BLX Banco Latinoamericano de Comercio Exterior SA

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: February 14, 2020

BLADEX ANNOUNCES PROFIT FOR THE FOURTH QUARTER 2019 OF $22.1 MILLION, OR $0.56 PER SHARE;

FULL YEAR 2019 PROFIT OF $86.1 MILLION, OR $2.17 PER SHARE

PANAMA CITY, REPUBLIC OF PANAMA, February 14, 2020

Banco Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX, “Bladex”, or “the Bank”), a Panama-based multinational bank originally established by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the region, today announced its results for the fourth quarter (“4Q19”) and full year (“FY19”) ended December 31, 2019.

The consolidated financial information in this document has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

FY19 & 4Q19 Highlights

CEO’s Comments

Mr. N. Gabriel Tolchinsky, Bladex’s Chief Executive Officer said, “In 2019, the global economy experienced its weakest year of growth since the financial crisis, weighed down by tensions that have significantly slowed international trade. The main drivers for the lackluster performance were the trade war between the US and China, negative trade flows that disrupted supply chains, and idiosyncratic risks in some countries.

2019 was also a very difficult year for Latin America regionally. Economic growth came in significantly below beginning of year expectations and significantly below last year’s levels. Of the largest three economies of Latin America, Brazil was the only one that showed any signs of life, though growing tepidly, while Mexico stagnated, a remarkable decoupling from a strong US economy and Argentina´s GDP shrank.

We regard Brazil as the main potential driver for economic growth in the Region. That said, Colombia and Peru should also perform well. But with (a) commodity prices depressed because of trade uncertainties and a strong US dollar, (b) Mexico stuck in low or no growth mode due to needed fiscal restraint, tight monetary policy to keep portfolio moneys flowing and a fundamental lack of investment, (c) potential social unrest in Chile and (d) smaller countries like Costa Rica mired in a fiscal red ink and Ecuador struggling to comply with the IMF program, we simply do not see other countries as significant contributors to Regional growth.

We continue to believe that the current macroeconomic context offers no room for complacency. Furthermore, low growth combined with risk aversion is exacerbating liquidity for top names in the Region, compressing their margins, while not always compensating for the risk these credits represent.

Nevertheless, Bladex´s book of business is solid as we have been able to add new clients, shift exposures to lower risk jurisdictions and structure value added transactions. We achieved our current profitability levels despite this very challenging environment. Over the past two years, macroeconomic risks, slow regional economic growth, tepid trade flows, idiosyncratic country and industry risks have been the norm. And, all these risks were coupled with an overwhelming amount of liquidity chasing the same creditworthy clients. If Bladex can deliver 8.6% ROAE with these headwinds, we should be very well positioned to deliver more sizeable returns in more benign environments that surely will come. We are keenly aware of the risks in the Region’s industries and entities we finance. And, I can say with confidence that our team knows how to spot opportunities and deliver results.

We continue to diversify our funding sources beyond our typical Central Bank deposits, bilateral lines of credit, capital markets and international borrowings. We recently started a new Yankee CD program that will complement our short-term funding structure.

On the cost side, expenses continue to stay under control.

Against this backdrop, the management of Bladex, and its Board of Directors, is cautiously optimistic for 2020 and look for a continuation of the profitability path we embarked on in the last five quarters.”

RESULTS BY BUSINESS SEGMENT

The Bank’s activities are managed and executed in two business segments, Commercial and Treasury. Information related to each reportable segment is set out below. Business segment results are based on the Bank’s managerial accounting process, which assigns assets, liabilities, revenue and expense items to each business segment on a systemic basis.

COMMERCIAL BUSINESS SEGMENT

The Commercial Business Segment encompasses the Bank’s core business of financial intermediation and fee generation activities developed to cater to corporations, financial institutions and investors in Latin America. These activities include the origination of bilateral short-term and medium-term loans, structured and syndicated credits, loan commitments, and financial guarantee contracts such as issued and confirmed letters of credit, stand-by letters of credit, guarantees covering commercial risk, and other assets consisting of customers’ liabilities under acceptances.

Profits from the Commercial Business Segment include (i) net interest income from loans; (ii) fees and commissions from the issuance, confirmation and negotiation of letters of credit, guarantees and loan commitments, and through loan structuring and syndication activities; (iii) gain on sale of loans generated through loan intermediation activities; (iv) recovery or impairment loss on financial instruments, as well as gain (loss) in other non-financial assets, net; and (v) direct and allocated operating expenses.

Commercial Portfolio balance totaled $6.5 billion as of December 31, 2019, a 5% QoQ increase compared to $6.2 billion as of September 30, 2019, and a 3% YoY increase compared to $6.3 billion as of December 31, 2018. Average Commercial Portfolio balances were $6.1 billion for the FY19 (stable YoY), and $6.2 billion for the 4Q19, which resulted in a 6% increase QoQ (stable YoY).

As of December 31, 2019, 73% of the Commercial Portfolio was scheduled to mature within a year, and 53% of its short.-term origination represented trade finance transactions, compared to 76% and 53%, respectively, a quarter ago, and 74% and 59%, respectively, a year ago.

The following graphs illustrate the geographic distribution of the Bank’s Commercial Portfolio, highlighting the portfolio´s risk diversification by country and across industry segments:

The Bank’s traditional client base of financial institutions represented 56% of the total Commercial Portfolio at the end of 4Q19, compared to 55% a quarter ago and 52% a year ago. The portfolio continued to be well diversified across corporate sectors, with total oil and gas exposure (integrated & downstream) at 10% of the total Commercial Portfolio at the end of 4Q19, down from 12% a quarter and year ago. All the remaining industry sectors were at 5% or lower, except for electric power industry which accounted for 6% of total Commercial Portfolio.

Geographically, exposure in Brazil, the Bank’s largest country-risk exposure, decreased to 16% of the total Commercial Portfolio, compared to 17% and 19% a quarter and year ago, respectively, out of which 81% was with financial institutions at the end of 4Q19, compared to 85% and 73% a quarter and year ago, respectively. Exposure in Argentina was reduced to 3% of the total Commercial Portfolio at the end of 4Q19, from 10% a year ago, as the Bank re-shifted its portfolio origination towards top-tier banks and corporations in lower-risk countries, focusing its growth in top rated countries in the Region, where it was able to take advantage of good risk/return opportunities. Consequently, exposures in Colombia and Chile increased to 15% and 11% of the total Commercial Portfolio, which now represent the second and fourth largest country exposures, respectively, up from 11% and 3% a year ago. In addition, exposure to other top-rated countries outside of Latin America, which relates to transactions carried out in the Region, was also increased to 7% of total portfolio at the end of the 4Q19, from 2% a year ago. Mexico, which still represents a significant part of the portfolio as the third largest exposure, decreased to 12% of the Commercial Portfolio, compared to 14% a quarter and year ago.

Refer to Exhibit IX for additional information relating to the Bank’s Commercial Portfolio distribution by country, and Exhibit XI for the Bank’s distribution of loan disbursements by country.

Commercial Business Segment’s results were $25.6 million for the 4Q19 (+12% QoQ; +8% YoY) and $94.8 million for the FY19 (+254% YoY). The quarterly Profit increases were mainly attributable to the re-shifting of its portfolio towards lower-risk countries that resulted on a $1.9 million reversal of impairment losses on financial instruments in 4Q19 compared to net losses on financial instruments and other assets in the comparative periods, along with a 7% QoQ increase in total revenues, mainly from higher fee income. Annual Profit improvement was mainly driven by lower impairment losses on financial instruments and losses in other assets, coupled with improved operating efficiency on a 17% YoY reduction in operating expenses and steady top-line revenues.

TREASURY BUSINESS SEGMENT

The Treasury Business Segment focuses on managing the Bank’s investment portfolio and the overall structure of its assets and liabilities to achieve more efficient funding and liquidity positions for the Bank, mitigating the traditional financial risks associated with the balance sheet, such as interest rate, liquidity, price and currency risks. Interest-earning assets managed by the Treasury Business Segment include liquidity positions in cash and cash equivalents, and financial instruments related to the investment management activities, consisting of securities at fair value through other comprehensive income (“FVOCI”) and securities at amortized cost (the “Investment Portfolio”). The Treasury Business Segment also manages the Bank’s interest-bearing liabilities, which constitute its funding sources, mainly deposits, short- and long-term borrowings and debt.

Profits from the Treasury Business Segment include net interest income derived from the above mentioned treasury assets and liabilities, and related net other income (net results from derivative financial instruments and foreign currency exchange, gain (loss) per financial instruments at fair value through profit or loss (“FVTPL”), gain (loss) on sale of securities at FVOCI, and other income), recovery or impairment loss on financial instruments, and direct and allocated operating expenses.

Liquidity balances totaled $1,160 million at the end of 4Q19, up from $963 million at the end of 3Q19 and down from $1,706 million at the end of 4Q18. Deposits placed with the Federal Reserve Bank of New York represented 98% at the end of 4Q19. As of these quarter-end dates, liquidity balances to total assets represented 16.0%, 14.4% and 22.4%, respectively, while the liquidity balances to total deposits ratio was 40.2%, 33.8% and 57.4%, respectively.

The Investment Portfolio balances totaled $80 million as of December 31, 2019, down from $85 million as of September 30, 2019, and $107 million as of December 31, 2018. As of these dates, the Investment Portfolio accounted for 1% of total assets, mostly consisting of readily-quoted Latin American securities, out of which 72% represented sovereign or state-owned risk at the end of the 4Q19, compared to 71% a quarter ago and 76% a year ago (refer to Exhibit X for a per-country risk distribution of the Investment Portfolio).

On the funding side, deposit balances totaled $2.9 billion at the end of 4Q19, up 1% from a quarter ago and down 3% from a year ago. As of December 31, 2019, total deposits represented 48% of total funding sources, which compared to 52% and 46% of total funding sources a quarter and year ago, respectively. Many of the deposits are placed by central banks or designees (i.e.: Class A shareholders of the Bank), representing 61%, 62% and 71% of total deposits at the same dates, respectively. Short- and medium-term borrowings and debt totaled $3.1 billion, which represented a 20% QoQ increase and a 11% YoY decrease, on a reopening of the bond issuance in the Mexican capital markets and several short-term bilateral transactions during the quarter. Weighted average funding costs were 2.69% in 4Q19 and 3.10% in FY19, down 40bps and 43bps from a quarter and year ago on higher average deposit base and lower quarterly LIBOR-based market rates, and yearly up 34bps compared to FY18, mainly reflecting the annual increase on LIBOR-based market rates.

Treasury Business Segment’s results were a $3.5 million loss for the 4Q19 (-42% QoQ; -16% YoY) and an $8.8 million loss for FY19 (+24% YoY). The quarterly decreases were mainly associated to a $1.8 million loss in other financial instruments during the 4Q19 related to the Bank’s results on its hedging positions, partially offset by a $0.8 million Net Interest Income in the 4Q19, primarily driven by the positive impact from the repricing on the Bank’s asset-liability interest rate gap position. The 24% improvement YoY was driven by higher Net Interest Income mainly from the positive gap income, along with a 17% decrease in operating expenses.

NII for the 4Q19 totaled $26.9 million (+1% QoQ; -4% YoY), with NIM of 1.65% (-12bps QoQ; +4bps YoY). The 1% QoQ improvement was mainly attributable to higher average lending volumes. The 4% YoY quarterly decrease was mainly due to a decline in lending spreads and to the net effect of lower average LIBOR-based market rates, partly compensated by decreased average low-yielding liquidity levels.

NII and NIM for FY19 reached $109.5 million (stable YoY) and 1.74% (+3bps YoY), respectively. The net positive effect of higher average LIBOR-based market rates throughout the year, was offset by lower average lending volumes and decreased average liability deposit balances, impacting overall funding costs.

FEES AND COMMISSIONS

Fees and Commissions, net, includes the fee income associated with letters of credit and the fee income derived from loan structuring and syndication activities, and other commissions, mostly from other contingent credits, such as guarantees and credit commitments, net of fee expenses.

4Q19 and FY19 Fees and Commissions income totaled $5.4 million and $15.6 million, respectively. The QoQ increase of 90% was primarily attributable to the closing of two structured transactions in 4Q19, while YoY total fees remained relatively stable. Fee income from the letters of credit business has remained steady on a quarterly basis throughout 2019; whereas FY19 fees and commissions decreased 9% YoY on lower letters of credit revenues with syndication fees up 14% after closing six transaction.

The total allowance for credit losses on the Commercial Portfolio totaled $102.4 million, or 1.57% of the Commercial Portfolio at December 31, 2019, compared to $104.1 million, or 1.67% and 1.65% of the portfolio, a quarter and year ago, respectively. The $1.7 million QoQ decrease was mostly associated to lower net provision requirements resulting from the collectively assessed allocation segment (IFRS Stage 2), based on lifetime expected credit losses, as the Bank reduced its exposure in this segment.

Credit-impaired Loans, also referred to as Non-Performing Loans or NPLs, were $61.8 million, or 1.0% of total Loan Portfolio balances at the end of 4Q19, as no new NPLs was recorded during 2019. These levels of NPLs compare to $64.7 million, or 1.1% of total Loan Portfolio as of December 31, 2018. Total allowance for credit losses was 1.7 times NPL balances at the end of 4Q19 and 3Q19, compared to 1.6 times NPL balances a year ago.

Fourth Quarter and Full Year operating expenses totaled $11.3 million and $40.7 million, respectively. The quarterly increases of 26% QoQ was mostly explained by higher employee-related expenses and other seasonal expenses compared to the previous quarter. The annual decrease of 17% YoY was mainly associated to lower employee-related expenses resulting from the personnel restructuring in 2018, together with other cost savings.

Efficiency Ratio improved to 32% for FY19 (-6pts YoY) as operating expenses decreased 17% YoY with total revenues nearly stable (-1% YoY), reflecting an effective cost control management and overall improved structural and operational efficiencies. 4Q19 Efficiency Ratio increased 6pts QoQ to 36% (stable YoY), as improved revenues QoQ were offset by higher operating expenses.

The Bank’s equity consists entirely of issued and fully paid ordinary common stock, with 39.6 million common shares outstanding as of December 31, 2019. At the same date, the Bank’s ratio of total assets to total equity increased to 7.1 times, and the Bank’s capitalization remained solid with a Tier 1 Basel III Capital Ratio of 19.8%, with risk-weighted assets up 8% QoQ due to Commercial Portfolio growth, but 6% down YoY on the Commercial Portfolio’s mix shift towards lower country risk.

RECENT EVENTS

Notes:

Footnotes:

SAFE HARBOR STATEMENT

ABOUT BLADEX

Bladex, a multinational bank originally established by the central banks of Latin-American and Caribbean countries, began operations in 1979 to promote foreign trade and economic integration in the Region. The Bank, headquartered in Panama, also has offices in Argentina, Brazil, Colombia, Mexico, and the United States of America, and a Representative License in Peru, supporting the regional expansion and servicing its customer base, which includes financial institutions and corporations.

Bladex is listed on the NYSE in the United States of America (NYSE: BLX), since 1992, and its shareholders include: central banks and state-owned banks and entities representing 23 Latin American countries; commercial banks and financial institutions; and institutional and retail investors through its public listing.

CONFERENCE CALL INFORMATION

There will be a conference call to discuss the Bank’s quarterly results on Friday, February 14, 2020 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please dial (800) 311-9401 in the United States or, if outside the United States, (334) 323-7224. Participants should use conference ID# 8034, and dial in five minutes before the call is set to begin. There will also be a live audio webcast of the conference at http://www.bladex.com. The webcast presentation will be available for viewing and downloads on http://www.bladex.com.

The conference call will become available for review on Conference Replay one hour after its conclusion and will remain available for 60 days. Please dial (877) 919-4059 or (334) 323-0140, and follow the instructions. The replay passcode is: 44638262.

For more information, please access http://www.bladex.com or contact:

Mrs. Ana Graciela de Méndez

Chief Financial Officer

Tel: +507 210-8563

E-mail address: amendez@bladex.com