Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2021

Commission File Number 1-11414

BANCO LATINOAMERICANO DE COMERCIO EXTERIOR, S.A.

(Exact name of Registrant as specified in its Charter)

FOREIGN TRADE BANK OF LATIN AMERICA, INC.

(Translation of Registrant’s name into English)

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

P.O. Box 0819-08730

Panama City, Republic of Panama

(Address of Registrant’s Principal Executive Offices)

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

Form 20-F ☒ Form 40-F ☐

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

Yes ☐ No ☒

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

Yes ☐ No ☒

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 11, 2021

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

	By:	/s/ Ana Graciela de Méndez
	Name:	Ana Graciela de Méndez
	Title:	CFO

Banco Latinoamericano

de Comercio Exterior, S.A.

and Subsidiaries

Unaudited condensed consolidated interim financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020.

Banco Latinoamericano de Comercio Exterior, S.A.

and Subsidiaries

Contents

Unaudited condensed consolidated interim statement of financial position		3
Unaudited condensed consolidated interim statement of profit or loss		4
Unaudited condensed consolidated interim statement of comprehensive income		5
Unaudited condensed consolidated interim statement of changes in equity		6
Unaudited condensed consolidated interim statement of cash flows		7
Notes to the unaudited condensed consolidated interim financial statements		8

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

Unaudited condensed consolidated interim statement of financial position

March 31, 2021 and December 31, 2020

(In thousands of US dollars)

	Notes	March 31, 2021 (Unaudited)			December 31, 2020 (Audit)
Assets

Cash and due from banks	4,5		819,514			863,812

Securities and other financial assets, net	3,4,6		391,401			398,068

Loans, net	3,4,7		5,042,467			4,896,647

Customers’ liabilities under acceptances	3,4		78,164			74,366
Derivative financial instruments - assets	3,4,10		16,340			27,778
Equipment and leasehold improvements, net			15,361			16,213
Intangibles, net			1,712			1,984
Investment properties			3,145			3,214
Other assets	11		6,742			6,816
Total assets			6,374,846			6,288,898

Liabilities and Equity
Liabilities:
Demand deposits			355,301			170,660
Time deposits			2,830,446			2,968,240
	3,4,12		3,185,747			3,138,900
Interest payable			2,853			1,975
Total deposits			3,188,600			3,140,875

Securities sold under repurchase agreements	3,4,13		156,690			10,663
Borrowings and debt, net	4,14		1,869,304			1,985,070
Interest payable			9,248			9,175

Acceptance outstanding	3,4		78,164			74,366
Derivative financial instruments - liabilities	3,4,10		19,449			9,211
Allowance for loan commitments and financial guarantees contracts losses	3,4		2,936			2,904
Other liabilities	15		13,780			18,714
Total liabilities			5,338,171			5,250,978

Equity:
Common stock			279,980			279,980
Treasury stock			(57,452	)		(57,999	)
Additional paid-in capital in excess of value assigned to common stock			120,305			120,414
Capital reserves	21		95,210			95,210
Regulatory reserves	21		136,019			136,019
Retained earnings			466,978			464,088
Other comprehensive income (loss)			(4,365	)		208
Total equity			1,036,675			1,037,920
Total liabilities and equity			6,374,846			6,288,898

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

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

Unaudited condensed consolidated interim statements of profit or loss

For the three months ended March 31, 2021 and 2020

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

	Notes	2021			2020
Interest income:
Deposits			361			2,459
Securities			1,637			640
Loans			30,921			55,890
Total interest income	18		32,918			58,990
Interest expense:
Deposits			(3,472	)		(11,462	)
Borrowings and debt			(10,551	)		(21,727	)
Total interest expense	18		(14,023	)		(33,189	)

Net interest income			18,895			25,801

Other income (expense):
Fees and commissions, net	17		3,040			3,073
Loss on financial instruments, net	9		(71	)		(358	)
Other income, net			97			240
Total other income, net	18		3,066			2,955

Total revenues			21,961			28,756

Less:
Reversal for credit losses	3,18		-			89

Operating expenses:
Salaries and other employee expenses			(5,448	)		(7,007	)
Depreciation of investment properties, equipment and improvements			(819	)		(735	)
Amortization of intangible assets			(271	)		(191	)
Other expenses			(2,607	)		(2,610	)
Total operating expenses	18		(9,145	)		(10,543	)
Profit for the period			12,816			18,302

Per share data:
Basic earnings per share (in US dollars)	16		0.32			0.46
Diluted earnings per share (in US dollars)	16		0.32			0.46
Weighted average basic shares (in thousands of shares)	16		39,693			39,609
Weighted average diluted shares (in thousands of shares)	16		39,693			39,609

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, 2021 and 2020

(In thousands of US dollars)

	2021			2020
Profit for the period		12,816			18,302
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		(111	)		320

Items that are or may be reclassified subsequently to profit or loss:
Change in fair value on financial instruments, net of hedging		(4,417	)		(1,230	)
Reclassification of gains (losses) on financial instruments to the profit or loss		(493	)		(117	)
Exchange difference in conversion of foreign currency operation		448			185

Other comprehensive income (loss)		(4,573	)		(842	)

Total comprehensive income for the period		8,243			17,460

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, 2021 and 2020

(In thousands of US dollars)

	Common stock		Treasury stock			Additional paid-in capital in excess of value assigned to common stock			Capital reserves		Regulatory reserves		Retained earnings			Other comprehensive income			Total equity
Balances at January 1, 2020		279,980		(59,669	)		120,362			95,210		136,019		446,083			(1,818	)		1,016,167
Profit for the period		-		-			-			-		-		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

Balances at January 1, 2021		279,980		(57,999	)		120,414			95,210		136,019		464,088			208			1,037,920
Profit for the period		-		-			-			-		-		12,816			-			12,816
Other comprehensive income (loss)		-		-			-			-		-		-			(4,573	)		(4,573	)
Compensation cost - stock options and stock units plans		-		-			438			-		-		-			-			438
Exercised options and stock units vested		-		547			(547	)		-		-		-			-			-
Dividends declared		-		-			-			-		-		(9,926	)		-			(9,926	)
Balances at March 31, 2021		279,980		(57,452	)		120,305			95,210		136,019		466,978			(4,365	)		1,036,675

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, 2021 and 2020

(In thousands of US dollars)

	2021			2020
Cash flows from operating activities
Profit for the period		12,816			18,302
Adjustments to reconcile profit for the period to net cash provided by (used in) operating activities:
Depreciation of equipment and leasehold improvements		819			735
Amortization of intangible assets		271			191
(Reversal) provision for credit losses		-			(89	)
Unrealized loss on financial instruments at fair value through profit or loss		(56	)		-
Amortization of premium and discount related to securities		-			100
Compensation cost - share-based payment		438			484
Net changes in hedging position and foreign currency		79			(2,527	)
Loss for disposal of equipment and leasehold improvements		255			-
Interest income		(32,918	)		(58,990	)
Interest expense		14,023			33,189
Net decrease (increase) in operating assets:
Pledged deposits		(10,912	)		(37,149	)
Loans		(156,039	)		511,523
Other assets		98			(723	)
Net increase (decrease) in operating liabilities:
Due to depositors		46,847			(420,740	)
Other liabilities		(5,025	)		(4,986	)
Cash flows provided by operating activities		(129,304	)		39,320
Interest received		39,588			60,350
Interest paid		(14,222	)		(33,869	)
Net cash (used in) provided by operating activities		(103,938	)		65,801

Cash flows from investing activities:
Acquisition of equipment and leasehold improvements		(156	)		(9	)
Proceeds from the sale of securities at fair value through OCI		-			1,882
Proceeds from redemption of securities at amortized cost		42,599			14,825
Purchases of securities at amortized cost		(39,007	)		(14,549	)
Net cash provided by investing activities		3,436			2,149

Cash flows from financing activities:
Increase in securities sold under repurchase agreements		146,027			13,357
Net increase in short-term borrowings and debt		75,274			103,460
Proceeds from long-term borrowings and debt		95,955			50,000
Repayments of long-term borrowings and debt		(261,832	)		(81,631	)
Payments of leases liabilities		(297	)		(273	)
Dividends paid		(9,835	)		(15,165	)
Net cash provided by financing activities		45,292			69,749

(Decrease) increase net in cash and cash equivalents		(55,210	)		137,699
Cash and cash equivalents at beginning of the period		846,008			1,159,718
Cash and cash equivalents at end of the period		790,798			1,297,417

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

1.	Corporate information

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

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

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

Bladex Head Office’s subsidiaries are the following:

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

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

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

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

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

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

These unaudited condensed consolidated interim financial statements were authorized for issue by the Board of Directors on April 20, 2021.

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

Notes to the unaudited condensed consolidated interim financial statements

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

2.	Basis of preparation of the consolidated financial statements

2.1

Statement of compliance

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

3.	Financial risk

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

Credit risk

Credit quality analysis

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

Loans at amortized cost

March 31, 2021
	PD Ranges	Stage 1			Stage 2			Stage 3			Total
Grades 1 - 4	0.03 - 0.74		2,469,615			-			-			2,469,615
Grades 5 - 6	0.75 - 3.80		2,226,671			134,705			-			2,361,376
Grades 7 - 8	3.81 - 34.51		105,663			116,022			10,593			232,278
Grades 9 - 10	34.52 - 100		-			-			-			-
			4,801,949			250,727			10,593			5,063,269
Loss allowance			(16,511	)		(19,583	)		(5,002	)		(41,096	)
Total			4,785,438			231,144			5,591			5,022,173

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

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

March 31, 2021
	12-month PD Ranges	Stage 1			Stage 2			Stage 3		Total
Commitments and contingencies
Grades 1 - 4	0.03 - 0.74		194,659			-			-		194,659
Grades 5 - 6	0.75 - 3.80		196,194			38,446			-		234,640
Grades 7 - 8	3.81 - 34.51		137,438			-			-		137,438
			528,291			38,446			-		566,737

Customers’ liabilities under acceptances
Grades 1 - 4	0.03 - 0.74		40,049			-			-		40,049
Grades 5 - 6	0.75 - 3.80		-			-			-		-
Grades 7 - 8	3.81 - 34.51		38,115			-			-		38,115
			78,164			-			-		78,164
			606,455			38,446			-		644,901
Loss allowance			(2,542	)		(394	)		-		(2,936	)
Total			603,913			38,052			-		641,965

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

Securities at amortized cost

March 31, 2021
	12-month PD Ranges	Stage 1			Stage 2		Stage 3		Total
Grades 1 - 4	0.03 - 0.74		97,923			-		-		97,923
Grades 5 - 6	0.75 - 3.80		61,108			-		-		61,108
			159,031			-		-		159,031
Loss allowance			(532	)		-		-		(532	)
Total			158,499			-		-		158,499

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

Securities at fair value through other comprehensive income (FVOCI)

March 31, 2021
	12-month PD Ranges	Stage 1			Stage 2		Stage 3		Total
Grades 1 - 4	0.03 - 0.74		230,130			-		-		230,130
			230,130			-		-		230,130
Loss allowance			(43	)		-		-		(43	)
Total			230,087			-		-		230,087

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

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

	March 31, 2021
	Stage 1		Stage 2		Stage 3		Total
Current		4,801,949		250,727		10,593		5,063,269

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

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

	March 31, 2021
	Notional value USD		Derivative financial instruments - fair value asset		Derivative financial instruments - fair value liabilities
Interest rate swaps		145,000		2,042		(1,294	)
Cross-currency swaps		625,504		14,139		(17,591	)
Foreign exchange forwards		61,679		159		(564	)
Total		832,183		16,340		(19,449	)

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

ii.

Loss allowances

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

Loans at amortized cost

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		16,661			19,916			4,588		41,165
Transfer to lifetime expected credit losses		-			-			-		-
Transfer to credit-impaired financial instruments		-			-			-		-
Net effect of changes in allowance for expected credit losses		(211	)		(181	)		414		22
Financial instruments that have been derecognized during the period		(5,380	)		(152	)		-		(5,532	)
New financial assets originated or purchased		5,441			-			-		5,441
Write-offs		-			-			-		-
Recoveries		-			-			-		-
Allowance for expected credit losses as of March 31, 2021		16,511			19,583			5,002		41,096

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

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

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		2,426			478			-		2,904
Net effect of changes in reserve for expected credit losses		(47	)		(84	)		-		(131	)
Financial instruments that have been derecognized during the period		(1,142	)		-			-		(1,142	)
New instruments originated or purchased		1,305			-			-		1,305
Allowance for expected credit losses as of March 31, 2021		2,542			394			-		2,936

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

Securities at amortized cost

	Stage 1			Stage 2			Stage 3		Total
Allowance for expected credit losses as of December 31, 2020		462			33			-		495
Net effect of changes in allowance for expected credit losses		(1	)		-			-		(1	)
Financial instruments that have been derecognized during the period		(99	)		(33	)		-		-
New financial assets originated or purchased		170			-			-		170
Allowance for expected credit losses as of March 31, 2021		532			-			-		532

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

Securities at fair value through other comprehensive income (FVOCI)

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

Securities at fair value through other comprehensive income (FVOCI)

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

The following table provides a reconciliation between:

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

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

							Securities
March 31, 2021	Loans at amortized cost			Loan commitments and financial guarantee contracts			At amortized cost			FVOCI		Total
Net effect of changes in allowance for expected credit losses		22			(131	)		(1	)		-		(110	)
Financial instruments that have been derecognized during the year		(5,532	)		(1,142	)		(132	)		-		(6,806	)
New financial assets originated or purchased		5,441			1,305			170			-		6,916
Total		(69	)		32			37			-		-

							Securities
March 31, 2020	Loans at amortized cost			Loan commitments and financial guarantee contracts			At amortized cost			FVOCI		Total
Net effect of changes in allowance for expected credit losses		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	)

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Credit risk (continued)

iii.

Credit-impaired financial assets

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

	March 31, 2021		December 31, 2020
Credit-impaired loans and advances at beginning of period		4,588		54,573
Classified as credit-impaired during the period		-		2,100
Change in allowance for expected credit losses		351		(744	)
Release for asset sale		-		-
Recoveries of amounts previously written off		-		139
Interest income		63		626
Write-offs		-		(52,106	)
Credit-impaired loans and advances at end of period		5,002		4,588

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

Financial risk (continued)

Credit risk (continued)

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.

Concentration by sector and industry

					Loan commitments and				Securities
	Loans at amortized cost				financial guarantee contracts				At amortized cost				FVOCI
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Carrying amount - principal		5,063,269		4,911,397		78,164		74,366		159,031		164,074		230,130		231,348
Amount committed/guaranteed		-		-		566,737		564,898		-		-		-		-

Concentration by sector
Corporations:
Private		1,375,104		1,425,929		277,144		276,249		43,770		56,979		60,105		60,403
State-owned		918,149		741,791		92,706		92,299		24,874		29,985		23,576		23,858
Financial institutions:				-
Private		2,162,688		2,231,742		65,783		65,434		47,918		33,715		-		-
State-owned		571,913		476,520		209,268		205,282		42,469		28,276		141,386		141,974
Sovereign		35,415		35,415		-		-		-		15,119		5,063		5,113
Total		5,063,269		4,911,397		644,901		639,264		159,031		164,074		230,130		231,348

Concentration by industry
Financial institutions		2,734,601		2,708,262		275,051		270,716		90,387		61,991		141,386		141,974
Manufacturing		790,435		760,985		172,613		173,493		52,797		66,053		45,413		45,654
Oil and petroleum derived products		778,082		586,030		98,189		98,189		15,847		20,911		38,268		38,607
Agricultural		302,413		336,715		-		-		-		-		-		-
Services		207,480		264,597		62,971		63,086		-		-		-		-
Mining		94,961		94,955		-		-		-		-		-		-
Sovereign		35,415		35,415		-		-		-		15,119		5,063		5,113
Other		119,882		124,438		36,077		33,780		-		-		-		-
Total		5,063,269		4,911,397		644,901		639,264		159,031		164,074		230,130		231,348

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

Notes to the unaudited condensed consolidated interim financial statements

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

Financial risk (continued)

Credit risk (continued)

Risk rating and concentration by country

					Loan commitments and				Securities
	Loans at amortized cost				financial guarantee contracts				At amortized cost				FVOCI
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Carrying amount - principal		5,063,269		4,911,397		78,164		74,366		159,031		164,074		230,130		231,348
Amount committed/guaranteed		-		-		566,737		564,898		-		-		-		-

Rating
1-4		2,469,615		2,582,794		234,708		247,425		97,923		108,505		230,130		231,348
5-6		2,361,376		2,096,138		234,640		237,807		61,108		55,569		-		-
7-8		232,278		232,465		175,553		154,032		-		-		-		-
9		-		-		-		-		-		-		-		-
10		-		-		-		-		-		-		-		-
Total		5,063,269		4,911,397		644,901		639,264		159,031		164,074		230,130		231,348

Concentration by country
Argentina		107,626		130,944		-		-		-		-		-		-
Belgium		9,377		9,807		-		-		-		-		-		-
Bolivia		12,000		12,000		2,800		2,800		-		-		-		-
Brazil		1,109,073		971,652		50,000		50,000		61,108		41,128		-		-
Canada		-		-		-		-		-		-		-		-
Chile		603,179		533,945		1,180		7,911		11,898		11,992		28,639		28,972
Colombia		653,307		714,258		50,333		50,333		14,827		29,998		-		-
Costa Rica		136,817		146,200		54,378		56,876		-		-		-		-
Dominican Republic		188,904		202,433		16,500		16,500		-		-		-		-
Ecuador		29,739		45,511		182,324		165,275		-		-		-		-
El Salvador		30,002		40,000		579		1,087		-		-		-		-
France		152,808		150,810		81,426		84,862		-		-		-		-
Germany		-		-		-		-		-		-		-		-
Guatemala		293,352		281,485		44,345		43,845		-		-		-		-
Honduras		19,668		10,199		775		345		-		-		-		-
Hong Kong		7,000		1,800		-		-		-		-		-		-
Jamaica		45,696		23,274		-		-		-		-		-		-
Luxembourg		50,000		50,000		-		-		-		-		-		-
Mexico		544,144		607,099		4,731		4,995		43,651		43,910		-		-
Nicaragua		-		-		-		-		-		-		-		-
Panama		253,861		241,097		60,089		61,435		10,412		10,399		-		-
Paraguay		116,694		100,816		11,800		11,800		-		-		-		-
Peru		316,933		272,752		52,248		47,245		17,135		26,647		-		-
Singapore		27,518		75,095		-		-		-		-		-		-
Switzerland		-		-		-		-		-		-		-		-
Trinidad and Tobago		151,716		165,995		-		-		-		-		-		-
United States of America		127,930		113,816		-		-		-		-		89,428		89,794
United Kingdom		10,409		10,409		-		-		-		-		-		-
Uruguay		65,516		-		31,393		33,955		-		-		-		-
Multilateral		-		-		-		-		-		-		112,063		112,582
Total		5,063,269		4,911,397		644,901		639,264		159,031		164,074		230,130		231,348

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

Notes to the unaudited condensed consolidated interim financial statements

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

Financial risk (continued)

Credit risk (continued)

iv.

Offsetting financial assets and liabilities

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

Derivative financial instruments – assets

March 31, 2021
			Gross amounts offset in the consolidated statement of financial position		Net amount of assets presented in the consolidated statement of financial position		Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of assets						Financial instruments		Cash collateral received			Net Amount
Derivative financial instruments used for hedging		16,340		-		16,340		-		(9,810	)		6,530
Total		16,340		-		16,340		-		(9,810	)		6,530

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

Financial risk (continued)

Credit risk (continued)

Securities sold under repurchase agreements and derivative financial instruments – liabilities

March 31, 2021
				Gross amounts offset in the consolidated statement of financial position		Net amount of assets presented in the consolidated statement of financial position			Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of liabilities								Financial instruments		Cash collateral received		Net Amount
Securities sold under repurchase agreements		(156,690	)		-		(156,690	)		171,041		-		14,351
Derivative financial instruments used for hedging		(19,449	)		-		(19,449	)		-		18,716		(733	)
Total		(176,139	)		-		(176,139	)		171,041		18,716		13,618

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

Financial risk (continued)

Liquidity risk

Exposure to liquidity risk

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

	March 31, 2021			December 31, 2020
At the end of the period		159.39	%		249.42	%
Period average		110.60	%		115.98	%
Maximum of the period		223.31	%		249.42	%
Minimum of the period		74.24	%		53.26	%

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

	March 31, 2021						December 31, 2020
(in millions of USD dollars)	Cash and due from banks		Securities FVOCI		Total		Cash and due from banks		Securities FVOCI		Total
United State of America		737		41		778		740		90		830
Other O.E.C.D countries		-		20		20		100		-		100
Latin America		4		-		4		6		-		6
Other countries		50		-		50		-		-		-
Multilateral		-		141		141		-		112		112
Total		791		202		993		846		202		1,048

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

(in millions of USD dollars)	March 31, 2021			December 31, 2020
Demand liabilities and “overnight”		355			171
% Demand liabilities and “overnight” to total deposits		11.15	%		5.44	%

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Liquidity risk (continued)

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

(in millions of USD dollars)	March 31, 2021			December 31, 2020
Total liquid assets		992			1,048
% Total assets to total liabilities		31.15	%		33.40	%
% Total liquid assets in the U.S. Federal Reserve		69.05	%		65.68	%

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

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

(in millions of USD dollars)	March 31, 2021		December 31, 2020
Loan portfolio at amortized cost and securities portfolio less than/equal to 1 year according to its original terms		3,321		3,114
Average term (days)		176		195

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

(in millions of USD dollars)	March 31, 2021		December 31, 2020
Loan portfolio at amortized cost and securities portfolio greater than/equal to 1 year according to its original terms		2,132		2,193
Average term (days)		2,017		1,382

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Liquidity risk (continued)

ii.

Maturity analysis for financial liabilities and financial assets

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

	March 31, 2021
	Up to 3			3 to 6			6 months						More than 5			Gross inflows			Carrying
Description	months			months			to 1 year			1 to 5 years			years			(outflows)			amount
Assets
Cash and due from banks		819,529			-			-			-			-			819,529			819,514
Securities and other financial assets, net		11,323			12,868			51,470			323,260			-			398,921			391,401
Loans, net		1,679,847			1,109,184			1,192,864			1,155,148			104,117			5,241,160			5,042,467
Derivative financial instruments - assets		1,059			484			-			14,423			374			16,340			16,340
Total		2,511,758			1,122,536			1,244,334			1,492,831			104,491			6,475,950			6,269,722

Liabilities
Deposits		(2,520,640	)		(457,603	)		(207,100	)		(7,042	)		-			(3,192,385	)		(3,188,600	)
Securities sold under repurchase agreements		(54,961	)		(52,958	)		(49,325	)		-			-			(157,244	)		(156,690	)
Borrowings and debt, net		(119,355	)		(78,711	)		(418,883	)		(1,370,597	)		(29,248	)		(2,016,794	)		(1,878,552	)
Derivative financial instruments - liabilities		(850	)		(52	)		-			(18,533	)		(14	)		(19,449	)		(19,449	)
Total		(2,695,806	)		(589,324	)		(675,308	)		(1,396,172	)		(29,262	)		(5,385,872	)		(5,243,291	)

Contingencies
Confirmed lettes of credit		174,094			32,786			-			-			-			206,880			206,880
Stand-by letters of credit and guarantees		111,041			35,840			55,232			10,000			-			212,113			212,113
Credit commitments		-			8,125			19,286			118,333			-			145,744			145,744
Total		285,135			76,751			74,518			128,333			-			564,737			564,737
Net position		(469,183	)		456,461			494,508			(31,674	)		75,229			525,341			461,694

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Liquidity risk (continued)

ii.

Maturity analysis for financial liabilities and financial assets (continued)

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

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

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

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

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

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Liquidity risk (continued)

iii.

Liquidity reserves

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

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

	March 31,				December 31,
	2021				2020
	Amount		Fair Value		Amount		Fair Value
Balances with Central Banks		685,167		685,167		688,612		688,612
Cash and balances with other bank ⁽¹⁾		105,631		105,631		157,396		157,396
Total Liquidity reserves		790,798		790,798		846,008		846,008

⁽¹⁾

Excludes pledged deposits.

iv.

Financial assets available to support future funding

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

March 31, 2021
	Guaranteed		Available as collateral
Cash and due from banks		28,716		790,798
Notional of investment securities		164,265		212,989
Loans at amortized cost		-		5,063,269
Total assets		192,981		6,067,056

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Market risk

The Bank manages market risk by considering the condensed consolidated interim financial situation of the Bank. For the definition of market risk and information on how the Bank manages the market risks of trading and non-trading portfolios, see note 6.

Interest rate risk

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

	March 31, 2021
Description	Up to 3 months			3 to 6 months			6 months to 1 year			1 to 5 years			More than 5 years			Non interest rate risk			Total
Assets
Demand deposits and time deposits		816,787			-			-			-			-			2,727			819,514
Securities and other financial assets		9,028			10,851			56,770			314,752			-			-			391,401
Loans		3,384,038			1,080,231			486,895			106,099			11,045			-			5,068,308
Total assets		4,209,853			1,091,082			543,665			420,851			11,045			2,727			6,279,223

Liabilities
Demand deposits and time deposits		(2,517,186	)		(455,161	)		(204,974	)		(6,900	)		-			(1,526	)		(3,185,747	)
Securities sold under repurchase agreements		(54,856	)		(52,807	)		(49,027	)		-			-			-			(156,690	)
Borrowings and debt		(100,515	)		(65,149	)		(361,750	)		(1,308,203	)		(33,687	)		-			(1,869,304	)
Total liabilities		(2,672,557	)		(573,117	)		(615,751	)		(1,315,103	)		(33,687	)		(1,526	)		(5,211,741	)
Net effect of derivative financial instruments held for interest risk management		209			432			-			(4,110	)		360			-			(3,109	)
Total interest rate sensitivity		1,537,505			518,397			(72,086	)		(898,362	)		(22,282	)		1,201			1,064,373

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Market risk (continued)

ii. Interest rate risk (continued)

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

	Change in interest rate	Effect on profit or loss			Effect on equity
March 31, 2021	+50 bps		2,637			8,210
	-50 bps		(2,085	)		(1	)

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

Interest rate movements affect reported equity in the following ways:

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

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

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

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

iii. Foreign exchange risk

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

	March 31, 2021
	Brazilian Real		European Euro		Japanese Yen		Colombian Peso		Mexican Peso			Other Currencies ⁽¹⁾		Total
Exchance rate		5.64		1.17		110.74		3,663.44		20.44
Assets
Cash and due from banks		100		11		1		38		1,164			38		1,352
Loans		-		-		-		-		136,640			-		136,640
Total Assets		100		11		1		38		137,804			38		137,992

Liabilities
Borrowings and debt		-		-		-		-		(137,402	)		-		(137,402	)
Total liabilities		-		-		-		-		(137,402	)		-		(137,402	)

Net currency position		100		11		1		38		402			38		590

⁽¹⁾

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

3.	Financial risk (continued)

Market risk (continued)

iii.

Foreign exchange risk (continued)

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

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

Net currency position		81		13				20		147			80		342

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

4.	Fair value of financial instruments

Recurring valuation

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

	March 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Securities and other financial assets:
Securities at FVOCI - Corporate debt		-		225,067		-		225,067
Securities at FVOCI - Sovereign debt		-		5,063		-		5,063
Loans at fair value through profit or loss		-		-		5,039		5,039
Total securities and other financial assets		-		230,130		5,039		235,169

Derivative financial instruments - assets:
Interest rate swaps		-		2,042		-		2,042
Cross-currency swaps		-		14,139		-		14,139
Foreign exchange forwards		-		159		-		159
Total derivative financial instrument assets		-		16,340		-		16,340
Total assets at fair value		-		246,469		5,039		251,508

Liabilities
Derivative financial instruments - liabilities:
Interest rate swaps		-		1,294		-		1,294
Cross-currency swaps		-		17,591		-		17,591
Foreign exchange forwards		-		563		-		563
Total derivative financial instruments - liabilities		-		19,449		-		19,449
Total liabilities at fair value		-		19,449		-		19,449

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

Notes to the unaudited condensed consolidated interim financial statements

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

4.	Fair value of financial instruments (continued)

Recurring valuation (continued)

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

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

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

4.	Fair value of financial instruments (continued)

Non-recurring valuation

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

	March 31, 2021
	Carrying		Fair
	value		value		Level 1		Level 2		Level 3
Assets
Cash and deposits on banks		819,514		819,514		-		819,514		-
Securities at amortized cost ⁽¹⁾		160,187		161,531		-		151,103		10,428
Loans at amortized cost, net ⁽²⁾		5,037,428		5,137,370		-		5,137,370		-
Customers’ liabilities under acceptances		78,164		78,164		-		78,164		-
Investment properties		3,145		3,145		-		-		3,145

Liabilities
Deposits		3,188,600		3,188,600		-		3,188,600		-
Securities sold under repurchase agreements		156,690		156,690		-		156,690		-
Borrowings and debt, net ⁽³⁾		1,850,802		1,854,272		-		1,854,272		-
Customers’ liabilities under acceptances		78,164		78,164		-		78,164		-

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

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

⁽¹⁾

The carrying value of securities at amortized cost is net of accrued interest receivable of $1.6 million and the allowance for expected credit losses of $0.5 million as of March 31, 2021 (accrued interest receivable of $1.9 million and the allowance for expected credit losses of $0.4 million as of December 31, 2020).

⁽²⁾

The carrying value of loans at amortized cost is net of accrued interest receivable of $20.9 million, the allowance for expected credit losses of $41.0 million and unearned interest and deferred fees of $5.7 million for March 31, 2021 (accrued interest receivable of $27.3 million, the allowance for expected credit losses of $41.1 million and unearned interest and deferred fees of $5.8 million for December 31, 2020).

⁽³⁾

Borrowings and debt exclude lease liabilities for an amount of $18.5 million and $18.7 million as of March 31, 2020 and December 31, 2020, respectively.

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

Notes to the unaudited condensed consolidated interim financial statements

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

4.	Fair value of financial instruments (continued)

Level 3 - Fair value measurement

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

	Debt instruments at fair value through profit or loss (debentures)			Loans at fair value through profit or loss			Total
At December 31, 2019		6,492			-			6,492
Additions		1,433			5,750			7,183
Net changes in fair value⁽¹⁾		(2,175	)		(801	)		(2,976	)
Sales		(5,750	)		-			(5,750	)
At December 31, 2020		-			4,949			4,949
Additions		-			-			-
Net changes in fair value⁽¹⁾		-			90			90
Sales		-			-			-
At March 31, 2021		-			5,039			5,039

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

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

Loans at fair value through profit or loss - Level 3

In 2020, the Bank realized the sale of the debt instrument measured at fair value through profit or loss for $5.8 million. As a result, the Bank recognized a loan and classified it at fair value through profit or loss with a carrying amount of $5.0 million and $4.9 million as of March 31, 2021 and December 31, 2020, respectively.

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

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

Fair value measurement sensitivity to unobservable inputs – discount rate		2021		2020
A significant increase in volatility would result in a lower fair value		6.043% to 8.430%		3.128% to 8.89%

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

Notes to the unaudited condensed consolidated interim financial statements

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

4.	Fair value of financial instruments (continued)

Level 3 - Fair value measurement (continued)

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

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

Loans at fair value through profit or loss	Effect on profit or loss
+ 100 bps to the observable and unobservable inputs	(140	)

- 100 bps to the observable and unobservable inputs	144

5.	Cash and due from banks

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

	March 31,		December 31,
	2021		2020
Cash and due from banks		2,727		4,331
Interest-bearing deposits in banks		816,787		859,481
Total		819,514		863,812

Less:
Pledged deposits		28,716		17,804
Total cash and cash equivalents		790,798		846,008

	March 31, 2021		December 31, 2020
	Amount	Interest rate range	Amount	Interest rate range
Interest-bearing deposits in banks:
Demand deposits ⁽¹⁾	706,787	0.01% to 2.95%	749,481	0.03% to 3.08%
Time deposits	110,000	-	110,000	-
Total	816,787		859,481

Pledged deposits	28,716	0.07%	17,804	0.09%

⁽¹⁾

Interest-bearing demand deposits based on daily rates determined by banks. In addition, rates of 2.95% and 3.08% correspond to a deposit placed in 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)

5.	Cash and due from banks (continued)

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

	March 31,		December 31,
	2021		2020
Country:
United States of America⁽¹⁾		11,775		11,515
Switzerland		7,737		3,027
Netherlands		3,394		334
Mexico		2,320		790
France		2,070		50
Japan		810		1,330
Canada		610		610
United Kingdom		-		130
Spain		-		18
Total		28,716		17,804

⁽¹⁾

Includes pledged deposits of $10.0 million at March 31, 2021 for both periods, with the New York State Banking Department under March 1994 legislation and deposits pledged to guarantee derivative financial instrument transactions.

6.	Securities and other financial assets, net

Securities and other financial assets are presented as follows:

				At fair value
At March 31, 2021				With changes in other comprehensive income (loss)					With
Carrying amount	Amortized cost			Recyclable to profit and loss			Non-recyclable to profit and loss		changes in profit or loss		Total securities and other financial assets, net
Principal		159,031			230,130			-		-		389,161
Interest receivable		1,688			1,084			-		-		2,772
Reserves ⁽¹⁾		(532	)		(43	)		-		-		(575	)
		160,187			231,171			-		-		391,358

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.	Securities and other financial assets, net (continued)

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

(1)

The loss allowance for losses for securities at FVOCI is included in equity in the condensed consolidated interim statement of financial position in the line Other comprehensive income. At March 31, 2021 and December 31, 2020, the principal plus interest receivable for securities at FVOCI is $231,214 and $232,504, respectively.

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

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

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

			At fair value
At March 31, 2021			With changes in other comprehemsive income				With
	Amortized cost		Recyclable to profit ans loss		Non-recyclable to profit and loss		changes in profit or loss		Total securities and other financial assets, net
Due within 1 year		15,897		43,960		-		-		59,857
After 1 year but within 5 years		143,134		186,170		-		-		329,304
Balance - principal		159,031		230,130		-		-		389,161

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

6.	Securities and other financial assets, net (continued)

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

	March 31, 2021									December 31, 2020
	Amortized cost			Fair value			Total			Amortized cost			Fair value		Total
Securities pledged to secure repurchase transactions		142,402			28,639			171,041			11,998			-		11,998
Securities sold under repurchase agreements		(130,247	)		(26,443	)		(156,690	)		(10,663	)		-		(10,663	)

Loans

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

	March 31,			December 31,
	2021			2020
Loans at amortized cost		5,063,269			4,911,397
Interest receivable		20,990			27,350
Loss allowances		(41,096	)		(41,165	)
Unearned interest and deferred fees		(5,735	)		(5,884	)
Loans at amortized cost, net		5,037,428			4,891,698
Loans at fair value through profit or loss ⁽¹⁾		-			4,949
Loans, net		5,037,428			4,896,647

⁽¹⁾The Bank realized the sale of debt instruments measured at fair value through profit or loss for $5.8 million. As a result, the Bank recognized a loan and classified it at fair value through profit or loss with a carrying amount of $5.0 million and $4.9 million as of March 31, 2021 and December 31, 2020, respectively.

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

Notes to the unaudited condensed consolidated interim financial statements

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

7.	Loans (continued)

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

	March 31,		December 31,
	2020		2020
Fixed interest rates		2,804,142		2,544,544
Floating interest rates		2,264,166		2,371,802
Total		5,968,308		4,916,346

As of March 31, 2021 and December 31, 2020, 79% and 41% of the loan portfolio at fixed interest rates has remaining maturities of less than 180 days. The range of interest rates on loans fluctuates from 0.43% to 9.28% (December 31, 2020 0.43% to 9.70%).

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

	March 31,		December 31,
	2021		20120
Class A and B shareholder loans		475,253		522,316
% Loans to class A and B shareholders over total loan portfolio		9%		11%
% Class A and B stockholders with loans over number of class A and B stockholders		13%		12%

Modified financial assets

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

	March 31, 2021		December 31, 2020
Gross carrying amount before modification		-		8,829
Allowance loss before modification ⁽¹⁾		-		(1,796	)
Net amortized cost before modification		-		7,033

Gross carrying amount after modification		-		8,829
Allowance loss after modification ⁽²⁾		-		(1,802	)
Net amortized cost after modification		-		7,027

⁽¹⁾ Expected credit loss for 12 months.

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

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.	Loans (continued)

Recognition and derecognition of financial assets

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

8.	Loan commitments and financial guarantee contracts

In the normal course of business, to meet the financing needs of its customers, the Bank is party to loan commitments and financial guarantee contracts. These instruments involve, to varying degrees, elements of credit and market risk in excess of the amount recognized in the condensed consolidated interim statement of financial position. Credit risk represents the possibility of loss resulting from the failure of a customer to perform in accordance with the terms of a contract.

The Bank’s outstanding loan commitments and financial guarantee contracts are as follows:

	March 31,		December 31,
	2021		2020
Documentary letters of credit		208,880		216,782
Stand-by letters of credit and guarantees - commercial risk		212,113		210,497
Credit commitments		145,744		137,619
Total loans commitments and financial guarantee contracts		566,737		564,898

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

Maturities	March 31,		December 31,
	2021		2020
Up to 1 year		438,404		419,015
From 1 to 2 years		108,333		75,883
Over 2 to 5 years		20,000		70,000
Total		566,737		564,898

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

Notes to the unaudited condensed consolidated interim financial statements

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

9.	Gain (loss) on financial instruments, net

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

	For the three months ended March 31,
	2021			2020
Loss on derivative financial instruments and foreign currency exchange, net		(127	)		(358	)

Unrealized gain on financial instruments at fair value through profit or loss		56			-
		(71	)		(358	)

10.

Derivative financial instruments

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

	March 31, 2021
	Nominal amount		Carrying amount of hedging instruments
	Nominal amount		Asset ⁽¹⁾		Liability ⁽²⁾
Interest rate risk
Fair value hedges		85,000		2,042		(116	)
Cash flow hedges		60,000		-		(1,178	)
Interest rate and foreign exchange risk
Fair value hedges		344,221		419		(15,488	)
Cash flow hedges		281,283		13,720		(2,103	)
Foreign exchange risk
Cash flow hedges		61,679		159		(564	)
		832,183		16,340		(19,449	)

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

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Fair value hedges (continued)

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

	March 31, 2021
	Nominal amount		Carrying amount of hedging instruments					Changes in fair value used to calculate hedge			Ineffectiveness recognized in
	Nominal amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness ⁽³⁾			profit or loss ⁽³⁾
Interest rate risk
Loans		10,000		-		(64	)		64			(1	)
Securities at FVOCI		5,000		-		(52	)		24			3
Borrowings and debt		70,000		2,042		-			(134	)		16
Interest rate and foreign exchange risk
Loans		3,807		419		-			63			(33	)
Borrowings and debt		340,414		-		(15,488	)		(12,958	)		143
Total		429,221		2,461		(15,604	)		(12,941	)		128

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

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

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Fair value hedges

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

	March 31, 2021
	Carrying amount of hedged items					Line in the consolidated statement of financial position that includes the	Accumulated amount of fair value hedge adjustments included in the			Change in fair value of the hedged items used
	Asset		Liability			carrying amount of the hedged items	carrying amount of the hedged items			to calculate hedge ineffectiveness⁽¹⁾
Interest rate risk
Loans		10,101		-		Loans, net		4			(65	)
Securities at FVOCI		5,070		-		Securities and other financial assets, net		106			(21	)
Borrowings and debt		-		(72,134	)	Borrowings and debt, net		(142	)		150
Interest rate and foreign exchange risk
Loans		3,450		-				(751	)		(96	)
Borrowings and debt		-		(325,082	)	Borrowings and debt, net		14,184			13,101
Total		18,621		(397,216	)			13,401			13,069

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

⁽¹⁾ Included in the condensed consolidated interim statement of profit or loss is the line Loss on financial instruments, net.

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Fair value hedges (continued)

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

	March 31, 2021
Maturity	Interest rate swaps		Foreign exchange and interest rate risks		Total
Fair value hedge
Less than 1 year		85,000		-		85,000
Over 1 to 2 years		-		275,453		275,453
Over 2 to 5 years		-		68,768		68,768
Total		85,000		344,221		429,221

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Cash flow hedges

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

	March 31, 2021
	Nominal		Carrying amount of hedging instruments					Change in fair value used for calculating hedge			Changes in the fair value of the hedging instruments recognized in			Ineffectiveness recognized in			Amount reclassified from the hedge reserve to profit
	amount		Asset ⁽¹⁾		Liability ⁽²⁾			ineffectiveness			OCI ⁽³⁾			profit or loss ⁽⁴⁾			or loss⁽⁴⁾
Interest rate risk
Borrowings and debt		60,000		-		(1,178	)		359			358			(1	)		-
Interest rate and foreign exchange risk
Borrowings and debt		281,283		13,720		(2,103	)		(13,598	)		(13,262	)		336			-
Foreign exchange risk
Loans		61,679		159		(564	)		266			264			(2	)		(2,999	)
Borrowings and debt		-		-		-			-			-			-			-
Total		402,962		13,879		(3,845	)		(12,973	)		(12,640	)		333			(2,999	)

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

⁽¹⁾

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

⁽²⁾

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

⁽³⁾

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

⁽⁴⁾

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Cash flow hedges (continued)

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

	March 31, 2021
	Carrying amount of hedged items					Line in the consolidated statement of financial position that includes the carrying amount of	Change in the fair value of the hedged items used to calculate the hedge			Cash flow
	Asset		Liability			the hedged items	ineffectiveness			hedge reserve
Interest rate risk
Borrowings and debt		-		(20,043	)	Borrowings and debt, net		(358	)		1,080
Interest rate and foreign exchange risk
Borrowings and debt		-		(298,424	)	Borrowings and debt, net		13,262			3,275
Foreign exchange risk
Loans		61,902		-		Loans, net		(264	)		531
Total		61,902		(318,467	)			12,640			4,886

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

10.

Derivative financial instruments (continued)

Cash flow hedge (continued)

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

	March 31, 2021
Maturity	Foreign exchange risk		Interest rate swaps		Foreign exchange and interest rate risks		Total
Cash flow hedge
Less than 1 year		61,679		40,000		-		101,679
Over 1 to 2 years		-		15,000		30,333		45,333
Over 2 to 5 years		-		5,000		222,245		227,245
More than 5 years		-		-		28,705		28,705
Total		61,679		60,000		281,283		402,962

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

11.

Other assets

Following is a summary of other assets:

	March 31,		December 31,
	2021		2020
Accounts receivable		795		938
Prepaid expenses		2,565		2,541
Prepaid fees and commissions		339		486
Interest receivable - deposits		34		8
IT projects under development		352		218
Severance fund		1,936		1,927
Other		721		698
		6,742		6,816

12.

Deposits

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

	March 31,		December 31,
	2021		2020
Demand		355,301		170,660
Up to 1 month		642,074		1,127,120
From 1 month to 3 months		985,083		878,900
From 3 months to 6 months		737,941		544,860
From 6 months to 1 year		413,465		365,879
From 1 year to 2 years		51,883		51,481
		3,185,747		3,138,900

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

	March 31,		December 31,
	2021		2020
Aggregate amounts of $100,000 or more		3,185,529		3,138,684
Aggregate amounts of deposits in the New York Agency		718,042		657,851

	March 31,
	2021		2020
Interest expense on deposits made in the New York Agency		1,238		1,563

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

Notes to the unaudited condensed consolidated interim financial statements

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

13.

Securities sold under repurchase agreements

As of March 31, 2021 and December 31, 2020, the Bank had financing transactions under repurchase agreements for $156.7 million and $10.7 million, respectively.

During the periods ended March 31, 2021, 2020 and 2019, interest expense related to financing transactions under repurchase agreements totaled $75 thousand, $193 thousand and $287 thousand, respectively. These expenses are included as interest expense – borrowings and debt line in the condensed consolidated interim statement of profit or loss.

14.

Borrowings and debt

Some borrowing agreements include various events of default and covenants related to minimum capital adequacy ratios, incurrence of additional liens, and asset sales, as well as other customary covenants, representations and warranties. As of March 31, 2021, the Bank was in compliance with all those covenants.

Borrowings and debt are detailed as follows:

	March 31, 2021
	Short-Term						Long-term
Carrying amount	Borrowings		Debt		Lease Liabilities		Borrowings			Debt			Lease Liabilities		Total
Principal		455,119		-		1,271		250,671			1,151,500			17,231		1,875,792
Prepaid commissions		-		-		-		(373	)		(6,115	)		-		(6,488	)
		455,119		0		1,271		250,298			1,145,385			17,231		1,869,304

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

14.

Borrowings and debt (continued)

Short-term borrowings and debt

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

	March 31,		December 31,
	2021		2020
Short-term borrowings:
At fixed interest rates		15,764		55,000
At floating interest rates		439,355		276,585
Total borrowings		455,119		331,585
Short-term debt:
At floating interest rates		-		49,350
Total debt		-		49,350
Total short-term borrowings and debt		455,119		380,935

Range of fixed interest rates on borrowings and debt in U.S. dollars		1.40%		0.45% to 1.40%
Range of floating interest rates on borrowings in U.S. dollars		0.36% to 0.81%		0.47% to 1.65%
Range of fixed interest rates on borrowings in Mexican pesos		4.68%		0.00%
Range of floating interest rates on borrowings and debt in Mexican pesos		4.74%		4.97% to 5.05%

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

	March 31,		December 31,
	2021		2020
Currency
US dollar		416,957		299,957
Mexican peso		38,162		80,978
Total		455,119		380,935

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

Notes to the unaudited condensed consolidated interim financial statements

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

14.

Borrowings and debt (continued)

Long-term borrowings and debt

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

Long-term borrowings:	March 31, 2021		December 31, 2020
At fixed interest rates with due dates from April 2021 to May 2022		67,292		68,190
At floating interest rates with due dates from October 2021 to August 2023		183,379		408,820
Total long-term borrowings		250,671		477,010

Long-term debt:
At fixed interest rates with due dates from July 2021 to December 2027		827,036		784,006
At floating interest rates with due dates from March 2022 to June 2023		324,464		332,027
Total long-term debt		1,151,500		1,116,033
Total long-term borrowings and debt		1,402,171		1,593,043
Less: Prepaid commissions		(6,488		(7,707
Total long-term borrowings and debt, net		1,395,683		1,585,336

Range of fixed interest rates on borrowings and debt in U.S. dollars		2.04% to 3.05%		2.04% to 3.05%
Range of floating interest rates on borrowings and debt in U.S. dollars		1.23% to 1.81%		1.16% to 1.85%
Range of fixed interest rates on borrowings in Mexican pesos		6.77% to 9.09%		6.77% to 9.09%
Range of floating interest rates on borrowings and debt in Mexican pesos		4.67% to 5.65%		4.87% to 5.74%
Range of fixed interest rates on debt in Japanese yens		0.52% to 0.95%		0.52%
Range of fixed interest rates on debt in Euros		0.23% to 3.75%		0.9% to 3.75%
Range of fixed interest rates on debt in Australian dollars		0.00%		0.00%
Range of fixed interest rates on debt in Sterling pounds		1.50%		0.00%

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

Notes to the unaudited condensed consolidated interim financial statements

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

14.

Borrowings and debt (continued)

Long-term borrowings and debt (continued)

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

	March 31, 2021		December 31, 2020
Currency
US dollar		685,146		910,296
Mexican peso		500,804		509,687
Euro		126,142		101,469
Japanese yen		84,981		71,591
Sterling pounds		5,098		-
Total		1,402,171		1,593,043

Future payments of long-term borrowings and debt outstanding as of March 31, 2021, are as follows (excluding lease liabilities):

Payments	Outstanding
2021		62,018
2022		415,106
2023		199,083
2024		61,649
2025		612,386
2026		35,105
2027		16,824
		1,402,171

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

Notes to the unaudited condensed consolidated interim financial statements

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

14.

Borrowings and debt (continued)

Long-term borrowings and debt (continued)

Reconciliation – Movements of borrowings

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

	2021			2020
Balance as of January 1,		1,985,070			3,138,310
Net increase in short-term borrowings and debt		75,274			103,460
Proceeds from long-term borrowings and debt		95,955			50,000
Repayments of long-term borrowings and debt		(261,832	)		(81,631	)
Payment of lease liabilities		(297	)		(273	)
Change in foreign currency		(25,340	)		(74,745	)
Adjustment of fair value for hedge accounting relationship		(726	)		948
Other adjustments		1,200			949
Balance as of March 31,		1,869,303			3,137,018

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

14.

Borrowings and debt (continued)

Lease liabilities

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

	March 31, 2021		December 31, 2020
Due within 1 year		2,071		2,058
After 1 year but within 5 years		10,644		10,641
After 5 years but within 10 years		10,830		11,354
Total undiscounted lease liabilities		23,545		24,053

Short-term		1,271		1,244
Long-term		17,231		17,555
Lease liabilities included in the consolidated statement of financial position		18,502		18,799

Amounts recognized in the statement of cash flows:

		March 31, 2021				December 31, 2020
Payments of lease liabilities			297				1,114

Amounts recognized in profit or loss:

	March 31, 2021			March 31, 2020
Interest on lease liabilities		(208	)		(220	)
Income from sub-leasing right-of-use assets		66			94

15.

Other liabilities

Following is a summary of other liabilities:

	March 31,		December 31,
	2021		2020
Accruals and other accumulated expenses		7,257		9,213
Accounts payable		3,475		6,307
Others		3,048		3,194
		13,780		18,714

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

Notes to the unaudited condensed consolidated interim financial statements

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

16.

Earnings per share

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

	March 31,
	2021		2020
(Thousands of U.S. dollars)
Profit for the period		12,816		18,302

(U.S. dollars)
Basic earnings per share		0.32		0.46
Diluted earnings per share		0.32		0.46

(Thousands of shares)
Weighted average of common shares outstanding applicable to basic EPS		39,693		39,609

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

Adjusted weighted average of common shares outstanding applicable to diluted EPS		39,693		39,609

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

Notes to the unaudited condensed consolidated interim financial statements

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

17.

Fee and commission income

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

	Three months ended March 31, 2021
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Issuance and confirmation		-		2,245		554			2,799
Negotiation and acceptance		-		16		-			16
Amendment		-		254		-			254
Structuring		100		-		-			100
Other		-		27		(156	)		(129	)
		100		2,542		398			3,040

	Three months ended March 31, 2020
	Syndications		Documentary and standby letters of credit		Other Commissions, net			Total
Issuance and confirmation		-		2,146		291			2,437
Negotiation and acceptance		-		145		-			145
Amendment		-		142		-			142
Structuring		396		-		-			396
Others		-		31		(78	)		(47	)
		396		2,464		213			3,073

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

	March 31,
	2021
Up to 1 year		2,012
From 1 to 2 years		856
More than 2 years		44
		2,912

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

Notes to the unaudited condensed consolidated interim financial statements

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

18.

Business segment information

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

	Three months ended March 31, 2021
	Commercial			Treasury			Total
Interest income		30,920			1,998			32,918
Interest expense		(166	)		(13,857	)		(14,023	)
Inter-segment net interest income		(12,022	)		12,022			-
Net interest income		18,732			163			18,895
Other income (expense), net		3,257			(191	)		3,066
Total income		21,989			(28	)		21,961

Reversal of (provision for) credit losses		37			(37	)		-
Gain (loss) on non-financial assets, net		-			-			-
Operating expenses		(7,148	)		(1,997	)		(9,145	)
Segment profit (loss)		14,878			(2,062	)		12,816

Segment assets		5,137,623			1,230,515			6,368,138
Segment liabilities		95,901			5,228,490			5,324,391

	Three months ended 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

Reversal of (provision for) credit losses		89			-			89
Gain (loss) on non-financial assets, net		-			-			-
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

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

Notes to the unaudited condensed consolidated interim financial statements

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

18.

Business segment information (continued)

Reconciliation on information on reportable segments

	Three months ended March 31
	2021		2020
Profit for the period		12,816		18,302

Assets:
Assets from reportable segments		6,368,138		6,812,969
Other assets - unallocated		6,708		9,554
Total assets		6,374,846		6,822,523

Liabilities:
Liabilities from reportable segments		5,324,391		5,791,790
Other liabilities - unallocated		13,780		12,245
Total liabilities		5,338,171		5,804,035

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

Notes to the unaudited condensed consolidated interim financial statements

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

19.

Related party transactions

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

	March 31,			December 31,
	2021			2020
Assets
Demand deposits		1,702			3,269
Loans, net		17,574			22,499
Total asset		19,276			25,768

Liabilities
Time deposits		250,000			240,000
Total liabilities		250,000			240,000

Contingencies
Stand-by letters of credit		11,800			28,300
Loss allowance		(54	)		(60	)
Total contingencies		11,746			28,240

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

	March 31,
	2021			2020
Interest income
Loans		100		540
Total interest income		100		540
Interest expense
Deposits		(623	)	(467	)
Total interest expense		(623	)	(467	)

Net interest income (expenses)		(523	)	73

Other income (expense)
Fees and commissions, net		60		88
Total other income, net		60		88

Net income from related parties		(463	)	161

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

Notes to the unaudited condensed consolidated interim financial statements

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

19.

Related party transactions (continued)

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

	March 31,
	2021		2020
Expenses:
Compensation costs to directors		240		348
Compensation costs to executives		1,603		3,274

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

20.

Litigation

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

21.

Applicable laws and regulations

Liquidity index

In according with the established in Rule No. 2-2018 issued by the Superintendence of Banks of Panama (SBP), as of March 31, 2021 and December 31, 2020 the minimum LCR to be reported to the SBP was 65% and 50%, respectively. The Bank´s LCR as of March 31, 2021 and December 31, 2020 was 233% and 249%, respectively.

In compliance with the Rule No. 4-2008 issued by the SBP, the percentage of the liquidity index reported by the Bank to the regulator as of March 31, 2021 and December 31, 2020 was 77.29% and 79.99%, respectively.

Capital adequacy

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


	March 31, 2021		December 31, 2020
Capital funds		1,052,197		1,048,182

Risk-weighted assets		5,431,105		5,187,054
Capital adequacy index		19.37%		20.21%

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

Notes to the unaudited condensed consolidated interim financial statements

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

21.

Applicable laws and regulations (continued)

Leverage ratio

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

	March 31, 2021		December 31, 2020
Ordinary capital		916,179		912,164

Non-risk-weighted assets		6,571,783		6,479,416
Leverage ratio		13.94%		14.08%

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

	March 31, 2021
	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Loans at amortized cost
Corporations		2,273,379		9,281		10,593		-		-		2,293,254
Financial Institutions:
Private		2,162,687		-		-		-		-		2,162,687
State-owned		571,913		-		-		-		-		571,913
		2,734,600		-		-		-		-		2,734,600
Sovereign		35,415		-		-		-		-		35,415
		5,043,395		9,281		10,593		-		-		5,063,269

Allowance for loan losses IFRS ^(*):		34,237		1,857		5,002		-		-		41,096

Loans at FVTPL
Financial Institutions:
Private		5,039		-		-		-		-		5,039
Total loans		5,048,434		9,281		10,593		-		-		5,068,308

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

Notes to the unaudited condensed consolidated interim financial statements

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

21.

Applicable laws and regulations (continued)

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

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

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

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

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

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

	March 31, 2021
Loans at amortized cost	Normal		Special Mention		Substandard		Doubtful		Unrecoverable		Total
Impaired loans		-		-		10,593		-		-		10,593
Total		-		-		10,593		-		-		10,593

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

	March 31, 2021		December 31, 2020
Non-accruing loans:
Private corporations		10,593		10,593
Total non-accruing loans		10,593		10,593

Interest that would be reversed if the loans had been classified as non-accruing loans		414		351
Income from collected interest on non-accruing loans		-		-

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

Notes to the unaudited condensed consolidated interim financial statements

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

21.

Applicable laws and regulations (continued)

Modified special mention loans

In accordance with the requirements of Article 4-E of Rule No. 9-2020, a detail of the portfolio of modified special mention category loans and their respective provisions and regulatory reserves as of March 31,2021 and December 31, 2020, classified according to the three-stage model of IFRS 9 follows:

	March 31, 2021
	Stage 1		Stage 2		Stage 3		Total
Modified special mention loans
Modified loans
Corporate		-		8,829		-		8,829
(-) Modified loans secured by pledged deposits in the same bank up to the guaranteed amount		-		-		-		-
(+) Interest receivable				7		-		7
(-) Unearned interest and deferred fees		-		-		-		-
Total loan portfolio subject to provisions
Rule No. 9-2020		-		8,836		-		8,836

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

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

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

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

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

Notes to the unaudited condensed consolidated interim financial statements

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

21.

Applicable laws and regulations (continued)

As of March 31, 2021, the modified special mention loan has complied with its contractual payments of the loan agreement.

It is important to note that in addition to the modified special mention loan, the Bank maintains corporate loans in Substandard category and that they embraced to the moratorium of Law No. 156 of June 30, 2020. As of March 31, 2021 and December 31, 2020, these loans carrying amount are $11.0 million and $10.9 million, respectively (including interest) and present interest payments with a default of up to 30 days.

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

The provision and reserve are detailed as follows:

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

Capital reserve

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

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