200,028

Derivative financial instruments - assets:
Interest rate swaps		-		1,095		-		1,095
Cross-currency swaps		-		5,369		-		5,369
Foreign exchange forwards		-		660		-		660
Total derivative financial instrument assets		-		7,124		-		7,124
Total assets at fair value		-		201,929		5,223		207,152

Liabilities
Derivative financial instruments - liabilities:
Interest rate swaps		-		738		-		738
Cross-currency swaps		-		23,032		-		23,032
Foreign exchange forwards		-		-		-		-
Total derivative financial instruments - liabilities		-		23,770		-		23,770
Total liabilities at fair value		-		23,770		-		23,770

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Fair value of financial instruments (continued)

Recurring valuation (continued)

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Securities and other financial assets:
Securities at FVOCI - Corporate debt		-		226,235		-		226,235
Securities at FVOCI - Sovereign debt		-		5,113		-		5,113
Loans at fair value through profit or loss		-		-		4,949		4,949
Total securities and other financial assets		-		231,348		4,949		236,297

Derivative financial instruments - assets:
Interest rate swaps		-		1,831		-		1,831
Cross-currency swaps		-		25,947		-		25,947
Foreign exchange forwards		-		-		-		-
Total derivative financial instrument assets		-		27,778		-		27,778
Total assets at fair value		-		259,126		4,949		264,075

Liabilities
Derivative financial instruments - liabilities:
Interest rate swaps		-		1,774		-		1,774
Cross-currency swaps		-		3,848		-		3,848
Foreign exchange forwards		-		3,589		-		3,589
Total derivative financial instruments - liabilities		-		9,211		-		9,211
Total liabilities at fair value		-		9,211		-		9,211

Fair value calculations are provided only for a limited portion of assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used for estimates, comparisons of fair value information disclosed by the Bank with those of other companies may not be meaningful for comparative analysis.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Fair value of financial instruments (continued)

Non-recurring valuation

The following table provides information on the carrying value and the estimated fair value of the Bank’s financial instruments that are not measured on a recurring basis:

	September 30, 2021
	Carrying value		Fair value		Level 1		Level 2		Level 3
Assets
Cash and deposits on banks		663,975		663,975		-		663,975		-
Securities at amortized cost ⁽¹⁾		577,426		577,261		-		567,582		9,679
Loans at amortized cost, net ⁽²⁾		5,263,604		5,348,107		-		5,348,107		-
Customers' liabilities under acceptances		239,544		239,544		-		239,544		-
Investment properties		2,050		2,050		-		-		2,050

Liabilities
Deposits		3,381,845		3,381,845		-		3,381,845		-
Securities sold under repurchase agreements		330,998		330,998		-		330,998		-
Borrowings and debt, net ⁽³⁾		1,942,816		1,940,103		-		1,940,103		-
Customers' liabilities under acceptances		239,544		239,544		-		239,544		-

	December 31, 2020
	Carrying value		Fair value		Level 1		Level 2		Level 3
Assets
Cash and deposits on banks		863,812		863,812		-		863,812		-
Securities at amortized cost ⁽¹⁾		165,564		168,110		-		157,698		10,412
Loans at amortized cost, net ⁽²⁾		4,891,698		4,972,599		-		4,972,599		-
Customers' liabilities under acceptances		74,366		74,366		-		74,366		-
Investment properties		3,214		3,214		-		-		3,214

Liabilities
Deposits		3,140,875		3,140,875		-		3,140,875		-
Securities sold under repurchase agreements		10,663		10,663		-		10,663		-
Borrowings and debt, net ⁽³⁾		1,966,271		1,989,719		-		1,989,719		-
Customers' liabilities under acceptances		74,366		74,366		-		74,366		-

⁽¹⁾

The carrying value of securities at amortized cost is net of accrued interest receivable of $6.4 million and the allowance for expected credit losses of $1.7 million as of September 30, 2021 (accrued interest receivable of $1.9 million and the allowance for expected credit losses of $0.4 million as of December 31, 2020).

⁽²⁾

The carrying value of loans at amortized cost is net of accrued interest receivable of $20.9 million, the allowance for expected credit losses of $41.4 million and unearned interest and deferred fees of $8.2 million for September 30, 2021 (accrued interest receivable of $27.3 million, the allowance for expected credit losses of $41.1 million and unearned interest and deferred fees of $5.8 million for December 31, 2020).

⁽³⁾

Borrowings and debt exclude lease liabilities for an amount of $17.8 million and $18.7 million as of September 30, 2020 and December 31, 2020, respectively.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

4.	Fair value of financial instruments (continued)

Level 3 - Fair value measurement

The following table presents the movement of a level 3 financial instruments measured at fair value:

	Debt instruments at fair value through profit or loss (debentures)			Loans at fair value through profit or loss			Total
At December 31, 2019		6,492			-			6,492
Additions		1,433			5,750			7,183
Net changes in fair value(1)		(2,175	)		(801	)		(2,976	)
Sales		(5,750	)		-			(5,750	)
At December 31, 2020		-			4,949			4,949
Additions		-			-			-
Net changes in fair value(1)		-			274			274
Sales		-			-			-
At September 30, 2021		-			5,223			5,223

⁽¹⁾ The fair value of the instrument includes interest receivable.

For financial instruments measured at fair value in level 3 category, the Bank uses the following methodologies and inputs using present value techniques.

Loans at fair value through profit or loss - Level 3

In 2020, the Bank realized the sale of the debt instrument measured at fair value through profit or loss for $5.8 million. As a result, the Bank recognized a loan and classified it at fair value through profit or loss with a carrying amount of $5.2 million and $4.9 million as of September 30, 2021 and December 31, 2020, respectively.

Inputs used in the fair value measurement are detailed as follows:

*Observable inputs*		*Unobservable inputs*
- Forward interest rate referenced to 12M USD Libor		- Discount rate or discount margin of floating rate bond "USD US composite B+" with credit risk similar to the instrument analyzed adjusted by the country risk premium.

Fair value measurement sensitivity to unobservable inputs – discount rate		2021		2020
A significant increase in volatility would result in a lower fair value		6.86% - 7.48%		3.128% to 8.89%

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Fair value of financial instruments (continued)

Level 3 - Fair value measurement (continued)

Management used market data published in Bloomberg for the construction of the discount curve, which allows for a more accurate measurement of the instrument.

Although the Bank believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different fair value measurements. For fair value measurements in level 3, changing one or more of the assumptions used would have the following effects.

Loans at fair value through profit or loss

Effect on profit
or loss

+ 100 bps to the observable and unobservable inputs

(130

)

- 100 bps to the observable and unobservable inputs

134

Cash and due from banks

The following table presents the details of interest-bearing deposits in banks and pledged deposits:

	September 30,		December 31,
	2021		2020
Unrestricted deposits with the Federal Reserve of the United States of America		566,849		688,612
Cash and non-interest-bearing deposits in other banks		2,233		4,331
Cash and interest-bearing deposits in other banks⁽¹⁾		94,893		170,869
Total cash and due from banks		663,975		863,812

Less:
Time deposits with original maturity over 90 days and other restricted deposits ⁽¹⁾		31,627		17,804
Total cash and due from banks in the consolidated statement of cash flows		632,348		846,008

⁽¹⁾

Includes restricted deposit of $10.0 million for both periods with the New York State Banking Department under March 1994 legislation and margin call deposits collateralizing derivative financial instrument transactions demand deposits based on daily rates determined by banks.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Cash and due from banks (continued)

The following table presents the pledged deposits classified by country risk:

	September 30,		December 31,
	2021		2020
Country:
United States of America⁽¹⁾		11,485		11,515
Switzerland		7,787		3,027
Netherlands		3,290		334
Japan		3,060		1,330
France		2,980		50
Mexico		1,700		790
United Kingdom		710		130
Spain		315		18
Germany		300		-
Canada		-		610
Total		31,627		17,804

⁽¹⁾

Includes pledged deposits of $10.0 million for both periods, with the New York State Banking Department under March 1994 legislation and deposits pledged to guarantee derivative financial instrument transactions.

Securities and other financial assets, net

Securities and other financial assets are presented as follows:

			At fair value
At September 30, 2021			With changes in other comprehensive income (loss)				With
Carrying amount	Amortized cost			Recyclable to profit and loss		Non-recyclable to profit and loss		changes in profit or loss	Total securities and other financial assets, net
Principal	572,769			194,805		-		-	767,574
Interest receivable	6,434			726		-		-	7,160
Reserves ⁽¹⁾	(1,777	)		(26	)	-		-	(1,803	)
	577,426			195,505		-		-	772,931

			At fair value
At December 31, 2020			With changes in other comprehensive income (loss)				With
Carrying amount	Amortized cost			Recyclable to profit and loss		Non-recyclable to profit and loss		changes in profit or loss	Total securities and other financial assets, net
Principal	164,074			231,348		-		-	395,422
Interest receivable	1,985			1,156		-		-	3,141
Reserves ⁽¹⁾	(495	)		(43	)	-		-	(538	)
	165,564			232,461		-		-	398,025

(1)

The loss allowance for losses for securities at FVOCI is included in equity in the condensed consolidated interim statement of financial position in the line Other comprehensive income.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Securities and other financial assets, net (continued)

As of December 31, 2020, the Bank sold 261,164 shares, which were designated at their initial recognition at fair value with changes in other comprehensive income due to market changes affecting the liquidity of the instrument.

The cumulative fair value of the shares sold was $1.7 million, and the cumulative loss recognized in other comprehensive income was $602 thousand, transferred to retained earnings.

Securities and other financial assets by contractual maturity are shown in the following table:

		At fair value
At September 30, 2021		With changes in other comprehemsive income			With
	Amortized cost		Recyclable to profit ans loss	Non-recyclable to profit and loss		changes in profit or loss	Total securities and other financial assets, net
Due within 1 year	37,533		107,988	-		-	145,521
After 1 year but within 5 years	535,236		86,817	-		-	622,053
Balance - principal	572,769		194,805	-		-	767,574

		At fair value
At December 31, 2020		With changes in other comprehemsive income			With
	Amortized cost		Recyclable to profit ans loss	Non-recyclable to profit and loss		changes in profit or loss	Total securities and other financial assets, net
Due within 1 year	40,625		34,027	-		-	74,652
After 1 year but within 5 years	123,449		197,321	-		-	320,770
Balance - principal	164,074		231,348	-		-	395,422

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Securities and other financial assets, net (continued)

The following table includes the securities pledged to secure repurchase transactions accounted for as secured pledged:

	September 30, 2021						December 31, 2020
		Amortized cost		Fair value	Total			Amortized cost		Fair value	Total

Securities pledged to secure repurchase transactions		358,674		-	358,674			11,998		-	11,998
Securities sold under repurchase agreements		(330,998	)	-	(330,998	)		(10,663	)	-	(10,663	)

Loans

The following table presents the loan portfolio according to its classification and subsequent measurement:

	September 30,			December 31,
	2021				2020
Loans at amortized cost		5,292,390			4,911,397
Interest receivable		20,912			27,350
Loss allowances		(41,465	)		(41,165	)
Unearned interest and deferred fees		(8,233	)		(5,884	)
Loans at amortized cost, net		5,263,604			4,891,698
Loans at fair value through profit or loss ⁽¹⁾		5,223			4,949
Loans, net		5,268,827			4,896,647

⁽¹⁾The Bank realized the sale of debt instruments measured at fair value through profit or loss for $5.8 million. As a result, the Bank recognized a loan and classified it at fair value through profit or loss with a carrying amount of $5.2 million and $4.9 million as of September 30, 2021 and December 31, 2020, respectively.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Loans (continued)

The fixed and floating interest rate distribution of the loan portfolio is as follows:

	September 30,		December 31,
	2020		2020
Fixed interest rates		2,930,034		2,544,544
Floating interest rates		2,367,579		2,371,802
Total		5,297,613		4,916,346

As of September 30, 2021, and December 31, 2020, 84% and 41% of the loan portfolio at fixed interest rates has remaining maturities of less than 180 days. The range of interest rates on loans fluctuates from 0.41% to 9.75% (December 31, 2020 0.43% to 9.70%).

The following table details information relating to loans granted to class A and B shareholders:

	September 30,		December 31,
	2021		20120
Class A and B shareholder loans		393,199		522,316
% Loans to class A and B shareholders over total loan portfolio		7%		11%
% Class A and B stockholders with loans over number of class A and B stockholders		10%		12%

Modified financial assets

The following table refers to modified financial assets during the period, where modification does not result in de-recognition:

	September 30, 2021			December 31, 2020
Gross carrying amount before modification		65,000			8,829
Allowance loss before modification ⁽¹⁾		(12,739	)		(1,796	)
Net amortized cost before modification		52,261			7,033

Gross carrying amount after modification		65,000			8,829
Allowance loss after modification ⁽²⁾		(12,699	)		(1,802	)
Net amortized cost after modification		52,301			7,027

⁽¹⁾ Expected credit loss for 12 months.

⁽²⁾Expected credit loss within the life of the financial asset.

Recognition and derecognition of financial assets

During the period ended December 31, 2020, a Stage 3 impaired loan was sold for $11.6 million and a Stage 2 loan with a significant increase in credit risk was sold for $13.2 million, both classified at amortized cost. This resulted in a write-off against reserves of $56.1 million. These sales were made based on compliance with the Bank's strategy to optimize credit risk of its loan portfolio.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Loan commitments and financial guarantee contracts

In the normal course of business, to meet the financing needs of its customers, the Bank is party to loan commitments and financial guarantee contracts. These instruments involve, to varying degrees, elements of credit and market risk in excess of the amount recognized in the condensed consolidated interim statement of financial position. 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 loan commitments and financial guarantee contracts are as follows:

	September 30,		December 31,
	2021		2020
Documentary letters of credit		256,305		216,782
Stand-by letters of credit and guarantees - commercial risk		199,232		210,497
Credit commitments		200,119		137,619
Total loans commitments and financial guarantee contracts		655,656		564,898

The remaining maturity profile of the Bank’s outstanding loan commitments and financial guarantee contracts is as follows:

	September 30,		December 31,
Maturities	2021		2020
Up to 1 year		570,144		419,015
From 1 to 2 years		85,512		75,883
Over 2 to 5 years		-		70,000
Total		655,656		564,898

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

Gain (loss) on financial instruments, net

The following table sets forth the details for the gain or loss on financial instruments recognized in the condensed consolidated interim statements of profit or loss:

	For the three months ended September 30,
	2021			2020
Loss on derivative financial instruments and foreign currency exchange, net		(118	)		(357	)
Unrealized gain (loss) on financial instruments at fair value through profit or loss		509			(159	)
Realized (loss) gain on financial instruments at fair value through profit or loss		(836	)		79
Gain on sale of financial instruments at amortized cost		333			-
		(112	)		(437	)

	For the nine months ended September 30,
	2021			2020
Gain (loss) on derivative financial instruments and foreign currency exchange, net		1,201			(2,242	)
Unrealized gain (loss) on financial instruments at fair value through profit or loss		172			(2,986	)
Realized (loss) gain on financial instruments at fair value through profit or loss		(1,669	)		484
Gain on sale of financial instruments at amortized cost		333			-
Realized gain on financial instruments at fair value through OCI		14			-
		51			(4,744	)

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments

The following table details quantitative information on the notional amounts and carrying amounts of the derivative instruments used for hedging by type of risk hedged and type of hedge:

	September 30, 2021
	Nominal		Carrying amount of hedging instruments
	amount		Asset ⁽¹⁾		Liability ⁽²⁾
Interest rate risk
Fair value hedges		40,000		1,095		-
Cash flow hedges		20,000		-		(738	)
Interest rate and foreign exchange risk
Fair value hedges		343,687		378		(17,993	)
Cash flow hedges		327,473		4,991		(5,039	)
Foreign exchange risk
Cash flow hedges		40,244		660		-
		771,404		7,124		(23,770	)

	December 31, 2020
	Nominal		Carrying amount of hedging instruments
	amount		Asset ⁽¹⁾		Liability ⁽²⁾
Interest rate risk
Fair value hedges		85,667		1,831		(233	)
Cash flow hedges		60,000		-		(1,541	)
Interest rate and foreign exchange risk
Fair value hedges		344,489		2,856		(3,848	)
Cash flow hedges		221,508		23,091		-
Foreign exchange risk
Cash flow hedges		71,353		-		(3,589	)
		783,017		27,778		(9,211	)

⁽¹⁾ Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - assets.

⁽²⁾ Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - liabilities.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Fair value hedges (continued)

The following table details the notional amounts and carrying amounts of derivative instruments used in fair value hedges by type of risk and hedged item, along with the changes during the periods used to determine and recognize the ineffectiveness of the hedge:

	September 30, 2021
	Nominal		Carrying amount of hedging instruments					Changes in fair value used to calculate hedge			Ineffectiveness recognized in
	amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness ⁽³⁾			profit or loss ⁽³⁾
Interest rate risk
Borrowings and debt		40,000		1,095		-			1			14
Interest rate and foreign exchange risk
Loans		3,273		378		-			21			(95	)
Borrowings and debt		340,414		-		(17,993	)		(15,961	)		679
Total		383,687		1,473		(17,993	)		(15,939	)		598

	December 31, 2020
	Nominal		Carrying amount of hedging instruments					Changes in fair value used to calculate hedge			Ineffectiveness recognized in
	amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness ⁽³⁾			profit or loss ⁽³⁾
Interest rate risk
Loans		10,667		-		(132	)		84			1
Securities at FVOCI		5,000		-		(101	)		(29	)		(20	)
Borrowings and debt		70,000		1,831		-			199			(27	)
Interest rate and foreign exchange risk
Loans		4,075		356		-			178			(149	)
Borrowings and debt		340,414		2,500		(3,848	)		(2,524	)		(468	)
Total		430,156		4,687		(4,081	)		(2,092	)		(663	)

⁽¹⁾ Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - assets.

⁽²⁾ Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - liabilities.

⁽³⁾ Included in the condensed consolidated interim statement of profit or loss is the line Loss on financial instruments, net.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Fair value hedges (continued)

The following table details the notional amounts and carrying amounts of the fair value hedged items by type of risk and hedged item, along with the changes during the period used to determine and recognize the ineffectiveness of the hedge:

	September 30, 2021
		Carrying amount of hedged items			Line in the consolidated statement of financial position that includes the	Accumulated amount of fair value hedge adjustments included in the		Change in fair value of the hedged items used
		Asset	Liability		carrying amount of the hedged items	carrying amount of the hedged items		to calculate hedge ineffectiveness⁽¹⁾
Interest rate risk
Borrowings and debt		-	(41,134	)	Borrowings and debt, net	(28	)	13
Interest rate and foreign exchange risk
Loans		2,935	-		Loans, net	(770	)	(116	)
Borrowings and debt		-	(322,395	)	Borrowings and debt, net	17,722		16,640
Total		2,935	(363,529	)		16,924		16,537

	December 31, 2020
	Carrying amount of hedged items					Line in the consolidated statement of financial position that includes the	Accumulated amount of fair value hedge adjustments included in the			Change in fair value of the hedged items used
	Asset		Liability			carrying amount of the hedged item	carrying amount of the hedged items			to calculate hedge ineffectiveness⁽¹⁾
Interest rate risk
Loans		10,837		-		Loans, net		74			(83	)
Securities at FVOCI		5,113		-		Securities and other financial assets, net		85			9
Borrowings and debt		-		(71,937	)	Borrowings and debt, net		(292	)		(226	)
Interest rate and foreign exchange risk
Loans		3,789		-		Loans, net		(654	)		(327	)
Borrowings and debt		-		(339,688	)	Borrowings and debt, net		1,083			2,056
Total		19,739		(411,625	)			296			1,429

⁽¹⁾

Included in the condensed consolidated interim statement of profit or loss is the line Loss on financial instruments, net.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Fair value hedges (continued)

The following table details the maturity of the notional amount for the derivative instruments used in fair value hedges:

	September 30, 2021
Maturity	Interest rate swaps		Foreign exchange and interest rate risks		Total
Fair value hedge
Less than 1 year		40,000		271,646		311,646
Over 1 to 2 years		-		3,273		3,273
Over 2 to 5 years		-		68,768		68,768
Total		40,000		343,687		383,687

	December 31, 2020
Maturity	Interest rate swaps		Foreign exchange and interest rate risks		Total
Fair value hedge
Less than 1 year		85,667		-		85,667
Over 1 to 2 years		-		271,646		271,646
Over 2 to 5 years		-		72,843		72,843
Total		85,667		344,489		430,156

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Cash flow hedges

The following table details the notional amounts and carrying amounts of derivative instruments used in cash flow hedges by type of risk and hedged item, along with the changes during the period used to determine and recognize the ineffectiveness of the hedge:

	September 30, 2021
	Nominal		Carrying amount of hedging instruments					Change in fair value used for calculating hedge			Changes in the fair value of the hedging instruments recognized in			Ineffectiveness recognized in			Amount reclassified from the hedge reserve to profit
	amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness			OCI ⁽³⁾			profit or loss ⁽⁴⁾			or loss⁽⁴⁾
Interest rate risk
Borrowings and debt		20,000		-		(738	)		364			362			(2	)		(423	)
Interest rate and foreign exchange risk
Borrowings and debt		327,473		4,991		(5,039	)		(25,180	)		(24,931	)		249			-
Foreign exchange risk
Loans		40,244		660		-			705			702			(3	)		(3,589	)
Total		387,717		5,651		(5,777	)		(24,111	)		(23,867	)		244			(4,012	)

	December 31, 2020
	Nominal		Carrying amount of hedging instruments					Change in fair value used for calculating hedge			Changes in the fair value of the hedging instruments recognized in			Ineffectiveness recognized in		Amount reclassified from the hedge reserve to profit
	amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness			OCI ⁽³⁾			profit or loss ⁽⁴⁾		or loss⁽⁴⁾
Interest rate risk
Borrowings and debt		60,000		-		(1,541	)		(443	)		(442	)		1		(75	)
Interest rate and foreign exchange risk
Borrowings and debt		221,508		23,091		-			23,380			23,481			101		(1,697	)
Foreign exchange risk
Loans		71,353		-		(3,589	)		(3,466	)		(3,465	)		1		(1,927	)
Borrowings and debt		-		-		-			-			-			-		-
Total		352,861		23,091		(5,130	)		19,471			19,574			103		(3,699	)

⁽¹⁾

Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - assets.

⁽²⁾

Included in the condensed consolidated interim statement of financial position under the line Derivative financial instruments - liabilities.

⁽³⁾

Included in equity in the condensed consolidated interim statement of financial position on the line Other comprehensive income.

⁽⁴⁾

Included in the condensed consolidated interim statement of profit or loss under the line Loss on financial instruments, net.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Cash flow hedges (continued)

The following table details the nominal amounts and carrying amounts of the cash flow hedged items by type of risk and hedged item, along with the changes during the period used to determine and recognize the ineffectiveness of the hedge:

	September 30, 2021
	Carrying amount of hedged items					Line in the consolidated statement of financial position that includes the carrying amount of the	Change in the fair value of the hedged items used to calculate the hedge			Cash flow hedge
	Asset		Liability			hedged items	ineffectiveness			reserve
Interest rate risk
Borrowings and debt		-		(20,042	)	Borrowings and debt, net		(362	)		650
Interest rate and foreign exchange risk
Borrowings and debt		-		(340,964	)	Borrowings and debt, net		24,931			10,329
Foreign exchange risk
Loans		39,472		-		Loans, net		(702	)		339
Total		39,472		(361,006	)			23,867			11,318

	December 31, 2020
	Carrying amount of hedged items					Line in the consolidated statement of financial position that includes the carrying amount of the	Change in the fair value of the hedged items used to calculate the hedge			Cash flow hedge
	Asset		Liability			hedged items	ineffectiveness			reserve
Interest rate risk
Borrowings and debt		-		(20,045	)	Borrowings and debt, net		442			1,440
Interest rate and foreign exchange risk
Borrowings and debt		-		(243,817	)	Borrowings and debt, net		(23,481	)		(1,980	)
Foreign exchange risk
Loans		74,509		-		Loans, net		3,465			562
Total		74,509		(263,862	)			(19,574	)		22

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

10.

Derivative financial instruments (continued)

Cash flow hedge (continued)

The following table details the maturity of the derivative instruments used in cash flow hedges:

	September 30, 2021
Maturity	Foreign exchange risk		Interest rate swaps		Foreign exchange and interest rate risks		Total
Cash flow hedge
Less than 1 year		40,244		-		-		40,244
Over 1 to 2 years		-		20,000		30,332		50,332
Over 2 to 5 years		-		-		280,072		280,072
More than 5 years		-		-		17,069		17,069
Total		40,244		20,000		327,473		387,717

	December 31, 2020
Maturity	Foreign exchange risk		Interest rate swaps		Foreign exchange and interest rate risks		Total
Cash flow hedge
Less than 1 year		71,353		40,000		-		111,353
Over 2 to 5 years		-		20,000		197,854		217,854
More than 5 years		-		-		23,654		23,654
Total		71,353		60,000		221,508		352,861

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

11.

Other assets

Following is a summary of other assets:

	September 30,		December 31,
	2021		2020
Accounts receivable		940		938
Prepaid expenses		1,296		2,541
Prepaid fees and commissions		312		486
Interest receivable - deposits		23		8
IT projects under development		439		218
Severance fund		1,964		1,927
Other		677		698
		5,651		6,816

12.

Deposits

The maturity profile of the Bank’s deposits, excluding interest payable, as follows:

	September 30,		December 31,
	2021		2020
Demand		431,874		170,660
Up to 1 month		712,610		1,127,120
From 1 month to 3 months		881,241		878,900
From 3 months to 6 months		951,271		544,860
From 6 months to 1 year		346,934		365,879
From 1 year to 2 years		54,888		51,481
		3,378,818		3,138,900

The following table presents additional information regarding the Bank’s deposits

	September 30,		December 31,
	2021		2020
Aggregate amounts of $100,000 or more		3,378,501		3,138,684
Aggregate amounts of deposits in the New York Agency		604,361		657,851

	Three months ended September 30
	2021		2020
Interest expense on deposits made in the New York Agency		847		1,040

	Nine months ended September 30
	2021		2020
Interest expense on deposits made in the New York Agency		3,097		3,857

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

13.

Securities sold under repurchase agreements

As of September 30, 2021, and December 31, 2020, the Bank had financing transactions under repurchase agreements for $331 million and $10.7 million, respectively.

During the periods ended September 30, 2021 and 2020, interest expense related to financing transactions under repurchase agreements totaled $525 thousand and $407 thousand, respectively. These expenses are included as interest expense – borrowings and debt line in the condensed consolidated interim statement of profit or loss.

14.

Borrowings and debt

Some borrowing agreements include various events of default and covenants related to minimum capital adequacy ratios, incurrence of additional liens, and asset sales, as well as other customary covenants, representations and warranties. As of September 30, 2021, the Bank was in compliance with all those covenants.

Borrowings and debt are detailed as follows:

	September 30, 2021
	Short-Term						Long-term
Carrying amount	Borrowings		Debt		Lease Liabilities		Borrowings			Debt			Lease Liabilities		Total
Principal		415,469		-		1,326		298,693			1,234,084			16,557		1,966,129
Prepaid commissions		-		-		-		(210	)		(5,220	)		-		(5,430	)
		415,469		-		1,326		298,483			1,228,864			16,557		1,960,699

	December 31, 2020
	Short-Term						Long-term
Carrying amount	Borrowings		Debt		Lease Liabilities		Borrowings			Debt			Lease Liabilities		Total
Principal		331,585		49,350		1,244		477,010			1,116,033			17,555		1,992,777
Prepaid commissions		-		-		-		(1,158	)		(6,549	)		-		(7,707	)
		331,585		49,350		1,244		475,852			1,109,484			17,555		1,985,070

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

14.

Borrowings and debt (continued)

Short-term borrowings and debt

The breakdown of short-term (original maturity of less than one year, excluding lease liabilities) borrowings and debt, along with contractual interest rates, is as follows:

	September 30,		December 31,
	2021		2020
Short-term borrowings:
At fixed interest rates		10,000		55,000
At floating interest rates		405,469		276,585
Total borrowings		415,469		331,585
Short-term debt:
At floating interest rates		-		49,350
Total debt		-		49,350
Total short-term borrowings and debt		415,469		380,935

Range of fixed interest rates on borrowings and debt in U.S. dollars		0.50%		0.45% to 1.40%
Range of floating interest rates on borrowings in U.S. dollars		0.33% to 0.48%		0.47% to 1.65%
Range of floating interest rates on borrowings and debt in Mexican pesos		5.15% to 5.20%		4.97% to 5.05%

The outstanding balances of short-term borrowings and debt by currency, are as follows:

	September 30,		December 31,
	2021		2020
Currency
US dollar		350,000		299,957
Mexican peso		65,469		80,978
Total		415,469		380,935

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

14.

Borrowings and debt (continued)

Long-term borrowings and debt

The breakdown of borrowings and long-term debt (original maturity of more than one year, excluding lease liabilities), along with contractual interest rates, plus prepaid commissions as of September 30, 2021 and December 31, 2020, respectively, are as follows (excludes lease liabilities):

	September 30, 2021			December 31, 2020
Long-term borrowings:
At fixed interest rates with due dates from November 2021 to September 2023		116,027			68,190
At floating interest rates with due dates from October 2021 to August 2023		182,666			408,820
Total long-term borrowings		298,693			477,010

Long-term debt:
At fixed interest rates with due dates from June 2022 to December 2027		912,400			784,006
At floating interest rates with due dates from March 2022 to June 2023		321,684			332,027
Total long-term debt		1,234,084			1,116,033
Total long-term borrowings and debt		1,532,777			1,593,043
Less: Prepaid commissions		(5,430	)		(7,707	)
Total long-term borrowings and debt, net		1,527,347			1,585,336

Range of fixed interest rates on borrowings and debt in U.S. dollars		0.8% to 2.38%			2.04% to 3.05%
Range of floating interest rates on borrowings and debt in U.S. dollars		1.17% to 1.78%			1.16% to 1.85%
Range of fixed interest rates on borrowings in Mexican pesos		6.50% to 9.09%			6.77% to 9.09%
Range of floating interest rates on borrowings and debt in Mexican pesos		5.14% to 5.92%			4.87% to 5.74%
Range of fixed interest rates on debt in Japanese yens		0.40% to 0.95%			0.52%
Range of fixed interest rates on debt in Euros		0.23% to 3.75%			0.9% to 3.75%
Range of fixed interest rates on debt in Australian dollars		1.41%			0.00%
Range of fixed interest rates on debt in Sterling pounds		1.50%			0.00%

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

14.

Borrowings and debt (continued)

Long-term borrowings and debt (continued)

The balances of long-term borrowings and debt by currency, excluding prepaid commissions, are as follows (excluding lease liabilities):

	September 30, 2021		December 31, 2020
Currency

US dollar		780,024		910,296
Mexican peso		494,088		509,687
Euro		124,062		101,469
Japanese yen		111,547		71,591
Australian dollar		18,070		-
Sterling pounds		4,986		-
Total		1,532,777		1,593,043

Future payments of long-term borrowings and debt outstanding as of September 30, 2021, are as follows (excluding lease liabilities):

	Outstanding
Payments
2021		30,879
2022		411,599
2023		273,298
2024		155,381
2025		610,230
2026		34,821
2027		16,569
		1,532,777

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

14.

Borrowings and debt (continued)

Long-term borrowings and debt (continued)

Reconciliation – Movements of borrowings

The following table presents the reconciliation of movements of borrowings and debt arising from financing activities, as presented in the condensed consolidated interim statements of cash flows:

	2021			2020
Balance as of January 1,		1,985,070			3,138,310
Net increase (decrease) in short-term borrowings and debt		37,222			(1,162,760	)
Proceeds from long-term borrowings and debt		167,675			386,096
Repayments of long-term borrowings and debt		(194,094	)		(246,982	)
Payment of lease liabilities		(916	)		(820	)
Net increase in lease liabilities		-			27
Change in foreign currency		(35,011	)		(43,888	)
Adjustment of fair value for hedge accounting relationship		(1,465	)		962
Other adjustments		2,218			(4,002	)
Balance as of September 30,		1,960,699			2,066,943

The reconciliation of equity account movements is presented in the condensed consolidated interim statement of changes in equity.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

14.

Borrowings and debt (continued)

Lease liabilities

Maturity analysis of contractual undiscounted cash flows of the lease liabilities is detailed below:

	September 30, 2021		December 31, 2020
Due within 1 year		2,098		2,058
After 1 year but within 5 years		10,636		10,641
After 5 years but within 10 years		9,782		11,354
Total undiscounted lease liabilities		22,516		24,053

Short-term		1,326		1,244
Long-term		16,557		17,555
Lease liabilities included in the consolidated statement of financial position		17,883		18,799

Amounts recognized in the statement of cash flows:

		September 30, 2021				December 31, 2020
Payments of lease liabilities			916				1,114

Amounts recognized in profit or loss:

	Three months ended September 30,
	2021			2020
Interest on lease liabilities		(201	)		(214	)
Income from sub-leasing right-of-use assets		52			66

	Nine months ended September 30,
	2021		2020
Interest on lease liabilities	(614	)	(651	)
Income from sub-leasing right-of-use assets	185		188

15.

Other liabilities

Following is a summary of other liabilities:

	September 30,		December 31,
	2021		2020
Accruals and other accumulated expenses		8,745		9,213
Accounts payable		2,658		6,307
Others		2,630		3,194
		14,033		18,714

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

16.

Earnings per share

The following table presents a reconciliation of profit and share data used in the basic and diluted earnings per share (“EPS”) computations for the dates indicated:

	Three months ended September 30
	2021		2020
(Thousands of U.S. dollars)
Profit for the period		15,731		15,444

(U.S. dollars)
Basic earnings per share		0.41		0.39
Diluted earnings per share		0.41		0.39

(Thousands of shares)
Weighted average of common shares outstanding applicable to basic EPS		38,789		39,672

Effect of diluted securities:
Stock options and restricted stock units plan		-		-

Adjusted weighted average of common shares outstanding applicable to diluted EPS		38,789		39,672

	Nine months ended September 30
	2021		2020
(Thousands of U.S. dollars)
Profit for the period		42,631		47,852

(U.S. dollars)
Basic earnings per share		1.08		1.21
Diluted earnings per share		1.08		1.21

(Thousands of shares)
Weighted average of common shares outstanding applicable to basic EPS		39,377		39,645

Effect of diluted securities:
Stock options and restricted stock units plan		-		-

Adjusted weighted average of common shares outstanding applicable to diluted EPS		39,377		39,645

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

17.

Fee and commission income

Fee and commission income from contracts with customers broken down by main types of services according to the scope of IFRS 15, are detailed as follows:

	Three months ended September 30, 2021
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Openning and confirmation		-		2,674		555			3,229
Negotiation and acceptance		-		8		-			8
Amendment		-		364		-			364
Structuring		1,327		-		-			1,327
Other		-		4		(180	)		(176	)
		1,327		3,050		375			4,752

	Nine months ended September 30, 2021
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Openning and confirmation		-		7,931		1,754			9,685
Negotiation and acceptance		-		37		-			37
Amendment		-		990		(16	)		974
Structuring		1,828		-		-			1,828
Other		-		35		(496	)		(461	)
		1,828		8,993		1,242			12,063

	Three months ended September 30, 2020
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Openning and confirmation		-		2,134		413			2,547
Negotiation and acceptance		-		11		-			11
Amendment		-		136		-			136
Structuring		63		-		-			63
Other		-		3		(149	)		(146	)
		63		2,284		264			2,611

	Nine months ended September 30, 2020
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Openning and confirmation		-		5,919		933			6,852
Negotiation and acceptance		-		174		-			174
Amendment		-		406		-			406
Structuring		514		-		-			514
Other		-		36		(358	)		(322	)
		514		6,535		575			7,624

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

17.

Fee and commission income (continued)

The following table provides information on the ordinary income that is expected to be recognized on the contracts in force:

	September 30,
	2021
Up to 1 year		2,279
From 1 to 2 years		267
		2,546

18.

Business segment information

The following table provides certain information regarding the Bank’s operations by segment:

	Three months ended September 30, 2021
	Commercial			Treasury			Total
Interest income		31,916			2,854			34,770
Interest expense		(161	)		(12,530	)		(12,691	)
Inter-segment net interest income		(10,469	)		10,469			-
Net interest income		21,286			793			22,079
Other income (expense), net		4,939			(188	)		4,751
Total income		26,225			605			26,830


Reversal of (provision for) credit losses		115			(886	)		(771	)
Operating expenses		(7,874	)		(2,454	)		(10,328	)
Segment profit (loss)		18,466			(2,735	)		15,731

	Nine months ended September 30, 2021
	Commercial			Treasury			Total
Interest income		94,819			7,033			101,852
Interest expense		(492	)		(39,388	)		(39,880	)
Inter-segment net interest income		(33,830	)		33,830			-
Net interest income		60,497			1,475			61,972
Other income (expense), net		12,676			(267	)		12,409
Total income		73,173			1,208			74,381


(Provision for) reversal of credit losses		(890	)		(1,265	)		(2,155	)
Operating expenses		(22,902	)		(6,693	)		(29,595	)
Segment profit (loss)		49,381			(6,750	)		42,631

Segment assets		5,524,936			1,446,516			6,971,452
Segment liabilities		257,504			5,692,819			5,950,323

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

18.

Business segment information (continued)

	Three months ended September 30, 2020
	Commercial			Treasury			Total
Interest income		37,886			1,808			39,694
Interest expense		(172	)		(16,914	)		(17,086	)
Inter-segment net interest income		(16,513	)		16,513			-
Net interest income		21,201			1,407			22,608
Other income (expense), net		2,929			(348	)		2,581
Total income		24,130			1,059			25,189


(Provision for) reversal of credit losses		(1,430	)		(113	)		(1,543	)
Gain (loss) on non-financial assets, net		140			-			140
Operating expenses		(6,507	)		(1,835	)		(8,342	)
Segment profit (loss)		16,333			(889	)		15,444

	Nine months ended September 30, 2020
	Commercial			Treasury			Total
Interest income		136,690			6,500			143,190
Interest expense		(521	)		(72,538	)		(73,059	)
Inter-segment net interest income		(69,282	)		69,282			-
Net interest income		66,887			3,244			70,131
Other income (expense), net		5,488			(1,770	)		3,718
Total income		72,375			1,474			73,849


Reversal of (provision for) credit losses		1,356			(203	)		1,153
Operating expenses		(20,111	)		(7,039	)		(27,150	)
Segment profit (loss)		53,620			(5,768	)		47,852

Segment assets		4,657,429			1,647,046			6,304,475
Segment liabilities		106,921			5,163,939			5,270,860

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

18.

Business segment information (continued)

Reconciliation on information on reportable segments

	Three months ended September 30
	2021		2020
Profit for the period		15,731		15,444

	Nine months ended September 30
	2021		2020
Profit for the period		42,631		47,852


Assets:
Assets from reportable segments		6,971,452		6,304,475
Other assets - unallocated		5,628		6,719
Total assets		6,977,080		6,311,194


Liabilities:
Liabilities from reportable segments		5,950,323		5,270,860
Other liabilities - unallocated		14,033		14,627
Total liabilities		5,964,356		5,285,487

19.

Related party transactions

The detail of the assets and liabilities with related private corporations and financial institutions is as follows:

	September 30,			December 31,
	2021			2020
Assets
Demand deposits		1,343			3,269
Loans, net		-			22,499
Total asset		1,343			25,768

Liabilities
Time deposits		220,000			240,000
Total liabilities		220,000			240,000


Contingencies
Stand-by letters of credit		9,080			28,300
Loss allowance		(46	)		(60	)
Total contingencies		9,034			28,240

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

19.

Related party transactions (continued)

The detail of income and expenses with related parties is as follows:

	Three months ended September 30
	2021			2020
Interest income
Loans		-			239
Interest expense
Deposits		(398	)		(819	)

Net interest income (expenses)		(398	)		(580	)

Other income (expense)
Fees and commissions, net		67			115

Net income from related parties		(331	)		(465	)

	Nine months ended September 30
	2021			2020
Interest income
Loans		161			1,010
Interest expense
Deposits		(1,658	)		(2,129	)

Net interest income (expenses)		(1,497	)		(1,119	)

Other income (expense)
Fees and commissions, net		185			299

Net income from related parties		(1,312	)		(820	)

The total compensation paid to directors and the executives as representatives of the Bank amounted to:

	Three months ended September 30
	2021		2020
Expenses:
Compensation costs to directors		466		450
Compensation costs to executives		931		620

	Nine months ended September 30
	2021		2020
Expenses:
Compensation costs to directors		1,173		1,249
Compensation costs to executives		3,220		4,811

Compensation costs to directors and executives, include annual cash retainers and the cost of granted restricted stock and restricted stock units.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

20.

Litigation

Bladex is not engaged in any litigation that is significant to the Bank’s business or, to the best of the knowledge of Bank’s management, that is likely to have an adverse effect on its business, consolidated financial position or its consolidated financial performance.

21.

Applicable laws and regulations

Liquidity index

In according with the established in Rule No. 2-2018 issued by the Superintendence of Banks of Panama (SBP), as of September 30, 2021 and December 31, 2020 the minimum LCR to be reported to the SBP was 65% for both periods. The Bank´s LCR as of September 30, 2021 and December 31, 2020 was 202% and 249%, respectively.

The Rule No. 4-2008 issued by the SBP, establishes that every general license or international license bank must maintain, always, a minimum balance of liquid assets equivalent to 30% of the gross total of its deposits in the Republic of Panama or overseas up to 186 days, counted from the reporting date. The liquidity index reported by the Bank to the regulator as of September 30, 2021 and December 31, 2020 was 72.91% and 79.99%, respectively.

Capital adequacy

In compliance with the established in the Banking Law of the Republic of Panama and the Rules No. 01-2015 and No. 03-2016 below, the information corresponding to the total capital adequacy index is presented:

	September 30, 2021		December 31, 2020
Capital funds		1,034,873		1,048,182

Risk-weighted assets		6,106,811		5,187,054

Capital adequacy index		16.95%		20.21%

Leverage ratio

The table below presents the Bank´s leverage ratio in compliance with Article No.17 of the Rule No. 1-2015:

	September 30, 2021		December 31, 2020
Ordinary capital		973,554		912,164

Non-risk-weighted assets		7,000,172		6,479,416

Leverage ratio		12.84%		14.08%

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

21.

Applicable laws and regulations (continued)

Specific provisions

Based on the classification of risks, collateral and in compliance with SBP Rule No. 4-2013, the Bank classified the loan portfolio as follows:

	September 30, 2021
	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Loans at amortized cost
Corporations		2,789,655		68,806		10,593		-		-		2,869,054
Financial Institutions:
Private		1,962,252		-		-		-		-		1,962,252
State-owned		431,571		-		-		-		-		431,571
		2,393,823		-		-		-		-		2,393,823
Sovereign		29,513		-		-		-		-		29,513
		5,212,991		68,806		10,593		-		-		5,292,390

Allowance for loan losses IFRS (*):		22,978		13,362		5,125		-		-		41,465

Loans at FVTPL
Financial Institutions:
Private		5,223		-		-		-		-		5,223
Total loans		5,218,214		68,806		10,593		-		-		5,297,613

	December 31, 2020
	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Loans at amortized cost
Corporations		2,147,846		9,281		10,593		-		-		2,167,720
Financial Institutions:
Private		2,231,742		-		-		-		-		2,231,742
State-owned		476,520		-		-		-		-		476,520
		2,708,262		-		-		-		-		2,708,262
Sovereign		35,415		-		-		-		-		35,415
		4,891,523		9,281		10,593		-		-		4,911,397

Allowance for loan losses IFRS ^(*):		34,720		1,857		4,588		-		-		41,165

Loans at FVTPL
Financial Institutions:
Private		4,949		-		-		-		-		4,949
Total loans		4,896,472		9,281		10,593		-		-		4,916,346

As of September 30, 2021, and December 31, 2020, there are no restructured loans.

^(*⁾ As of September 30, 2021, and December 31, 2020, there is no excess in the specific provision calculated in accordance with Agreement No. 8-2014 of the SBP, over the provision calculated in accordance with IFRS.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

21.

Applicable laws and regulations (continued)

For statutory purposes only, non-accruing loans are presented by category as follows:

	September 30, 2021
Loans at amortized cost	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Impaired loans		-		-		10,593		-		-		10,593
Total		-		-		10,593		-		-		10,593

	December 31, 2020
Loans at amortized cost	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Impaired loans		-		-		10,593		-		-		10,593
Total		-		-		10,593		-		-		10,593

September 30, December 31,

2021 2020

Non-accruing loans:

Private corporations 10,593 10,593

Total non-accruing loans 10,593 10,593

Interest that would be reversed if the loans had been classified as non-accruing loans 536 351

Income from collected interest on non-accruing loans - -

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

21.

Applicable laws and regulations (continued)

Modified special mention loans

As of September 30, 2021, the Bank there are no modified special mention category loans.

In accordance with the requirements of Article 4-E of Rule No. 9-2020, a detail of the portfolio of modified special mention category loans and their respective provisions and regulatory reserves as of December 31, 2020, classified according to the three-stage model of IFRS 9 follows:

	December 31, 2020
	Stage 1		Stage 2		Stage 3		Total
Modified special mention loans
Modified loans
Corporate		-		8,829		-		8,829
(-) Modified loans secured by pledged deposits in the same bank up to the guaranteed amount		-		-		-		-
(+) Interest receivable				7		-		7
(-) Unearned interest and deferred fees		-		-		-		-
Total loan portfolio subject to provisions
Rule No. 9-2020		-		8,836		-		8,836

Allowance
Allowance IFRS 9		-		1,767		-		1,767
Collective allowance (complement to 1.5%) *								-
Regulatory reserve (complement to 3%) *								-
Total allowance and reserves								1,767

^* Because IFRS 9 provision for modified special mention loans by $1.7million exceeds the generic provision equivalent to the 3% required by Rule No. 9-2020, the Bank does not require additional complementary equity reserves to the existing provision.

Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries

Notes to the unaudited condensed consolidated interim financial statements

(Amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

21.

Applicable laws and regulations (continued)

As of September 30, 2021, and December 31, 2020, the total amount of the dynamic provision and the regulatory credit reserve calculated according to the guidelines of Rule No. 4-2013 of the SBP is $136 million for both years, appropriated from retained earnings for purposes of compliance with local regulatory requirements. This appropriation is restricted from dividend distribution in order to comply with local regulations.

The provision and reserve are detailed as follows:

	September 30, 2021		December 31, 2020
Dynamic provision		136,019		136,019
Regulatory credit reserve		-		-
		136,019		136,019

Capital reserve

In addition to capital reserves required by regulations, the Bank maintains a capital reserve of $95.3 million, which was voluntarily established. Pursuant to Article No. 69 of the Banking Law, reduction of capital reserves requires prior approval of SBP.

22.

Subsequent events

The Bank announced a quarterly cash dividend of $0.25 US dollar cents per share corresponding to the third quarter of 2021. The cash dividend was approved by the Board of Directors on October 27, 2021 and it was payable on November 23, 2021 to the Bank’s stockholders as of November 9, 2021 record date.