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 May, 2020
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-Fx 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 ¨ Nox
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¨ Nox
Banco
Latinoamericano de Comercio Exterior, S.A. and Subsidiaries
Unaudited condensed consolidated
interim statement as of March 31, 2020
and for the three months
ended March 31, 2020 and 2019.
Banco Latinoamericano de
Comercio Exterior, S.A. and Subsidiaries
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries
Unaudited condensed consolidated interim statement of financial position
|
March 31, 2020 and December 31, 2019
|
(In thousands of US dollars)
|
|
|
Notes
|
|
March 31,
2020
(Unaudited)
|
|
|
December 31,
2019
(Audited)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
6,7
|
|
|
1,353,018
|
|
|
|
1,178,170
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities and other financial assets, net
|
|
5,6,8
|
|
|
86,326
|
|
|
|
88,794
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
5,337,487
|
|
|
|
5,892,997
|
|
Interest receivable
|
|
|
|
|
40,613
|
|
|
|
41,757
|
|
Allowance for loans losses
|
|
|
|
|
(99,941
|
)
|
|
|
(99,307
|
)
|
Unearned interest and deferred fees
|
|
|
|
|
(11,095
|
)
|
|
|
(12,114
|
)
|
Loans, net
|
|
5,6,9
|
|
|
5,267,064
|
|
|
|
5,823,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers' liabilities under acceptances
|
|
5,6
|
|
|
66,657
|
|
|
|
115,682
|
|
Derivative financial instruments - assets
|
|
5,6,12
|
|
|
17,044
|
|
|
|
11,157
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment and leasehold improvements, net
|
|
|
|
|
18,110
|
|
|
|
18,752
|
|
Intangibles, net
|
|
|
|
|
1,236
|
|
|
|
1,427
|
|
Investment properties
|
|
|
|
|
3,494
|
|
|
|
3,494
|
|
Other assets
|
|
13
|
|
|
9,574
|
|
|
|
8,857
|
|
Total assets
|
|
|
|
|
6,822,523
|
|
|
|
7,249,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
|
|
302,442
|
|
|
|
85,786
|
|
Time deposits
|
|
|
|
|
2,165,154
|
|
|
|
2,802,550
|
|
|
|
6,14
|
|
|
2,467,596
|
|
|
|
2,888,336
|
|
Interest payable
|
|
|
|
|
5,048
|
|
|
|
5,219
|
|
Total deposits
|
|
|
|
|
2,472,644
|
|
|
|
2,893,555
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements
|
|
6,15
|
|
|
53,888
|
|
|
|
40,530
|
|
Borrowings and debt, net
|
|
6,16
|
|
|
3,137,018
|
|
|
|
3,138,310
|
|
Interest payable
|
|
|
|
|
10,045
|
|
|
|
10,554
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers' liabilities under acceptances
|
|
5,6
|
|
|
66,657
|
|
|
|
115,682
|
|
Derivative financial instruments - liabilities
|
|
5,6,12
|
|
|
49,095
|
|
|
|
14,675
|
|
Allowance for loan commitments and financial guarantees contracts losses
|
|
5
|
|
|
2,443
|
|
|
|
3,044
|
|
Other liabilities
|
|
17
|
|
|
12,245
|
|
|
|
17,149
|
|
Total liabilities
|
|
|
|
|
5,804,035
|
|
|
|
6,233,499
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
279,980
|
|
|
|
279,980
|
|
Treasury stock
|
|
|
|
|
(59,409
|
)
|
|
|
(59,669
|
)
|
Additional paid-in capital in excess of value assigned to common stock
|
|
|
|
|
120,586
|
|
|
|
120,362
|
|
Capital reserves
|
|
|
|
|
95,210
|
|
|
|
95,210
|
|
Regulatory reserves
|
|
23
|
|
|
136,019
|
|
|
|
136,019
|
|
Retained earnings
|
|
|
|
|
448,762
|
|
|
|
446,083
|
|
Other comprehensive income (loss)
|
|
|
|
|
(2,660
|
)
|
|
|
(1,818
|
)
|
Total equity
|
|
|
|
|
1,018,488
|
|
|
|
1,016,167
|
|
Total liabilities and equity
|
|
|
|
|
6,822,523
|
|
|
|
7,249,666
|
|
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 months ended March 31, 2020 and 2019
|
|
|
|
|
|
|
(In thousands of US dollars, except per share data and number of shares)
|
|
|
|
|
|
|
|
|
Notes
|
|
2020
|
|
|
2019
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
2,459
|
|
|
|
5,357
|
|
Securities
|
|
|
|
|
640
|
|
|
|
942
|
|
Loans
|
|
|
|
|
55,890
|
|
|
|
67,255
|
|
Total interest income
|
|
20
|
|
|
58,990
|
|
|
|
73,554
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
(11,462
|
)
|
|
|
(17,694
|
)
|
Borrowings and debt
|
|
|
|
|
(21,727
|
)
|
|
|
(27,841
|
)
|
Total interest expense
|
|
20
|
|
|
(33,189
|
)
|
|
|
(45,534
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
25,801
|
|
|
|
28,020
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Fees and commissions, net
|
|
19,20
|
|
|
3,073
|
|
|
|
2,350
|
|
Loss on financial instruments, net
|
|
11,20
|
|
|
(358
|
)
|
|
|
756
|
|
Other income, net
|
|
|
|
|
240
|
|
|
|
945
|
|
Total other income, net
|
|
20
|
|
|
2,955
|
|
|
|
4,051
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
28,756
|
|
|
|
32,071
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on financial instruments
|
|
5,20
|
|
|
89
|
|
|
|
(942
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Salaries and other employee expenses
|
|
|
|
|
(7,007
|
)
|
|
|
(6,311
|
)
|
Depreciation of equipment and leasehold improvements
|
|
|
|
|
(735
|
)
|
|
|
(691
|
)
|
Amortization of intangible assets
|
|
|
|
|
(191
|
)
|
|
|
(164
|
)
|
Other expenses
|
|
|
|
|
(2,611
|
)
|
|
|
(2,718
|
)
|
Total operating expenses
|
|
20
|
|
|
(10,543
|
)
|
|
|
(9,884
|
)
|
Profit for the period
|
|
|
|
|
18,302
|
|
|
|
21,245
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (in US dollars)
|
|
18
|
|
|
0.46
|
|
|
|
0.54
|
|
Diluted earnings per share (in US dollars)
|
|
18
|
|
|
0.46
|
|
|
|
0.54
|
|
Weighted average basic shares (in thousands of shares)
|
|
18
|
|
|
39,609
|
|
|
|
39,542
|
|
Weighted average diluted shares (in thousands of shares)
|
|
18
|
|
|
39,609
|
|
|
|
39,542
|
|
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 months ended March 31, 2020 and 2019
|
|
|
|
|
|
(In thousands of US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Profit for the period
|
|
|
18,302
|
|
|
|
21,245
|
|
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
|
|
|
320
|
|
|
|
257
|
|
|
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
Change in fair value on debt financial instruments at FVOCI, net of hedging
|
|
|
(1,230
|
)
|
|
|
(1,781
|
)
|
Reclassification of gains (losses) on financial instruments to the profit or loss
|
|
|
(117
|
)
|
|
|
470
|
|
Exchange difference in conversion of foreign currency operation
|
|
|
185
|
|
|
|
(76
|
)
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
(842
|
)
|
|
|
(1,130
|
)
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
17,460
|
|
|
|
20,115
|
|
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 stockholders's equity
|
For the three months ended March 31, 2020 and 2019
|
(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, 2019
|
|
|
279,980
|
|
|
|
(61,076
|
)
|
|
|
119,987
|
|
|
|
95,210
|
|
|
|
136,019
|
|
|
|
423,050
|
|
|
|
420
|
|
|
|
993,590
|
|
Effect for change in accounting policy
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,006
|
)
|
|
|
-
|
|
|
|
(2,006
|
)
|
Profit for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,245
|
|
|
|
-
|
|
|
|
21,245
|
|
Other comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,130
|
)
|
|
|
(1,130
|
)
|
Compensation cost - stock options and stock units plans
|
|
|
-
|
|
|
|
-
|
|
|
|
460
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
460
|
|
Exercised options and stock units vested
|
|
|
-
|
|
|
|
129
|
|
|
|
(129
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Dividends declared
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15,225
|
)
|
|
|
-
|
|
|
|
(15,225
|
)
|
Balances at March 31, 2019
|
|
|
279,980
|
|
|
|
(60,947
|
)
|
|
|
120,318
|
|
|
|
95,210
|
|
|
|
136,019
|
|
|
|
427,064
|
|
|
|
(710
|
)
|
|
|
996,934
|
|
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
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,302
|
|
|
|
-
|
|
|
|
18,302
|
|
Other comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,218
|
)
|
|
|
(1,218
|
)
|
Transfer of fair value on equity instrument at FVOCI
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(376
|
)
|
|
|
376
|
|
|
|
-
|
|
Compensation cost - stock options and stock units plans
|
|
|
-
|
|
|
|
-
|
|
|
|
484
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
484
|
|
Exercised options and stock units vested
|
|
|
-
|
|
|
|
260
|
|
|
|
(260
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Dividends declared
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(15,247
|
)
|
|
|
-
|
|
|
|
(15,247
|
)
|
Balances at March 31, 2020
|
|
|
279,980
|
|
|
|
(59,409
|
)
|
|
|
120,586
|
|
|
|
95,210
|
|
|
|
136,019
|
|
|
|
448,762
|
|
|
|
(2,660
|
)
|
|
|
1,018,488
|
|
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 three months ended March 31, 2020 and 2019
|
|
|
|
|
(In thousands of US dollars)
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
18,302
|
|
|
|
21,245
|
|
Adjustments to reconcile profit for the year to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation of equipment and leasehold improvements
|
|
|
735
|
|
|
|
691
|
|
Amortization of intangible assets
|
|
|
191
|
|
|
|
164
|
|
Impairment (gain) loss on financial instruments
|
|
|
(89
|
)
|
|
|
942
|
|
Gain, net on sale of financial assets at fair value through OCI
|
|
|
-
|
|
|
|
(109
|
)
|
Amortization of premium and discount related to securities at amortized cost
|
|
|
100
|
|
|
|
92
|
|
Compensation cost - share-based payment
|
|
|
484
|
|
|
|
460
|
|
Net changes in hedging position
|
|
|
(2,527
|
)
|
|
|
394
|
|
Interest income
|
|
|
(58,990
|
)
|
|
|
(73,554
|
)
|
Interest expense
|
|
|
33,189
|
|
|
|
45,534
|
|
Net decrease (increase) in operating assets:
|
|
|
|
|
|
|
|
|
Pledged deposits
|
|
|
(37,149
|
)
|
|
|
6,551
|
|
Loans
|
|
|
511,523
|
|
|
|
297,671
|
|
Other assets
|
|
|
(723
|
)
|
|
|
10,737
|
|
Net increase (decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Due to depositors
|
|
|
(420,740
|
)
|
|
|
(223,247
|
)
|
Other liabilities
|
|
|
(4,986
|
)
|
|
|
76
|
|
Cash flows provided by operating activities
|
|
|
39,320
|
|
|
|
87,647
|
|
Interest received
|
|
|
60,350
|
|
|
|
67,663
|
|
Interest paid
|
|
|
(33,869
|
)
|
|
|
(48,756
|
)
|
Net cash provided by operating activities
|
|
|
65,801
|
|
|
|
106,554
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of equipment and leasehold improvements
|
|
|
(9
|
)
|
|
|
(25
|
)
|
Proceeds from the sale of securities at fair value through OCI
|
|
|
1,882
|
|
|
|
4,200
|
|
Proceeds from redemption of securities at amortized cost
|
|
|
14,825
|
|
|
|
12,700
|
|
Purchases of securities at amortized cost
|
|
|
(14,549
|
)
|
|
|
(200
|
)
|
Net cash provided by investing activities
|
|
|
2,149
|
|
|
|
16,675
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Increase (decrease) in securities sold under repurchase agreements
|
|
|
13,357
|
|
|
|
(11,535
|
)
|
Net increase (decrease) in short-term borrowings and debt
|
|
|
103,460
|
|
|
|
(868,016
|
)
|
Proceeds from long-term borrowings and debt
|
|
|
50,000
|
|
|
|
470,159
|
|
Repayments of long-term borrowings and debt
|
|
|
(81,631
|
)
|
|
|
(633,752
|
)
|
Payments of leases liabilities
|
|
|
(273
|
)
|
|
|
(254
|
)
|
Dividends paid
|
|
|
(15,165
|
)
|
|
|
(15,383
|
)
|
Net cash provided by (used in) financing activities
|
|
|
69,749
|
|
|
|
(1,058,781
|
)
|
|
|
|
|
|
|
|
|
|
Increase (decrease) net in cash and cash equivalents
|
|
|
137,699
|
|
|
|
(935,552
|
)
|
Cash and cash equivalents at beginning of the period
|
|
|
1,159,718
|
|
|
|
1,706,192
|
|
Cash and cash equivalents at end of the period
|
|
|
1,297,417
|
|
|
|
770,640
|
|
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)
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 isto 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 April 8, 2020.
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 condensed consolidated interim financial statements
|
2.1
Statement of compliance
These unaudited 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 unaudited 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, 2019, contained in the Bank’s
annual audited consolidated financial statements. The unaudited 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.
|
Changes in significant accounting policies
|
|
3.1
|
New accounting policies and amendments not yet adopted
|
As of January 1, 2020, the Bank
applied the Interest Rate Benchmark Reform (“the Reform”), which contains amendments to IFRS 9 Financial Instruments and
IFRS 7 Financial Instruments: Disclosures Information, issued by the International Accounting Standards Board (IASB) as the
Phase 1 of the Project of IBOR Reform to address the increase in the level of uncertainty of the long-term feasibility of some
benchmark interest rates and the first reforms applied to such rates. Phase 1 of the amendments addresses the effects on financial
information due to such uncertainties.
On initial designation of the
hedging relationship, the Bank formally documents the relationship between the hedging instrument and hedged item, including the
risk management objective and strategy in undertaking the hedge, together with the method that will be used to assess the effectiveness
of the hedging relationship. The Bank makes an assessment, both on inception of the hedging relationship and on an ongoing basis,
of whether the hedging instrument is expected to be highly effective in offsetting the changes in the fair value or cash flows
of the respective hedged item during the period for which the hedge is designated. For the purpose of evaluating whether the hedging
relationship is expected to be highly effective, the Bank assumes that the benchmark interest rate is not altered as a result of
IBOR reform.
If the Bank concludes that the
actual result of a hedging relationship is not effective or is outside the minimum levels determined by Risk Management as highly
effective, then the Bank determines if the hedging relationship continues to qualify for hedge accounting or whether it must be
discontinued. This includes, for example, determining that the hedge is expected to be highly effective prospectively and that
effectiveness of the hedging relationship can be reliably measured.
The Bank will cease to apply
the amendments to its retrospective and prospective effectiveness assessment of the hedging relationship when the uncertainty arising
from interest rate benchmark reform is no longer present with respect to the timing and the amount of the interest rate benchmark-based
cash flows of the hedged item or hedging instrument, or when the hedging relationship is discontinued.
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.
|
Significant accounting policies
|
|
4.1.
|
Judgments, estimates and significant accounting assumptions
|
|
A.
|
Estimates and assumptions
|
The key assumptions concerning
the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Bank based
its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may change due to market changes or circumstances beyond the control of the
Bank. Such changes are reflected in the assumptions when they occur.
The Bank’s management
has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in
business for the foreseeable future. Therefore, the condensed consolidated financial statements continue to be prepared on a going
concern basis.
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)
This note presents information about the Bank’s
exposure to financial risks and the Bank’s management of capital.
|
i.
|
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 gross carrying amounts. For loan commitments and financial guarantee
contracts, the amounts in the table represent the amounts committed or guaranteed, respectively.
Loans
|
|
March
31, 2020
|
|
`
|
|
|
|
|
PD
Ranges
|
|
|
Stage
1
|
|
|
Stage
2
|
|
|
Stage
3
|
|
|
Total
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
2,543,852
|
|
|
-
|
|
|
-
|
|
|
2,543,852
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
2,044,471
|
|
|
228,209
|
|
|
-
|
|
|
2,272,680
|
|
Grades 7 - 8
|
|
|
3.96 - 30.67
|
|
|
340,782
|
|
|
118,328
|
|
|
-
|
|
|
459,110
|
|
Grades 9 - 10
|
|
|
30.68 - 100
|
|
|
-
|
|
|
-
|
|
|
61,845
|
|
|
61,845
|
|
|
|
|
|
|
|
4,929,105
|
|
|
346,537
|
|
|
61,845
|
|
|
5,337,487
|
|
Loss allowance
|
|
|
|
|
|
(27,326
|
)
|
|
(17,871
|
)
|
|
(54,744
|
)
|
|
(99,941
|
)
|
Total
|
|
|
|
|
|
4,901,779
|
|
|
328,666
|
|
|
7,101
|
|
|
5,237,546
|
|
|
|
December
31, 2019
|
|
|
|
|
|
|
PD Ranges
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
2,928,401
|
|
|
-
|
|
|
-
|
|
|
2,928,401
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
2,330,150
|
|
|
85,173
|
|
|
-
|
|
|
2,415,323
|
|
Grades 7 - 8
|
|
|
3.96 - 30.67
|
|
|
343,606
|
|
|
143,822
|
|
|
-
|
|
|
487,428
|
|
Grades 9 - 10
|
|
|
30.68 - 100
|
|
|
-
|
|
|
-
|
|
|
61,845
|
|
|
61,845
|
|
|
|
|
|
|
|
5,602,157
|
|
|
228,995
|
|
|
61,845
|
|
|
5,892,997
|
|
Loss allowance
|
|
|
|
|
|
(28,892
|
)
|
|
(15,842
|
)
|
|
(54,573
|
)
|
|
(99,307
|
)
|
Total
|
|
|
|
|
|
5,573,265
|
|
|
213,153
|
|
|
7,272
|
|
|
5,793,690
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Loan commitments, financial
guarantees issued and customers’ liabilities under acceptances
|
|
March
31, 2020
|
|
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage
1
|
|
|
Stage
2
|
|
|
Stage
3
|
|
|
Total
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
157,231
|
|
|
-
|
|
|
-
|
|
|
157,231
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
104,085
|
|
|
35,843
|
|
|
-
|
|
|
139,928
|
|
Grades 7 - 8
|
|
|
3.96 - 30.67
|
|
|
130,441
|
|
|
-
|
|
|
-
|
|
|
130,441
|
|
|
|
|
|
|
|
391,757
|
|
|
35,843
|
|
|
-
|
|
|
427,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers' liabilities under acceptances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
4,983
|
|
|
-
|
|
|
-
|
|
|
4,983
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Grades 7 - 8
|
|
|
3.96 - 30.67
|
|
|
61,674
|
|
|
-
|
|
|
-
|
|
|
61,674
|
|
|
|
|
|
|
|
66,657
|
|
|
-
|
|
|
-
|
|
|
66,657
|
|
|
|
|
|
|
|
458,414
|
|
|
35,843
|
|
|
-
|
|
|
494,257
|
|
Loss allowance
|
|
|
|
|
|
(2,052
|
)
|
|
(391
|
)
|
|
-
|
|
|
(2,443
|
)
|
Total
|
|
|
|
|
|
456,362
|
|
|
35,452
|
|
|
-
|
|
|
491,814
|
|
|
|
December
31, 2019
|
|
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
153,874
|
|
|
-
|
|
|
-
|
|
|
153,874
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
150,631
|
|
|
27,446
|
|
|
-
|
|
|
178,077
|
|
Grades 7 - 8
|
|
|
4.13 - 30.43
|
|
|
161,421
|
|
|
-
|
|
|
-
|
|
|
161,421
|
|
|
|
|
|
|
|
465,926
|
|
|
27,446
|
|
|
-
|
|
|
493,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers' liabilities under acceptances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
13,367
|
|
|
-
|
|
|
-
|
|
|
13,367
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
5,491
|
|
|
-
|
|
|
-
|
|
|
5,491
|
|
Grades 7 - 8
|
|
|
4.13 - 30.43
|
|
|
96,824
|
|
|
-
|
|
|
-
|
|
|
96,824
|
|
|
|
|
|
|
|
115,682
|
|
|
-
|
|
|
-
|
|
|
115,682
|
|
|
|
|
|
|
|
581,608
|
|
|
27,446
|
|
|
-
|
|
|
609,054
|
|
Loss allowance
|
|
|
|
|
|
(2,683
|
)
|
|
(361
|
)
|
|
-
|
|
|
(3,044
|
)
|
Total
|
|
|
|
|
|
578,925
|
|
|
27,085
|
|
|
-
|
|
|
606,010
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Securities at amortized cost
|
|
March
31, 2020
|
|
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage
1
|
|
|
Stage
2
|
|
|
Stage
3
|
|
|
Total
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
74,200
|
|
|
-
|
|
|
-
|
|
|
74,200
|
|
|
|
|
|
|
|
74,200
|
|
|
-
|
|
|
-
|
|
|
74,200
|
|
Loss allowance
|
|
|
|
|
|
(106
|
)
|
|
-
|
|
|
-
|
|
|
(106
|
)
|
Total
|
|
|
|
|
|
74,094
|
|
|
-
|
|
|
-
|
|
|
74,094
|
|
|
|
December
31, 2019
|
|
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Grades 1 - 4
|
|
|
0.03 - 0.74
|
|
|
73,047
|
|
|
-
|
|
|
-
|
|
|
73,047
|
|
Grades 5 - 6
|
|
|
0.75 - 3.95
|
|
|
-
|
|
|
1,500
|
|
|
-
|
|
|
1,500
|
|
|
|
|
|
|
|
73,047
|
|
|
1,500
|
|
|
-
|
|
|
74,547
|
|
Loss allowance
|
|
|
|
|
|
(103
|
)
|
|
(10
|
)
|
|
-
|
|
|
(113
|
)
|
Total
|
|
|
|
|
|
72,944
|
|
|
1,490
|
|
|
-
|
|
|
74,434
|
|
Securities at fair value
through other comprehensive income (FVOCI)
|
|
March
31, 2020
|
|
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage
1
|
|
|
Stage
2
|
|
|
Stage
3
|
|
|
Total
|
|
Grades 1
- 4
|
|
|
0.03
- 0.74
|
|
|
5,065
|
|
|
-
|
|
|
-
|
|
|
5,065
|
|
|
|
|
|
|
|
5,065
|
|
|
-
|
|
|
-
|
|
|
5,065
|
|
Loss
allowance
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
|
|
5,065
|
|
|
-
|
|
|
-
|
|
|
5,065
|
|
|
|
December
31, 2019
|
|
|
|
|
12-month
PD Ranges
|
|
|
Stage
1
|
|
|
Stage
2
|
|
|
Stage
3
|
|
|
Total
|
|
Grades
1 - 4
|
|
|
0.03
- 0.74
|
|
|
5,094
|
|
|
-
|
|
|
-
|
|
|
5,094
|
|
|
|
|
|
|
|
5,094
|
|
|
-
|
|
|
-
|
|
|
5,094
|
|
Loss
allowance
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
|
|
5,094
|
|
|
-
|
|
|
-
|
|
|
5,094
|
|
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)
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
The following table presents information of the current
and past due balances of loans in stages 1, 2 and 3:
|
|
March 31, 2020
|
|
|
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
4,929,105
|
|
|
|
346,537
|
|
|
|
43,445
|
|
|
|
5,319,087
|
|
Past due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90-120 days
|
|
|
-
|
|
|
|
-
|
|
|
|
3,724
|
|
|
|
3,724
|
|
151-180 days
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
More than 180 days
|
|
|
-
|
|
|
|
-
|
|
|
|
14,676
|
|
|
|
14,676
|
|
Total past due
|
|
|
-
|
|
|
|
-
|
|
|
|
18,400
|
|
|
|
18,400
|
|
Total
|
|
|
4,929,105
|
|
|
|
346,537
|
|
|
|
61,845
|
|
|
|
5,337,487
|
|
|
|
December
31, 2019
|
|
|
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
5,602,157
|
|
|
|
228,995
|
|
|
|
47,169
|
|
|
|
5,878,321
|
|
Past due
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90-120 days
|
|
|
-
|
|
|
|
-
|
|
|
|
3,724
|
|
|
|
3,724
|
|
151-180 days
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
More than 180 days
|
|
|
-
|
|
|
|
-
|
|
|
|
10,952
|
|
|
|
10,952
|
|
Total past due
|
|
|
-
|
|
|
|
-
|
|
|
|
14,676
|
|
|
|
14,676
|
|
Total
|
|
|
5,602,157
|
|
|
|
228,995
|
|
|
|
61,845
|
|
|
|
5,892,997
|
|
As of March 31, 2020 and December
31, 2019, other financial assets were no past due or impaired balances.
The following table presents
an analysis of counterparty credit exposures arising from derivative transactions. The Bank's derivative transactions are generally
fully secured by cash.
|
|
March
31,
|
|
|
|
Notional
value USD
|
|
|
Derivative
financial
instrument
-fair value
asset
|
|
|
Derivative
financial
instrument
-fair value
liabilities
|
|
Interest rate swaps
|
|
|
470,667
|
|
|
|
3,675
|
|
|
|
(2,696
|
)
|
Cross-currency swaps
|
|
|
401,721
|
|
|
|
2,346
|
|
|
|
(46,399
|
)
|
Foreign exchange forwards
|
|
|
57,194
|
|
|
|
11,023
|
|
|
|
-
|
|
Total
|
|
|
929,582
|
|
|
|
17,044
|
|
|
|
(49,095
|
)
|
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)
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
|
December 31, 2019
|
|
|
|
Notional
value USD
|
|
|
Derivative
financial
instrument
- fair value
asset
|
|
|
Derivative
financial
instrument
- fair value
liabilities
|
|
Interest rate swaps
|
|
|
521,333
|
|
|
|
407
|
|
|
|
(1,903
|
)
|
Cross-currency swaps
|
|
|
369,869
|
|
|
|
10,125
|
|
|
|
(10,197
|
)
|
Foreign exchange forwards
|
|
|
74,471
|
|
|
|
625
|
|
|
|
(2,575
|
)
|
Total
|
|
|
965,673
|
|
|
|
11,157
|
|
|
|
(14,675
|
)
|
|
ii.
|
Collateral and other credit enhancements
|
The amount and type of collateral
required depends on an assessment of the credit risk of the counterparty. Guidelines are in place covering the acceptability and
valuation of each type of collateral.
Derivatives and repurchase
agreements
In the ordinary course of business,
the Bank enters into derivative financial instrument transactions and securities sold under repurchase agreements under industry
standards agreements. Depending on the collateral requirements stated in the contracts, the Bank and counterparties can receive
or deliver collateral based on the fair value of the financial instruments transacted between parties. Collateral typically consists
of pledged cash deposits and securities. The master netting agreements include clauses that, in the event of default, provide for
close-out netting, which allows all positions with the defaulting counterparty to be terminated and net settled with a single payment
amount.
The International Swaps and
Derivatives Association master agreement (“ISDA”) and similar master netting arrangements do not meet the criteria
for offsetting in the consolidated statement of financial position. This is because they create for the parties to the agreement
a right of set-off of recognized amounts that is enforceable only following an event of default, insolvency or bankruptcy of the
Bank or the counterparties or following other predetermined events.
Such arrangements provide for
single net settlement of all financial instruments covered by the agreements in the event of default on any one contract. Master
netting arrangements do not normally result in an offset of balance–sheet assets and liabilities unless certain conditions
for offsetting are met.
Although master netting arrangements
may significantly reduce credit risk, it should be noted that:
|
-
|
Credit risk is eliminated only to the extent that amounts due to the same counterparty will be
settled after the assets are realized.
|
|
-
|
The extent to which overall credit risk is reduced may change substantially within a short period
because the exposure is affected by each transaction subject to the arrangement.
|
Loans
The main types of collateral
obtained are, as follows:
|
-
|
For commercial lending, liens on real estate property, inventory and trade receivables.
|
The Bank also obtains guarantees
from parent companies for loans to their subsidiaries. Management monitors the market value of collateral and will request additional
collateral in accordance with the underlying agreement. It is the Bank’s policy to dispose of repossessed property in an
orderly fashion. The proceeds are used to reduce or repay the outstanding claim. In general, the Bank does not occupy repossessed
property for business use.
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)
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
The Bank holds guarantees and
other financial credit enhancements against certain exposures in the loan portfolio. As of March 31, 2020, and December 31, 2019,
the coverage ratio to the carrying amount of the loan portfolio was 13% and 12% respectively.
|
iii.
|
Implementation of forward-looking information
|
The Bank incorporates information
of the economic environments on a forward-looking view, when assessing whether the credit risk of a financial instrument has significantly
increased since initial recognition through customer and country rating models which include projections of the inputs under analysis.
Supplementary, for the expected
credit loss measurement the results of the alert model can be considered, which are analyzed through a severity indicator to total
risk resulting from the estimates and assumptions of several macroeconomics factors. These estimates and assumptions are supported
by a base scenario associated to a probability of occurrence of 95%. Other scenarios represent optimistic and pessimistic results.
The implementation and interpretation of the outcomes of the alert are based on the expert judgement of management, based on suggestions
of areas such as Credit Risk, Economic Studies and Loan Recovery of the Bank.
The external information could
include economic data and projections published by governmental committees, monetary agencies (e.g., Federal Reserve Bank and from
countries where the Bank operates), supranational organizations (International Monetary Fund, The World Bank, World Trade
Organization), private sector, academic projections, credit rating agencies, among other.
Principal macroeconomies variables
of the country rating model with forward-looking scenarios are:
Variables
|
Description
|
|
|
GDP
Growth (Var. %)
|
% Variation in the growth of the Gross Domestic
Product (GDP)
|
|
|
ComEx
Growth (Var. %)
|
% Variation in foreign trade growth (Exp. +
Imp.)
|
The model uses, as main inputs,
the following macroeconomic variables: the percentage variation of the gross domestic product of Latin America and the percentage
of the foreign trade index growth. The main movements and changes in the variables are analyzed, in general and in particular for
each country in the region. This historical and projected information over a period of five years allows Management a complementary
means to estimate the macroeconomic effects in the Bank's 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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
The table below lists the macroeconomic
assumptions by country used in the base, optimistic and pessimistic scenarios over the five-year average forecast period.
|
|
|
|
Variable
|
|
|
|
|
|
GDP Growth (Var.%)
|
|
|
ComEx Growth Index (Var.%)
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
December 31,
|
|
Country
|
|
Scenario
|
|
2020
|
|
|
20219
|
|
|
2020
|
|
|
2019
|
|
|
|
Central
|
|
|
2.3
|
%
|
|
|
2.1
|
%
|
|
|
6.2
|
%
|
|
|
4.0
|
%
|
Brazil
|
|
Upside
|
|
|
3.3
|
%
|
|
|
3.1
|
%
|
|
|
9.7
|
%
|
|
|
7.5
|
%
|
|
|
Downside
|
|
|
0.9
|
%
|
|
|
0.7
|
%
|
|
|
2.2
|
%
|
|
|
0.0
|
%
|
|
|
Central
|
|
|
3.5
|
%
|
|
|
3.4
|
%
|
|
|
7.3
|
%
|
|
|
5.5
|
%
|
Colombia
|
|
Upside
|
|
|
4.6
|
%
|
|
|
4.5
|
%
|
|
|
10.3
|
%
|
|
|
8.5
|
%
|
|
|
Downside
|
|
|
2.2
|
%
|
|
|
2.1
|
%
|
|
|
3.8
|
%
|
|
|
2.0
|
%
|
|
|
Central
|
|
|
1.8
|
%
|
|
|
1.3
|
%
|
|
|
3.8
|
%
|
|
|
2.5
|
%
|
Mexico
|
|
Upside
|
|
|
2.8
|
%
|
|
|
2.3
|
%
|
|
|
7.8
|
%
|
|
|
6.5
|
%
|
|
|
Downside
|
|
|
0.6
|
%
|
|
|
0.1
|
%
|
|
|
-0.7
|
%
|
|
|
-2.0
|
%
|
|
|
Central
|
|
|
2.6
|
%
|
|
|
2.2
|
%
|
|
|
5.6
|
%
|
|
|
2.7
|
%
|
Chile
|
|
Upside
|
|
|
3.7
|
%
|
|
|
3.3
|
%
|
|
|
9.1
|
%
|
|
|
6.2
|
%
|
|
|
Downside
|
|
|
1.4
|
%
|
|
|
1.0
|
%
|
|
|
1.6
|
%
|
|
|
-1.3
|
%
|
|
|
Central
|
|
|
1.8
|
%
|
|
|
1.2
|
%
|
|
|
4.7
|
%
|
|
|
3.9
|
%
|
Ecuador
|
|
Upside
|
|
|
2.8
|
%
|
|
|
2.2
|
%
|
|
|
7.7
|
%
|
|
|
6.9
|
%
|
|
|
Downside
|
|
|
0.3
|
%
|
|
|
-0.3
|
%
|
|
|
1.2
|
%
|
|
|
0.4
|
%
|
|
|
Central
|
|
|
3.4
|
%
|
|
|
3.4
|
%
|
|
|
5.4
|
%
|
|
|
5.4
|
%
|
Guatemala
|
|
Upside
|
|
|
4.4
|
%
|
|
|
4.4
|
%
|
|
|
8.4
|
%
|
|
|
8.4
|
%
|
|
|
Downside
|
|
|
2.2
|
%
|
|
|
2.2
|
%
|
|
|
1.9
|
%
|
|
|
1.9
|
%
|
|
|
Central
|
|
|
3.1
|
%
|
|
|
2.8
|
%
|
|
|
7.4
|
%
|
|
|
5.7
|
%
|
Dominican Republic
|
|
Upside
|
|
|
4.1
|
%
|
|
|
3.8
|
%
|
|
|
10.9
|
%
|
|
|
9.2
|
%
|
|
|
Downside
|
|
|
1.8
|
%
|
|
|
1.5
|
%
|
|
|
3.4
|
%
|
|
|
1.7
|
%
|
|
|
Central
|
|
|
4.8
|
%
|
|
|
4.3
|
%
|
|
|
5.3
|
%
|
|
|
3.8
|
%
|
Panama
|
|
Upside
|
|
|
6.3
|
%
|
|
|
5.8
|
%
|
|
|
8.3
|
%
|
|
|
6.8
|
%
|
|
|
Downside
|
|
|
1.8
|
%
|
|
|
0.3
|
%
|
|
|
1.8
|
%
|
|
|
0.3
|
%
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
|
|
|
|
iv.
|
Loss allowances
|
The following tables show reconciliations
from the opening to the closing balance of the loss allowance by class of financial instrument.
Loans
|
|
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
|
|
|
(183
|
)
|
|
|
183
|
|
|
|
-
|
|
|
|
-
|
|
Net effect of changes in allowance for expected credit losses
|
|
|
(383
|
)
|
|
|
2,748
|
|
|
|
56
|
|
|
|
2,421
|
|
Financial instruments that have been derecognized during the period
|
|
|
(8,296
|
)
|
|
|
(902
|
)
|
|
|
-
|
|
|
|
(9,198
|
)
|
New financial assets originated or purchased
|
|
|
7,296
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,296
|
|
Write-offs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
115
|
|
|
|
115
|
|
Allowance
for expected credit losses as of March 31, 2020
|
|
|
27,326
|
|
|
|
17,871
|
|
|
|
54,744
|
|
|
|
99,941
|
|
|
|
|
Stage 1
|
|
|
|
Stage 2
|
|
|
|
Stage 3
|
|
|
|
Total
|
|
Allowance
for expected credit losses as of December 31, 2018
|
|
|
34,957
|
|
|
|
16,389
|
|
|
|
49,439
|
|
|
|
100,785
|
|
Transfer to lifetime expected credit losses
|
|
|
(2,488
|
)
|
|
|
2,488
|
|
|
|
-
|
|
|
|
-
|
|
Net effect of changes in allowance for expected credit losses
|
|
|
(2,154
|
)
|
|
|
5,881
|
|
|
|
7,987
|
|
|
|
11,714
|
|
Financial instruments that have been derecognized during the period
|
|
|
(27,118
|
)
|
|
|
(8,916
|
)
|
|
|
(500
|
)
|
|
|
(36,534
|
)
|
New financial assets originated or purchased
|
|
|
25,695
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,695
|
|
Write-offs
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,405
|
)
|
|
|
(2,405
|
)
|
Recoveries
|
|
|
-
|
|
|
|
-
|
|
|
|
52
|
|
|
|
52
|
|
Allowance
for expected credit losses as of December 31, 2019
|
|
|
28,892
|
|
|
|
15,842
|
|
|
|
54,573
|
|
|
|
99,307
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Loan commitments, financial
guarantee contracts and customers’ liabilities under acceptances
The allowance for expected credit
losses on loan commitments and financial guarantee contracts reflects the Bank’s management estimate expected credit losses
of customers’ liabilities under acceptances and items such as: confirmed letters of credit, stand-by letters of credit, guarantees,
and credit commitments.
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Allowance
for expected credit losses as of December 31, 2019
|
|
|
2,683
|
|
|
|
361
|
|
|
|
-
|
|
|
|
3,044
|
|
Net effect of changes in reserve for expected credit loss
|
|
|
(238
|
)
|
|
|
30
|
|
|
|
-
|
|
|
|
(208
|
)
|
Financial instruments that have been derecognized during the period
|
|
|
(1,580
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,580
|
)
|
New instruments originated or purchased
|
|
|
1,187
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,187
|
|
Allowance
for expected credit losses as of March 31, 2020
|
|
|
2,052
|
|
|
|
391
|
|
|
|
-
|
|
|
|
2,443
|
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Allowance
for expected credit losses as of December 31, 2018
|
|
|
3,089
|
|
|
|
200
|
|
|
|
-
|
|
|
|
3,289
|
|
Net effect of changes in reserve for expected credit loss
|
|
|
(17
|
)
|
|
|
170
|
|
|
|
-
|
|
|
|
153
|
|
Financial instruments that have been derecognized during the year
|
|
|
(2,497
|
)
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
(2,506
|
)
|
New instruments originated or purchased
|
|
|
2,108
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,108
|
|
Allowance
for expected credit losses as of December 31, 2019
|
|
|
2,683
|
|
|
|
361
|
|
|
|
-
|
|
|
|
3,044
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Securities at amortized cost
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Allowance
for expected credit losses as of December 31, 2019
|
|
|
103
|
|
|
|
10
|
|
|
|
-
|
|
|
|
113
|
|
Net effect of changes in allowance for expected credit losses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial instruments that have been derecognized during the period
|
|
|
(27
|
)
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(37
|
)
|
New financial assets originated or purchased
|
|
|
30
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30
|
|
Allowance
for expected credit losses as of March 31, 2020
|
|
|
106
|
|
|
|
-
|
|
|
|
-
|
|
|
|
106
|
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Allowance
for expected credit losses as of December 31, 2018
|
|
|
113
|
|
|
|
27
|
|
|
|
-
|
|
|
|
140
|
|
Net effect of changes in allowance for expected credit losses
|
|
|
(1
|
)
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
(18
|
)
|
Financial instruments that have been derecognized during the year
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(46
|
)
|
New financial assets originated or purchased
|
|
|
37
|
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
Allowance
for expected credit losses as of December 31, 2019
|
|
|
103
|
|
|
|
10
|
|
|
|
-
|
|
|
|
113
|
|
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 period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Allowance
for expected credit losses as of March 31, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
|
Stage 1
|
|
|
Stage 2
|
|
|
Stage 3
|
|
|
Total
|
|
Allowance for expected credit losses as of December 31, 2018
|
|
|
33
|
|
|
|
140
|
|
|
|
-
|
|
|
|
173
|
|
Financial instruments that have been derecognized during the year
|
|
|
(33
|
)
|
|
|
(140
|
)
|
|
|
-
|
|
|
|
(173
|
)
|
Allowance for expected credit losses as of December 31, 2019
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
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 ‘impairment losses on financial instruments’ line item in the condensed consolidated
interim statement of profit or loss and other comprehensive income.
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
March
31, 2020
|
|
Loans
|
|
|
Loan commitments
and financial
guarantee contracts
|
|
|
At amortized cost
|
|
|
FVOCI
|
|
|
Total
|
|
Net effect
of changes in allowance for expected credit losses
|
|
|
2,421
|
|
|
|
(208
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
2,213
|
|
Financial instruments
that have been derecognized during the year
|
|
|
(9,198
|
)
|
|
|
(1,580
|
)
|
|
|
-
|
|
|
|
(37
|
)
|
|
|
(10,815
|
)
|
New financial assets originated
or purchased
|
|
|
7,296
|
|
|
|
1,187
|
|
|
|
-
|
|
|
|
30
|
|
|
|
8,513
|
|
Total
|
|
|
519
|
|
|
|
(601
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
March 31, 2019
|
|
Loans
|
|
|
Loan commitments
and financial
guarantee contracts
|
|
|
At amortized cost
|
|
|
FVOCI
|
|
|
Total
|
|
Net effect
of changes in allowance for expected credit losses
|
|
|
9,360
|
|
|
|
(266
|
)
|
|
|
(8
|
)
|
|
|
(7
|
)
|
|
|
9,079
|
|
Financial instruments
that have been derecognized during the year
|
|
|
(15,569
|
)
|
|
|
(1,802
|
)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(17,381
|
)
|
New financial assets originated
or purchased
|
|
|
7,763
|
|
|
|
1,481
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,244
|
|
Total
|
|
|
1,554
|
|
|
|
(587
|
)
|
|
|
(8
|
)
|
|
|
(17
|
)
|
|
|
942
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
|
|
|
|
v.
|
Credit-impaired financial assets
|
Credit-impaired loans and advances are graded 8 to
10 in the Bank’s internal credit risk grading system.
The following table sets out a reconciliation of
changes in the net carrying amount of credit-impaired loans .
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Credit-impaired loans and advances at beginning of
period
|
|
|
54,573
|
|
|
|
49,439
|
|
Classified as credit-impaired during the period
|
|
|
-
|
|
|
|
-
|
|
Change in expected credit losses allowance
|
|
|
(115
|
)
|
|
|
7,664
|
|
Release for asset sale
|
|
|
-
|
|
|
|
(500
|
)
|
Recoveries of amounts previously written off
|
|
|
115
|
|
|
|
52
|
|
Interest income
|
|
|
171
|
|
|
|
323
|
|
Write-offs
|
|
|
-
|
|
|
|
(2,405
|
)
|
Credit-impaired loans and advances at end of period
|
|
|
54,744
|
|
|
|
54,573
|
|
|
vi.
|
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.
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Concentration by sector and industry
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
At amortized cost
|
|
|
FVOCI
|
|
|
Loan commitments and
financial guarantee contracts
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Carrying amount - principal
|
|
|
5,337,487
|
|
|
|
5,892,997
|
|
|
|
74,200
|
|
|
|
74,547
|
|
|
|
5,065
|
|
|
|
5,094
|
|
|
|
66,657
|
|
|
|
115,682
|
|
Amount committed/guaranteed
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
427,600
|
|
|
|
493,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentration by sector
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
|
|
|
1,611,790
|
|
|
|
1,782,808
|
|
|
|
6,998
|
|
|
|
2,998
|
|
|
|
-
|
|
|
|
-
|
|
|
|
160,810
|
|
|
|
213,161
|
|
State-owned
|
|
|
757,042
|
|
|
|
780,491
|
|
|
|
28,809
|
|
|
|
23,792
|
|
|
|
-
|
|
|
|
-
|
|
|
|
69,718
|
|
|
|
69,822
|
|
Financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
|
|
|
2,522,994
|
|
|
|
2,692,787
|
|
|
|
18,000
|
|
|
|
19,276
|
|
|
|
-
|
|
|
|
-
|
|
|
|
77,521
|
|
|
|
75,130
|
|
State-owned
|
|
|
398,440
|
|
|
|
589,690
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
186,208
|
|
|
|
250,941
|
|
Sovereign
|
|
|
47,221
|
|
|
|
47,221
|
|
|
|
20,393
|
|
|
|
28,481
|
|
|
|
5,065
|
|
|
|
5,094
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
5,337,486
|
|
|
|
5,892,997
|
|
|
|
74,200
|
|
|
|
74,547
|
|
|
|
5,065
|
|
|
|
5,094
|
|
|
|
494,257
|
|
|
|
609,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentration by industry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial institutions
|
|
|
2,921,434
|
|
|
|
3,282,477
|
|
|
|
18,000
|
|
|
|
19,276
|
|
|
|
-
|
|
|
|
-
|
|
|
|
263,729
|
|
|
|
326,071
|
|
Industrial
|
|
|
875,826
|
|
|
|
925,375
|
|
|
|
30,706
|
|
|
|
21,658
|
|
|
|
-
|
|
|
|
-
|
|
|
|
127,381
|
|
|
|
143,560
|
|
Oil and petroleum derived products
|
|
|
530,687
|
|
|
|
561,068
|
|
|
|
5,101
|
|
|
|
5,132
|
|
|
|
-
|
|
|
|
-
|
|
|
|
46,492
|
|
|
|
71,571
|
|
Agricultural
|
|
|
265,337
|
|
|
|
327,288
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Services
|
|
|
431,478
|
|
|
|
370,753
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,224
|
|
|
|
20,497
|
|
Mining
|
|
|
102,366
|
|
|
|
162,364
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Sovereign
|
|
|
47,221
|
|
|
|
47,221
|
|
|
|
20,393
|
|
|
|
28,481
|
|
|
|
5,065
|
|
|
|
5,094
|
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
163,138
|
|
|
|
216,451
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
51,431
|
|
|
|
47,355
|
|
Total
|
|
|
5,337,486
|
|
|
|
5,892,997
|
|
|
|
74,200
|
|
|
|
74,547
|
|
|
|
5,065
|
|
|
|
5,094
|
|
|
|
494,257
|
|
|
|
609,054
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
Risk rating and concentration by country
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
At
amortized cost
|
|
|
|
FVOCI
|
|
|
Loan
commitments and financial guarantee contracts
|
|
|
March
31,
2020
|
|
|
|
December
31,
2019
|
|
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Carrying amount
- principal
|
|
5,337,487
|
|
|
|
5,892,997
|
|
|
|
74,200
|
|
|
74,547
|
|
|
|
5,065
|
|
|
5,094
|
|
|
66,657
|
|
|
115,682
|
|
Amount committed/guaranteed
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
427,600
|
|
|
493,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4
|
|
2,543,852
|
|
|
|
2,928,401
|
|
|
|
74,200
|
|
|
73,047
|
|
|
|
5,065
|
|
|
5,094
|
|
|
162,214
|
|
|
167,241
|
|
5-6
|
|
2,272,680
|
|
|
|
2,415,323
|
|
|
|
-
|
|
|
1,500
|
|
|
|
-
|
|
|
-
|
|
|
139,928
|
|
|
183,568
|
|
7-8
|
|
459,110
|
|
|
|
487,428
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
192,115
|
|
|
258,245
|
|
10
|
|
61,845
|
|
|
|
61,845
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
5,337,487
|
|
|
5,892,997
|
|
|
74,200
|
|
74,547
|
|
|
5,065
|
|
5,094
|
|
494,257
|
|
609,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentration by country
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina
|
|
194,526
|
|
|
|
226,481
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Belgium
|
|
14,105
|
|
|
|
13,742
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Bolivia
|
|
5,000
|
|
|
|
7,000
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
3,079
|
|
|
400
|
|
Brazil
|
|
959,464
|
|
|
|
1,015,316
|
|
|
|
-
|
|
|
1,500
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
50,000
|
|
Canada
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
657
|
|
|
657
|
|
Chile
|
|
578,710
|
|
|
|
683,132
|
|
|
|
-
|
|
|
-
|
|
|
|
5,065
|
|
|
5,094
|
|
|
8,388
|
|
|
8
|
|
Colombia
|
|
834,401
|
|
|
|
906,091
|
|
|
|
15,282
|
|
|
15,338
|
|
|
|
-
|
|
|
-
|
|
|
37,000
|
|
|
50,610
|
|
Costa Rica
|
|
221,288
|
|
|
|
220,380
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
59,752
|
|
|
59,161
|
|
Dominican Republic
|
|
104,139
|
|
|
|
289,853
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
16,500
|
|
|
16,500
|
|
Ecuador
|
|
169,761
|
|
|
|
174,267
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
185,253
|
|
|
252,391
|
|
El Salvador
|
|
64,900
|
|
|
|
54,232
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
5,596
|
|
|
5,555
|
|
France
|
|
149,144
|
|
|
|
152,530
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
47,906
|
|
|
47,906
|
|
Germany
|
|
33,725
|
|
|
|
34,613
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Guatemala
|
|
295,270
|
|
|
|
278,557
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
44,808
|
|
|
44,200
|
|
Honduras
|
|
126,441
|
|
|
|
128,937
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
1,265
|
|
|
300
|
|
Hong Kong
|
|
-
|
|
|
|
10,400
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Jamaica
|
|
31,603
|
|
|
|
38,312
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Luxembourg
|
|
58,225
|
|
|
|
59,813
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Mexico
|
|
485,150
|
|
|
|
754,465
|
|
|
|
21,416
|
|
|
21,505
|
|
|
|
-
|
|
|
-
|
|
|
30,000
|
|
|
27,377
|
|
Panama
|
|
379,455
|
|
|
|
268,355
|
|
|
|
37,502
|
|
|
36,204
|
|
|
|
-
|
|
|
-
|
|
|
26,659
|
|
|
25,304
|
|
Paraguay
|
|
120,348
|
|
|
|
127,970
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
10,652
|
|
|
10,652
|
|
Peru
|
|
196,976
|
|
|
|
150,301
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
6,742
|
|
|
8,033
|
|
Singapore
|
|
50,259
|
|
|
|
90,955
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Switzerland
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
10,000
|
|
|
10,000
|
|
Trinidad and Tobago
|
|
181,676
|
|
|
|
181,676
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
United States of America
|
|
25,000
|
|
|
|
25,000
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Uruguay
|
|
57,921
|
|
|
|
619
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
5,337,487
|
|
|
5,892,997
|
|
|
74,200
|
|
74,547
|
|
|
5,065
|
|
5,094
|
|
494,257
|
|
609,054
|
|
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)
|
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
vii.
|
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:
|
a)
|
Derivative financial instruments – assets
|
March 31, 2020
|
|
|
|
|
|
|
|
|
Gross
amounts
offset in the
consolidated
|
|
|
|
Net
amount of
assets presented
in the
consolidated
|
|
|
|
Gross
amounts not offset in the
consolidated statement of
financial position
|
|
Description
|
|
|
Gross
amounts of
assets
|
|
|
|
statement of
financial position
|
|
|
|
statement of
financial position
|
|
|
|
Financial
instruments
|
|
|
|
Cash
collateral
received
|
|
|
|
Net
Amount
|
|
Derivative financial
instruments used for hedging
|
|
|
17,044
|
|
|
|
-
|
|
|
|
17,044
|
|
|
|
-
|
|
|
|
(12,006
|
)
|
|
|
5,038
|
|
Total
|
|
|
17,044
|
|
|
|
-
|
|
|
|
17,044
|
|
|
|
-
|
|
|
|
(12,006
|
)
|
|
|
5,038
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
Gross
amounts
offset in the
consolidated
|
|
|
|
Net
amount of
assets presented
in the
consolidated
|
|
|
|
Gross
amounts not offset in the
consolidated statement of
financial position
|
|
Description
|
|
|
Gross
amounts of
assets
|
|
|
|
statement of
financial position
|
|
|
|
statement
of
financial position
|
|
|
|
Financial
instruments
|
|
|
|
Cash
collateral
received
|
|
|
|
Net
Amount
|
|
Derivative financial
instruments used for hedging
|
|
|
11,157
|
|
|
|
-
|
|
|
|
11,157
|
|
|
|
-
|
|
|
|
(9,350
|
)
|
|
|
1,807
|
|
Total
|
|
|
11,157
|
|
|
|
-
|
|
|
|
11,157
|
|
|
|
-
|
|
|
|
(9,350
|
)
|
|
|
1,807
|
|
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)
5.
|
Financial risk (continued)
|
|
A.
|
Credit risk (continued)
|
|
b)
|
Securities sold under repurchase and derivative financial instruments – liabilities
|
March 31, 2020
|
|
|
|
Gross
|
|
|
Gross
amounts
offset in the
consolidated
|
|
|
Net amount
of liabilities
presented
in the
consolidated
|
|
|
Gross amounts not offset
in the consolidated
statement of financial
position
|
|
|
|
|
Description
|
|
amounts
of
liabilities
|
|
|
statement of
financial
position
|
|
|
statement of
financial
position
|
|
|
Financial
instruments
|
|
|
Cash
collateral
pledged
|
|
|
Net
Amount
|
|
Securities sold under repurchase agreements
|
|
|
(53,888
|
)
|
|
|
-
|
|
|
|
(53,888
|
)
|
|
|
56,265
|
|
|
|
2,685
|
|
|
|
5,062
|
|
Derivative financial instruments used for hedging
|
|
|
(49,095
|
)
|
|
|
-
|
|
|
|
(49,095
|
)
|
|
|
-
|
|
|
|
47,916
|
|
|
|
(1,179
|
)
|
Total
|
|
|
(102,983
|
)
|
|
|
-
|
|
|
|
(102,983
|
)
|
|
|
56,265
|
|
|
|
50,601
|
|
|
|
3,883
|
|
December 31, 2019
|
|
|
|
Gross
|
|
|
Gross
amounts
offset in the
consolidated
|
|
|
Net amount
of liabilities
presented
in the
consolidated
|
|
|
Gross
amounts not offset
in the consolidated
statement of financial
position
|
|
|
|
|
Description
|
|
amounts
of
liabilities
|
|
|
statement of
financial
position
|
|
|
statement of
financial
position
|
|
|
Financial
instruments
|
|
|
Cash
collateral
pledged
|
|
|
Net
Amount
|
|
Securities sold under repurchase agreements
|
|
|
(40,530
|
)
|
|
|
-
|
|
|
|
(40,530
|
)
|
|
|
41,937
|
|
|
|
320
|
|
|
|
1,727
|
|
Derivative financial instruments used for hedging
|
|
|
(14,675
|
)
|
|
|
-
|
|
|
|
(14,675
|
)
|
|
|
-
|
|
|
|
14,632
|
|
|
|
(43
|
)
|
Total
|
|
|
(55,205
|
)
|
|
|
-
|
|
|
|
(55,205
|
)
|
|
|
41,937
|
|
|
|
14,952
|
|
|
|
1,684
|
|
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)
|
5.
|
Financial risk (continued)
|
|
i.
|
Exposure to liquidity risk
|
The key measure used by the
Bank for managing liquidity risk is the ratio of net liquid assets to deposits from customers and short-term funding. For this
purpose, ‘net liquid assets’ includes cash and cash equivalents which consist of deposits from banks, customers, debt
securities issued, other borrowings and commitments maturing within the next month.
The following table details
the Bank's liquidity ratios, described in the previous paragraph, as of March 31, 2020 and December 31, 2019, respectively, along
with average information for the period:
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
At the end of the period
|
|
|
121.05
|
%
|
|
|
52.48
|
%
|
Period average
|
|
|
90.58
|
%
|
|
|
37.82
|
%
|
Maximum of the period
|
|
|
185.50
|
%
|
|
|
53.38
|
%
|
Minimum of the period
|
|
|
53.26
|
%
|
|
|
23.23
|
%
|
The following table include
the Bank’s liquid assets by geographical location:
(in millions of USD dollars)
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
United State of America
|
|
|
1,293
|
|
|
|
1,132
|
|
Other O.E.C.D countries
|
|
|
-
|
|
|
|
4
|
|
Latin America
|
|
|
9
|
|
|
|
4
|
|
Other countries
|
|
|
-
|
|
|
|
20
|
|
Total
|
|
|
1,302
|
|
|
|
1,160
|
|
The following table includes
the Bank’s demand deposits from customers and its ratio to total deposits from customers:
(in millions of USD dollars)
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Demand liabilities and "overnight"
|
|
|
596
|
|
|
|
86
|
|
% Demand liabilities and "overnight" of total deposits
|
|
|
24.12
|
%
|
|
|
2.97
|
%
|
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)
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Total liquid assets
|
|
|
1,302
|
|
|
|
1,160
|
|
% Total assets of total liabilities
|
|
|
52.66
|
%
|
|
|
40.15
|
%
|
% Total liquid assets in the U.S. Federal Reserve
|
|
|
99.31
|
%
|
|
|
97.37
|
%
|
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)
|
5.
|
Financial risk (continued)
|
|
B.
|
Liquidity risk (continued)
|
The remaining liquid assets
were composed of short-term deposits in other banks.
While the Bank's liabilities
generally expire in shorter periods than their assets, the associated liquidity risk is diminished by the short-term nature of
the loan portfolio, because 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)
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Loan portfolio and investment portfolio less than/equal to 1 year according to its original term
|
|
|
2,981
|
|
|
|
3,485
|
|
Average term (days)
|
|
|
282
|
|
|
|
189
|
|
The following table includes
the carrying amount for the Bank’s loans and securities medium term portfolio with maturity based over one year based on
their original contractual term together with its average remaining term:
(in millions of USD dollars)
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Loan portfolio and investment portfolio greater than/equal to 1 year according to its original term
|
|
|
2,442
|
|
|
|
2,497
|
|
Average term (days)
|
|
|
1,980
|
|
|
|
1,185
|
|
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)
|
5.
|
Financial risk (continued)
|
|
B.
|
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:
|
|
March 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 Inflow (outflow)
|
|
|
Carrying
amount
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
1,353,018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,353,018
|
|
|
|
1,353,018
|
|
Securities and other financial assets, net
|
|
|
11,457
|
|
|
|
9,233
|
|
|
|
12,971
|
|
|
|
60,947
|
|
|
|
-
|
|
|
|
94,608
|
|
|
|
86,326
|
|
Loans, net
|
|
|
1,390,815
|
|
|
|
909,647
|
|
|
|
1,319,462
|
|
|
|
1,768,660
|
|
|
|
156,134
|
|
|
|
5,544,718
|
|
|
|
5,267,064
|
|
Derivative financial instruments - assets
|
|
|
10,661
|
|
|
|
3,879
|
|
|
|
-
|
|
|
|
2,504
|
|
|
|
-
|
|
|
|
17,044
|
|
|
|
17,115
|
|
Total
|
|
|
2,765,951
|
|
|
|
922,759
|
|
|
|
1,332,433
|
|
|
|
1,832,111
|
|
|
|
156,134
|
|
|
|
7,009,388
|
|
|
|
6,723,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(2,231,628
|
)
|
|
|
(123,534
|
)
|
|
|
(121,910
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,477,072
|
)
|
|
|
(2,472,644
|
)
|
Securities sold under repurchase agreements
|
|
|
(49,344
|
)
|
|
|
(4,732
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(54,076
|
)
|
|
|
(53,888
|
)
|
Borrowings and debt, net
|
|
|
(1,237,027
|
)
|
|
|
(734,905
|
)
|
|
|
(316,380
|
)
|
|
|
(914,777
|
)
|
|
|
(13,006
|
)
|
|
|
(3,216,095
|
)
|
|
|
(3,137,018
|
)
|
Derivative financial instruments - liabilities
|
|
|
(128
|
)
|
|
|
-
|
|
|
|
(4,620
|
)
|
|
|
(44,347
|
)
|
|
|
-
|
|
|
|
(49,095
|
)
|
|
|
(49,095
|
)
|
Total
|
|
|
(3,518,127
|
)
|
|
|
(863,171
|
)
|
|
|
(442,910
|
)
|
|
|
(959,124
|
)
|
|
|
(13,006
|
)
|
|
|
(5,796,338
|
)
|
|
|
(5,712,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Confirmed lettes of credit
|
|
|
117,252
|
|
|
|
10,426
|
|
|
|
9,802
|
|
|
|
-
|
|
|
|
-
|
|
|
|
137,480
|
|
|
|
137,480
|
|
Stand-by letters of credit and guaranteed
|
|
|
90,465
|
|
|
|
65,491
|
|
|
|
94,032
|
|
|
|
10,132
|
|
|
|
-
|
|
|
|
260,120
|
|
|
|
260,120
|
|
Credit commitments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30,000
|
|
|
|
-
|
|
|
|
30,000
|
|
|
|
30,000
|
|
Total
|
|
|
207,717
|
|
|
|
75,917
|
|
|
|
103,834
|
|
|
|
40,132
|
|
|
|
-
|
|
|
|
427,600
|
|
|
|
427,600
|
|
Net position
|
|
|
(959,893
|
)
|
|
|
(16,329
|
)
|
|
|
785,689
|
|
|
|
832,855
|
|
|
|
143,128
|
|
|
|
785,450
|
|
|
|
583,278
|
|
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)
|
5.
|
Financial risk (continued)
|
|
B.
|
Liquidity risk (continued)
|
|
|
December 31, 2019
|
|
Description
|
|
Up to 3
months
|
|
|
3 to 6 months
|
|
|
6 months to
1 year
|
|
|
1 to 5 years
|
|
|
More than
5 years
|
|
|
Gross Inflow (outflow)
|
|
|
Carrying
amount
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
1,178,288
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,178,288
|
|
|
|
1,178,170
|
|
Securities and other financial assets, net
|
|
|
16,684
|
|
|
|
6,457
|
|
|
|
7,293
|
|
|
|
54,544
|
|
|
|
6,492
|
|
|
|
91,470
|
|
|
|
88,794
|
|
Loans, net
|
|
|
1,960,381
|
|
|
|
967,594
|
|
|
|
1,207,469
|
|
|
|
1,822,519
|
|
|
|
150,742
|
|
|
|
6,108,705
|
|
|
|
5,823,333
|
|
Derivative financial instruments - assets
|
|
|
-
|
|
|
|
625
|
|
|
|
-
|
|
|
|
10,532
|
|
|
|
-
|
|
|
|
11,157
|
|
|
|
11,157
|
|
Total
|
|
|
3,155,353
|
|
|
|
974,676
|
|
|
|
1,214,762
|
|
|
|
1,887,595
|
|
|
|
157,234
|
|
|
|
7,389,620
|
|
|
|
7,101,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(2,574,180
|
)
|
|
|
(198,786
|
)
|
|
|
(122,680
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,895,646
|
)
|
|
|
(2,893,555
|
)
|
Securities sold under repurchase agreements
|
|
|
(40,691
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40,691
|
)
|
|
|
(40,530
|
)
|
Borrowings and debt, net
|
|
|
(1,407,612
|
)
|
|
|
(451,736
|
)
|
|
|
(230,776
|
)
|
|
|
(1,147,699
|
)
|
|
|
(13,422
|
)
|
|
|
(3,251,245
|
)
|
|
|
(3,148,864
|
)
|
Derivative financial instruments - liabilities
|
|
|
(2,425
|
)
|
|
|
(775
|
)
|
|
|
(1,711
|
)
|
|
|
(12,014
|
)
|
|
|
-
|
|
|
|
(16,925
|
)
|
|
|
(14,675
|
)
|
Total
|
|
|
(4,024,908
|
)
|
|
|
(651,297
|
)
|
|
|
(355,167
|
)
|
|
|
(1,159,713
|
)
|
|
|
(13,422
|
)
|
|
|
(6,204,507
|
)
|
|
|
(6,097,624
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Confirmed lettes of credit
|
|
|
84,235
|
|
|
|
77,493
|
|
|
|
7,592
|
|
|
|
-
|
|
|
|
-
|
|
|
|
169,320
|
|
|
|
169,320
|
|
Stand-by letters of credit and guaranteed
|
|
|
35,906
|
|
|
|
95,440
|
|
|
|
114,078
|
|
|
|
10,057
|
|
|
|
-
|
|
|
|
255,481
|
|
|
|
255,481
|
|
Credit commitments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
68,571
|
|
|
|
-
|
|
|
|
68,571
|
|
|
|
68,571
|
|
Total
|
|
|
120,141
|
|
|
|
172,933
|
|
|
|
121,670
|
|
|
|
78,628
|
|
|
|
-
|
|
|
|
493,372
|
|
|
|
493,372
|
|
Net position
|
|
|
(989,696
|
)
|
|
|
150,446
|
|
|
|
737,925
|
|
|
|
649,254
|
|
|
|
143,812
|
|
|
|
691,741
|
|
|
|
510,458
|
|
The amounts in the table 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 have simultaneous gross and the net amounts for derivatives that are net settled.
|
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)
|
5.
|
Financial risk (continued)
|
|
B.
|
Liquidity risk (continued)
|
As part of management of liquidity
risk arising from financial liabilities, the Bank holds liquid assets comprising cash and cash equivalents, which can be readily
sold to meet liquidity requirements.
The following table sets out
the components of the Banks’s liquidity reserves:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
Amount
|
|
|
Fair Value
|
|
|
Amount
|
|
|
Fair Value
|
|
Balance with Central Banks
|
|
|
1,267,730
|
|
|
|
1,267,730
|
|
|
|
1,129,016
|
|
|
|
1,129,016
|
|
Cash and balances with other bank
|
|
|
85,288
|
|
|
|
85,288
|
|
|
|
49,154
|
|
|
|
49,154
|
|
Total Liquidity reserves
|
|
|
1,353,018
|
|
|
|
1,353,018
|
|
|
|
1,178,170
|
|
|
|
1,178,170
|
|
|
iv.
|
Financial assets available to support future funding
|
The following table sets out the Bank’s financial
assets available to support future funding:
March 31, 2020
|
|
|
|
Guaranteed
|
|
|
Available as collateral
|
|
Cash and due from banks
|
|
|
55,333
|
|
|
|
1,297,685
|
|
Notional of investment securities
|
|
|
55,300
|
|
|
|
23,000
|
|
Loan portfolio
|
|
|
-
|
|
|
|
5,337,487
|
|
Total assets
|
|
|
110,633
|
|
|
|
6,658,172
|
|
December 31, 2019
|
|
|
|
Guaranteed
|
|
|
Available as collateral
|
|
Cash and due from banks
|
|
|
18,452
|
|
|
|
1,159,718
|
|
Notional of investment securities
|
|
|
40,531
|
|
|
|
38,045
|
|
Loan portfolio
|
|
|
-
|
|
|
|
5,823,333
|
|
Total assets
|
|
|
58,983
|
|
|
|
7,021,096
|
|
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)
|
5.
|
Financial risk (continued)
|
The Bank manages market risk by considering the consolidated
financial situation of the Bank.
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:
|
|
March
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
|
|
|
1,344,692
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,326
|
|
|
|
1,353,018
|
|
Securities and other financial assets
|
|
|
6,351
|
|
|
|
22,063
|
|
|
|
50,851
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
79,265
|
|
Loans
|
|
|
3,445,944
|
|
|
|
882,223
|
|
|
|
813,510
|
|
|
|
195,810
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,337,487
|
|
Total assets
|
|
|
4,796,987
|
|
|
|
904,286
|
|
|
|
864,361
|
|
|
|
195,810
|
|
|
|
-
|
|
|
|
8,326
|
|
|
|
6,769,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and time deposits
|
|
|
(2,224,511
|
)
|
|
|
(122,783
|
)
|
|
|
(120,302
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,467,596
|
)
|
Securities sold repurchase agreements
|
|
|
(49,213
|
)
|
|
|
(4,675
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(53,888
|
)
|
Borrowings and debt
|
|
|
(2,672,021
|
)
|
|
|
(218,044
|
)
|
|
|
(73,392
|
)
|
|
|
(153,965
|
)
|
|
|
-
|
|
|
|
(19,596
|
)
|
|
|
(3,137,018
|
)
|
Total liabilities
|
|
|
(4,945,745
|
)
|
|
|
(345,502
|
)
|
|
|
(193,694
|
)
|
|
|
(153,965
|
)
|
|
|
-
|
|
|
|
(19,596
|
)
|
|
|
(5,658,502
|
)
|
Net effect of derivative financial instruments held for interest risk management
|
|
|
(128
|
)
|
|
|
844
|
|
|
|
(4,620
|
)
|
|
|
(45,443
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(49,347
|
)
|
Total interest rate sensitivity
|
|
|
(148,886
|
)
|
|
|
559,628
|
|
|
|
666,047
|
|
|
|
(3,598
|
)
|
|
|
-
|
|
|
|
(11,270
|
)
|
|
|
1,061,921
|
|
|
|
December 31, 2019
|
|
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
|
|
|
1,155,155
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,155,155
|
|
Securities and other financial assets
|
|
|
14,935
|
|
|
|
6,351
|
|
|
|
5,055
|
|
|
|
53,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
79,641
|
|
Loans
|
|
|
4,031,432
|
|
|
|
1,096,355
|
|
|
|
548,028
|
|
|
|
208,443
|
|
|
|
8,739
|
|
|
|
-
|
|
|
|
5,892,997
|
|
Total assets
|
|
|
5,201,522
|
|
|
|
1,102,706
|
|
|
|
553,083
|
|
|
|
261,743
|
|
|
|
8,739
|
|
|
|
-
|
|
|
|
7,127,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and time deposits
|
|
|
(2,570,324
|
)
|
|
|
(197,300
|
)
|
|
|
(120,419
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(293
|
)
|
|
|
(2,888,336
|
)
|
Securities sold repurchase agreements
|
|
|
(40,530
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40,530
|
)
|
Borrowings and debt
|
|
|
(2,534,382
|
)
|
|
|
(401,432
|
)
|
|
|
(25,261
|
)
|
|
|
(157,321
|
)
|
|
|
-
|
|
|
|
(19,914
|
)
|
|
|
(3,138,310
|
)
|
Total liabilities
|
|
|
(5,145,236
|
)
|
|
|
(598,732
|
)
|
|
|
(145,680
|
)
|
|
|
(157,321
|
)
|
|
|
-
|
|
|
|
(20,207
|
)
|
|
|
(6,067,176
|
)
|
Net effect of derivative financial instruments held for interest risk management
|
|
|
(2,425
|
)
|
|
|
(150
|
)
|
|
|
(1,711
|
)
|
|
|
(1,482
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,768
|
)
|
Total interest rate sensitivity
|
|
|
53,861
|
|
|
|
503,824
|
|
|
|
405,692
|
|
|
|
102,940
|
|
|
|
8,739
|
|
|
|
(20,207
|
)
|
|
|
1,054,849
|
|
Management of interest rate
risk is complemented by monitoring the sensitivity of the Bank’s financial assets and liabilities to various standard interest
rate scenarios. Standard scenarios that are considered on a monthly basis include a 50bps, 100bps and 200bps, respectively, parallel
fall or rise in all yield curves which are assessed accordingly to market conditions.
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)
|
5.
|
Financial risk (continued)
|
|
C.
|
Market risk (continued)
|
|
i.
|
Interest rate risk (continued)
|
The following is an analysis
of the Bank’s sensitivity to an increase or decrease in market interest rates, assuming no asymmetrical movements in yield
curves and a constant financial position:
|
|
Change in
interest rate
|
|
|
Effect on
profit or loss
|
|
|
Effect
on Equity
|
|
March 31, 2020
|
|
|
+200 bps
|
|
|
|
(14,848
|
)
|
|
|
(21,776
|
)
|
|
|
|
-200 bps
|
|
|
|
(4,120
|
)
|
|
|
(21,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
|
+200 bps
|
|
|
|
14,297
|
|
|
|
(66,840
|
)
|
|
|
|
-200 bps
|
|
|
|
(14,297
|
)
|
|
|
66,840
|
|
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.
|
i.
|
Exposure to currency 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 which are included in other assets and liabilities based on their fair value.
|
|
March 31, 2020
|
|
|
|
Brazilian
Real
|
|
|
European
Euro
|
|
|
Japanese
Yen
|
|
|
Colombian
Peso
|
|
|
Mexican
Peso
|
|
|
Other
Currencies
(1)
|
|
|
Total
|
|
Exchance rate
|
|
|
5.19
|
|
|
|
1.10
|
|
|
|
107.68
|
|
|
|
4,965.38
|
|
|
|
23.60
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
146
|
|
|
|
15
|
|
|
|
5
|
|
|
|
66
|
|
|
|
6,884
|
|
|
|
66
|
|
|
|
7,182
|
|
Loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
345,677
|
|
|
|
-
|
|
|
|
345,677
|
|
Total Assets
|
|
|
146
|
|
|
|
15
|
|
|
|
5
|
|
|
|
66
|
|
|
|
352,561
|
|
|
|
66
|
|
|
|
352,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(352,187
|
)
|
|
|
-
|
|
|
|
(352,187
|
)
|
Total liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(352,187
|
)
|
|
|
-
|
|
|
|
(352,187
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net currency position
|
|
|
146
|
|
|
|
15
|
|
|
|
|
|
|
|
66
|
|
|
|
374
|
|
|
|
66
|
|
|
|
672
|
|
(1) It includes other currencies such
as: Argentine pesos, Australian dollar, Swiss franc, Sterling pound, Peruvian soles, and 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)
|
5.
|
Financial risk (continued)
|
|
C.
|
Market risk (continued)
|
|
ii.
|
Foreign exchange risk
|
|
|
December 31, 2019
|
|
|
|
Brazilian
Real
|
|
|
European
Euro
|
|
|
Japanese
Yen
|
|
|
Colombian
Peso
|
|
|
Mexican
Peso
|
|
|
Other
Currencies
(1)
|
|
|
Total
|
|
Exchance rate
|
|
|
4.02
|
|
|
|
1.12
|
|
|
|
108.67
|
|
|
|
3,287.50
|
|
|
|
18.88
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
|
274
|
|
|
|
17
|
|
|
|
4
|
|
|
|
34
|
|
|
|
4,243
|
|
|
|
58
|
|
|
|
4,630
|
|
Loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
473,729
|
|
|
|
-
|
|
|
|
473,729
|
|
Total Assets
|
|
|
274
|
|
|
|
17
|
|
|
|
4
|
|
|
|
34
|
|
|
|
477,972
|
|
|
|
58
|
|
|
|
478,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(478,038
|
)
|
|
|
-
|
|
|
|
(478,038
|
)
|
Total liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(478,038
|
)
|
|
|
-
|
|
|
|
(478,038
|
)
|
Net currency position
|
|
|
274
|
|
|
|
17
|
|
|
|
4
|
|
|
|
34
|
|
|
|
(66
|
)
|
|
|
58
|
|
|
|
321
|
|
(1) It includes other currencies such
as: Argentine pesos, Australian dollar, Swiss franc, Sterling pound, Peruvian soles, and Renminbi.
|
6.
|
Fair value of financial instruments
|
The Bank determines the fair
value of its financial instruments using the fair value hierarchy established in IFRS 13 - Fair Value Measurements and Disclosure,
which requires the Bank to maximize the use of observable inputs (those that reflect the assumptions that market participants would
use in pricing the asset or liability developed based on market information obtained from sources independent of the reporting
entity) and to minimize the use of unobservable inputs (those that reflect the reporting entity’s own assumptions about the
inputs that market participants would use in pricing the asset or liability developed based on the best information available in
the circumstances) when measuring fair value. Fair value is used on a recurring basis to measure assets and liabilities in which
fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to assess assets and liabilities
for impairment or for disclosure purposes. Fair value is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of
the asset or liability, the Bank uses some valuation techniques and assumptions when estimating fair value.
The Bank applied the following
fair value hierarchy:
Level 1 – Assets or liabilities
for which an identical instrument is traded in an active market, such as publicly-traded instruments or futures contracts.
Level 2 – Assets or liabilities
valued based on observable market data for similar instruments, quoted prices in markets that are not active; or other observable
inputs that can be corroborated by observable market data for substantially the full term of the asset or liability.
Level 3 – Assets or liabilities
for which significant valuation inputs are not readily observable in the market; instruments measured based on the best available
information, which might include some internally-developed data, and considers risk premiums that a market participant would require.
When determining the fair value
measurements for assets and liabilities that are required or permitted to be recorded at fair value, the Bank considers the principal
or most advantageous market in which it would transact and considers the inputs that market participants would use when pricing
the asset or liability. When possible, the Bank uses active markets and observable prices to value identical assets or 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)
|
6.
|
Fair value of financial instruments (continued)
|
When identical assets and liabilities
are not traded in active markets, the Bank uses observable market information for similar assets and liabilities. However, certain
assets and liabilities are not actively traded in observable markets and the Bank must use alternative valuation techniques to
determine the fair value measurement. The frequency of transactions, the size of the bid-ask spread, and the size of the investment
are factors considered in determining the liquidity of markets and the relevance of observed prices in those markets.
When there has been a significant
decrease in the valuation of the financial asset or liability, or in the level of activity for a financial asset or liability,
the Bank uses the present value technique which considers market information to determine a representative fair value in usual
market conditions.
A description of the valuation
methodologies used for assets and liabilities measured at fair value on a recurring basis, including the general classification
of such assets and liabilities under the fair value hierarchy is presented below:
Financial instruments at
FVTPL and FVOCI
Financial instruments at FVTPL
and FVOCI are carried at fair value, which is based upon quoted prices when available, or if quoted market prices are not available,
on discounted expected cash flows using market rates commensurate with the credit quality and maturity of the security.
When quoted prices are available
in an active market, financial instruments at FVTPL and financial instruments at FVOCI are classified in level 1 of the fair value
hierarchy. If quoted market prices are not available or they are available in markets that are not active, then fair values are
estimated based upon quoted prices for similar instruments, or where these are not available, by using internal valuation techniques,
principally discounted cash flows models. Such securities are classified within levels 2 and 3 of the fair value hierarchy.
Derivative financial instruments
and hedged items that qualify as a fair value hedging relationship
The valuation techniques and
inputs depend on the type of derivative and the nature of the underlying instrument. Exchange-traded derivatives that are valued
using quoted prices are classified within level 1 of the fair value hierarchy.
For those derivative contracts
without quoted market prices, fair value is based on internal valuation techniques using inputs that are readily observable and
that can be validated by information available in the market. The principal technique used to value these instruments is the discounted
cash flows model and the key inputs considered in this technique include interest rate yield curves and foreign exchange rates.
These derivatives are classified within level 2 of the fair value hierarchy.
The fair value adjustments applied
by the Bank to its derivative carrying values include credit valuation adjustments (“CVA”), which are applied to OTC
derivative instruments, in which the base valuation generally discounts expected cash flows using the Overnight Index Swap (“OIS”)
interest rate curves. Because not all counterparties have the same credit risk as that implied by the relevant OIS curve, a CVA
is necessary to incorporate the market view of both, counterparty credit risk and the Bank’s own credit risk, in the valuation.
Own-credit and counterparty
CVA is determined using a fair value curve consistent with the Bank’s or counterparty credit rating. The CVA is designed
to incorporate a market view of the credit risk inherent in the derivative portfolio. However, most of the Bank’s derivative
instruments are negotiated bilateral contracts and are not commonly transferred to third parties. Derivative instruments are normally
settled contractually, or if terminated early, are terminated at a value negotiated bilaterally between the counterparties. Therefore,
the CVA (both counterparty and own-credit) may not be realized upon a settlement or termination in the normal course of business.
In addition, all or a portion of the CVA may be reversed or otherwise adjusted in future periods in the event of changes in the
credit risk of the Bank or its counterparties or due to the anticipated termination of the transactions.
Financial instruments assets
and liabilities recognized and designated as hedged items that qualify as a fair value hedging relationship are measured at amortized
cost and adjusted for the effect of the risks covered in the hedging relationship.
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)
|
6.
|
Fair value of financial instruments (continued)
|
|
A.
|
Recurring valuation (continued)
|
Financial instruments
measured at fair value on a recurring basis by caption on the consolidated statement of financial position using the fair
value hierarchy are described below:
|
|
March 31, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities and other financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities at FVOCI - Corporate debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Securities at FVOCI - Sovereign debt
|
|
|
-
|
|
|
|
5,065
|
|
|
|
-
|
|
|
|
5,065
|
|
Equity instrument at FVOCI
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Debt instrument at fair value through profit or loss
|
|
|
-
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
6,492
|
|
Total securities and other financial assets
|
|
|
-
|
|
|
|
5,065
|
|
|
|
6,492
|
|
|
|
11,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
-
|
|
|
|
3,675
|
|
|
|
-
|
|
|
|
3,675
|
|
Cross-currency swaps
|
|
|
-
|
|
|
|
2,346
|
|
|
|
-
|
|
|
|
2,346
|
|
Foreign exchange forwards
|
|
|
-
|
|
|
|
11,023
|
|
|
|
-
|
|
|
|
11,023
|
|
Total derivative financial instrument assets
|
|
|
-
|
|
|
|
17,044
|
|
|
|
-
|
|
|
|
17,044
|
|
Total assets at fair value
|
|
|
-
|
|
|
|
22,109
|
|
|
|
6,492
|
|
|
|
28,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
-
|
|
|
|
2,696
|
|
|
|
-
|
|
|
|
2,696
|
|
Cross-currency swaps
|
|
|
-
|
|
|
|
46,399
|
|
|
|
-
|
|
|
|
46,399
|
|
Foreign exchange forwards
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total derivative financial instruments - liabilities
|
|
|
-
|
|
|
|
49,095
|
|
|
|
-
|
|
|
|
49,095
|
|
Total liabilities at fair value
|
|
|
-
|
|
|
|
49,095
|
|
|
|
-
|
|
|
|
49,095
|
|
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)
6.
|
Fair value of financial instruments (continued)
|
|
A.
|
Recurring valuation (continued)
|
|
|
December 31, 2019
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities and other financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities at FVOCI - Corporate debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Securities at FVOCI - Sovereign debt
|
|
|
-
|
|
|
|
5,094
|
|
|
|
-
|
|
|
|
5,094
|
|
Equity instrument at FVOCI
|
|
|
-
|
|
|
|
1,889
|
|
|
|
-
|
|
|
|
1,889
|
|
Debt instrument at fair value through profit or loss
|
|
|
-
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
6,492
|
|
Total securities and other financial assets
|
|
|
-
|
|
|
|
6,983
|
|
|
|
6,492
|
|
|
|
13,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
-
|
|
|
|
407
|
|
|
|
-
|
|
|
|
407
|
|
Cross-currency swaps
|
|
|
-
|
|
|
|
10,125
|
|
|
|
-
|
|
|
|
10,125
|
|
Foreign exchange forwards
|
|
|
-
|
|
|
|
625
|
|
|
|
-
|
|
|
|
625
|
|
Total derivative financial instrument assets
|
|
|
-
|
|
|
|
11,157
|
|
|
|
-
|
|
|
|
11,157
|
|
Total assets at fair value
|
|
|
-
|
|
|
|
18,140
|
|
|
|
6,492
|
|
|
|
24,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments - liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
-
|
|
|
|
1,903
|
|
|
|
-
|
|
|
|
1,903
|
|
Cross-currency swaps
|
|
|
-
|
|
|
|
10,197
|
|
|
|
-
|
|
|
|
10,197
|
|
Foreign exchange forwards
|
|
|
-
|
|
|
|
2,575
|
|
|
|
-
|
|
|
|
2,575
|
|
Total derivative financial instruments - liabilities
|
|
|
-
|
|
|
|
14,675
|
|
|
|
-
|
|
|
|
14,675
|
|
Total liabilities at fair value
|
|
|
-
|
|
|
|
14,675
|
|
|
|
-
|
|
|
|
14,675
|
|
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)
|
6.
|
Fair value of financial instruments (continued)
|
|
B.
|
Non-recurring valuation
|
The following
methods and inputs were used by the Bank’s management in estimating the fair values of financial instruments whose fair value
is not measured on a recurring basis:
Financial instruments with
carrying value that approximates fair value
The carrying value of certain
financial assets, including cash and due from banks, interest-bearing deposits in banks, customers’ liabilities under acceptances,
interest receivable and certain financial liabilities including customer’s demand and time deposits, securities sold under
repurchase agreements, interest payable, and acceptances outstanding, due to their short-term nature, is considered to approximate
their fair value. These instruments are classified in Level 2.
Securities at amortized cost
The fair value has been estimated
upon current market quotations, where available. If quoted market prices are not available, fair value has been estimated based
upon quoted prices of similar instruments, or where these are not available, on discounted expected future cash flows using market
rates commensurate with the credit quality and maturity of the security. These securities are classified in Levels 2 and 3.
Loans
The fair value of the loan portfolio,
including impaired loans, is estimated by discounting expected future cash flows using the current rates at which loans would be
made to borrowers with similar credit ratings and for the same remaining maturities, considering the contractual terms in effect
as of March 31 of the relevant year. These assets are classified in Levels 2 and 3.
Transfer of financial assets
Gains or losses on sale of loans
depend in part on the carrying amount of the financial assets involved in the transfer, and their fair value at the date of transfer.
The fair value of these instruments is determined based upon quoted market prices when available or is based on the present value
of future expected cash flows using information related to credit losses, prepayment speeds, forward yield curves, and discounted
rates commensurate with the risk involved.
Short and long-term borrowings
and debt
The fair value of short and
long-term borrowings and debt is estimated using discounted contractual future cash flows based on the current incremental borrowing
rates for similar types of borrowing arrangements, considering the changes in the Bank’s credit margin. These liabilities
are classified in Level 2.
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)
6.
|
Fair value of financial instruments (continued)
|
|
B.
|
Non-recurring valuation (continued)
|
The following table provides
information on the carrying value and an estimated fair value of the Bank’s financial instruments that are not measured on
a recurring basis:
|
|
March
31, 2020
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
value
|
|
|
value
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and deposits on banks
|
|
|
1,353,018
|
|
|
|
1,353,018
|
|
|
|
-
|
|
|
|
1,353,018
|
|
|
|
-
|
|
Securities at amortized cost (1)
|
|
|
74,761
|
|
|
|
72,557
|
|
|
|
-
|
|
|
|
49,526
|
|
|
|
23,031
|
|
Loans, net (2)
|
|
|
5,267,064
|
|
|
|
5,240,179
|
|
|
|
-
|
|
|
|
5,174,056
|
|
|
|
66,123
|
|
Customers' liabilities under acceptances
|
|
|
66,657
|
|
|
|
66,657
|
|
|
|
-
|
|
|
|
66,657
|
|
|
|
-
|
|
Investment properties
|
|
|
3,494
|
|
|
|
3,494
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
2,467,596
|
|
|
|
2,467,596
|
|
|
|
-
|
|
|
|
2,467,596
|
|
|
|
-
|
|
Securities sold under repurchase agreements
|
|
|
53,888
|
|
|
|
53,888
|
|
|
|
-
|
|
|
|
53,888
|
|
|
|
-
|
|
Borrowings and debt, net (3)
|
|
|
3,117,422
|
|
|
|
3,069,353
|
|
|
|
-
|
|
|
|
3,069,353
|
|
|
|
-
|
|
Customers' liabilities under acceptances
|
|
|
66,657
|
|
|
|
66,657
|
|
|
|
-
|
|
|
|
66,657
|
|
|
|
-
|
|
|
|
December
31, 2019
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
value
|
|
|
value
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and deposits on banks
|
|
|
1,178,170
|
|
|
|
1,178,170
|
|
|
|
-
|
|
|
|
1,178,170
|
|
|
|
-
|
|
Securities at amortized cost (1)
|
|
|
75,271
|
|
|
|
75,724
|
|
|
|
-
|
|
|
|
56,914
|
|
|
|
18,810
|
|
Loans, net (2)
|
|
|
5,823,333
|
|
|
|
6,162,885
|
|
|
|
-
|
|
|
|
6,101,040
|
|
|
|
61,845
|
|
Customers' liabilities under acceptances
|
|
|
115,682
|
|
|
|
115,682
|
|
|
|
-
|
|
|
|
115,682
|
|
|
|
-
|
|
Investment properties
|
|
|
3,494
|
|
|
|
3,494
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
2,888,336
|
|
|
|
2,888,336
|
|
|
|
-
|
|
|
|
2,888,336
|
|
|
|
-
|
|
Securities sold under repurchase agreements
|
|
|
40,530
|
|
|
|
40,530
|
|
|
|
-
|
|
|
|
40,530
|
|
|
|
-
|
|
Borrowings and debt, net (3)
|
|
|
3,118,396
|
|
|
|
3,126,333
|
|
|
|
-
|
|
|
|
3,126,333
|
|
|
|
-
|
|
Customers' liabilities under acceptances
|
|
|
115,682
|
|
|
|
115,682
|
|
|
|
-
|
|
|
|
115,682
|
|
|
|
-
|
|
|
(1)
|
The carrying value of securities at amortized cost is
net of the accrued interest receivable of $0.6 million and the allowance for expected credit losses of $0.1 million as of March
31, 2020 and the accrued interest receivable of $0.8 million and the allowance for expected credit losses of $0.1 million as of
December 31, 2019.
|
|
(2)
|
The carrying value of loans at amortized cost is net of the accrued interest receivable of $40.6
million, the allowance for expected credit losses of $99.9 million and unearned interest and deferred fees of $11 million for March
31, 2020, and the accrued interest receivable of $41.7 million, the allowance for expected credit losses of $99.3 million and unearned
interest and deferred fees of $12.1 million for December 31, 2019.
|
|
(3)
|
Borrowings and debt excludes the lease liabilities for an amount of $19.6 million and $19.9 million
as of March 31, 2020 and December 31, 2019, 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)
|
6.
|
Fair value of financial instruments (continued)
|
The Bank has an established
control framework for the measurement of fair values, which is independent of front office management, to verify the valuation
of significant fair value measurements of derivative financial instruments, securities and other financial instrument. Specific
controls include:
|
-
|
Verification of observable pricing.
|
|
-
|
Validation of performance of valuation models.
|
|
-
|
A review and approval process for new models and changes to existing models.
|
|
-
|
Analysis and assessment of significant valuation fluctuations.
|
|
-
|
Review of significant unobservable inputs, valuation adjustments and changes to fair value measurement
of Level 3 instruments.
|
|
D.
|
Level 3 - Fair value measurement
|
The following table presents
the movement of a Level 3 financial instruments measured at fair value
Carrying amount as of December 31, 2019
|
|
|
6,492
|
|
Unrealized loss
|
|
|
-
|
|
Carrying amount as of March 31, 2020
|
|
|
6,492
|
|
Significant inputs used to
determine fair value for Level 3 financial instruments
The following table presents
the significant inputs used to determine the fair value for Level 3 financial instruments:
Unobservable inputs
|
|
Observable inputs
|
-
|
Discount rate for similar companies of the same business
line adjusted due to the debt-equity structure of the issuer
|
|
-
|
|
Average recovery factor for companies that reported default
– Moody’s
|
Fair value measurement sensitivity to unobservable inputs
|
|
|
Range of estimates
|
|
A significant increase in volatility would result in a lower fair value
|
|
|
12.97% a 27.50%
|
|
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)
|
6.
|
Fair value of financial instruments (continued)
|
|
D.
|
Level 3 - Fair value measurement (continued)
|
The effect of unobservable
inputs on fair value measurement
Although the Bank believes that
its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements
of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used would have the following effects.
Debentures at fair value through profit or loss
|
|
Effect on profit
or loss
|
|
+ 100 bps to the observable and unobservable inputs
|
|
|
(230
|
)
|
- 100 bps to the unobservable and observable inputs
|
|
|
240
|
|
|
7.
|
Cash and due from banks
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash and due from banks
|
|
|
8,326
|
|
|
|
23,015
|
|
Interest-bearing deposits in banks
|
|
|
1,344,692
|
|
|
|
1,155,155
|
|
Total
|
|
|
1,353,018
|
|
|
|
1,178,170
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Pledged deposits
|
|
|
55,601
|
|
|
|
18,452
|
|
Total cash and cash equivalents
|
|
|
1,297,417
|
|
|
|
1,159,718
|
|
The following table presents
the details of interest-bearing deposits in banks and pledged deposits:
|
|
March
31, 2020
|
|
|
December
31, 2019
|
|
|
|
Amount
|
|
|
Interest
rate
range
|
|
|
Amount
|
|
|
Interest
rate
range
|
|
Interest-bearing deposits in banks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
(1)
|
|
|
1,329,692
|
|
|
|
0.05% a 4.69
|
%
|
|
|
1,135,155
|
|
|
|
1.55% a 5.10
|
%
|
Time deposits
|
|
|
15,000
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
Total
|
|
|
1,344,692
|
|
|
|
|
|
|
|
1,155,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pledged deposits
|
|
|
55,601
|
|
|
|
0.09
|
%
|
|
|
18,452
|
|
|
|
1.55
|
%
|
(1)
|
Interest-bearing demand deposits based on daily rates determined by banks. In addition, rates of
4.69% and 5.10% corresponds to a deposit placed in MXN – México.
|
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)
|
7.
|
Cash and due from banks (continued)
|
The following table provides a breakdown of pledged
deposits by country risk:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Country:
|
|
|
|
|
|
|
|
|
Netherlands
|
|
|
17,364
|
|
|
|
-
|
|
Switzerland
|
|
|
11,307
|
|
|
|
9,567
|
|
Mexico
|
|
|
7,750
|
|
|
|
-
|
|
Spain
|
|
|
7,290
|
|
|
|
-
|
|
Japan
|
|
|
3,850
|
|
|
|
1,470
|
|
United States of America (1)
|
|
|
6,706
|
|
|
|
5,645
|
|
France
|
|
|
1,334
|
|
|
|
1,770
|
|
Total
|
|
|
55,601
|
|
|
|
18,452
|
|
|
(1)
|
Includes pledged deposits of $5 million at March 31, 2020 and $3.5 million at December 31, 2019,
with the New York State Banking Department under March 1994 legislation and deposits pledged to guarantee derivative financial
instrument transactions.
|
|
8.
|
Securities and other financial assets, net
|
All securities and other financial
assets as of March 31, 2020 and December 31, 2019 are presented as follows:
|
|
|
|
|
At
fair value
|
|
|
|
|
At
March 31, 2020
|
|
|
|
|
With
changes in other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Carrying
amount
|
|
Amortized
cost
|
|
|
Recyclable
to
profit and loss
|
|
|
Non-recyclable
to
profit and loss
|
|
|
With
changes in
profit or loss
|
|
|
Total
securities and other
financial assets, net
|
|
Principal
|
|
|
74,200
|
|
|
|
5,065
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
85,757
|
|
Interest
receivable
|
|
|
667
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
674
|
|
Reserves
|
|
|
(106
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(106
|
)
|
|
|
|
74,761
|
|
|
|
5,073
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
86,325
|
|
|
|
|
|
|
At
fair value
|
|
|
|
|
At December 31, 2019
|
|
|
|
|
With
changes in other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Carrying
amount
|
|
Amortized
cost
|
|
|
Recyclable
to
profit and loss
|
|
|
Non-recyclable
to
profit and loss
|
|
|
With
changes in
profit or loss
|
|
|
Total
securities and other
financial assets, net
|
|
Principal
|
|
|
74,547
|
|
|
|
5,094
|
|
|
|
1,889
|
|
|
|
6,492
|
|
|
|
88,022
|
|
Interest receivable
|
|
|
837
|
|
|
|
48
|
|
|
|
-
|
|
|
|
-
|
|
|
|
885
|
|
Reserves
|
|
|
(113
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(113
|
)
|
|
|
|
75,271
|
|
|
|
5,142
|
|
|
|
1,889
|
|
|
|
6,492
|
|
|
|
88,794
|
|
As of March 31, 2020, and December
31, 2019, the Bank sold 261,164 and 767,301 shares, respectively, which were designated in 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 $4.8 million, respectively, and the cumulative loss recognized in OCI was $376 thousand
and $151 thousand, respectively, transferred to retained earnings.
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)
|
8.
|
Securities and other financial assets, net (continued)
|
Securities and other financial
assets by contractual maturity are shown in the following table:
|
|
|
|
|
At
fair value
|
|
|
|
|
At March 31, 2020
|
|
|
|
|
With
changes in other comprehensive
income
|
|
|
|
|
|
|
|
|
|
Amortized
cost
|
|
|
Recyclabe
to
profit ans loss
|
|
|
Non-recyclable
to
profit and loss
|
|
|
With
changes in
profit or loss
|
|
|
Total
securities and other
financial assets, net
|
|
Due within 1 year
|
|
|
28,101
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
28,101
|
|
After 1 year but within 5 years
|
|
|
46,099
|
|
|
|
5,065
|
|
|
|
-
|
|
|
|
-
|
|
|
|
51,164
|
|
After 5 years but within 10 years
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non maturity
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
6,492
|
|
Balance - principal
|
|
|
74,200
|
|
|
|
5,065
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
85,757
|
|
|
|
|
|
|
At
fair value
|
|
|
|
|
At December 31, 2019
|
|
|
|
|
With
changes in other comprehensive
income
|
|
|
|
|
|
|
|
|
|
Amortized
cost
|
|
|
Recyclabe
to
profit ans loss
|
|
|
Non-recyclable
to
profit and loss
|
|
|
With
changes in
profit or loss
|
|
|
Total
securities and other
financial assets, net
|
|
Due within 1 year
|
|
|
28,295
|
|
|
|
-
|
|
|
|
1,889
|
|
|
|
-
|
|
|
|
30,184
|
|
After 1 year but within 5 years
|
|
|
46,252
|
|
|
|
5,094
|
|
|
|
-
|
|
|
|
-
|
|
|
|
51,346
|
|
After 5 years but within 10 years
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non maturity
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,492
|
|
|
|
6,492
|
|
Balance - principal
|
|
|
74,547
|
|
|
|
5,094
|
|
|
|
1,889
|
|
|
|
6,492
|
|
|
|
88,022
|
|
The following table includes
the securities pledge to secure repurchase transactions accounted for as secured pledged:
|
|
March
31, 2020
|
|
|
December
31, 2019
|
|
|
|
Amortized
cost
|
|
|
Fair
value
|
|
|
Total
|
|
|
Amortized
cost
|
|
|
Fair
value
|
|
|
Total
|
|
Securities pledged to secure repurchase transactions
|
|
|
51,200
|
|
|
|
5,065
|
|
|
|
56,265
|
|
|
|
36,843
|
|
|
|
5,094
|
|
|
|
41,937
|
|
Securities sold under repurchase agreements
|
|
|
(49,013
|
)
|
|
|
(4,875
|
)
|
|
|
(53,888
|
)
|
|
|
(35,647
|
)
|
|
|
(4,883
|
)
|
|
|
(40,530
|
)
|
The following table presents
the realized gains or losses on sale of securities at fair value through other comprehensive income :
|
|
Three
months ended March 31th
|
|
|
|
2020
|
|
|
2019
|
|
Realized gain on sale of securities
|
|
|
-
|
|
|
|
109
|
|
Realized loss on sale of securities
|
|
|
-
|
|
|
|
-
|
|
Net gain on sale of securities at FVOCI
|
|
|
-
|
|
|
|
109
|
|
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)
The fixed and floating interest rate distribution
of the loan portfolio is as follows:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Fixed interest rates
|
|
|
2,566,052
|
|
|
|
2,757,333
|
|
Floating interest rates
|
|
|
2,771,435
|
|
|
|
3,135,664
|
|
Total
|
|
|
5,337,487
|
|
|
|
5,892,997
|
|
As of March 31, 2020, and December
31, 2019, 63% and 74% of the loan portfolio at fixed interest rates has remaining maturities of less than 180 days.
As of March 31, 2020, the range
of interest rates on loans fluctuates from 1.20% to 13.93% (December 31, 2019 1.20% to 13.93%).
As
of March 31, 2020, and December 31, 2019, the Bank had credit transactions in the normal course of business with 12% and 11%, respectively,
of its Class “A” and “B” stockholders. All transactions were made based on arm’s-length terms and
subject to prevailing commercial criteria and market rates and were subject to all of the Bank’s Corporate Governance and
control procedures. As of March 31, 2020, and December 31, 2019, approximately 13% and 11%,
respectively, of the outstanding loan portfolio was placed with the Bank’s Class “A” and “B” stockholders
and their related parties. As of March 31, 2020, the Bank was not directly or indirectly owned or controlled by another corporation
or any foreign government, and no Class “A” or “B” shareholder was the owner of record of more than 3.5 %
of the total outstanding shares of the voting capital stock of the Bank.
Recognition and derecognition
of financial assets
During the periods ended March
31, 2020 and December 31, 2019, the Bank sold loans measured at amortized cost. These sales were made based on compliance
with the Bank's strategy to optimize credit risk of its loan portfolio.
The carrying amounts and gains
arising from the derecognition of these financial instruments are presented in the following table. These gains are presented within
the line “Gain (loss) on financial instruments, net” in the consolidated statement of profit or loss.
|
|
Assignments
and
participations
|
|
|
Gains
(losses)
|
|
Carrying amount as of March 31, 2020
|
|
|
5,000
|
|
|
|
-
|
|
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.
|
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 consolidated 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:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Documentary letters of credit
|
|
|
137,479
|
|
|
|
169,320
|
|
Stand-by letters of credit and guarantees - commercial risk
|
|
|
260,121
|
|
|
|
255,481
|
|
Credit commitments
|
|
|
30,000
|
|
|
|
68,571
|
|
Total loans commitments and financial guarantee contracts
|
|
|
427,600
|
|
|
|
493,372
|
|
The remaining maturity profile
of the Bank’s outstanding loan commitments and financial guarantee contracts is as follows:
|
|
March 31,
|
|
|
December 31,
|
|
Maturities
|
|
2020
|
|
|
2019
|
|
Up to 1 year
|
|
|
387,468
|
|
|
|
424,744
|
|
From 1 to 2 years
|
|
|
30,132
|
|
|
|
8,628
|
|
From 2 to 5 years
|
|
|
10,000
|
|
|
|
60,000
|
|
Total
|
|
|
427,600
|
|
|
|
493,372
|
|
|
11.
|
Gain (loss) on financial instruments, net
|
The following table sets forth
the details for the gain or loss on financial instrument recognized in the consolidated statements of profit or loss:
|
|
For the three months ended
|
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
(Loss) gain on derivative financial instruments and changes in foreign currency, net
|
|
|
(1,191
|
)
|
|
|
270
|
|
Gain on financial instruments at fair value through profit or loss
|
|
|
833
|
|
|
|
377
|
|
Realized gain on sale of a financial instruments at FVOCI
|
|
|
-
|
|
|
|
109
|
|
|
|
|
(358
|
)
|
|
|
756
|
|
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)
|
12.
|
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 :
|
|
March 31, 2020
|
|
|
|
|
|
|
Carrying amount of hedging instruments
|
|
|
|
Nominal amount
|
|
|
Asset (1)
|
|
|
Liability (2)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
397,667
|
|
|
|
3,675
|
|
|
|
(401
|
)
|
Cash flow hedges
|
|
|
73,000
|
|
|
|
-
|
|
|
|
(2,295
|
)
|
Interest rate and foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
346,506
|
|
|
|
1,511
|
|
|
|
(41,824
|
)
|
Cash flow hedges
|
|
|
55,215
|
|
|
|
835
|
|
|
|
(4,575
|
)
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
|
57,194
|
|
|
|
11,023
|
|
|
|
-
|
|
Net investment hedges
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
929,582
|
|
|
|
17,044
|
|
|
|
(49,095
|
)
|
|
|
December 31, 2019
|
|
|
|
|
|
|
Carrying amount of hedging instruments
|
|
|
|
Nominal amount
|
|
|
Asset (1)
|
|
|
Liability (2)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
398,333
|
|
|
|
407
|
|
|
|
(805
|
)
|
Cash flow hedges
|
|
|
123,000
|
|
|
|
-
|
|
|
|
(1,098
|
)
|
Interest rate and foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges
|
|
|
346,844
|
|
|
|
10,125
|
|
|
|
(8,527
|
)
|
Cash flow hedges
|
|
|
23,025
|
|
|
|
-
|
|
|
|
(1,670
|
)
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
|
72,391
|
|
|
|
625
|
|
|
|
(2,552
|
)
|
Net investment hedges
|
|
|
2,080
|
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
|
965,673
|
|
|
|
11,157
|
|
|
|
(14,675
|
)
|
(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)
|
12.
|
Derivative financial instruments (continued)
|
The hedging instruments detailed
in the tables above are presented in the consolidated statement of financial position as derivative financial instruments - assets
or derivative financial instruments - liabilities.
As part of the financial risk
management, the Bank uses the following hedging relationships:
For control purposes, derivative
instruments are recorded at their nominal amount in memoranda accounts. Interest rate swaps are made either in a single currency
or cross currency for a prescribed period to exchange a series of interest rate flows, which involve fixed for floating interest
payments, and vice versa. The Bank also engages in certain foreign exchange forward contracts to serve customers’ transaction
needs and to manage foreign currency risk. All such positions are hedged with an offsetting contract for the same currency.
The Bank manages and controls
the risks on these foreign exchange trades by establishing counterparty credit limits by customer and by adopting policies that
do not allow for open positions in the loan and investment portfolio. The Bank also uses foreign exchange forward contracts to
hedge the foreign exchange risk associated with the Bank’s equity investment in a non-U.S. dollar functional currency foreign
entity. Derivative and foreign exchange forward instruments negotiated by the Bank are executed mainly over-the-counter (OTC).
These contracts are executed between two counterparties that negotiate specific agreement terms, including notional amount, exercise
price and maturity.
This type of hedge is used to
mitigate the risk of changes in foreign exchange currency rates, as well as changes in interest rate risk. Within the derivative
financial instruments used by the Bank for fair value hedging are interest rate swap contracts whereby a series of interest rate
flows in a single currency are exchanged over a prescribed period and cross currency swaps contracts that generally involve the
exchange of both interest and principal amounts in two different currencies.
The Bank’s exposure to
interest rate risk is disclosed in Note 5(C)(i). Interest rate risk to which the Bank applies hedge accounting arises from fixed-rate
euro medium term notes and other long-term notes issuances (“Certificados Bursatiles”), fixed-rate loans and advances,
whose fair value fluctuates when benchmark interest rates change. The Bank hedges interest rate risk only to the extent of benchmark
interest rates because the changes in fair value of a fixed-rate note or loan are significantly influenced by changes in the benchmark
interest rate. Hedge accounting is applied where economic hedging relationships meet the hedge accounting criteria.
Before fair value hedge accounting
is applied by the Bank, the Bank determines whether an economic relationship between the hedged item and the hedging instrument
exists based on an assessment of the qualitative characteristics of these items and the hedged risk that is supported by quantitative
analysis. The Bank considers whether the critical terms of the hedged item and hedging instrument closely align when assessing
the presence of an economic relationship. The Bank assesses whether the fair value of the hedged item and the hedging instrument
respond similarly to similar risks. The Bank further supports this qualitative assessment by using regression analysis to assess
whether the hedging instrument is expected to be and has been highly effective in offsetting changes in the fair value of the
hedged item. The sources of ineffectiveness mainly come from forward rates, discount rates and cross currency basis (cost of the
operation).
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)
|
12.
|
Derivative financial instruments (continued)
|
|
A.
|
Fair value hedge (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 period used to determine and recognize the ineffectiveness of the hedge:
|
|
March 31, 2020
|
|
|
|
Nominal
|
|
|
Carrying amount of
hedging instruments
|
|
|
Changes
in fair
value used to
calculate hedge
ineffectiveness (3)
|
|
|
Ineffectiveness
recognized in
profit or loss (3)
|
|
|
|
amount
|
|
|
Asset
(1)
|
|
|
Liability
(2)
|
|
|
|
|
|
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
12,667
|
|
|
|
-
|
|
|
|
(269
|
)
|
|
|
(97
|
)
|
|
|
(3
|
)
|
Securities at FVOCI
|
|
|
5,000
|
|
|
|
-
|
|
|
|
(132
|
)
|
|
|
(87
|
)
|
|
|
(17
|
)
|
Borrowings and debt
|
|
|
380,000
|
|
|
|
3,675
|
|
|
|
-
|
|
|
|
750
|
|
|
|
(171
|
)
|
Interest rate and foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
6,092
|
|
|
|
1,511
|
|
|
|
-
|
|
|
|
1,227
|
|
|
|
268
|
|
Borrowings and debt
|
|
|
340,414
|
|
|
|
-
|
|
|
|
(41,824
|
)
|
|
|
(42,532
|
)
|
|
|
(112
|
)
|
Total
|
|
|
744,173
|
|
|
|
5,186
|
|
|
|
(42,225
|
)
|
|
|
(40,739
|
)
|
|
|
(35
|
)
|
|
|
December 31, 2019
|
|
|
|
Nominal
|
|
|
Carrying amount of hedging instruments
|
|
|
Changes
in fair
value used to
calculate hedge
ineffectiveness (3)
|
|
|
Ineffectiveness
recognized in
profit or loss (3)
|
|
|
|
amount
|
|
|
Asset (1)
|
|
|
Liability (2)
|
|
|
|
|
|
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
13,333
|
|
|
|
-
|
|
|
|
(166
|
)
|
|
|
(127
|
)
|
|
|
(9
|
)
|
Securities at FVOCI
|
|
|
5,000
|
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
(97
|
)
|
|
|
(17
|
)
|
Borrowings and debt
|
|
|
380,000
|
|
|
|
407
|
|
|
|
(594
|
)
|
|
|
5,203
|
|
|
|
(65
|
)
|
Interest rate and foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
6,430
|
|
|
|
276
|
|
|
|
-
|
|
|
|
(482
|
)
|
|
|
(214
|
)
|
Borrowings and debt
|
|
|
340,414
|
|
|
|
9,849
|
|
|
|
(8,527
|
)
|
|
|
7,234
|
|
|
|
55
|
|
Total
|
|
|
745,177
|
|
|
|
10,532
|
|
|
|
(9,332
|
)
|
|
|
11,731
|
|
|
|
(250
|
)
|
(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)
12.
|
Derivative financial instruments (continued)
|
|
A.
|
Fair value hedge (continued)
|
The following table details the notional amounts
and carrying amounts of the hedged items at fair value by type of risk and hedged item, along with the changes during the period
used to determine and recognize the ineffectiveness of the hedge:
|
|
March
31, 2020
|
|
|
|
Carrying
amount of
hedged items
|
|
|
Line
in the
consolidated
statement of
financial
position that
includes the
carrying
amount of
the hedged
|
|
Accumulated
amount of
fair value
hedge
adjustments
included in
the carrying
amount of
the hedged
|
|
|
Change
in fair
value of the
hedged items
used to
calculate hedge
|
|
|
|
Asset
|
|
|
Liability
|
|
|
items
|
|
items
|
|
|
ineffectiveness(1)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
13,011
|
|
|
|
-
|
|
|
Loans, net
|
|
|
252
|
|
|
|
94
|
|
Securities at FVOCI
|
|
|
5,065
|
|
|
|
-
|
|
|
Securities and other financial assets,
net
|
|
|
24
|
|
|
|
70
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
(385,712
|
)
|
|
Borrowings and debt, net
|
|
|
(903
|
)
|
|
|
(921
|
)
|
Interest rate and foreign exchange
risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
4,750
|
|
|
|
-
|
|
|
Loans, net
|
|
|
(1,287
|
)
|
|
|
(959
|
)
|
Borrowings
and debt
|
|
|
-
|
|
|
|
(297,707
|
)
|
|
Borrowings and debt,
net
|
|
|
41,280
|
|
|
|
42,420
|
|
Total
|
|
|
22,826
|
|
|
|
(683,419
|
)
|
|
|
|
|
39,366
|
|
|
|
40,704
|
|
|
|
December
31, 2019
|
|
|
|
Carrying
amount of
hedged items
|
|
|
Line
in the
consolidated
statement of
financial
position that
includes the
carrying
amount of
the hedged
|
|
Accumulated
amount of
fair value
hedge
adjustments
included in
the carrying
amount of
the hedged
|
|
|
Change
in fair
value of the
hedged items
used to
calculate hedge
|
|
|
|
Asset
|
|
|
Liability
|
|
|
items
|
|
items
|
|
|
|
ineffectiveness(1)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
-
|
|
|
|
(385,712
|
)
|
|
Loans, net
|
|
|
(903
|
)
|
|
|
(921
|
)
|
Securities at FVOCI
|
|
|
-
|
|
|
|
-
|
|
|
Securities and other financial assets,
net
|
|
|
-
|
|
|
|
-
|
|
Borrowings and debt
|
|
|
4,750
|
|
|
|
-
|
|
|
Borrowings and debt, net
|
|
|
(1,287
|
)
|
|
|
(959
|
)
|
Interest rate and foreign exchange
risk
|
|
|
-
|
|
|
|
(297,707
|
)
|
|
|
|
|
|
|
|
|
42,420
|
|
Loans
|
|
|
22,826
|
|
|
|
(683,419
|
)
|
|
Loans, net
|
|
|
39,366
|
|
|
|
40,704
|
|
Borrowings
and debt
|
|
|
-
|
|
|
|
-
|
|
|
Borrowings and debt,
net
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
27,576
|
|
|
|
(1,366,838
|
)
|
|
|
|
|
37,176
|
|
|
|
81,244
|
|
(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)
12.
|
Derivative financial instruments (continued)
|
|
A.
|
Fair value hedge (continued)
|
The following table details
the maturity of the notional amount for the derivative instruments used in fair value hedges:
|
|
March 31, 2020
|
|
Maturity
|
|
Interest rate
swaps
|
|
|
Foreign
exchange
and interest
rate risks
|
|
|
Total
|
|
Fair value hedge
|
|
|
|
|
|
|
|
|
|
Less to 1 year
|
|
|
352,667
|
|
|
|
-
|
|
|
|
352,667
|
|
1 to 2 years
|
|
|
45,000
|
|
|
|
-
|
|
|
|
45,000
|
|
2 to 5 years
|
|
|
-
|
|
|
|
346,506
|
|
|
|
346,506
|
|
Total
|
|
|
397,667
|
|
|
|
346,506
|
|
|
|
744,173
|
|
|
|
December 31, 2019
|
|
Maturity
|
|
Interest rate
swaps
|
|
|
Foreign
exchange
and interest
rate risks
|
|
|
Total
|
|
Fair value hedge
|
|
|
|
|
|
|
|
|
|
Less than 1 year
|
|
|
350,000
|
|
|
|
-
|
|
|
|
350,000
|
|
1 to 2 years
|
|
|
48,333
|
|
|
|
-
|
|
|
|
48,333
|
|
2 to 5 years
|
|
|
-
|
|
|
|
346,844
|
|
|
|
346,844
|
|
Total
|
|
|
398,333
|
|
|
|
346,844
|
|
|
|
745,177
|
|
This type of hedge is used to
mitigate the risk of changes in foreign exchange currency rates, as well as changes in interest rate risk, that could include variability
in the future cash flows. Within the derivative financial instruments used by the Bank for a cash flow hedging are interest rate
swaps contracts whereby a series of interest rate flows in a single currency are exchanged over a prescribed period, cross currency
swaps contracts that generally involve the exchange of both interest and principal amounts in two different currencies, and foreign
exchange forward contracts, an agreement to purchase or sell foreign currency at a future date at agreed-upon terms.
The Bank’s exposure to
market risk is disclosed in Note 5 (C) (ii). The Bank determines the amount of the exposure to which it applies hedge accounting
by assessing the potential impact of changes in interest rates and foreign currency exchange rates on the future cash flows. This
assessment is performed using analytical techniques, such as cash flow sensitivity analysis. As noted above for fair value hedges,
by using derivative financial instruments to hedge exposures to changes in interest rates and foreign currency exchange rates,
the Bank exposes itself to credit risk of the counterparties to the derivatives, which is not offset by the hedged items. This
exposure is managed similarly to that off fair value hedges.
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)
12.
|
Derivative financial instruments (continued)
|
|
B.
|
Cash flow hedge (continued)
|
The Bank determines whether
an economic relationship exists between the cash flows of the hedged item and hedging instrument based on an assessment of the
qualitative characteristics of these items and the hedged risk that is supported by quantitative analysis. The Bank considers whether
the critical terms of the hedged item and hedging instrument closely align when assessing the presence of an economic relationship.
The Bank assesses whether the cash flows of the hedged item and the hedging instrument respond similarly to the hedged risk, such
as the benchmark interest rate or foreign currency. The Bank further supports this qualitative assessment by using sensitivity
analysis to assess whether the hedging instrument is expected to be and has been highly effective in offsetting changes in the
present value of the hedged item. The Bank assesses hedge effectiveness using the hypothetical derivative method, which creates
a derivative instrument to serve as a proxy for the hedged transaction. The terms of the hypothetical derivative match the critical
terms of the hedged item and it has a fair value of zero at inception. The sources of ineffectiveness arise mainly because of the
differences in discount rates (OIS - Overnight Index Swap).
The maximum length of time over
which the Bank has hedged its exposure to the variability in future cash flows on forecasted transactions is 3 years .
The Bank recognized the lifetime
associated cost of the foreign exchange forward contracts into interest income, in profit or loss, as an adjustment to the yield
on hedged items creating an accumulated reserve in OCI, reclassified to profit or loss at their maturity. The Bank estimates that
approximately $187 thousand are expected to be reclassified into profit or loss during the year ending March
31, 2021.
The Bank recognized the lifetime
associated cost of the foreign exchange forward contracts into interest expense, in profit or loss, as an adjustment to the yield
on hedge items creating an accumulated reserve in OCI, reclassified to profit or loss at their maturity. The Bank estimates that
approximately $6 thousand are expected to be reclassified into profit or loss during the year ending March
31, 2021.
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:
|
|
March
31, 2020
|
|
|
|
Nominal
amount
|
|
|
Carrying
amount of
hedging instruments
|
|
|
Change
in fair
value used for
calculating
|
|
|
Changes
in
the fair
value of the
hedging
instruments
|
|
|
Ineffectiveness
|
|
|
Amount
reclassified
from the
hedge
reserve to
|
|
|
|
|
|
|
Asset
(1)
|
|
|
Liability
(2)
|
|
|
hedge
ineffectiveness
|
|
|
recognized
in OCI (3)
|
|
|
recognized in
profit
or loss (4)
|
|
|
profit
or
loss (4)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
and debt
|
|
|
73,000
|
|
|
|
-
|
|
|
|
(2,295
|
)
|
|
|
(1,228
|
)
|
|
|
(1,227
|
)
|
|
|
1
|
|
|
|
(46
|
)
|
Interest rate and
foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
and debt
|
|
|
55,215
|
|
|
|
835
|
|
|
|
(4,575
|
)
|
|
|
(2,040
|
)
|
|
|
(2,042
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
57,194
|
|
|
|
11,023
|
|
|
|
-
|
|
|
|
10,593
|
|
|
|
10,594
|
|
|
|
1
|
|
|
|
(2,414
|
)
|
Borrowings
and debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
185,409
|
|
|
|
11,858
|
|
|
|
(6,870
|
)
|
|
|
7,325
|
|
|
|
7,325
|
|
|
|
-
|
|
|
|
(2,460
|
)
|
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)
|
12.
|
Derivative financial instruments (continued)
|
|
B.
|
Cash flow hedge (continued)
|
|
|
December
31, 2019
|
|
|
|
Nominal
amount
|
|
|
Carrying
amount of
hedging instruments
|
|
|
Change
in fair
value used for
calculating
|
|
|
Changes
in
the fair
value of the
hedging
instruments
|
|
|
Ineffectiveness
|
|
|
Amount
reclassified
from the
hedge
reserve to
|
|
|
|
|
|
|
Asset
(1)
|
|
|
Liability
(2)
|
|
|
hedge
ineffectiveness
|
|
|
recognized
in OCI (3)
|
|
|
recognized in
profit
or loss (4)
|
|
|
profit
or
loss (4)
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
and debt
|
|
|
123,000
|
|
|
|
-
|
|
|
|
(1,098
|
)
|
|
|
(1,459
|
)
|
|
|
(1,458
|
)
|
|
|
1
|
|
|
|
39
|
|
Interest rate and
foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
and debt
|
|
|
23,025
|
|
|
|
-
|
|
|
|
(1,670
|
)
|
|
|
(284
|
)
|
|
|
(283
|
)
|
|
|
1
|
|
|
|
-
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
72,391
|
|
|
|
625
|
|
|
|
(2,552
|
)
|
|
|
(2,346
|
)
|
|
|
(2,344
|
)
|
|
|
2
|
|
|
|
(1,070
|
)
|
Borrowings
and debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,545
|
)
|
Total
|
|
|
218,416
|
|
|
|
625
|
|
|
|
(5,320
|
)
|
|
|
(4,089
|
)
|
|
|
(4,085
|
)
|
|
|
4
|
|
|
|
(6,576
|
)
|
(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.
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:
|
|
March
31, 2020
|
|
|
|
Carrying
amount of
hedged items
|
|
|
Line
in the
consolidated
statement of
financial position
that includes the
carrying amount
|
|
Change
in the
fair value of
the hedged
items used to
calculate
|
|
|
|
|
|
|
Asset
|
|
|
Liability
|
|
|
of
the hedged
items
|
|
the hedge
ineffectiveness
(4)
|
|
|
Cash
flow
hedge reserve
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
and debt
|
|
|
-
|
|
|
|
(20,099
|
)
|
|
Borrowings
and debt, net
|
|
|
1,227
|
|
|
|
2,255
|
|
Interest rate and foreign
exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
(51,771
|
)
|
|
Borrowings and debt, net
|
|
|
2,042
|
|
|
|
204
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
45,899
|
|
|
|
-
|
|
|
Loans, net
|
|
|
(10,594
|
)
|
|
|
24
|
|
Deposits
|
|
|
-
|
|
|
|
-
|
|
|
Deposit
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
45,899
|
|
|
|
(71,870
|
)
|
|
|
|
|
(7,325
|
)
|
|
|
2,483
|
|
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)
|
12.
|
Derivative financial instruments (continued)
|
|
B.
|
Cash flow hedge (continued)
|
|
|
December
31, 2019
|
|
|
|
Carrying amount of
hedged items
|
|
|
Line in the consolidated
|
|
Change in the fair
value
|
|
|
|
|
|
|
Asset
|
|
|
Liability
|
|
|
statement
of financial
position that includes
the carrying amount of
the hedged items
|
|
of
the hedged
items used
to calculate the hedge
ineffectiveness (4)
|
|
|
Cash
flow
hedge reserve
|
|
Interest rate risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
(70,110
|
)
|
|
Borrowings and debt, net
|
|
|
1,458
|
|
|
|
1,072
|
|
Interest rate and foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and debt
|
|
|
-
|
|
|
|
(21,234
|
)
|
|
Borrowings and debt, net
|
|
|
283
|
|
|
|
(5
|
)
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
73,861
|
|
|
|
-
|
|
|
Loans, net
|
|
|
2,344
|
|
|
|
263
|
|
Deposit
|
|
|
-
|
|
|
|
-
|
|
|
Deposit
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
73,861
|
|
|
|
(91,344
|
)
|
|
|
|
|
4,085
|
|
|
|
1,330
|
|
(1) Included in the condensed consolidated
interim statement of profit and loss or the line Loss on financial instruments, net.
The following table details
the maturity of the derivative instruments used in cash flow hedges:
|
|
March 31, 2020
|
|
Maturity
|
|
Foreign
exchange risk
|
|
|
Interest rate
swaps
|
|
|
Foreign
exchange and
interest rate
risks
|
|
|
Total
|
|
Cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less to 1 year
|
|
|
57,194
|
|
|
|
13,000
|
|
|
|
55,215
|
|
|
|
125,409
|
|
1 to 2 years
|
|
|
-
|
|
|
|
40,000
|
|
|
|
-
|
|
|
|
40,000
|
|
2 to 5 years
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
20,000
|
|
Total
|
|
|
57,194
|
|
|
|
73,000
|
|
|
|
55,215
|
|
|
|
185,409
|
|
|
|
December 31, 2019
|
Maturity
|
|
Foreign
exchange risk
|
|
|
Interest rate
swaps
|
|
|
Foreign
exchange and
interest rate
risks
|
|
|
Total
|
|
Cash flow hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 1 year
|
|
|
74,471
|
|
|
|
63,000
|
|
|
|
23,025
|
|
|
|
160,496
|
|
1 to 2 years
|
|
|
-
|
|
|
|
40,000
|
|
|
|
-
|
|
|
|
40,000
|
|
2 to 5 years
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
20,000
|
|
Total
|
|
|
74,471
|
|
|
|
123,000
|
|
|
|
23,025
|
|
|
|
220,496
|
|
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)
|
12.
|
Derivative financial instruments (continued)
|
A foreign currency exposure
arises from a net investment either in a subsidiary that has a different functional currency from that of the Bank or in a financial
instrument in a foreign currency designated at FVOCI. The hedge risk in the net investment hedge is the variability in the US dollar
against any other foreign currency that will result in a reduction in the carrying amount.
The Bank’s policy is to
hedge the net investment only to the extent of the debt principal; therefore, the hedge ratio is established by aligning the principal
amount in foreign currency of the debt with the carrying amount of the net investment that is designated.
When the hedging instrument
is a forward foreign exchange contract, the Bank establishes a hedge relationship where the notional of the forward foreign exchange
contract matches the carrying amount of the designated net investment. The Bank ensures that the foreign currency in which the
hedging instrument is denominated is the same as the functional currency of the net investment. The only source of ineffectiveness
that is expected to arise from these hedging relationships is due to the effect of the counterparty and the Bank’s own credit
risk on the fair value of the derivative.
The following table details
the notional amount and carrying amount of the derivative instruments used as net investment hedge by type of risk and hedged item,
along with changes during the period used to determine and recognize the ineffectiveness of the hedge:
|
|
|
March
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
|
|
|
|
|
amount
|
|
|
|
Asset
(1)
|
|
|
|
Liability
(2)
|
|
|
|
ineffectiveness
|
|
|
OCI (3)
|
|
|
|
profit
or loss (4)
|
|
|
|
profit
or loss (4)
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
December 31, 2019
|
|
|
|
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
|
|
|
|
amount
|
|
|
Asset
(1)
|
|
|
Liability
(2)
|
|
|
ineffectiveness
|
|
|
OCI
(3)
|
|
|
profit or loss
(4)
|
|
|
profit
or loss (4)
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
|
|
|
2,080
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
-
|
|
|
|
(78
|
)
|
Total
|
|
|
2,080
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
-
|
|
|
|
(78
|
)
|
Derivative instruments used
in net investment hedges at December 31, 2019 have a maturity of less than 30 days.
(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 of 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)
|
12.
|
Derivative financial instruments (continued)
|
|
C.
|
Net investment hedge (continued)
|
The following table details
the nominal value and carrying amount of the net investment hedged items by type of risk and hedged item, along with changes during
the period used to determine and recognize the ineffectiveness of the hedge:
|
|
|
March 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
(1)
|
|
|
|
reserve
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
|
|
|
-
|
|
|
|
-
|
|
|
|
Securities and other financial assets, net
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
December 31, 2019
|
|
|
|
|
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 (1)
|
|
|
|
reserve
|
|
Foreign exchange risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
|
|
|
1,889
|
|
|
|
-
|
|
|
|
Securities and other financial assets, net
|
|
|
|
23
|
|
|
|
23
|
|
Total
|
|
|
1,889
|
|
|
|
-
|
|
|
|
|
|
|
|
23
|
|
|
|
23
|
|
(1) 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)
Following is a summary of other
assets:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Accounts receivable
|
|
|
2,791
|
|
|
|
3,549
|
|
Interest receivable - deposits
|
|
|
20
|
|
|
|
26
|
|
IT projects under development
|
|
|
1,040
|
|
|
|
521
|
|
Other
|
|
|
5,723
|
|
|
|
4,761
|
|
|
|
|
9,574
|
|
|
|
8,858
|
|
The maturity profile of the
Bank’s deposits, excluding interest payable, as follows:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Demand
|
|
|
302,442
|
|
|
|
85,786
|
|
Up to 1 month
|
|
|
780,789
|
|
|
|
1,285,949
|
|
From 1 month to 3 months
|
|
|
619,790
|
|
|
|
628,981
|
|
From 3 months to 6 months
|
|
|
496,974
|
|
|
|
593,431
|
|
From 6 months to 1 year
|
|
|
262,601
|
|
|
|
289,189
|
|
From 1 year to 2 years
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
|
2,467,596
|
|
|
|
2,888,336
|
|
The following table presents
additional information regarding the Bank’s deposits
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Aggregate amounts of $100,000 or more
|
|
|
2,467,417
|
|
|
|
2,888,043
|
|
Aggregate amounts of deposits in the New York Agency
|
|
|
343,372
|
|
|
|
240,003
|
|
|
|
March 31th
|
|
|
|
2020
|
|
|
2019
|
|
Interest expense on deposits made in the New York Agency
|
|
|
4,714
|
|
|
|
1,732
|
|
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)
|
15.
|
Securities sold under repurchase agreements
|
As of March 31, 2020, and December
31, 2019, the Bank has financing transactions under repurchase agreements for $53.9 million and $40.5 million, respectively.
During the period ended March
31, 2020 and December 31, 2019, interest expense related to financing transactions under repurchase agreements totaled $193 thousand
and $287 thousand, respectively. These expenses are included as interest expense – borrowings and debt line in the consolidated
statement of profit or loss.
Borrowings consist of bilateral
funding and syndicated loans obtained from international banks. Debt instruments consist of public and private issuances under
the Bank's Euro Medium Term Notes Program (“EMTN”) as well as public issuances in the Mexican and Japanese markets.
The Bank's funding activities
include: (i) EMTN, which may be used to issue notes for up to $2.250 million, with maturities from 7 days up to a maximum of 30
years, at fixed or floating interest rates, or at discount, and in various currencies. The notes are generally issued in bearer
or registered form through one or more authorized financial institutions; (ii) Short-and Long-Term Notes (“Certificados Bursatiles”)
Program (the “Mexican Program”) in the Mexican local market, registered with the Mexican National Registry of Securities
administered by the National Banking and Securities Commission in Mexico (“CNBV”, for its acronym in Spanish), for
an authorized aggregate principal amount of 10 billion Mexican pesos with maturities from 1 day to 30 years.
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 March 31, 2020, the Bank was in compliance with all
those covenants.
Borrowings and debt
are detailed as follows:
|
|
March 31, 2020
|
|
|
|
Short-term
|
|
|
Long-term
|
|
|
|
|
Carrying amount
|
|
Borrowings
|
|
|
Debt
|
|
|
Lease
liabilities
|
|
|
Borrowings
|
|
|
Debt
|
|
|
Lease
liabilities
|
|
|
Total
|
|
Principal
|
|
|
1,678,125
|
|
|
|
5,000
|
|
|
|
1,169
|
|
|
|
689,321
|
|
|
|
747,482
|
|
|
|
18,427
|
|
|
|
3,139,524
|
|
Prepaid commissions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,153
|
)
|
|
|
(1,353
|
)
|
|
|
-
|
|
|
|
(2,506
|
)
|
|
|
|
1,678,125
|
|
|
|
5,000
|
|
|
|
1,169
|
|
|
|
688,168
|
|
|
|
746,129
|
|
|
|
18,427
|
|
|
|
3,137,018
|
|
|
|
December 31, 2019
|
|
|
|
Short-term
|
|
|
Long-term
|
|
|
|
|
Carrying amount
|
|
Borrowings
|
|
|
Debt
|
|
|
Lease
liabilities
|
|
|
Borrowings
|
|
|
Debt
|
|
|
Lease
liabilities
|
|
|
Total
|
|
Principal
|
|
|
1,573,663
|
|
|
|
22,000
|
|
|
|
1,145
|
|
|
|
723,419
|
|
|
|
802,676
|
|
|
|
18,769
|
|
|
|
3,141,672
|
|
Prepaid commissions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,456
|
)
|
|
|
(1,906
|
)
|
|
|
-
|
|
|
|
(3,362
|
)
|
|
|
|
1,573,663
|
|
|
|
22,000
|
|
|
|
1,145
|
|
|
|
721,963
|
|
|
|
800,770
|
|
|
|
18,769
|
|
|
|
3,138,310
|
|
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.
|
Borrowings and debt (continued)
|
Short-term
borrowings and debt
The breakdown of short-term (original maturity of
less than one year) borrowings and debt, along with contractual interest rates, is as follows :
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Short-term borrowings:
|
|
|
|
|
|
|
|
|
At fixed interest rates
|
|
|
941,082
|
|
|
|
607,500
|
|
At floating interest rates
|
|
|
737,043
|
|
|
|
966,163
|
|
Total borrowings
|
|
|
1,678,125
|
|
|
|
1,573,663
|
|
Short-term debt:
|
|
|
|
|
|
|
|
|
At fixed interest rates
|
|
|
5,000
|
|
|
|
22,000
|
|
At floating interest rates
|
|
|
-
|
|
|
|
-
|
|
Total debt
|
|
|
5,000
|
|
|
|
22,000
|
|
Total short-term borrowings and debt
|
|
|
1,683,125
|
|
|
|
1,595,663
|
|
|
|
|
|
|
|
|
|
|
Maximum balance at any month-end
|
|
|
1,683,125
|
|
|
|
1,595,663
|
|
Range of fixed interest rates on borrowings and debt in U.S. dollars
|
|
|
1.05% a 3.47%
|
|
|
|
2.07% to 2.52%
|
|
Range of floating interest rates on borrowings in U.S. dollars
|
|
|
0.99% a 2.35%
|
|
|
|
2.09% to 2.35%
|
|
Range of fixed interest rates on borrowings in Mexican pesos
|
|
|
7.52%
|
|
|
|
8.08%
|
|
Range of floating interest rates on borrowings in Mexican pesos
|
|
|
7.06% a 8.55%
|
|
|
|
7.71% to 8.31%
|
|
Range of fixed interest rates on borrowings in Euros
|
|
|
1.00%
|
|
|
|
-
|
|
The outstanding balances of
short-term borrowings and debt by currency, are as follows:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Currency
|
|
|
|
|
|
|
|
|
US dollar
|
|
|
1,566,350
|
|
|
|
1,476,000
|
|
Mexican peso
|
|
|
83,725
|
|
|
|
119,663
|
|
Euro
|
|
|
33,050
|
|
|
|
-
|
|
Total
|
|
|
1,683,125
|
|
|
|
1,595,663
|
|
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.
|
Borrowings and debt (continued)
|
Long-term
borrowings and debt
The breakdown of borrowings
and long-term debt (original maturity of more than one year), along with contractual interest rates, plus prepaid commissions as
of March 31, 2020 and December 31, 2019, respectively, are as follows (excludes lease liabilities ):
|
|
March
31,
|
|
|
December
31,
|
|
Long-term
borrowings:
|
|
2020
|
|
|
2019
|
|
At fixed
interest rates with due dates from April 2020 to February 2022
|
|
|
32,417
|
|
|
|
65,435
|
|
At
floating interest rates with due dates from May 2020 to August 2023
|
|
|
656,904
|
|
|
|
657,984
|
|
Total
long-term borrowings
|
|
|
689,321
|
|
|
|
723,419
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
At fixed interest rates
with due dates from May 2020 to March 2024
|
|
|
500,505
|
|
|
|
502,880
|
|
At
floating interest rates with due dates from March 2022 to June 2023
|
|
|
246,977
|
|
|
|
299,796
|
|
Total
long-term debt
|
|
|
747,482
|
|
|
|
802,676
|
|
Total long-term borrowings
and debt
|
|
|
1,436,803
|
|
|
|
1,526,095
|
|
Less:
Prepaid commissions
|
|
|
(2,506
|
)
|
|
|
(3,362
|
)
|
Total
long-term borrowings and debt, net
|
|
|
1,434,297
|
|
|
|
1,522,733
|
|
|
|
|
|
|
|
|
|
|
Maximum
outstanding balance at any month – end
|
|
|
1,525,103
|
|
|
|
1,527,126
|
|
Range
of fixed interest rates on borrowings and debt in U.S. dollars
|
|
|
2.56%
a 3.25%
|
|
|
|
2.56%
a 3.25%
|
|
Range
of floating interest rates on borrowings and debt in U.S. dollars
|
|
|
1.1%
a 3.03%
|
|
|
|
2.46%
a 3.36%
|
|
Range
of fixed interest rates on borrowings in Mexican pesos
|
|
|
5.73%
a 9.09%
|
|
|
|
5.73%
a 9.09%
|
|
Range
of floating interest rates on borrowings and debt in Mexican pesos
|
|
|
7.64%
a 8.65%
|
|
|
|
8.14%
a 9.13%
|
|
Range
of fixed interest rates on debt in Japanese yens
|
|
|
0.52%
|
|
|
|
0.52%
|
|
Range
of fixed interest rates on debt in Euros
|
|
|
3.75%
|
|
|
|
3.75%
|
|
Range
of fixed interest rates on debt in Australian dollars
|
|
|
3.33%
|
|
|
|
3.33%
|
|
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.
|
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:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Currency
|
|
|
|
|
|
|
|
|
US dollar
|
|
|
1,068,593
|
|
|
|
1,097,611
|
|
Mexican peso
|
|
|
222,860
|
|
|
|
280,105
|
|
Japanese yen
|
|
|
68,569
|
|
|
|
67,831
|
|
Euro
|
|
|
58,365
|
|
|
|
59,465
|
|
Australian dollar
|
|
|
18,416
|
|
|
|
21,083
|
|
Total
|
|
|
1,436,803
|
|
|
|
1,526,095
|
|
Future payments of long-term
borrowings and debt outstanding as of March 31, 2020, are as follows:
Payments
|
|
Outstanding
|
|
2020
|
|
|
393,722
|
|
2021
|
|
|
529,597
|
|
2022
|
|
|
392,620
|
|
2023
|
|
|
62,500
|
|
2024
|
|
|
58,364
|
|
|
|
|
1,436,803
|
|
Reconciliation of movements
of borrowings and debt arising from financing activities, as presented in the consolidated statements of cash flows:
|
|
2020
|
|
|
2019
|
|
Balance as of January 1,
|
|
|
3,138,310
|
|
|
|
3,518,446
|
|
Net increase (decrease) in short-term borrowings and debt
|
|
|
103,460
|
|
|
|
(868,016
|
)
|
Proceeds from long-term borrowings and debt
|
|
|
50,000
|
|
|
|
470,159
|
|
Repayments of long-term borrowings and debt
|
|
|
(81,631
|
)
|
|
|
(633,752
|
)
|
Payment of lease liabilities
|
|
|
(273
|
)
|
|
|
(254
|
)
|
Recognition of lease liabilities
|
|
|
-
|
|
|
|
20,734
|
|
Change in foreign currency
|
|
|
(74,745
|
)
|
|
|
3,076
|
|
Adjustment of fair value for hedge accounting relationship
|
|
|
948
|
|
|
|
2,153
|
|
Other adjustments
|
|
|
949
|
|
|
|
662
|
|
Balance as of March 31,
|
|
|
3,137,018
|
|
|
|
2,513,208
|
|
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.
|
Borrowings and debt (continued)
|
Lease
liabilities
Maturity
analysis of contractual undiscounted cash flows of the lease liability is detailed below:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Due within 1 year
|
|
|
10,481
|
|
|
|
2,005
|
|
After 1 year but within 5 years
|
|
|
12,953
|
|
|
|
10,470
|
|
After 5 years but within 10 years
|
|
|
2,036
|
|
|
|
13,492
|
|
Total undiscounted lease liabilities
|
|
|
25,470
|
|
|
|
25,967
|
|
Short-term
|
|
|
1,169
|
|
|
|
1,145
|
|
Long-term
|
|
|
18,427
|
|
|
|
18,769
|
|
Lease liabilities included in the consolidated statement of financial position
|
|
|
19,596
|
|
|
|
19,914
|
|
Amounts recognized in the statement
of cash flows
|
|
March 31,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash outflow for leases
|
|
|
273
|
|
|
|
1,072
|
|
Amounts recognized in profit
or loss
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Interest on lease liabilities
|
|
|
220
|
|
|
|
243
|
|
Income from sub-leasing right-of-use
assets
|
|
|
94
|
|
|
|
75
|
|
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)
Following is a summary of other
liabilities:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Accruals and other accumulated expenses
|
|
|
7,297
|
|
|
|
11,901
|
|
Accounts payable
|
|
|
2,149
|
|
|
|
2,526
|
|
Others
|
|
|
2,799
|
|
|
|
2,722
|
|
|
|
|
12,245
|
|
|
|
17,149
|
|
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:
|
|
For the three months ended March 31st
|
|
|
|
2020
|
|
|
2019
|
|
(Thousands of U.S. dollars)
|
|
|
|
|
|
|
Profit for the period
|
|
|
18,302
|
|
|
|
21,245
|
|
|
|
|
|
|
|
|
|
|
(U.S. dollars)
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
0.46
|
|
|
|
0.54
|
|
Diluted earnings per share
|
|
|
0.46
|
|
|
|
0.54
|
|
|
|
|
|
|
|
|
|
|
(Thousands of shares)
|
|
|
|
|
|
|
|
|
Weighted average of common shares outstanding applicable to basic EPS
|
|
|
39,609
|
|
|
|
39,542
|
|
|
|
|
|
|
|
|
|
|
Effect of diluted securities:
|
|
|
|
|
|
|
|
|
Stock options and restricted stock units plan
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average of
common shares outstanding applicable to diluted EPS
|
|
|
39,609
|
|
|
|
39,542
|
|
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.
|
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:
|
|
March 31, 2020
|
|
|
|
Syndications
|
|
|
Documentary
and
standby letters of
credit
|
|
|
Other
Commissions,
net
|
|
|
Total
|
|
Openning and confirmation
|
|
|
-
|
|
|
|
2,146
|
|
|
|
291
|
|
|
|
2,437
|
|
Negotiation and acceptance
|
|
|
-
|
|
|
|
145
|
|
|
|
-
|
|
|
|
145
|
|
Amendment
|
|
|
-
|
|
|
|
142
|
|
|
|
-
|
|
|
|
142
|
|
Structuring
|
|
|
396
|
|
|
|
-
|
|
|
|
-
|
|
|
|
396
|
|
Other
|
|
|
-
|
|
|
|
31
|
|
|
|
(78
|
)
|
|
|
(47
|
)
|
|
|
|
396
|
|
|
|
2,464
|
|
|
|
213
|
|
|
|
3,073
|
|
|
|
March 31, 2019
|
|
|
|
Syndications
|
|
|
Documentary and
standby letters of
credit
|
|
|
Other Commissions,
net
|
|
|
Total
|
|
Openning and confirmation
|
|
|
-
|
|
|
|
1,846
|
|
|
|
209
|
|
|
|
2,055
|
|
Negotiation and acceptance
|
|
|
-
|
|
|
|
163
|
|
|
|
-
|
|
|
|
163
|
|
Amendment
|
|
|
-
|
|
|
|
93
|
|
|
|
-
|
|
|
|
93
|
|
Structuring
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
63
|
|
|
|
(24
|
)
|
|
|
39
|
|
|
|
|
-
|
|
|
|
2,165
|
|
|
|
185
|
|
|
|
2,350
|
|
The following table provides
information on the ordinary income that is expected to be recognized on the contracts in force:
|
|
Up to 1 year
|
|
|
1 to 2 years
|
|
|
More than 2
years
|
|
|
Total
|
|
Ordinary income expected to be recognized on the contracts as of March 31, 2020
|
|
|
1,640
|
|
|
|
-
|
|
|
|
1,022
|
|
|
|
2,662
|
|
|
|
Up to 1 year
|
|
|
1 to 2 years
|
|
|
More than 2
years
|
|
|
Total
|
|
Ordinary income expected to be recognized on the contracts as of December 31, 2019
|
|
|
1,462
|
|
|
|
95
|
|
|
|
1,026
|
|
|
|
2,583
|
|
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.
|
Business segment information
|
The Bank’s activities
are managed and executed in two business segments: Commercial and Treasury. Information related to each reportable segment is set
out below. Business segment results are based on the Bank’s managerial accounting process, which assigns assets, liabilities,
revenue and expense items to each business segment on a systematic basis. The maximum decision-making operating authority of the
Bank is represented by the Chief Executive Officer and the Executive Committee, who review the internal management reports for
each division at least every six months. Segment profit, as included in the internal management reports is used to measure performance
as management believes that this information is the most relevant in evaluating the results of the respective segments relative
to other entities that operate within the same industry.
The Bank’s net interest
income represents the main driver of profits; therefore, the Bank presents its interest-earning assets by business segment, to
give an indication of the size of business generating net interest income. Interest-earning assets also generate gains and losses
on sales, mainly from financial instruments at fair value through OCI and financial instruments at fair value through profit or
loss, which are included in net other income. The Bank also discloses its other assets and contingencies by business segment, to
give an indication of the size of business that generates net fees and commissions, also included in net other income.
The Commercial Business Segment
encompasses the Bank’s core business of financial intermediation and fee generating activities developed to cater to corporations,
financial institutions and investors in Latin America. These activities include the origination of bilateral short-term and
medium-term loans, structured and syndicated credits, loan commitments, and financial guarantee contracts such as issued and confirmed
letters of credit, stand-by letters of credit, guarantees covering commercial risk, and other assets consisting of customers’
liabilities under acceptances.
Profits from the Commercial
Business Segment include (i) net interest income from loans; (ii) fees and commissions from the issuance, confirmation and negotiation
of letters of credit, guarantees and loan commitments, and through loan structuring and syndication activities; (iii) gain on sale
of loans generated through loan intermediation activities, such as sales in the secondary market and distribution in the primary
market; (iv) recovery or impairment loss on financial instruments, as well as gain (loss) in other non-financial assets, net; and
(v) direct and allocated operating expenses.
The Treasury Business Segment
focuses on managing the Bank’s investment portfolio, and the overall structure of its assets and liabilities to achieve more
efficient funding and liquidity positions for the Bank, mitigating the traditional financial risks associated with the balance
sheet, such as interest rate, liquidity, price and currency risks. Interest-earning assets managed by the Treasury Business Segment
include liquidity positions in cash and cash equivalents, and financial instruments related to the investment management activities,
consisting of securities at FVOCI and securities at amortized cost. The Treasury Business Segment also manages the Bank’s
interest-bearing liabilities, which constitute its funding sources, mainly deposits, short- and long-term borrowings and debt.
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.
|
Business segment information (continued)
|
Profits from the Treasury Business
Segment include net interest income derived from the above mentioned treasury assets and liabilities, and related net other income
(net results from derivative financial instruments and foreign currency exchange, gain (loss) on financial instruments at FVTPL,
gain (loss) on sale of securities at FVOCI, and other income), recovery or impairment loss on financial instruments, and direct
and allocated operating expenses.
The following
table provides certain information regarding the Bank’s operations by segment:
|
|
March 31, 2020
|
|
|
|
Commercial
|
|
|
Treasury
|
|
|
Total
|
|
Interest income
|
|
|
55,891
|
|
|
|
3,099
|
|
|
|
58,990
|
|
Interest expense
|
|
|
(176
|
)
|
|
|
(33,013
|
)
|
|
|
(33,189
|
)
|
Inter-segment net interest income
|
|
|
(30,948
|
)
|
|
|
30,948
|
|
|
|
-
|
|
Net interest income
|
|
|
24,767
|
|
|
|
1,034
|
|
|
|
25,801
|
|
Other income (expense), net
|
|
|
3,349
|
|
|
|
(394
|
)
|
|
|
2,955
|
|
Total income
|
|
|
28,116
|
|
|
|
640
|
|
|
|
28,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on financial assets
|
|
|
89
|
|
|
|
-
|
|
|
|
89
|
|
Gain (impairment loss) on non-financial assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Operating expenses
|
|
|
(7,341
|
)
|
|
|
(3,202
|
)
|
|
|
(10,543
|
)
|
Segment profit (loss)
|
|
|
20,864
|
|
|
|
(2,562
|
)
|
|
|
18,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
5,359,398
|
|
|
|
1,453,571
|
|
|
|
6,812,969
|
|
Segment liabilities
|
|
|
84,777
|
|
|
|
5,707,013
|
|
|
|
5,791,790
|
|
|
|
March 31, 2019
|
|
|
|
Commercial
|
|
|
Treasury
|
|
|
Total
|
|
Interest income
|
|
|
67,255
|
|
|
|
6,299
|
|
|
|
73,554
|
|
Interest expense
|
|
|
(194
|
)
|
|
|
(45,340
|
)
|
|
|
(45,534
|
)
|
Inter-segment net interest income
|
|
|
(39,274
|
)
|
|
|
39,274
|
|
|
|
-
|
|
Net interest income
|
|
|
27,787
|
|
|
|
233
|
|
|
|
28,020
|
|
Other income (expense), net
|
|
|
2,598
|
|
|
|
1,453
|
|
|
|
4,051
|
|
Total income
|
|
|
30,385
|
|
|
|
1,686
|
|
|
|
32,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment (loss) profit on financial assets
|
|
|
(968
|
)
|
|
|
26
|
|
|
|
(942
|
)
|
Operating expenses
|
|
|
(7,310
|
)
|
|
|
(2,574
|
)
|
|
|
(9,884
|
)
|
Segment profit (loss)
|
|
|
22,107
|
|
|
|
(862
|
)
|
|
|
21,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
|
|
5,542,644
|
|
|
|
901,751
|
|
|
|
6,444,395
|
|
Segment liabilities
|
|
|
116,892
|
|
|
|
5,324,586
|
|
|
|
5,441,478
|
|
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.
|
Business segment information (continued)
|
Reconciliation on information on reportable
segments
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Profit for the period
|
|
|
18,302
|
|
|
|
21,245
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Assets from reportable segments
|
|
|
6,812,969
|
|
|
|
6,444,395
|
|
Other assets - unallocated
|
|
|
9,554
|
|
|
|
5,947
|
|
Total assets
|
|
|
6,822,523
|
|
|
|
6,450,342
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Liabilities from reportable segments
|
|
|
5,791,790
|
|
|
|
5,441,478
|
|
Other liabilities - unallocated
|
|
|
12,245
|
|
|
|
11,930
|
|
Total liabilities
|
|
|
5,804,035
|
|
|
|
5,453,408
|
|
The Bank applied IFRS 16, as
of January 1, 2019, using the modified retrospective approach to recognize right-of-use assets for $17.4 million presented within
equipment and leasehold improvements and lease liabilities for $20.9 million. As of March 31, 2020, assets and liabilities were
allocated between Commercial and Treasury segments .
As a result of the adoption
of the new standard, certain amounts related to equipment and leasehold improvements and intangibles were reclassified for presentation
purposes in the consolidated financial statement.
|
21.
|
Related party transactions
|
The detail of the assets and
liabilities with related private corporations and financial institutions is as follows:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
1,868
|
|
|
|
3,812
|
|
Loans, net
|
|
|
66,714
|
|
|
|
49,101
|
|
Total asset
|
|
|
68,582
|
|
|
|
52,913
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Time deposits
|
|
|
80,000
|
|
|
|
120,000
|
|
Total liabilities
|
|
|
80,000
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
Contingencies
|
|
|
|
|
|
|
|
|
Stand-by letters of credit
|
|
|
20,000
|
|
|
|
20,000
|
|
Loss allowance
|
|
|
(49
|
)
|
|
|
(49
|
)
|
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.
|
Related party transactions (continued)
|
The detail of income and expenses with related parties
is as follows:
|
|
March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Interest income
|
|
|
|
|
|
|
Loans
|
|
540
|
|
|
750
|
|
Interest expense
|
|
|
|
|
|
|
Deposits
|
|
(467
|
)
|
|
(292
|
)
|
Borrowing
and debt (1)
|
|
-
|
|
|
(226
|
)
|
Total interest expense
|
|
(467
|
)
|
|
(518
|
)
|
|
|
|
|
|
|
|
Net interest income (expenses)
|
|
73
|
|
|
232
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
Fees and commissions, net
|
|
88
|
|
|
-
|
|
Gain on financial instruments, net
|
|
-
|
|
|
32
|
|
Total other income, net
|
|
88
|
|
|
32
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
Depreciation of equipment and leasehold improvements
|
|
-
|
|
|
(293
|
)
|
Other expenses
|
|
-
|
|
|
(91
|
)
|
Total operating expenses
|
|
-
|
|
|
(384
|
)
|
Net income from related parties
|
|
162
|
|
|
(120
|
)
|
|
(1)
|
This caption includes the financial cost relating to leases and depreciation expense for the right-of-use assets that rises
from the lease contract with related parties where the Bank acts as a lessee through March 31, 2019.
|
The total compensation paid
to directors and the executives as representatives of the Bank amounted to:
|
|
March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Expenses:
|
|
|
|
|
|
|
Compensation costs to directors
|
|
348
|
|
|
409
|
|
Compensation costs to executives
|
|
3,274
|
|
|
1,828
|
|
Compensation costs to directors
and executives, include annual cash retainers and the cost of granted restricted stock and restricted stock units.
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.
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)
|
23.
|
Applicable laws and regulations
|
Liquidity index
Rule No. 2-2018 issued by the
Superintendence of Banks of Panama (SBP) establishes that every general license or international license bank must guarantee, with
a higher level of confidence, that it is in the position to face its intraday liquidity obligations in a period when liquidity
pressure may affect the lending market. For that purpose, the Superintendence of Banks of Panama has established a short-term liquidity
coverage ratio known as “Liquidity Coverage Ratio or LCR”. This ratio is measured through the quotient of two amounts,
the first one corresponds to the high-quality liquid assets and the second one corresponds to the net cash outflows in 30 days.
As of March 31, 2020 and December
31, 2019, the minimum LCR to be reported to the SBP was 25% for both periods. The Bank´s LCR as of March 31, 2020 and December
31, 2019 was 121% and 131%, respectively.
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 formula is based on the following parameters:
|
Liquid assets
|
x 100 = X% (Liquidity ratio)
|
|
|
Liabilities (Deposits Received)
|
As of March 31, 2020, and December
31, 2019, the percentage of the liquidity index reported by the Bank to the regulator was 109.85% and 100.36%, respectively.
Capital adequacy
The Banking Law in the Republic
of Panama and the Rules No. 01-2015 and 03-2016 require that the general license banks maintain a total capital adequacy index
that shall not be lower, at any time, than 8% of total assets and off-balance sheet irrevocable contingency transactions, weighted
according to their risks; and ordinary primary capital that shall not be less than 4.5% of its assets and off-balance sheet transactions
that represent an irrevocable contingency, weighted based on their risks; and a primary capital that shall not be less than 6%
of its assets and off-balance sheet transactions that represent an irrevocable contingency, weighted based on their risks.
The primary objectives of the
Bank’s capital management policy are to ensure that the Bank complies with capital requirements imposed by local regulator
and maintains strong credit ratings and healthy capital ratios to support its business and to maximize shareholder value.
The Bank manages its capital
structure and adjusts it according to changes in economic conditions and the risk characteristics of its activities. To maintain
or adjust the capital structure, the Bank may adjust the amount of dividend payment to shareholders, return capital to shareholders
or issue capital securities. No changes have been made to the objectives, policies and processes from the previous periods. However,
they are under constant review by the Board.
|
|
March
31,
2020
|
|
|
December
31,
2019
|
|
Tier
1 capital
|
|
|
1,029,928
|
|
|
|
1,026,125
|
|
|
|
|
|
|
|
|
|
|
Risk weighted assets
|
|
|
5,373,187
|
|
|
|
5,937,648
|
|
|
|
|
|
|
|
|
|
|
Tier
1 capital ratio
|
|
|
19.17
|
%
|
|
|
17.28
|
%
|
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)
|
23.
|
Applicable laws and regulations (continued)
|
Leverage ratio
Article
No. 17 of the Rule No. 1-2015 establishes the leverage ratio of a regulated entity by means of the quotient between the ordinary
primary capital and the total exposure for non-risk-weighted assets inside and outside the statement of financial position established
by the SBP. For the determination of the exposure of off-balance-sheet operations, the criteria
established for credit and counterparty credit risk positions will be used. The exposure of the derivatives will be the fair value
at which it is recorded in the entity's assets.
The leverage
ratio cannot be lower, at any time, than 3%. The Bank will inform to SBP as often as the compliance with the leverage ratio is
determined.
|
|
March 31,
2020
|
|
|
December 31,
2019
|
|
Ordinary capital
|
|
|
893,909
|
|
|
|
890,106
|
|
|
|
|
|
|
|
|
|
|
Non-risk-weighted assets
|
|
|
6,925,528
|
|
|
|
7,323,187
|
|
|
|
|
|
|
|
|
|
|
Leverage ratio
|
|
|
12.91
|
%
|
|
|
12.15
|
%
|
Specific credit provisions
Rule No. 4-2013, modified by
Rule No. 8-2014, states that the specific provisions are originated from the objective and concrete evidence of impairment. These
provisions must be established for credit facilities classified according to the risk categories denominated as: special mention,
substandard, doubtful, or unrecoverable, both for individual credit facilities as for a group of such facilities. In the case of
a group, it corresponds to circumstances that indicate the existence of deterioration in credit quality, although individual identification
is still not possible.
Banks must calculate and maintain
at all times the amount of the specific provisions determined by the methodology specified in this Rule, which takes into account
the balance owed of each credit facility classified in any of the categories subject to provision, mentioned in the paragraph above;
the present value of each guarantee available in order to mitigate risk, as established by type of collateral; and a weighting
table that applies to the net exposure balance subject to loss of such credit facilities.
Article No. 34 of this Rule
establishes that all credits must be classified in the following five (5) categories, according to their default risk and loan
conditions, and establishes a minimum reserve for each classification: normal 0%, special mention 20%, substandard 50%, doubtful
80%, and unrecoverable 100%.
If there is an excess in the
specific provision, calculated in accordance with this Rule, compared to the provision calculated in accordance with IFRS, this
excess will be accounted for as a regulatory credit reserve in equity and will increase or decrease with appropriations from/to
retained earnings. The balance of the regulatory credit reserve will not be considered as capital funds for calculating certain
ratios or prudential indicators mentioned in the Rule.
Based on the classification
of risks, collateral and in compliance with SBP Rule No. 4-2013, the Bank classified the loan portfolio as follows:
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)
|
23.
|
Applicable laws and regulations (continued)
|
Specific credit provisions (continued)
|
|
March 31, 2019
|
|
Loans
|
|
Normal
|
|
|
Special Mention
|
|
|
|
Substandard
|
|
|
|
Doubtful
|
|
|
Unrecoverable
|
|
|
Total
|
|
Corporations
|
|
|
2,294,446
|
|
|
|
12,541
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
2,368,832
|
|
Banks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
|
|
|
2,522,994
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,522,994
|
|
State-owned
|
|
|
398,440
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
398,440
|
|
|
|
|
2,921,434
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,921,434
|
|
Sovereign
|
|
|
47,221
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47,221
|
|
Total
|
|
|
5,263,101
|
|
|
|
12,541
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
5,337,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses IFRS
(*):
|
|
|
42,706
|
|
|
|
2,491
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,744
|
|
|
|
99,941
|
|
|
|
December 31, 2019
|
|
Loans
|
|
Normal
|
|
|
Special Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Unrecoverable
|
|
|
Total
|
|
Corporations
|
|
|
2,487,859
|
|
|
|
13,595
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
2,563,299
|
|
Banks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
|
|
|
2,692,787
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,692,787
|
|
State-owned
|
|
|
589,690
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
589,690
|
|
|
|
|
3,282,477
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,282,477
|
|
Sovereign
|
|
|
47,221
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47,221
|
|
Total
|
|
|
5,817,557
|
|
|
|
13,595
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
5,892,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses IFRS
(*):
|
|
|
42,396
|
|
|
|
2,338
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,573
|
|
|
|
99,307
|
|
As of March 31, 2020 and December
31, 2019, there are no restructured loans.
(*) As of March 31,
2020, and December 31, 2019, 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)
|
23.
|
Applicable laws and regulations (continued)
|
Specific credit provisions (continued)
For statutory purposes only, non-accruing loans are
presented by category as follows:
|
|
March 31, 2020
|
|
Non-accruing loans
|
|
Normal
|
|
|
Special Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Unrecoverable
|
|
|
Total
|
|
Impaired loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
61,845
|
|
Total
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
61,845
|
|
|
|
December 31, 2019
|
|
Non-accruing loans
|
|
Normal
|
|
|
Special Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Unrecoverable
|
|
|
Total
|
|
Impaired loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
61,845
|
|
Total
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,845
|
|
|
|
61,845
|
|
Credit risk coverage - dynamic provision
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Non-accruing loans:
|
|
|
|
|
|
|
|
|
Private corporations
|
|
|
61,845
|
|
|
|
61,845
|
|
Total non-accruing loans
|
|
|
61,845
|
|
|
|
61,845
|
|
|
|
|
|
|
|
|
|
|
Interest that would be reversed if the loans had been classified as non-accruing loans
|
|
|
1,550
|
|
|
|
1,379
|
|
Income from collected interest on non-accruing loans
|
|
|
-
|
|
|
|
631
|
|
The SBP by means of Rule No.
4-2013, establishes the compulsory constitution of a dynamic provision in addition to the specific credit provision as part of
the total provisions for the credit risk coverage.
The dynamic provision is an
equity item associated to the regulatory capital but does not replace or offset the capital adequacy requirements established by
the SBP.
Methodology for the constitution
of the regulatory credit reserve
The Superintendence of Banks
of Panama by means of the General Resolution of Board of Directors SBP-GJD-0003-2013 of July 9, 2013, establishes the accounting
methodology for differences that arise between the application of the International Financial Reporting Standards (IFRS) and the
application of prudential regulations issued by the SBP; as well as the additional disclosures required to be included in the notes
to the consolidated 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)
|
23.
|
Applicable laws and regulations (continued)
|
Methodology for the constitution of the regulatory
credit reserve (continued)
The parameters established in
this methodology are the following:
|
1.
|
The calculations of accounting balances in accordance with IFRS and the prudential standards issued
by the SBP will be carried out and the respective figures will be compared.
|
|
2.
|
When the calculation made in accordance with IFRS results in a greater reserve or provision for
the bank compared to the one resulting from the use of the prudential standards issued by the SBP, the Bank will account the IFRS
figures.
|
|
3.
|
When the impact of the use of prudential standards results
in a greater reserve or provision for the Bank, the effect of the application of IFRS will be recognized in profit or loss, and
the difference between IFRS calculation compared to the prudential standards calculation will be appropriated from retained earnings
as a regulatory credit reserve. If the bank does not have sufficient retained earnings, the difference will be presented as an
accumulated deficit account.
|
|
4.
|
The regulatory credit reserve mentioned in paragraph 3 of this Rule may not be reversed against the retained earnings as long
as there are differences between IFRS and the originated prudential regulations.
|
Considering that the Bank
presents its consolidated financial statements under IFRS, specifically for its expected credit reserves under IFRS 9, the
line "Regulatory credit reserve" established by the SBP has been used to present the difference between the
application of the accounting standard used and the prudential regulations of the SBP to comply with the requirements of Rule
No. 4-2013.
As
of March 31, 2020 , and December 31, 2019, 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 $136.0
million for both periods, 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:
|
|
March 31,
2020
|
|
|
December 31,
2019
|
|
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 $95.2 million, which was voluntarily established. Pursuant to
Article No. 69 of the Banking Law, reduction of capital reserves requires prior approval of SBP.
Bladex announced a quarterly
cash dividend of $0.25 US dollar cents per share corresponding to the first quarter of 2020. The cash dividend was approved by
the Board of Directors at its meeting held on April 8, 2020 and it was payable on May 13, 2020 to the Bank’s stockholders
as of April 27, 2020 record date.
The outbreak of the novel Coronavirus
disease, also known as COVID-19, initially reported in December of 2019, has spread rapidly as a pandemic among the world´s
population during the first quarter of 2020. The COVID-19 has negatively affected the economic conditions of companies in
most of the countries in the world, causing global uncertainty which can significantly affect Bladex’s operations, as well
as the operations of its customers, counterparties and suppliers. The duration and severity of the impacts of COVID-19
are uncertain at this time, and the Bank cannot predict the impact it may have in its operations and financial situation, which
could be material and adverse. The Bank's Management will continue to monitor and modify the operating and financial strategies
in order to mitigate the possible risks that could affect the business.
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:
|
May 18, 2020
|
FOREIGN TRADE BANK OF LATIN AMERICA, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ana Graciela de Méndez
|
|
|
|
|
|
|
|
|
Name:
|
Ana Graciela de Méndez
|
|
|
|
|
Title:
|
CFO
|
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