Your Connection to Latin America
Annual Report 2012
NOTE: CORPORATE GOVERNANCE (For purposes of section 303A of the NYSE Listed Company Manual / Corporate Governance rules). Bladex chose to include the information and documentation pertaining to compliance
Index
Who we are
2
Our Values
10
Message to Shareholders
14
Financial Performance
20
Risk Management
32
Our Human Capital
35
Corporate Social Responsibility
36
Offices
38
Financial Statements
40
with section 303A of the NYSE Listed Company Manual / Corporate Governance rules on its website (www.bladex.com). Bladex will continuously update this information.
1
NOTE: CORPORATE GOVERNANCE (For purposes of section 303A of the NYSE Listed Company Manual / Corporate Governance rules). Bladex chose to include the information and documentation pertaining to compliance
Index
Who we are
2
Our Values
10
Message to Shareholders
14
Financial Performance
20
Risk Management
32
Our Human Capital
35
Corporate Social Responsibility
36
Offices
38
Financial Statements
40
with section 303A of the NYSE Listed Company Manual / Corporate Governance rules on its website (www.bladex.com). Bladex will continuously update this information.
1
Who we are
A genuinely latin american bank
Bladex is a supranational bank represented by 23 central banks from the Region, with more than 30 years of experience in Latin America, and with deep knowledge of the economy’s various sectors, gained through
With a global network of correspondent banks, and local presence in six countries and eight cities in the Region, Bladex has disbursed over $191 billion in
Bladex’s Staff, by Nationality
Accumulated Credit Disbursements since Inception In US$ billion
December 31, 2012
Panama Brazil Other Mexico Colombia Argentina Peru
credits since our inception. The Bladex brand is synonymous with a commitment to excellence in providing customized customer service, and integrated financial solutions for investors and companies in the trade value chain in Latin America.
our close relationships with clients and governments.
57% 10% 10% 9% 6% 5% 3%
80.1
35.6 18.5
Caribbean
33.0
17.9
Central America
6.1 Andean Region*
Rest of South America
North America
Other Regions
* Includes Bolivia, Colombia, Ecuador and Peru
2
3
Who we are
A genuinely latin american bank
Bladex is a supranational bank represented by 23 central banks from the Region, with more than 30 years of experience in Latin America, and with deep knowledge of the economy’s various sectors, gained through
With a global network of correspondent banks, and local presence in six countries and eight cities in the Region, Bladex has disbursed over $191 billion in
Bladex’s Staff, by Nationality
Accumulated Credit Disbursements since Inception In US$ billion
December 31, 2012
Panama Brazil Other Mexico Colombia Argentina Peru
credits since our inception. The Bladex brand is synonymous with a commitment to excellence in providing customized customer service, and integrated financial solutions for investors and companies in the trade value chain in Latin America.
our close relationships with clients and governments.
57% 10% 10% 9% 6% 5% 3%
80.1
35.6 18.5
Caribbean
33.0
17.9
Central America
6.1 Andean Region*
Rest of South America
North America
Other Regions
* Includes Bolivia, Colombia, Ecuador and Peru
2
3
Bladex’s Credit Ratings Rating Agencies
Moody’s Mar ‘12*
Fitch Jul ‘12*
S&P Sep ‘12*
Short Term
P-2
F2
A-2
Long Term
Baa2
BBB+
BBB
Perspective
Stable
Stable
Stable
TERM
* Confirmation date of rating
Who we are
A world class institution
4
Our unique combination of share ownership that includes governments, and public shareholders in the USA, as well as an international presence in several markets, requires the highest standards of Corporate Governance. Our model for Corporate Governance determines the way we manage the Organization, reflecting our ethical standards, our integrated risk management framework, and our commitment to shareholders to adhere to best market practices. This model ensures that we comply with the rules and regulations enforced by the various regulatory authorities throughout the Americas to which Bladex is subject.
Our Corporate Governance model underpins everything we do; it encompasses the internal control structure by which we actively safeguard the assets and capital of our shareholders, and ensures the strict adherence to applicable accounting standards. Bladex has been listed on the New York Stock Exchange for over 20 years, being the first Latin American bank to be listed on NYSE–Euronext, and was the first Latin American bank to receive an investment grade rating (1992), which it still holds today.
The Bank is actively involved with international organizations, including as a member of the International Advisory Committee of the NYSE Board of Directors (IAC), a member of the Latin American Business Council (CEAL), and as a member of the Board of Directors of the Association of Trade and Forfaiting in the Americas (ATFA). Since its inception in 1979, Bladex has enjoyed preferred creditor status granted by most of the countries in the Region where it operates.
Transparency
Internal Corporate Governance Mechanisms
Accounting and Regulatory Standards
• Regulatory reports • Conference calls • Press releases • Analyst reports • Roadshows with investors and financial institutions • Rating agency reports • Information available on the website
• Disclosure Committee • Code of ethics • Whistleblower program • Internal controls designed and tested to comply with the Panamanian regulations and Section 404 of the Sarbanes Oxley Act • Operating Risk Committee • Management Committee
• US GAAP • Superintendency of Banks of Panama • Securities and Exchange Commission (SEC) • Sarbanes Oxley (SOX)
5
Bladex’s Credit Ratings Rating Agencies
Moody’s Mar ‘12*
Fitch Jul ‘12*
S&P Sep ‘12*
Short Term
P-2
F2
A-2
Long Term
Baa2
BBB+
BBB
Perspective
Stable
Stable
Stable
TERM
* Confirmation date of rating
Who we are
A world class institution
4
Our unique combination of share ownership that includes governments, and public shareholders in the USA, as well as an international presence in several markets, requires the highest standards of Corporate Governance. Our model for Corporate Governance determines the way we manage the Organization, reflecting our ethical standards, our integrated risk management framework, and our commitment to shareholders to adhere to best market practices. This model ensures that we comply with the rules and regulations enforced by the various regulatory authorities throughout the Americas to which Bladex is subject.
Our Corporate Governance model underpins everything we do; it encompasses the internal control structure by which we actively safeguard the assets and capital of our shareholders, and ensures the strict adherence to applicable accounting standards. Bladex has been listed on the New York Stock Exchange for over 20 years, being the first Latin American bank to be listed on NYSE–Euronext, and was the first Latin American bank to receive an investment grade rating (1992), which it still holds today.
The Bank is actively involved with international organizations, including as a member of the International Advisory Committee of the NYSE Board of Directors (IAC), a member of the Latin American Business Council (CEAL), and as a member of the Board of Directors of the Association of Trade and Forfaiting in the Americas (ATFA). Since its inception in 1979, Bladex has enjoyed preferred creditor status granted by most of the countries in the Region where it operates.
Transparency
Internal Corporate Governance Mechanisms
Accounting and Regulatory Standards
• Regulatory reports • Conference calls • Press releases • Analyst reports • Roadshows with investors and financial institutions • Rating agency reports • Information available on the website
• Disclosure Committee • Code of ethics • Whistleblower program • Internal controls designed and tested to comply with the Panamanian regulations and Section 404 of the Sarbanes Oxley Act • Operating Risk Committee • Management Committee
• US GAAP • Superintendency of Banks of Panama • Securities and Exchange Commission (SEC) • Sarbanes Oxley (SOX)
5
Who we are
A bank with vast experience in foreign trade
Bladex has unrivaled capabilities in delivering products and services across the foreign trade value chain. These stem from its deep knowledge of the Region and its unique expertise in foreign trade, qualities gained as a result of more than 30 years of experience and focus.
Our clients benefit from a business model that facilitates the connection between Latin America and the rest of the world, whether they are buying and selling products, or investing in the Region. The various stakeholders involved in business in Latin America, whether
By Trade Indicator
Commercial Portfolio
December 31, 2012
financial institutions, Latin American multinational companies, investors, or traditional exporters and importers, find in our business proposition both traditional trade finance products and services, as well as financial solutions customized to their specific needs.
By Segment Business December 31, 2012
Corporate Trade Non-trade
6
61% 39%
Financial Institutions Middle-market Companies
49% 39% 12% 7
Who we are
A bank with vast experience in foreign trade
Bladex has unrivaled capabilities in delivering products and services across the foreign trade value chain. These stem from its deep knowledge of the Region and its unique expertise in foreign trade, qualities gained as a result of more than 30 years of experience and focus.
Our clients benefit from a business model that facilitates the connection between Latin America and the rest of the world, whether they are buying and selling products, or investing in the Region. The various stakeholders involved in business in Latin America, whether
By Trade Indicator
Commercial Portfolio
December 31, 2012
By Business Segment December 31, 2012
61% 39% 6
financial institutions, Latin American multinational companies, investors, or traditional exporters and importers, find in our business proposition both traditional trade finance products and services, as well as financial solutions customized to their specific needs.
49% 39% 12% 7
Who we are
Value added to our shareholders
Bladex has a long tradition of sharing results with its shareholders, with a policy of paying quarterly dividends based on sustainable earnings growth. The year 2012 brought yet another dividend increase, as the quarterly dividend was raised from $0.25 per share to $0.30 per share, providing a dividend yield in excess of 5% per
Stock Price Evolution (BLX)
opportunity to investors interested in participating in the growth of Latin America. Bladex offers investors access to an entire continent, through an institution that has built a balanced portfolio spanning the Region, and that is uniquely positioned to benefit from the continued strong growth prospects of Latin America and its economies.
The market has recognized Bladex’s performance with an appreciation of its stock price of 34% in 2012. With a price-to-book ratio of only 1x, and a steadily growing business franchise, Bladex remains an attractive investment
Dividend per Share
23.02 21.57
18.78
annum. This was the fourth such increase over a period of 10 quarters.
5.3%
21.56 4.2%
18.49
4.9%
4.3%
4.6%
4.6%
0.25 14.94 0.15
0.15
0.20
0.20
4Q10
1Q11
0.20
0.20
2Q11
3Q11
5.6%
5.6%
5.0%
0.25
0.25
1Q12
2Q12
0.30
0.30
3Q12
4Q12
0.17
US$
01/11/2012
01/09/2012
01/07/2012
01/05/2012
01/03/2012
01/01/2012
01/11/2011
01/09/2011
01/07/2011
01/05/2011
01/03/2011
01/01/2011
01/11/2010
01/09/2010
11.92
01/07/2010
01/05/2010
01/03/2010
US$
12.02
01/01/2010
5.2%
4.7%
16.30 14.10
8
6.2%
1Q10
2Q10
3Q10
Dividend per Share
4Q11
Annualized Retun / Average Price per Share
Dividend Increase
9
Who we are
Value added to our shareholders
annum. This was the fourth such increase over a period of 10 quarters.
Bladex has a long tradition of sharing results with its shareholders, with a policy of paying quarterly dividends based on sustainable earnings growth. The year 2012 brought yet another dividend increase, as the quarterly dividend was raised from $0.25 per share to $0.30 per share, providing a dividend yield in excess of 5% per
Stock Price Evolution (BLX)
The market has recognized Bladex’s performance with an appreciation of its stock price of 34% in 2012. With a price-to-book ratio of only 1x, and a steadily growing business franchise, Bladex remains an attractive investment
Dividend per Share
23.02 21.57
18.78
opportunity to investors interested in participating in the growth of Latin America. Bladex offers investors access to an entire continent, through an institution that has built a balanced portfolio spanning the Region, and that is uniquely positioned to benefit from the continued strong growth prospects of Latin America and its economies.
5.3%
21.56 4.2%
18.49
4.9%
4.3%
4.6%
4.6%
0.25 14.94 0.15
0.15
0.20
0.20
4Q10
1Q11
0.20
0.20
2Q11
3Q11
5.6%
5.6%
5.0%
0.25
0.25
1Q12
2Q12
0.30
0.30
3Q12
4Q12
0.17
US$
01/11/2012
01/09/2012
01/07/2012
01/05/2012
01/03/2012
01/01/2012
01/11/2011
01/09/2011
01/07/2011
01/05/2011
01/03/2011
01/01/2011
01/11/2010
01/09/2010
11.92
01/07/2010
01/05/2010
01/03/2010
US$
12.02
01/01/2010
5.2%
4.7%
16.30 14.10
8
6.2%
1Q10
2Q10
3Q10
Dividend per Share
4Q11
Annualized Retun / Average Price per Share
Dividend Increase
9
Our Values express our identity and determine our behavior
Integrity is the very fabric of Bladex. The principles of our Corporate Governance call for ethical behavior that reflects honesty, transparency, and doing what is right. The Organization has a zero tolerance approach to unethical behavior.
10
11
Our Values express our identity and determine our behavior
Integrity is the very fabric of Bladex. The principles of our Corporate Governance call for ethical behavior that reflects honesty, transparency, and doing what is right. The Organization has a zero tolerance approach to unethical behavior.
10
11
12
Commitment highlights what we do at Bladex. We strive to provide our various stakeholders the means to find the best solution for their needs. Our conduct is directed toward meeting our clients’ requirements, and creating value for our shareholders.
Respect guides us in our behavior toward our co-workers, clients, shareholders, and the community. We promote an atmosphere of mutual trust and harmony, seeking to benefit from the diversity of a multi-cultural group of professionals. This leads to the development of a strong team culture.
Excellence remains our overriding goal. We aim to exceed stakeholders’ expectations through creativity and innovation. The pursuit of quality is present in everything we do.
Humility is the bond that makes our organization strong. We understand that our best performance comes when we are mindful of the importance of each person’s contribution toward the success and achievement of the goals of the organization.
13
12
Commitment highlights what we do at Bladex. We strive to provide our various stakeholders the means to find the best solution for their needs. Our conduct is directed toward meeting our clients’ requirements, and creating value for our shareholders.
Respect guides us in our behavior toward our co-workers, clients, shareholders, and the community. We promote an atmosphere of mutual trust and harmony, seeking to benefit from the diversity of a multi-cultural group of professionals. This leads to the development of a strong team culture.
Excellence remains our overriding goal. We aim to exceed stakeholders’ expectations through creativity and innovation. The pursuit of quality is present in everything we do.
Humility is the bond that makes our organization strong. We understand that our best performance comes when we are mindful of the importance of each person’s contribution toward the success and achievement of the goals of the organization.
13
Gonzalo Menéndez Duque
Chairman of the Board of Directors
Rubens V. Amaral Jr. Chief Executive Officer
A Message to Shareholders BLADEX’S RESULTS REFLECT A SOLID CORE BUSINESS FOCUSED ON SUPPORTING REGIONAL INTEGRATION IN LATIN AMERICA
Dear shareholders:
14
Bladex continued to build on its fundamental strengths to achieve strong results in 2012, despite increased volatility and uncertainty in the global economy, and subdued growth in the economies of the Latin American and Caribbean Region, and worldwide.
The Region’s average growth of 3.1% was lower than the previous year’s of 4.1%, but still significantly higher than the global average of 2.2%, making Latin America one of the most commercially dynamic and attractive regions for investment. One of the main factors slowing the average growth rate of Latin America in 2012 was a downturn in the Brazilian economy, which accounts for the largest national share of GDP in the Region. However,
Chile, Peru, and several countries in Central America continued to show sustained growth, and others, like Mexico, managed to exceed forecasts. As such, while the World Trade Organization projected global trade expansion of 2.5% in 2012, a significant drop from 2011 (5.0%), the Region still managed to achieve solid trade flow growth, with increases of 1.6% in exports and 3.9% in imports.
15
Gonzalo Menéndez Duque
Chairman of the Board of Directors
Rubens V. Amaral Jr. Chief Executive Officer
A Message to Shareholders BLADEX’S RESULTS REFLECT A SOLID CORE BUSINESS FOCUSED ON SUPPORTING REGIONAL INTEGRATION IN LATIN AMERICA
Dear shareholders:
14
Bladex continued to build on its fundamental strengths to achieve strong results in 2012, despite increased volatility and uncertainty in the global economy, and subdued growth in the economies of the Latin American and Caribbean Region, and worldwide.
The Region’s average growth of 3.1% was lower than the previous year’s of 4.1%, but still significantly higher than the global average of 2.2%, making Latin America one of the most commercially dynamic and attractive regions for investment. One of the main factors slowing the average growth rate of Latin America in 2012 was a downturn in the Brazilian economy, which accounts for the largest national share of GDP in the Region. However,
Chile, Peru, and several countries in Central America continued to show sustained growth, and others, like Mexico, managed to exceed forecasts. As such, while the World Trade Organization projected global trade expansion of 2.5% in 2012, a significant drop from 2011 (5.0%), the Region still managed to achieve solid trade flow growth, with increases of 1.6% in exports and 3.9% in imports.
15
Annual Total Disbursements
Tier 1 and Leverage Ratio
Non-accruing Loans to Total Loans, Net
In US$ billion
11.3
10.5
25.8%
1.82%
7.4
20.5% 5.7
4.1
0.71%
2010
2011
2012
2009
2010
2011
While volatility in global financial markets remained high throughout 2012, worst-case scenarios thankfully did not materialize. Export trade from the Region was affected mainly by the deceleration of growth in China, the recession in Europe, and a lower-than-expected expansion in the US. China’s growth rate dipped in 2012, strongly impacting the prices of raw materials exported by Latin America, but fortunately averting a ‘hard landing’. Furthermore, the European Union played a relatively minor role in Latin America’s trade flows, and did not offer many opportunities for growth. However, Europe’s economic deterioration and the knock-on effects of its debt crisis seem to have been effectively limited, helping to reduce volatility in global markets. Lastly, the weak growth in the U.S. economy as a result of its internal deficit and various fiscal issues 16
Domestic markets in Latin America remained strong, however, with a progressive increase in domestic demand fueling strong growth in most of our countries. This helped drive the downward trend in unemployment rates throughout the Region, and reinforced the fiscal discipline demonstrated by most countries over the past several years. In this macroeconomic scenario, Bladex managed to grow its commercial portfolio by 11% year-on-year, increasing total disbursements to over $11 billion, the highest level of the last 15 years. Our Regional penetration continued apace, with new client relationships bringing our business network to more than 400 clients. In line with our traditionally prudent approach to conducting business, Bladex maintained solid levels of liquidity and capital, and steadily
18.6%
17.9%
2009
2010
2011
2012
2012 Tier 1 (Basel I)
obscured the strengthening of its manufacturing sector, which has benefited companies in the Region that are an integral part of the value chain of finished goods.
8.2
0.65% 0.00%
2009
8.4 7.3
Leverage (times)
improved the credit quality of our portfolio. It is a particular source of satisfaction that, at the close of 2012, our non-accruing loan balance was zero.
to generate new fee revenue streams, providing structured transaction expertise tailored to our clients´ needs.
We continued to strengthen our funding structure with a medium-term debt issuance in a market that was new to us, the issuance of ‘Certificados Bursátiles’ in Mexico, and returned to the global capital markets with a benchmark 144A/Reg S bond issuance. These successful placements reflect not only the favorable reception on the part of investors of Latin American risk in general, but also specifically the superior credit quality of our Bank. Indeed, Bladex’s soundness was validated through our international ratings, including an upgrade to BBB+ by Fitch Ratings in July, 2012.
These efforts have already yielded several successful transactions, both small and large, which have started to make their mark in our commission (non-interest) revenues, and have laid the groundwork for a solid business going forward.
Within this global and regional economic scenario, we focused our efforts on ensuring sustained growth with more clients in more markets, while diversifying our revenue base by establishing a dedicated cross-functional team composed of commercial relationship managers, product structuring experts, and asset distribution managers
We continue to focus the Bank’s activities on our traditional, long-standing core business. In this respect, our asset management activities, while highly profitable from a market-return standpoint, have not produced the desired fee revenue stream and business synergies that we had originally envisioned. The decision to divest the Asset Management Unit was made after a thorough review of several options available to us. We believe this resolution achieves a gradual, but definitive and orderly, exit from non-core, more volatile revenue streams, while allowing the unit to prosper for Bladex’s benefit, under new stewardship. 17
Annual Total Disbursements
Tier 1 and Leverage Ratio
Non-accruing Loans to Total Loans, Net
In US$ billion
11.3
10.5
25.8%
1.82%
7.4
20.5% 5.7
4.1
0.71%
2010
2011
2012
2009
2010
2011
While volatility in global financial markets remained high throughout 2012, worst-case scenarios thankfully did not materialize. Export trade from the Region was affected mainly by the deceleration of growth in China, the recession in Europe, and a lower-than-expected expansion in the US. China’s growth rate dipped in 2012, strongly impacting the prices of raw materials exported by Latin America, but fortunately averting a ‘hard landing’. Furthermore, the European Union played a relatively minor role in Latin America’s trade flows, and did not offer many opportunities for growth. However, Europe’s economic deterioration and the knock-on effects of its debt crisis seem to have been effectively limited, helping to reduce volatility in global markets. Lastly, the weak growth in the U.S. economy as a result of its internal deficit and various fiscal issues 16
Domestic markets in Latin America remained strong, however, with a progressive increase in domestic demand fueling strong growth in most of our countries. This helped drive the downward trend in unemployment rates throughout the Region, and reinforced the fiscal discipline demonstrated by most countries over the past several years. In this macroeconomic scenario, Bladex managed to grow its commercial portfolio by 11% year-on-year, increasing total disbursements to over $11 billion, the highest level of the last 15 years. Our Regional penetration continued apace, with new client relationships bringing our business network to more than 400 clients. In line with our traditionally prudent approach to conducting business, Bladex maintained solid levels of liquidity and capital, and steadily
18.6%
17.9%
2009
2010
2011
2012
2012 Tier 1 (Basel I)
obscured the strengthening of its manufacturing sector, which has benefited companies in the Region that are an integral part of the value chain of finished goods.
8.2
0.65% 0.00%
2009
8.4 7.3
Leverage (times)
improved the credit quality of our portfolio. It is a particular source of satisfaction that, at the close of 2012, our non-accruing loan balance was zero.
to generate new fee revenue streams, providing structured transaction expertise tailored to our clients´ needs.
We continued to strengthen our funding structure with a medium-term debt issuance in a market that was new to us, the issuance of ‘Certificados Bursátiles’ in Mexico, and returned to the global capital markets with a benchmark 144A/Reg S bond issuance. These successful placements reflect not only the favorable reception on the part of investors of Latin American risk in general, but also specifically the superior credit quality of our Bank. Indeed, Bladex’s soundness was validated through our international ratings, including an upgrade to BBB+ by Fitch Ratings in July, 2012.
These efforts have already yielded several successful transactions, both small and large, which have started to make their mark in our commission (non-interest) revenues, and have laid the groundwork for a solid business going forward.
Within this global and regional economic scenario, we focused our efforts on ensuring sustained growth with more clients in more markets, while diversifying our revenue base by establishing a dedicated cross-functional team composed of commercial relationship managers, product structuring experts, and asset distribution managers
We continue to focus the Bank’s activities on our traditional, long-standing core business. In this respect, our asset management activities, while highly profitable from a market-return standpoint, have not produced the desired fee revenue stream and business synergies that we had originally envisioned. The decision to divest the Asset Management Unit was made after a thorough review of several options available to us. We believe this resolution achieves a gradual, but definitive and orderly, exit from non-core, more volatile revenue streams, while allowing the unit to prosper for Bladex’s benefit, under new stewardship. 17
ROE Evolution
Price / Book Value per Share
Dividends Payment US$ million
11.4% 8.6% 6.2%
2009
2010
2012
16.05 13.90
2009
2010
2011
2012
2009 Price per Share
The departure of Jaime Rivera after a long and successful tenure at the helm of the Bank, and Rubens’s succession as CEO, have also triggered a general reinforcement of the Bank´s management, with new talent rising from within the Bank, as well as joining us from outside. Simultaneously with the move to our new, state-of-the-art headquarters in June 2012, we have embarked on a fundamental project to review, measure, analyze, and improve internal processes and the organizational structure throughout the Bank, to ensure the efficiency of what we do and how we do it, and to generate near-term productivity gains. Our disciplined approach to creating or re-engineering operational processes where needed, or simply to fine-tuning what is already working well, will yield favorable results in the future. This approach applies not only to our day-to-day operations, but also to our long-term strategy and business development. The Bank´s strategy remains anchored by the pillars that have supported its growth throughout the years: our core competencies in foreign trade
18
21.56
18.46
24.6
21.9
2011
0.78
0.75
31.5
11.6%
0.99
0.97
41.8
2010
2011
2012
Price / Book Value per Share
flows, including both goods and capital, our deep knowledge of Latin America, and our expertise in measuring and managing risk.
importance of maintaining a dividend policy closely linked to core performance, while providing an attractive dividend yield to investors.
True to our corporate values of excellence, integrity, respect, commitment, and humility, we endeavor to be an exemplary institution for our clients, shareholders, and employees.
Accordingly, the Bank’s annual dividend pay-out was increased yet again in 2012, reaching $1.10 per share, compared to $0.85 per share the year before.
We are honored to be able to continue supporting the development of young people, as well as communities in precarious living conditions, in several countries in the Region, driven by our deeply-ingrained core value of commitment to social responsibility. Bladex continues to be strongly committed to sharing its success with its shareholders, and strives to increase its added value. Beyond increasing the return on shareholders’ investment, a key metric for us, and one with which we are making steady progress, the Bank’s Board of Directors and management have emphasized the
We were pleased to see that the market has rewarded Bladex’s performance throughout 2012, driving Bladex’s stock price to levels not seen in over five years, and reaching $21.56 at year-end 2012, up 34% from 2011. Price-to-book and price-to-earnings metrics improved, as well. While this was welcome, it does not deter us from continuing to look at opportunities to increase the Bank’s value for investors. We will continue working on the development of your institution in order to continue the upward trend. Lastly, we continue to be optimistic about the global economic environment and our business
in 2013. Absent major market disruptions, business growth should continue at a solid pace, accompanied by increased levels of efficiency in what we do: from the appropriate application of capital and leverage, to more active portfolio management producing higher net margins and spreads, along with effective cost management. We shall stay true to the Bank´s corporate values, without losing sight of what is most important in our work: meeting the needs of our clients, the expectations of our shareholders, and the satisfaction and performance of our employees. On behalf of the Bladex team,
Gonzalo Menéndez Duque
Rubens V. Amaral Jr.
Chairman of the Board of Directors
Chief Executive Officer
19
ROE Evolution
Price / Book Value per Share
Dividends Payment US$ million
11.4% 8.6% 6.2%
2009
2010
2012
16.05 13.90
2009
2010
2011
2012
2009 Price per Share
The departure of Jaime Rivera after a long and successful tenure at the helm of the Bank, and Rubens’s succession as CEO, have also triggered a general reinforcement of the Bank´s management, with new talent rising from within the Bank, as well as joining us from outside. Simultaneously with the move to our new, state-of-the-art headquarters in June 2012, we have embarked on a fundamental project to review, measure, analyze, and improve internal processes and the organizational structure throughout the Bank, to ensure the efficiency of what we do and how we do it, and to generate near-term productivity gains. Our disciplined approach to creating or re-engineering operational processes where needed, or simply to fine-tuning what is already working well, will yield favorable results in the future. This approach applies not only to our day-to-day operations, but also to our long-term strategy and business development. The Bank´s strategy remains anchored by the pillars that have supported its growth throughout the years: our core competencies in foreign trade
18
21.56
18.46
24.6
21.9
2011
0.78
0.75
31.5
11.6%
0.99
0.97
41.8
2010
2011
2012
Price / Book Value per Share
flows, including both goods and capital, our deep knowledge of Latin America, and our expertise in measuring and managing risk.
importance of maintaining a dividend policy closely linked to core performance, while providing an attractive dividend yield to investors.
True to our corporate values of excellence, integrity, respect, commitment, and humility, we endeavor to be an exemplary institution for our clients, shareholders, and employees.
Accordingly, the Bank’s annual dividend pay-out was increased yet again in 2012, reaching $1.10 per share, compared to $0.85 per share the year before.
We are honored to be able to continue supporting the development of young people, as well as communities in precarious living conditions, in several countries in the Region, driven by our deeply-ingrained core value of commitment to social responsibility. Bladex continues to be strongly committed to sharing its success with its shareholders, and strives to increase its added value. Beyond increasing the return on shareholders’ investment, a key metric for us, and one with which we are making steady progress, the Bank’s Board of Directors and management have emphasized the
We were pleased to see that the market has rewarded Bladex’s performance throughout 2012, driving Bladex’s stock price to levels not seen in over five years, and reaching $21.56 at year-end 2012, up 34% from 2011. Price-to-book and price-to-earnings metrics improved, as well. While this was welcome, it does not deter us from continuing to look at opportunities to increase the Bank’s value for investors. We will continue working on the development of your institution in order to continue the upward trend. Lastly, we continue to be optimistic about the global economic environment and our business
in 2013. Absent major market disruptions, business growth should continue at a solid pace, accompanied by increased levels of efficiency in what we do: from the appropriate application of capital and leverage, to more active portfolio management producing higher net margins and spreads, along with effective cost management. We shall stay true to the Bank´s corporate values, without losing sight of what is most important in our work: meeting the needs of our clients, the expectations of our shareholders, and the satisfaction and performance of our employees. On behalf of the Bladex team,
Gonzalo Menéndez Duque
Rubens V. Amaral Jr.
Chairman of the Board of Directors
Chief Executive Officer
19
We work for the growth, expansion, and profitability of foreign trade in the Region
Financial Performance
The results for 2012 demonstrated the strength of Bladex’s business model, as the Bank continued to add value to its clients with a focus on trade finance. During the year, the Region experienced an acceleration of economic activity in several countries, which helped propel the increase in balances of the Bank’s credit portfolio during 2012, especially in the segments of corporations and middle market companies. The credit quality of the Bank’s portfolio continued to improve, with a non-accrual balance of zero at year-end. Liquidity remained strong at $0.7 billion as of December 31, 2012. The Bank’s Tier 1 capitalization stood at 17.9% as of December 31, 2012, with leverage at 8.2 times, as the Bank continued to deploy capital toward business growth. Bladex’s financial results continued to strengthen in 2012, mainly as the result of growth and increased profitability in the Commercial Division. Net Income attributable to Bladex reached $93.0 million in 2012, compared to $83.2 million in 2011. The $9.8 million, or 12%, increase was the result of improved performance in core financial intermediation activity, partially offset by lower contributions from investment activities in the Treasury Division, from the non-core activities of the Asset Management Unit (presented as a discontinued operation as of December 31, 2012, pending completion of the divestiture of the Unit), and extraordinary items, which included a $5.6 million gain on the sale of premises and equipment associated with the move to a new headquarters.
Net Income by Division In US$ million
96.3
93.0 83.2
54.9
53.4
42.2
41.6 30.4
24.1
30.2
0.5 Commercial Division
2009 20
2010
–
-8.2 Treasury Division 2011
–
–
5.6
0.4 0.2 -0.4 -0.7
Other unallocated - Gain on Sale of Premises and Equipment
Discontinued Operations
Total
2012 21
We work for the growth, expansion, and profitability of foreign trade in the Region
Financial Performance
The results for 2012 demonstrated the strength of Bladex’s business model, as the Bank continued to add value to its clients with a focus on trade finance. During the year, the Region experienced an acceleration of economic activity in several countries, which helped propel the increase in balances of the Bank’s credit portfolio during 2012, especially in the segments of corporations and middle market companies. The credit quality of the Bank’s portfolio continued to improve, with a non-accrual balance of zero at year-end. Liquidity remained strong at $0.7 billion as of December 31, 2012. The Bank’s Tier 1 capitalization stood at 17.9% as of December 31, 2012, with leverage at 8.2 times, as the Bank continued to deploy capital toward business growth. Bladex’s financial results continued to strengthen in 2012, mainly as the result of growth and increased profitability in the Commercial Division. Net Income attributable to Bladex reached $93.0 million in 2012, compared to $83.2 million in 2011. The $9.8 million, or 12%, increase was the result of improved performance in core financial intermediation activity, partially offset by lower contributions from investment activities in the Treasury Division, from the non-core activities of the Asset Management Unit (presented as a discontinued operation as of December 31, 2012, pending completion of the divestiture of the Unit), and extraordinary items, which included a $5.6 million gain on the sale of premises and equipment associated with the move to a new headquarters.
Net Income by Division In US$ million
96.3
93.0 83.2
54.9
53.4
42.2
41.6 30.4
24.1
30.2
0.5 Commercial Division
2009 20
2010
–
-8.2 Treasury Division 2011
–
–
5.6
0.4 0.2 -0.4 -0.7
Other unallocated - Gain on Sale of Premises and Equipment
Discontinued Operations
Total
2012 21
Consolidated Financial Data - Summary 2012
2011
2010
2009
105 12 10 (56) 6 94 (1) 93
103 (4) 11 (50) 0 84 0 83
75 5 10 (42) 0 40 0 42
65 (15) 6 (39) 0 56 0 55
217 106 5,708 6,163 6,756 5,927 826
460 120 4,953 5,807 6,360 5,595 759
437 167 4,060 4,880 5,100 4,384 697
507 198 2,775 3,617 3,879 3,168 676
2.46 21.67
2.25 20.45
1.15 18.99
1.50 18.49
37,824 38,145 826 883
36,969 37,132 761 812
36,647 36,711 701 744
36,493 36,546 679 712
1.5% 11.6% 9.5% 42% 1.70% 0.90% 12.2% 17.9% 19.2% 8.2 10.2% 29.8% 0.0% 0.1%
1.5% 11.4% 12.2% 36% 1.81% 0.88% 11.9% 18.6% 19.9% 8.4 12.4% 34.1% 0.6% 0.0%
1.0% 6.2% 5.1% 55% 1.70% 0.97% 13.7% 20.5% 21.8% 7.3 8.2% 23.1% 0.7% 0.1%
1.4% 8.6% 11.1% 35% 1.62% 0.97% 17.4% 25.8% 27.0% 5.7 10.4% 32.0% 1.8% 0.0%
YEAR ENDED DECEMBER 31 (In US$ million, except per share amounts)
Income Statement Data Net interest income Reversal (provision) for credit losses (1) Fees and commissions, net Operating expenses Gain on sale of premises and equipment Net income from continuing operations Net gain (loss) from discontinued operations (2) Net income attributable to Bladex Selected Balance Sheet Data Treasury Portfolio (3) Investment fund Loan portfolio (4) Credit portfolio (5) Total assets Total liabilities Stockholders' equity Per Common Share Data Net income per share (US$) Book value per common share -period end- (US$) Common Shares Outstanding: (in thousands) Period average Period end Tier 1 Capital Total Capital Selected Financial Ratios (In %) Return on average assets ("ROA") Return on average stockholders' equity ("ROE") Operating Return on Average Equity ("Operating ROE") Efficiency Ratio Net interest margin Operating expenses to total average assets Stockholders' equity to total assets Tier 1 capital to risk-weighted assets Total capital to risk-weighted assets Leverage (times) Liquid Assets / Total Assets Liquid Assets / Total Deposits Non-accruing loans to total loan portfolio (4) Charge-offs to total loan portfolio (4) Notes (1)
22
Includes reversal (provision) for loan losses and off-balance sheet credit risk
(2)
In the fourth quarter 2012, the Bank established a plan to divest the operations of the Asset Management Unit. The amounts reported in the consolidated financial statements of income for the years ended December 31, 2011, 2010, 2009, have been reclassified to conform with the presentation of discontinued operations in 2012.
(3)
Includes securities available-for-sale and securities held-to-maturity, and trading assets. Excludes the Bank's investments in the Investment Fund.
(4)
Loan portfolio is presented net of unearned income and deferred loans fees.
(5)
Includes book value of loans, selected commercial deposits placed, fair value of investment securities, acceptances and contingencies, (including confirmed letters of credit, stand-by letters of credit, equity investments, guarantees covering commercial risk, credit default swaps, and credit commitments).
Commercial Division The Commercial Division incorporates the Bank’s core business of financial intermediation and fee generation activities relating to the Bank’s commercial portfolio, which includes loans, selected deposits placed, acceptances, and contingencies (letters of credit, guarantees, and credit commitments). The year 2012 again saw relatively slow global economic recovery, with a recurring impact on trade flows, which showed modest growth of 2.5%. Latin America has not been immune to the global slowdown, posting growth of only 1.6% in exports, and 3.9% in imports. Bladex’s own performance was also impacted by restrictive measures in important markets that limited U.S. dollar financing by foreign financial institutions. Such was the case in Brazil, where limitations applicable to foreign-sourced credits adversely impacted the prospects for growth in that market.
Despite such challenges, Bladex succeeded in growing its commercial portfolio by 11%, from $5.4 billion at the end of 2011 to $6.0 billion as of December 31, 2012. This was a result of the Bank’s expanded regional coverage, enabling it to refocus its resources to benefit from specific opportunities in particular geographical areas. The Brazilian and Colombian portfolios were reduced, as a percentage of the total portfolio, from 35% to 30% and from 14% to 8%, respectively, mostly due to strong growth in other countries such as Peru, which saw its share strongly increase from 6% to 14%, and the Central American and Caribbean region, which increased from 13% of the portfolio to over 20%, reaching a ten-year high of $1.2 billion. Net Income of the Commercial Division showed a sharp increase again in 2012, reaching $96.3 million, up 80% compared to 2011.
23
Consolidated Financial Data - Summary YEAR ENDED DECEMBER 31 (In US$ million, except per share amounts)
2012
2011
2010
2009
105 12 10 (56) 6 94 (1) 93
103 (4) 11 (50) 0 84 0 83
75 5 10 (42) 0 40 0 42
65 (15) 6 (39) 0 56 0 55
217 106 5,708 6,163 6,756 5,927 826
460 120 4,953 5,807 6,360 5,595 759
437 167 4,060 4,880 5,100 4,384 697
507 198 2,775 3,617 3,879 3,168 676
Income Statement Data Net interest income Reversal (provision) for credit losses (1) Fees and commissions, net Operating expenses Gain on sale of premises and equipment Net income from continuing operations Net gain (loss) from discontinued operations Net income attributable to Bladex Selected Balance Sheet Data Investment securities Investment fund Loan portfolio (2) Credit portfolio, net of unearned income (3) Total assets Total liabilities Stockholders' equity
Commercial Division
Per Common Share Data Net income per share (US$) Book value per common share -period end- (US$) Common Shares Outstanding: (in thousands) Period average Period end Tier 1 Capital Total Capital
2.46 21.67
2.25 20.45
1.15 18.99
1.50 18.49
37,824 38,145 826 883
36,969 37,132 761 812
36,647 36,711 701 744
36,493 36,546 679 712
1.5% 11.6% 9.5% 42% 1.70% 0.90% 12.2% 17.9% 19.2% 8.2 10.2% 29.8% 0.0% 0.1%
1.5% 11.4% 12.2% 36% 1.81% 0.88% 11.9% 18.6% 19.9% 8.4 12.4% 34.1% 0.6% 0.0%
1.0% 6.2% 5.1% 55% 1.70% 0.97% 13.7% 20.5% 21.8% 7.3 8.2% 23.1% 0.7% 0.1%
1.4% 8.6% 11.1% 35% 1.62% 0.97% 17.4% 25.8% 27.0% 5.7 10.4% 32.0% 1.8% 0.0%
Selected Financial Ratios (In %) Return on average assets ("ROA") Return on average stockholders' equity ("ROE") Operating Return on Average Equity ("Operating ROE") Efficiency Ratio Net interest margin Operating expenses to total average assets Stockholders' equity to total assets Tier 1 capital to risk-weighted assets Total capital to risk-weighted assets Leverage (times) Liquid Assets / Total Assets Liquid Assets / Total Deposits Non-accruing loans to total loan portfolio (2) Charge-offs to total loan portfolio (2) Notes
22
(1) Includes reversal (provision)
(2) Loan portfolio is presented net of
(3) Includes book value of loans, selected commercial deposits placed, fair value of investment
for loan losses and off-balance sheet credit risk.
unearned income and deferred loan fees.
securities, acceptances, and contingencies, (including confirmed letters of credit, stand-by letters of credit, equity investments, guarantees covering commercial risk, credit default swap and credit commitments).
The Commercial Division incorporates the Bank’s core business of financial intermediation and fee generation activities relating to the Bank’s commercial portfolio, which includes loans, selected deposits placed, acceptances, and contingencies (letters of credit, guarantees, and credit commitments). The year 2012 again saw relatively slow global economic recovery, with a recurring impact on trade flows, which showed modest growth of 2.5%. Latin America has not been immune to the global slowdown, posting growth of only 1.6% in exports, and 3.9% in imports. Bladex’s own performance was also impacted by restrictive measures in important markets that limited U.S. dollar financing by foreign financial institutions. Such was the case in Brazil, where limitations applicable to foreign-sourced credits adversely impacted the prospects for growth in that market.
Despite such challenges, Bladex succeeded in growing its commercial portfolio by 11%, from $5.4 billion at the end of 2011 to $6.0 billion as of December 31, 2012. This was a result of the Bank’s expanded regional coverage, enabling it to refocus its resources to benefit from specific opportunities in particular geographical areas. The Brazilian and Colombian portfolios were reduced, as a percentage of the total portfolio, from 35% to 30% and from 14% to 8%, respectively, mostly due to strong growth in other countries such as Peru, which saw its share strongly increase from 6% to 14%, and the Central American and Caribbean region, which increased from 13% of the portfolio to over 20%, reaching a ten-year high of $1.2 billion. Net Income of the Commercial Division showed a sharp increase again in 2012, reaching $96.3 million, up 80% compared to 2011.
23
Commercial Portfolio’s Composition End of period balances, in US$ million
5,953 237
5,354 364
4,446 382
5,716
3,110 331
4,990 4,064
Commercial Portfolio by Business Segment
2,779
End of period balances, in US$ million 2009
2010
2011
2012
5,953 Loans
5,354
Acceptances and Contingencies
712
455
4,446 226
2,938
3,110
Commercial Portfolio by Region
2,460
130
December 31, 2012
2,287
1,556 Rest of South America Andean Region* Central America North America Caribbean Other Regions
42% 26% 16% 9% 4% 3%
2,439
1,933
1,424 2009
Financial Institutions
2010
Corporate
2,303 2011
2012
Middle-market Companies
* Includes Bolivia, Colombia, Ecuador and Peru
Bladex focused its efforts on increasing portfolio optimization and profitability, bolstering the corporate banking and middle market portfolios with a 25% year-on-year combined increase, with the middle market client base alone growing by 50%. The financial institutions portfolio remained at the same level as that of the previous year by repositioning maturities in favor of higher margins.
24
25
Commercial Portfolio’s Composition End of period balances, in US$ million
5,953 237
5,354 364
4,446 382
5,716
3,110 331
4,990 4,064
Commercial Portfolio by Business Segment
2,779
End of period balances, in US$ million 2009
2010
2011
2012
5,953 Loans
5,354
Acceptances and Contingencies
712
455
4,446 226
2,938
3,110
Commercial Portfolio by Region
2,460
130
December 31, 2012
2,287
1,556 Rest of South America Andean Region* Central America North America Caribbean Other Regions
42% 26% 16% 9% 4% 3%
2,439
1,933
1,424 2009
Financial Institutions
2010
Corporate
2,303 2011
2012
Middle-market Companies
* Includes Bolivia, Colombia, Ecuador and Peru
Bladex focused its efforts on increasing portfolio optimization and profitability, bolstering the corporate banking and middle market portfolios with a 25% year-on-year combined increase, with the middle market client base alone growing by 50%. The financial institutions portfolio remained at the same level as that of the previous year by repositioning maturities in favor of higher margins.
24
25
In 2012, Bladex once again demonstrated its level of commitment to offering value-added financial structures and solutions to the Region, focused on ‘multi-Latin’ corporations. In this regard, a multi-tranche, multi-currency, medium-term syndicated loan for $130 million was successfully originated, led, structured, and disbursed to finance a cross-border acquisition between Mexico and Colombia, with the participation of six regional banks from Brazil, Colombia and Panama. Vendor financing activities also expanded, with a 48% increase in revenue generated by margins compared to 2011, and with a volume of transactions in 2012 in excess of $2.5 billion, a year-on-year increase of 33%. The outlook for 2013 is positive, with estimated growth prospects close to 4% for the Region, and a more favorable business environment than was experienced in 2012.
Industry Segment Exposure As of December 31, 2012
Oil & Gas Commodities Food Manufacturing Coffee Airlines Chemicals Capital Production Sugar Packing Paper Textiles Tobacco Other 26
24% 16% 9% 8% 6% 5% 3% 3% 2% 2% 2% 2% 2% 16%
Business Highlights 2012
The Commercial Division’s Net Income, which includes net interest income from loans, fee income, net allocated operating expenses, the reversal (provision) for credit losses, and recoveries (impairment) on assets, reached $96.3 million in 2012, compared to $53.4 million in 2011. The $42.9 million, or 80% increase for the year was the result of operating revenue growth attributable to increased net interest income from higher loan portfolio balances and lending rates, and a positive variation in provisions for credit losses due to improved country and client risk exposure profiles, partially offset by increased operating expenses. 2012 credit disbursements reached $11.3 billion, up 8% from the $10.5 billion figure reported in 2011. There were no non-accrual balances in the loan portfolio as of December 31, 2012, compared to $32.0 million, or 0.6%, as of December 31, 2011.
The commercial portfolio grew by 11% to $6.0 billion as of December 31, 2012, compared to $5.4 billion the year before, as a result of growth and diversification in the Bank’s established client base of corporations (which grew by 19%) and middle-market companies (which grew by 57%), partially offset by a 6% decrease in the financial institutions segment. Average portfolio balances increased 8% year-on-year. The commercial portfolio continued to be short-term and trade-related in nature, with 77%, or $4.6 billion, maturing within one year. 61% of the portfolio represented trade financing operations, while the remaining balance consisted primarily of lending to banks and corporations involved in foreign trade.
27
In 2012, Bladex once again demonstrated its level of commitment to offering value-added financial structures and solutions to the Region, focused on ‘multi-Latin’ corporations. In this regard, a multi-tranche, multi-currency, medium-term syndicated loan for $130 million was successfully originated, led, structured, and disbursed to finance a cross-border acquisition between Mexico and Colombia, with the participation of six regional banks from Brazil, Colombia and Panama. Vendor financing activities also expanded, with a 48% increase in revenue generated by margins compared to 2011, and with a volume of transactions in 2012 in excess of $2.5 billion, a year-on-year increase of 33%. The outlook for 2013 is positive, with estimated growth prospects close to 4% for the Region, and a more favorable business environment than was experienced in 2012.
Industry Segment Exposure As of December 31, 2012
Oil & Gas Commodities Food Manufacturing Coffee Airlines Chemicals Capital Production Sugar Packing Paper Textiles Tobacco Other 26
24% 16% 9% 8% 6% 5% 3% 3% 2% 2% 2% 2% 2% 16%
Business Highlights 2012
The Commercial Division’s Net Income, which includes net interest income from loans, fee income, net allocated operating expenses, the reversal (provision) for credit losses, and recoveries (impairment) on assets, reached $96.3 million in 2012, compared to $53.4 million in 2011. The $42.9 million, or 80% increase for the year was the result of operating revenue growth attributable to increased net interest income from higher loan portfolio balances and lending rates, and a positive variation in provisions for credit losses due to improved country and client risk exposure profiles, partially offset by increased operating expenses. 2012 credit disbursements reached $11.3 billion, up 8% from the $10.5 billion figure reported in 2011. There were no non-accrual balances in the loan portfolio as of December 31, 2012, compared to $32.0 million, or 0.6%, as of December 31, 2011.
The commercial portfolio grew by 11% to $6.0 billion as of December 31, 2012, compared to $5.4 billion the year before, as a result of growth and diversification in the Bank’s established client base of corporations (which grew by 19%) and middle-market companies (which grew by 57%), partially offset by a 6% decrease in the financial institutions segment. Average portfolio balances increased 8% year-on-year. The commercial portfolio continued to be short-term and trade-related in nature, with 77%, or $4.6 billion, maturing within one year. 61% of the portfolio represented trade financing operations, while the remaining balance consisted primarily of lending to banks and corporations involved in foreign trade.
27
Treasury Division
The Treasury & Capital Markets Division reinforced the Bank's liquidity position in 2012. In March, Bladex issued its first-ever 'Certificados Bursátiles' in the Mexican capital markets, in the amount of Pesos 2.0 billion (two billion Mexican pesos). The peso issuance was substantially oversubscribed, with total demand exceeding Pesos 2.3 billion, with twenty-five pension funds, insurance companies, private banks, commercial banks, and brokerage firms filling the book. Also in March, the Bank returned to the global bond markets with a benchmark five-year, $250 million fixed-rate
issuance; the bond was more than nine times oversubscribed, and Bladex opted to upsize the issuance amount to $400 million. These new bond issuances, combined with a two-year global syndicated loan completed in April for $200 million, significantly reinforced the Bank's liquidity position, and reflect investors’ confidence in Bladex’s solid financial profile, as well as in the prospects for continued increases of Latin America’s trade flows. Bladex is well-positioned for continued growth in 2013. The Division's Asset Distribution unit is responsible for the arrangement, structuring, and distribution of loan syndications on behalf of the Bank's borrowing clients, as well as for the purchase and sale of loans in the secondary market. Through its well-established network of correspondent banks, Bladex has established a platform for both primary and secondary market distribution of Latin American loans, including to investors based right here in the Region.
Liquidity End of period balances US$ million
The Treasury Division is responsible for the Bank’s funding and liquidity management, along with its investment securities activities, including management of the Bank’s interest rate, liquidity, price, and currency risks. The Division manages the Bank's liquidity balance, trading assets, securities available-for-sale, securities held-to-maturity, and the Bank's investment in the Investment Funds.
900 800
40%
34%
32%
35%
30%
700
30%
786
600
23%
690
25%
500 400 300 200 100 0
20%
421
402
15% 10%
12%
10%
10%
8% 2009
2010
2011
5% 2012
0%
Liquid Assets Liquid Assets / Total Assets Liquid Assets / Total Deposits
28
29
Treasury Division
The Treasury & Capital Markets Division reinforced the Bank's liquidity position in 2012. In March, Bladex issued its first-ever 'Certificados Bursátiles' in the Mexican capital markets, in the amount of Pesos 2.0 billion (two billion Mexican pesos). The peso issuance was substantially oversubscribed, with total demand exceeding Pesos 2.3 billion, with twenty-five pension funds, insurance companies, private banks, commercial banks, and brokerage firms filling the book. Also in March, the Bank returned to the global bond markets with a benchmark five-year, $250 million fixed-rate
issuance; the bond was more than nine times oversubscribed, and Bladex opted to upsize the issuance amount to $400 million. These new bond issuances, combined with a two-year global syndicated loan completed in April for $200 million, significantly reinforced the Bank's liquidity position, and reflect investors’ confidence in Bladex’s solid financial profile, as well as in the prospects for continued increases of Latin America’s trade flows. Bladex is well-positioned for continued growth in 2013. The Division's Asset Distribution unit is responsible for the arrangement, structuring, and distribution of loan syndications on behalf of the Bank's borrowing clients, as well as for the purchase and sale of loans in the secondary market. Through its well-established network of correspondent banks, Bladex has established a platform for both primary and secondary market distribution of Latin American loans, including to investors based right here in the Region.
Liquidity End of period balances US$ million
The Treasury Division is responsible for the Bank’s funding and liquidity management, along with its investment securities activities, including management of the Bank’s interest rate, liquidity, price, and currency risks. The Division manages the Bank’s funding and liquidity along with its investment securities activities in trading assets, securities available-for-sale, securities held-to-maturity, and the Bank´s investment in the Investment Funds.
900 800
40%
34%
32%
35%
30%
700
30%
786
600
23%
690
25%
500 400 300 200 100 0
20%
421
402
15% 10%
12%
10%
10%
8% 2009
2010
2011
5% 2012
0%
Liquid Assets Liquid Assets / Total Assets Liquid Assets / Total Deposits
28
29
In 2012, the Asset Distribution unit generated $2.7 million in fees during its first full year of operations, and closed a $130 million syndicated dual-currency, senior, multi-tranche revolving and term loan credit facility for a Colombia-based client. Bladex acted as the sole bookrunner and administrative agent on this transaction, completed in December 2012. The participating banks included several leading financial institutions from Colombia, Panama, and Brazil. This important transaction demonstrates Bladex’s expertise in providing financial solutions to our Latin American clients. The Bank is particularly well-positioned to add value in arranging syndications to support cross-border acquisition finance transactions, which in this case involved established Bladex clients in both Mexico and in Colombia. Bladex expects this new business to reach critical mass in 2013, contributing to the continued growth in fee revenue.
Business Highlights 2012
The Treasury Division reported a net loss of $8.2 million for the year 2012, compared to net income of $30.2 million during 2011. Net Income (Loss) is presented net of allocated operating expenses, and includes net interest income and net other income (loss) relating to Treasury activities. The year-on-year variance was attributable to a decrease in net interest income as a result of higher average funding costs associated with extended funding tenors and lower average balances in the investment securities portfolio, a decrease in non-interest operating income attributable to lower gains from investments in the Investment Funds, and increased operating expenses.
Funding Sources End of period, in US$ million
5,863
5,498
1,906
1,488
4,260
Liquid assets amounted to $0.7 billion as of December 31, 2012, compared to $0.8 billion as of December 31, 2011. The liquidity assets to total assets ratio was 10.2% as of December 31, 2012, compared to 12.4% as of December 31, 2011.
The securities available-for-sale portfolio totaled $0.2 billion as of December 31, 2012, compared to $0.4 billion as of December 31, 2011, as positions were reduced to take advantage of favorable market valuations. The securities available-for-sale portfolio consisted of readily-quoted Latin American securities, 91% of which were sovereign or state-owned risk. The deposits balance amounted to $2.3 billion, about the same level of the previous year, representing 39% of total financial liabilities. Borrowings and long-term debt amounted to $1.9 billion, a 28% increase over the year, as a result of inflows from bond issuances, and a medium-term loan syndication.
1,075
3,048
1,706
1,640
2,304
2,317
1,364
1,390 402
1,821
1,256 2009
2010
2011
2012
Borrowings and Long-term Debt Short-term borrowings Deposits
30
31
In 2012, the Asset Distribution unit generated $2.7 million in fees during its first full year of operations, and closed a $130 million syndicated dual-currency, senior, multi-tranche revolving and term loan credit facility for a Colombia-based client. Bladex acted as the sole bookrunner and administrative agent on this transaction, completed in December 2012. The participating banks included several leading financial institutions from Colombia, Panama, and Brazil. This important transaction demonstrates Bladex’s expertise in providing financial solutions to our Latin American clients. The Bank is particularly well-positioned to add value in arranging syndications to support cross-border acquisition finance transactions, which in this case involved established Bladex clients in both Mexico and in Colombia. Bladex expects this new business to reach critical mass in 2013, contributing to the continued growth in fee revenue.
Business Highlights 2012
The Treasury Division reported a net loss of $8.2 million for the year 2012, compared to net income of $30.2 million during 2011. Net Income (Loss) is presented net of allocated operating expenses, and includes net interest income and net other income (loss) relating to Treasury activities. The year-on-year variance was attributable to a decrease in net interest income as a result of higher average funding costs associated with extended funding tenors and lower average balances in the investment securities portfolio, a decrease in non-interest operating income attributable to lower gains from investments in the Investment Funds, and increased operating expenses.
Funding Sources End of period, in US$ million
5,863
5,498
1,906
1,488
4,260
Liquid assets amounted to $0.7 billion as of December 31, 2012, compared to $0.8 billion as of December 31, 2011. The liquidity assets to total assets ratio was 10.2% as of December 31, 2012, compared to 12.4% as of December 31, 2011.
The securities available-for-sale portfolio totaled $0.2 billion as of December 31, 2012, compared to $0.4 billion as of December 31, 2011, as positions were reduced to take advantage of favorable market valuations. The securities available-for-sale portfolio consisted of readily-quoted Latin American securities, 91% of which were sovereign or state-owned risk. The deposits balance amounted to $2.3 billion, about the same level of the previous year, representing 39% of total financial liabilities. Borrowings and long-term debt amounted to $1.9 billion, a 28% increase over the year, as a result of inflows from bond issuances, and a medium-term loan syndication.
1,075
3,048
1,706
1,640
2,304
2,317
1,364
1,390 402
1,821
1,256 2009
2010
2011
2012
Borrowings and Long-term Debt Short-term borrowings Deposits
30
31
Risk Management Bladex applies an enterprise risk management model reflecting best international practices, in line with the level of complexity and nature of the Organization’s business. This unit is independent from the other business areas of the Bank, and the Executive Vice President for Risk Management has veto power granted by the Board of Directors.
Directors and is responsible for reviewing and recommending to the Board of Directors, for its approval, policies related to Comprehensive Prudential Risk Management. It also approves internal risk ratings, amounts, maturities, and other conditions for each country where the Bank operates. The committee meets at least five times per year.
As provided in our “Enterprise Risk Management Framework”, the unit is organized according to risk type, with staff dedicated solely to assessing and monitoring Credit, Market, and Operational risks.
The Country Risk Committee, which proposes the internal ratings of the countries to the CPER and documents Management’s opinion with regard to generic reserves. The committee meets on a quarterly basis or at the request of its members, as may be required.
Due to global economic uncertainty and its potential impact on Bladex’s business, the management and monitoring role has been strengthened to include a function specifically created for continuous model improvement. This enables us to strictly monitor credit quality, and gives us a portfolio-level view, supplementing the scheduled monitoring already carried out by the Area on an individual credit basis. This includes regular visits to all countries and clients, as well as contact with local authorities, top business owners, senior executives of financial institutions, and with independent analysts, while continually improving our measurement models. Additionally, to support the expansion of the Bank’s network of offices in the Region, Risk Management staff was reinforced locally to provide better risk coverage. As a part of its Corporate Governance model, Bladex has established different analysis and approval levels for its activities. In the case of the Risk Area, these include: The Risk Policy and Assessment Committee (CPER), which is made up of members of the Board of
32
The Credit Committee, which has different approval levels depending on the nature of the client, its internal risk rating, country of risk, and the amount requested. Bladex does not approve credit facilities upon a single signature: it always requires the confirmation of a business officer, plus two additional authorized signatures (the Risk Area’s approval is required, and as such exercises veto power). The Asset and Liability Committee, which it participates in the analysis of the Bank’s structure of assets and liabilities, as well as its investments. The committee analyzes market, liquidity, foreign exchange, and interest rate risks, and proposes policies for their management and subsequent monitoring. The Operational Risk Committee, which analyzes, in accordance with best practices and regulations, the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. It includes legal risk, but excludes strategic and reputational risk.
33
Risk Management Bladex applies an enterprise risk management model reflecting best international practices, in line with the level of complexity and nature of the Organization’s business. This unit is independent from the other business areas of the Bank, and the Executive Vice President for Risk Management has veto power granted by the Board of Directors.
of Directors and is responsible for reviewing and recommending to the Board of Directors, for its approval, policies related to Comprehensive Prudential Risk Management. It also approves internal risk ratings, amounts, maturities, and other conditions for each country where the Bank operates. The committee meets at least five times per year.
As provided in our “Enterprise Risk Management Framework”, the unit is organized according to risk type, with staff dedicated solely to assessing and monitoring Credit, Market, and Operational risks.
The Country Risk Committee, which proposes the internal ratings of the countries to the CPER and documents Management’s opinion with regard to generic reserves. The committee meets on a quarterly basis or at the request of its members, as may be required.
Due to global economic uncertainty and its potential impact on Bladex’s business, the management and monitoring role has been strengthened to include a function specifically created for continuous model improvement. This enables us to strictly monitor credit quality, and gives us a portfolio-level view, supplementing the scheduled monitoring already carried out by the Area on an individual credit basis. This includes regular visits to all countries and clients, as well as contact with local authorities, top business owners, senior executives of financial institutions, and with independent analysts, while continually improving our measurement models. Additionally, to support the expansion of the Bank’s network of offices in the Region, Risk Management staff was reinforced locally to provide better risk coverage. As a part of its Corporate Governance model, Bladex has established different analysis and approval levels for its activities. In the case of the Risk Area, these include: The Credit Policy and Risk Assessment Committee (CPER), which is made up of members of the Board
32
The Credit Committee, which has different approval levels depending on the nature of the client, its internal risk rating, country of risk, and the amount requested. Bladex does not approve credit facilities upon a single signature: it always requires the confirmation of a business officer, plus two additional authorized signatures (the Risk Area’s approval is required, and as such exercises veto power). The Asset and Liability Committee, which it participates in the analysis of the Bank’s structure of assets and liabilities, as well as its investments. The committee analyzes market, liquidity, foreign exchange, and interest rate risks, and proposes policies for their management and subsequent monitoring. The Operational Risk Committee, which analyzes, in accordance with best practices and regulations, the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. It includes legal risk, but excludes strategic and reputational risk.
33
Bladex has created a special unit, which is responsible for ensuring that the Bank’s operational risk is properly managed, identifying risks inherent in each process, mitigating controls and their effectiveness, as well as the need for action plans for risk mitigation. During 2012, we continued with our implementation of this model, which includes: • Assessment of processes, through the implementation of matrices for impact self-assessment, and frequency of risks for assessing processes and sub-processes. • Qualitative assessment of risks, identifying action plans and proposals for improvement of critical processes, all of which meet set objectives. • Procedures for the collection of risk and loss events to be recorded in a centralized database with the aim of reducing risk incidents and losses, thus incorporating quality assessment into the risk management model. Bladex understands that the Risk Management process is not only essential for the achievement of its objectives, but also that it is the responsibility of each and everyone in the Bank to manage it efficiently. The incorporation of the Three Lines of Defense model into the Bank’s Corporate Governance framework provides a simple and effective
Our Human Capital makes the Difference
approach to effective decision-making. The lines of defense that make up the model are briefly described below: The first line of defense is found in the Business and Support areas, which are responsible for implementing business and risk-related decisions, carrying out business within the risk limits set forth in policies, and reporting on the results.
In 2012, Bladex strengthened and diversified its business, through the integration of a high quality team of professionals. To address the demands of the market and the challenges involved, a Human Resources strategy was designed, focusing on 4 priority areas:
The second line of defense is the actual monitoring involved in risk management, promoting an independent view of business with heightened awareness of the risks involved. Reporting the risk profile to the CPER is what separates risk takers, under the policies approved by the Board of Directors, from those that monitor risks. The third and last line of defense is the independent monitoring conducted by Internal Audit, which assess the effectiveness of the risk management system in terms of the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, protection of assets, and compliance with laws, regulations, and agreements. This conservative approach to risk management has ensured that the Bank maintains its high asset quality, even under adverse macroeconomic conditions. Operating under a favorable climate in the Region, at the end of 2012 Bladex reported total generic reserves of $77.8 million, compared to reserves of $82.6 million at the end of 2011.
1. Human Resources management and planning: Improving the effectiveness and efficiency of Human Resources systems and processes.
2. Talent and learning: Enhancing individual performance.
4. Human Resources functional excellence: Strengthening our professionalism and our contribution.
This strategy enabled us to standardize our processes and efficiently provide the various areas of the Bank with the appropriate human resources. In order to establish the base that will allow us to effectively address future challenges, we focused on implementing our talent-related
34
3. Organizational development: Improving organizational performance.
strategy, strengthening team work as a key ingredient of our culture and processes. We continue to reinforce the professionalism of our leadership team, while strengthening a culture of high performance. We also support key initiatives in our business and have begun to engage our employees through change interventions. 35
Bladex has created a special unit, which is responsible for ensuring that the Bank’s operational risk is properly managed, identifying risks inherent in each process, mitigating controls and their effectiveness, as well as the need for action plans for risk mitigation. During 2012, we continued with our implementation of this model, which includes: • Assessment of processes, through the implementation of matrices for impact self-assessment, and frequency of risks for assessing processes and sub-processes. • Qualitative assessment of risks, identifying action plans and proposals for improvement of critical processes, all of which meet set objectives. • Procedures for the collection of risk and loss events to be recorded in a centralized database with the aim of reducing risk incidents and losses, thus incorporating quality assessment into the risk management model. Bladex understands that the Risk Management process is not only essential for the achievement of its objectives, but also that it is the responsibility of each and everyone in the Bank to manage it efficiently. The incorporation of the Three Lines of Defense model into the Bank’s Corporate Governance framework provides a simple and effective
Our Human Capital makes the Difference
approach to effective decision-making. The lines of defense that make up the model are briefly described below: The first line of defense is found in the Business and Support areas, which are responsible for implementing business and risk-related decisions, carrying out business within the risk limits set forth in policies, and reporting on the results.
In 2012, Bladex strengthened and diversified its business, through the integration of a high quality team of professionals. To address the demands of the market and the challenges involved, a Human Resources strategy was designed, focusing on 4 priority areas:
The second line of defense is the actual monitoring involved in risk management, promoting an independent view of business with heightened awareness of the risks involved. Reporting the risk profile to the CPER is what separates risk takers, under the policies approved by the Board of Directors, from those that monitor risks. The third and last line of defense is the independent monitoring conducted by Internal Audit, which assess the effectiveness of the risk management system in terms of the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, protection of assets, and compliance with laws, regulations, and agreements. This conservative approach to risk management has ensured that the Bank maintains its high asset quality, even under adverse macroeconomic conditions. Operating under a favorable climate in the Region, at the end of 2012 Bladex reported total generic reserves of $77.8 million, compared to reserves of $82.6 million at the end of 2011.
1. Human Resources management and planning: Improving the effectiveness and efficiency of Human Resources systems and processes.
2. Talent and learning: Enhancing individual performance.
4. Human Resources functional excellence: Strengthening our professionalism and our contribution.
This strategy enabled us to standardize our processes and efficiently provide the various areas of the Bank with the appropriate human resources. In order to establish the base that will allow us to effectively address future challenges, we focused on implementing our talent-related
34
3. Organizational development: Improving organizational performance.
strategy, strengthening team work as a key ingredient of our culture and processes. We continue to reinforce the professionalism of our leadership team, while strengthening a culture of high performance. We also support key initiatives in our business and have begun to engage our employees through change interventions. 35
Childhood and education are important pillars of our social commitment
Corporate Social Responsibility
Our work as a socially responsible company is in line with the values that govern our corporate behavior. Our efforts are focused on programs aimed at fostering education and supporting children as key factors in achieving the development of our Latin American countries. We are aware that our institution plays an important role, beyond its economic function, as an agent for development in the communities where we are privileged to work. In Panama, where our headquarters are located, just as in previous years, we continued to
36
support the Marie Poussepin Educational Center; in 2012, the Bank donated a building providing six classrooms and a psychology and guided studies room, as well as an outdoor area for sport and cultural activities. These facilities provide the Center with additional space to accommodate a growing number of students in seventh to ninth grades. In addition to its institutional work, the Bank continued promoting volunteer work among its employees who, year after year, through their enthusiasm, time, and personal contributions, support the children and youth of this educational center. In 2012, a total of 148 students were sponsored by our employees through a scholarship program. Their contributions also helped to support the speech program for the school’s pre-kindergarten and kindergarten students, aimed at preventing early childhood learning problems. As a sponsor of the Financial Education Program for Schools implemented by the Banking Association and the Ministry of Education of Panama, an active group of Bladex employees runs workshops on managing personal finance for students, teachers, and parents. As part of our goal to support the other countries in the Region, this year, for the first time, Bladex contributed in Mexico to the Mexican Foundation for Social Reintegration, an organization that provides support through legal services, training, and job opportunities to facilitate the social reintegration of people of limited means with legal problems.
37
Childhood and education are important pillars of our social commitment
Corporate Social Responsibility
Our work as a socially responsible company is in line with the values that govern our corporate behavior. Our efforts are focused on programs aimed at fostering education and supporting children as key factors in achieving the development of our Latin American countries. We are aware that our institution plays an important role, beyond its economic function, as an agent for development in the communities where we are privileged to work. In Panama, where our headquarters are located, just as in previous years, we continued to
36
support the Marie Poussepin Educational Center; in 2012, the Bank donated a building providing six classrooms and a psychology and guided studies room, as well as an outdoor area for sport and cultural activities. These facilities provide the Center with additional space to accommodate a growing number of students in seventh to ninth grades. In addition to its institutional work, the Bank continued promoting volunteer work among its employees who, year after year, through their enthusiasm, time, and personal contributions, support the children and youth of this educational center. In 2012, a total of 148 students were sponsored by our employees through a scholarship program. Their contributions also helped to support the speech program for the school’s pre-kindergarten and kindergarten students, aimed at preventing early childhood learning problems. As a sponsor of the Financial Education Program for Schools implemented by the Banking Association and the Ministry of Education of Panama, an active group of Bladex employees runs workshops on managing personal finance for students, teachers, and parents. As part of our goal to support the other countries in the Region, this year, for the first time, Bladex contributed in Mexico to the Mexican Foundation for Social Reintegration, an organization that provides support through legal services, training, and job opportunities to facilitate the social reintegration of people of limited means with legal problems.
37
Offices
Argentina
Brazil
Colombia
Buenos Aires
• São Paulo • Porto Alegre
Bogota
United States
Mexico • Mexico City • Monterrey
• Miami • New York
Panama Panama Head Office
38
Peru Lima
39
Offices
Argentina
Brazil
Colombia
Buenos Aires
• São Paulo • Porto Alegre
Bogota
United States
Mexico • Mexico City • Monterrey
• Miami • New York
Panama Panama Head Office
38
Peru Lima
39
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries With Independent Auditors’ Report
Consolidated Balance Sheets as of December 31, 2012 and 2011, and Related Consolidated Statements of Income, Comprehensive Income, Changes in Stockholders’ Equity and Cash Flows for Each of the Three Years in the Period Ended December 31, 2012
Consolidated Financial Statements 2012, 2011 y 2010 Contents Independent Auditors’ Report – Consolidated Financial Statements
41
Consolidated balance sheets
42
Consolidated statements of income
43
Consolidated statements of comprehensive income
44
Consolidated statements of changes in stockholders’ equity and redeemable noncontrolling interest
45
Consolidated statements of cash flows
46
Notes to consolidated financial statements
40
Pages
47 - 101
41
Deloitte, Inc. Contadores Públicos Autorizados Apartado 0816-01558 Panamá, Rep. de Panamá Teléfono: (507) 303-4100 Facsimile: (507) 269-2386 infopanama@deloitte.com www.deloitte.com/pa
INDEPENDENT AUDITORS´ REPORT To the Board of Directors and Stockholders of Banco Latinoamericano de Comercio Exterior, S.A. and Subsidiaries We have audited the accompanying consolidated balance sheets of Banco Latinoamericano de Comercio Exterior, S.A. and Subsidiaries (the “Bank”) as of December 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and redeemable noncontrolling interest and cash flows for each of the three years in the period ended December 31, 2012. These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries With Independent Auditors’ Report
Consolidated Balance Sheets as of December 31, 2012 and 2011, and Related Consolidated Statements of Income, Comprehensive Income, Changes in Stockholders’ Equity and Cash Flows for Each of the Three Years in the Period Ended December 31, 2012
Consolidated Financial Statements 2012, 2011 y 2010 Contents
Pages
Independent Auditors’ Report – Consolidated Financial Statements
41
Consolidated balance sheets
42
Consolidated statements of income
43
Consolidated statements of comprehensive income
44
Consolidated statements of changes in stockholders’ equity and redeemable noncontrolling interest
45
Consolidated statements of cash flows
46
Notes to consolidated financial statements
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Banco Latinoamericano de Comercio Exterior, S.A. and Subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been translated into English for the convenience of readers outside of Panama.
February 28, 2013
47 - 101
.
Auditoría Impuestos 40
. Consultoría . Asesoría Financiera. 41
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated balance sheets
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated statements of income Years ended December 31, 2012, 2011 and 2010 (in US$ thousand, except per share amounts)
December 31, 2012 and 2011 (in US$ thousand, except share amounts)
Assets Cash and due from banks Interest-bearing deposits in banks (including pledged deposits of $14,519 in 2012 and $23,994 in 2011) Trading assets (including pledged securities to creditors of $1,262 in 2012 and $18,988 in 2011) Securities available-for-sale (including pledged securities to creditors of $152,340 in 2012 and $375,492 in 2011) Securities held-to-maturity (fair value of $34,149 in 2012 and $26,637 in 2011) (including pledged securities to creditors of $19,453 in 2012 and $17,486 in 2011) Investment fund Loans Less: Allowance for loan losses Unearned income and deferred fees Loans, net Customers' liabilities under acceptances Accrued interest receivable Premises and equipment (net of accumulated depreciation and amortization of $11,688 in 2012 and $17,881 in 2011) Derivative financial instruments used for hedging - receivable Other assets Total assets Liabilities and stockholders' equity Deposits: Noninterest-bearing - Demand Interest-bearing - Demand Time Total deposits Trading liabilities Securities sold under repurchase agreement Short-term borrowings Acceptances outstanding Accrued interest payable Borrowings and long-term debt Derivative financial instruments used for hedging - payable Reserve for losses on off-balance sheet credit risk Other liabilities Total liabilities
2011
6,718
12,814
4,23
700,312
830,670
5,23
5,265
20,436
6,23
183,017
416,300
6,23 7,23 8,23
34,113 105,888 5,715,556
26,536 120,425 4,959,573
9,23
72,976 7,100 5,635,480
88,547 6,697 4,864,329
1,157 37,819
1,110 38,168
12,808 19,239 14,580 6,756,396
6,673 4,159 18,412 6,360,032
580 131,295 2,185,385 2,317,260
680 66,906 2,235,920 2,303,506
32,304 158,374 1,449,023 1,157 17,943 1,905,540 11,747 4,841 28,348 5,926,537
5,584 377,002 1,323,466 1,110 11,790 1,487,548 53,742 8,887 22,568 5,595,203
3,384
5,547
23 23 10 21,23 11
12,23
5,23 4,5,6,13,23 14,23 23 23 15,23 21,23 9 11 19,20,21,23,24
Stockholders' equity: "Class A" common stock, no par value, assigned value of $6.67 (Authorized 40,000,000; outstanding 6,342,189) "Class B" common stock, no par value, assigned value of $6.67 (Authorized 40,000,000; outstanding 2,531,926 in 2012 and 2011 "Class E" common stock, no par value, assigned value of $6.67 (Authorized 100,000,000; outstanding 29,271,067 in 2012 and 28,257,827 in 2011) Additional paid-in capital in excess of assigned value of common stock Capital reserves Retained earnings Accumulated other comprehensive loss Treasury stock Total stockholders' equity
16,17,18,22,25
The accompanying notes are an integral part of these consolidated financial statements.
2012
4,23
Commitments and contingencies Redeemable noncontrolling interest
Total liabilities and stockholders' equity
42
Notes
6,21,22 16
Interest income: Deposits with banks Trading assets Investment securities: Available-for-sale Held-to-maturity Investment fund Loans Total interest income Interest expense: Deposits Investment fund Short-term borrowings Borrowings and long-term debt Total interest expense Net interest income Reversal of provision (provision) for loan losses
Notes 21
21
9
Net interest income, after reversal of provision (provision) for loan losses Other income (expense): Reversal of provision for losses on off-balance sheet credit risk Fees and commissions, net Derivative financial instruments and hedging Recoveries, net of impairment of assets Net gain (loss) from investment fund trading Net gain (loss) from trading securities Net gain on sale of securities available-for-sale Net gain (loss) on foreign currency exchange Gain on sale of premises and equipment Other income, net Net other income
9 21
6 10
Operating expenses: Salaries and other employee expenses Depreciation and amortization of premises and equipment Professional services Maintenance and repairs Expenses from the investment fund Other operating expenses Total operating expenses Net income from continuing operations Net income (loss) from discontinued operations Net income
3
Net income (loss) attributable to the redeemable noncontrolling interest Net income attributable to Bladex
2012
2011
2010
1,876 69
1,351 1,758
839 3,133
5,675 721 880 183,216 192,437
10,780 880 2,341 140,317 157,427
8,188 285 2,198 104,835 119,478
12,944 109 20,673 53,734 87,460 104,977
8,818 323 15,753 29,823 54,717 102,710
8,531 963 8,058 27,423 44,975 74,503
8,343
(8,841)
(9,091)
113,320
93,869
65,412
4,046 10,021 71 7,011 11,234 6,030 (10,525) 5,626 2,986 36,500
4,448 10,619 2,923 (57) 20,314 (6,494) 3,413 4,269 1,059 40,494
13,926 9,811 (1,446) 233 (7,995) (3,603) 2,346 1,870 1,279 16,421
33,171 2,269 4,053 1,936 2,953 11,432 55,814
27,825 2,139 4,151 1,634 4,372 9,966 50,087
22,251 2,471 3,977 1,615 3,996 7,908 42,218
94,006 (681) 93,325
84,276 (420) 83,856
39,615 206 39,821
293
676
93,032
83,180
42,244
(2,423)
93,713 (681) 93,032
83,600 (420) 83,180
42,038 206 42,244
Amounts attributable to Bladex:
44,407
44,407
20,683
20,683
214,890 121,419 95,210 422,048 (730) (91,452) 826,475
214,890 130,177 95,210 372,644 (3,112) (115,617) 759,282
6,756,396
6,360,032
Net income from continuing operations Net income (loss) from discontinued operations Earnings per share from continuing operations: Basic
18
2.48
2.26
1.15
Diluted
18
2.47
2.25
1.14
Earnings (loss) per share from discontinued operations: Basic
18
(0.02)
(0.01)
0.01
Diluted
18
(0.02)
(0.01)
0.01
Earnings per share: Basic
18
2.46
2.25
1.15
Diluted
18
2.45
2.24
1.15
Weighted average basic shares
18
37,824
36,969
36,647
Weighted average diluted shares
18
37,938
37,145
36,814
The accompanying notes are an integral part of these consolidated financial statements.
43
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated balance sheets
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated statements of income Years ended December 31, 2012, 2011 and 2010 (in US$ thousand, except per share amounts)
December 31, 2012 and 2011 (in US$ thousand, except share amounts)
Assets Cash and due from banks Interest-bearing deposits in banks (including pledged deposits of $14,519 in 2012 and $23,994 in 2011) Trading assets (including pledged securities to creditors of $1,262 in 2012 and $18,988 in 2011) Securities available-for-sale (including pledged securities to creditors of $152,340 in 2012 and $375,492 in 2011) Securities held-to-maturity (fair value of $34,149 in 2012 and $26,637 in 2011) (including pledged securities to creditors of $19,453 in 2012 and $17,486 in 2011) Investment fund Loans Less: Allowance for loan losses Unearned income and deferred fees Loans, net Customers' liabilities under acceptances Accrued interest receivable Premises and equipment (net of accumulated depreciation and amortization of $11,688 in 2012 and $17,881 in 2011) Derivative financial instruments used for hedging - receivable Other assets Total assets Liabilities and stockholders' equity Deposits: Noninterest-bearing - Demand Interest-bearing - Demand Time Total deposits Trading liabilities Securities sold under repurchase agreement Short-term borrowings Acceptances outstanding Accrued interest payable Borrowings and long-term debt Derivative financial instruments used for hedging - payable Reserve for losses on off-balance sheet credit risk Other liabilities Total liabilities
2011
6,718
12,814
4,23
700,312
830,670
5,23
5,265
20,436
6,23
183,017
416,300
6,23 7,23 8,23
34,113 105,888 5,715,556
26,536 120,425 4,959,573
9,23
72,976 7,100 5,635,480
88,547 6,697 4,864,329
1,157 37,819
1,110 38,168
12,808 19,239 14,580 6,756,396
6,673 4,159 18,412 6,360,032
580 131,295 2,185,385 2,317,260
680 66,906 2,235,920 2,303,506
32,304 158,374 1,449,023 1,157 17,943 1,905,540 11,747 4,841 28,348 5,926,537
5,584 377,002 1,323,466 1,110 11,790 1,487,548 53,742 8,887 22,568 5,595,203
3,384
5,547
23 23 10 21,23 11
12,23
5,23 4,5,6,13,23 14,23 23 23 15,23 21,23 9 11 19,20,21,23,24
Stockholders' equity: "Class A" common stock, no par value, assigned value of $6.67 (Authorized 40,000,000; outstanding 6,342,189) "Class B" common stock, no par value, assigned value of $6.67 (Authorized 40,000,000; outstanding 2,531,926 in 2012 and 2011 "Class E" common stock, no par value, assigned value of $6.67 (Authorized 100,000,000; outstanding 29,271,067 in 2012 and 28,257,827 in 2011) Additional paid-in capital in excess of assigned value of common stock Capital reserves Retained earnings Accumulated other comprehensive loss Treasury stock Total stockholders' equity
16,17,18,22,25
The accompanying notes are an integral part of these consolidated financial statements.
2012
4,23
Commitments and contingencies Redeemable noncontrolling interest
Total liabilities and stockholders' equity
42
Notes
6,21,22 16
Interest income: Deposits with banks Trading assets Investment securities: Available-for-sale Held-to-maturity Investment fund Loans Total interest income Interest expense: Deposits Investment fund Short-term borrowings Borrowings and long-term debt Total interest expense Net interest income Reversal of provision (provision) for loan losses
Notes 21
21
9
Net interest income, after reversal of provision (provision) for loan losses Other income (expense): Reversal of provision for losses on off-balance sheet credit risk Fees and commissions, net Derivative financial instruments and hedging Recoveries, net of impairment of assets Net gain (loss) from investment fund trading Net gain (loss) from trading securities Net gain on sale of securities available-for-sale Net gain (loss) on foreign currency exchange Gain on sale of premises and equipment Other income, net Net other income
9 21
6 10
Operating expenses: Salaries and other employee expenses Depreciation and amortization of premises and equipment Professional services Maintenance and repairs Expenses from the investment fund Other operating expenses Total operating expenses Net income from continuing operations Net income (loss) from discontinued operations Net income
3
Net income (loss) attributable to the redeemable noncontrolling interest Net income attributable to Bladex
2012
2011
2010
1,876 69
1,351 1,758
839 3,133
5,675 721 880 183,216 192,437
10,780 880 2,341 140,317 157,427
8,188 285 2,198 104,835 119,478
12,944 109 20,673 53,734 87,460 104,977
8,818 323 15,753 29,823 54,717 102,710
8,531 963 8,058 27,423 44,975 74,503
8,343
(8,841)
(9,091)
113,320
93,869
65,412
4,046 10,021 71 7,011 11,234 6,030 (10,525) 5,626 2,986 36,500
4,448 10,619 2,923 (57) 20,314 (6,494) 3,413 4,269 1,059 40,494
13,926 9,811 (1,446) 233 (7,995) (3,603) 2,346 1,870 1,279 16,421
33,171 2,269 4,053 1,936 2,953 11,432 55,814
27,825 2,139 4,151 1,634 4,372 9,966 50,087
22,251 2,471 3,977 1,615 3,996 7,908 42,218
94,006 (681) 93,325
84,276 (420) 83,856
39,615 206 39,821
293
676
93,032
83,180
42,244
(2,423)
93,713 (681) 93,032
83,600 (420) 83,180
42,038 206 42,244
Amounts attributable to Bladex:
44,407
44,407
20,683
20,683
214,890 121,419 95,210 422,048 (730) (91,452) 826,475
214,890 130,177 95,210 372,644 (3,112) (115,617) 759,282
6,756,396
6,360,032
Net income from continuing operations Net income (loss) from discontinued operations Earnings per share from continuing operations: Basic
18
2.48
2.26
1.15
Diluted
18
2.47
2.25
1.14
Earnings (loss) per share from discontinued operations: Basic
18
(0.02)
(0.01)
0.01
Diluted
18
(0.02)
(0.01)
0.01
Earnings per share: Basic
18
2.46
2.25
1.15
Diluted
18
2.45
2.24
1.15
Weighted average basic shares
18
37,824
36,969
36,647
Weighted average diluted shares
18
37,938
37,145
36,814
The accompanying notes are an integral part of these consolidated financial statements.
43
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries
Consolidated statements of comprehensive income
Consolidated statements of changes in stockholders' equity and redeemable noncontrolling interest
Years ended December 31, 2012, 2011 and 2010 (in US$ thousand)
Years ended December 31, 2012, 2011 and 2010
(in US$ thousand)
Notes Net income
2012
2011
Common stock
2010
93,325
83,856
39,821
22
8,436
4,095
2,325
22
(5,775)
(2,079)
(2,825)
2,661
2,016
22
5,699
1,097
22
(5,427)
Other comprehensive income (loss) Unrealized gains (losses) on securities available-for-sale: Unrealized gains arising from the year Less: reclassification adjustments for net gains included in net income Net change in unrealized gains (losses) on securities available for sale Unrealized gains (losses) on derivative financial instruments: Unrealized gains arising from the year Less: reclassification adjustments for net (gains) losses included in net income Net change in unrealized gains on derivative financial instruments Foreign currency translation adjustment, net of hedges: Current year change Change in foreign currency translation adjustment Other comprehensive income (loss) Comprehensive income Comprehensive income (loss) attributable to the redeemable noncontrolling interest Comprehensive income attributable to Bladex
The accompanying notes are an integral part of these consolidated financial statements.
44
272
(735) (735)
960 2,057
(744) (744)
2,198
3,329
95,523
87,185
109
676
95,414
86,509
(500)
1,391 (1,172) 219
(281) 39,540 (2,423) 41,963
Balances at January 1, 2010 Net income (loss) Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive loss Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Repurchase of common stock "Class E" Dividends declared Balances at December 31, 2010 Net income Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive income Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Dividends declared Balances at December 31, 2011 Net income Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive income (loss) Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Dividends declared Balances at December 31, 2012
Stockholders' equity Additional paid-in capital in excess of Accumulated assigned value other of common Capital Retained comprehensive stock reserves earnings income (loss)
Treasury stock
Total Redeemable stockholders' noncontrolling equity interest
279,980 -
134,820 -
95,210 -
301,389 42,244 -
(6,160) (281)
(129,602) -
675,637 42,244 (281)
34,900 (2,423) 9,900 (23,427) -
279,980 -
2,099 (909) (2,195) 133,815 -
95,210 -
(23,480) 320,153 83,180 -
(6,441) 3,329
909 3,029 (3) (125,667) -
2,099 834 (3) (23,480) 697,050 83,180 3,329
18,950 676 531 (14,610) -
279,980 -
2,311 (609) (5,340) 130,177 -
95,210 -
(30,689) 372,644 93,032 -
(3,112) 2,382
609 9,441 (115,617) -
2,311 4,101 (30,689) 759,282 93,032 2,382
5,547 293 1,773 (4,045) (184)
279,980
2,271 (771) (10,258) 121,419
95,210
(43,628) 422,048
(730)
771 23,394 (91,452)
2,271 13,136 (43,628) 826,475
3,384
The accompanying notes are an integral part of these consolidated financial statements.
45
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries
Consolidated statements of comprehensive income
Consolidated statements of changes in stockholders' equity and redeemable noncontrolling interest
Years ended December 31, 2012, 2011 and 2010 (in US$ thousand)
Years ended December 31, 2012, 2011 and 2010
(in US$ thousand)
Notes Net income
2012
2011
Common stock
2010
93,325
83,856
39,821
22
8,436
4,095
2,325
22
(5,775)
(2,079)
(2,825)
2,661
2,016
22
5,699
1,097
22
(5,427)
Other comprehensive income (loss) Unrealized gains (losses) on securities available-for-sale: Unrealized gains arising from the year Less: reclassification adjustments for net gains included in net income Net change in unrealized gains (losses) on securities available for sale Unrealized gains (losses) on derivative financial instruments: Unrealized gains arising from the year Less: reclassification adjustments for net (gains) losses included in net income Net change in unrealized gains on derivative financial instruments Foreign currency translation adjustment, net of hedges: Current year change Change in foreign currency translation adjustment Other comprehensive income (loss) Comprehensive income Comprehensive income (loss) attributable to the redeemable noncontrolling interest Comprehensive income attributable to Bladex
The accompanying notes are an integral part of these consolidated financial statements.
44
272
(735) (735)
960 2,057
(744) (744)
2,198
3,329
95,523
87,185
109
676
95,414
86,509
(500)
1,391 (1,172) 219
(281) 39,540 (2,423) 41,963
Balances at January 1, 2010 Net income (loss) Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive loss Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Repurchase of common stock "Class E" Dividends declared Balances at December 31, 2010 Net income Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive income Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Dividends declared Balances at December 31, 2011 Net income Redeemable noncontrolling interest - subscriptions Redeemable noncontrolling interest - redemptions Other comprehensive income (loss) Compensation cost - stock options and stock units plans Issuance of restricted stock Exercised options and stock units vested Dividends declared Balances at December 31, 2012
Stockholders' equity Additional paid-in capital in excess of Accumulated assigned value other of common Capital Retained comprehensive stock reserves earnings income (loss)
Treasury stock
Total Redeemable stockholders' noncontrolling equity interest
279,980 -
134,820 -
95,210 -
301,389 42,244 -
(6,160) (281)
(129,602) -
675,637 42,244 (281)
34,900 (2,423) 9,900 (23,427) -
279,980 -
2,099 (909) (2,195) 133,815 -
95,210 -
(23,480) 320,153 83,180 -
(6,441) 3,329
909 3,029 (3) (125,667) -
2,099 834 (3) (23,480) 697,050 83,180 3,329
18,950 676 531 (14,610) -
279,980 -
2,311 (609) (5,340) 130,177 -
95,210 -
(30,689) 372,644 93,032 -
(3,112) 2,382
609 9,441 (115,617) -
2,311 4,101 (30,689) 759,282 93,032 2,382
5,547 293 1,773 (4,045) (184)
279,980
2,271 (771) (10,258) 121,419
95,210
(43,628) 422,048
(730)
771 23,394 (91,452)
2,271 13,136 (43,628) 826,475
3,384
The accompanying notes are an integral part of these consolidated financial statements.
45
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated statements of cash flows Years ended December 31, 2012, 2011 and 2010 (in US$ thousand)
Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Activities of derivative financial instruments and hedging Depreciation and amortization of premises and equipment Provision (reversal of provision) for loan losses Provision (reversal of provision) for losses on off-balance sheet credit risk Impairment loss on assets Net gain on sale of securities available-for-sale Gain on sale of premises and equipment Compensation cost - compensation plans Amortization of premium and discounts on investments Net decrease (increase) in operating assets: Trading assets Investment fund Accrued interest receivable Other assets Net increase (decrease) in operating liabilities: Trading liabilities Accrued interest payable Other liabilities Net change from discontinued operating activities Net cash provided by operating activities Cash flows from investing activities: Net decrease (increase) in pledged deposits Net decrease (increase) in deposits with original maturities greater than three months Net increase in loans Proceeds from the sale of loans Acquisition of equipment and leasehold improvements Proceeds from the sale of premises and equipment Proceeds from the redemption of securities available-for-sale Proceeds from the sale of securities available-for-sale Proceeds from the redemption of securities held to maturity Purchases of investments available-for-sale Purchases of investments held-to-maturity Net change from discontinued investing activities Net cash used in investing activities Cash flows from financing activities: Net increase in due to depositors Net increase (decrease) in short-term borrowings and securities sold under repurchase agreements Proceeds from borrowings and long-term debt Repayments of borrowings and long-term debt Dividends paid Subscriptions of redeemable noncontrolling interest Redemptions of redeemable noncontrolling interest Exercised stock options Repurchase of common stock Net cash provided by financing activities Effect of exchange rate fluctuations on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Supplemental disclosures of cash flow information: Cash paid during the year for interest
Notes toconsolidated consolidated financial statements Notes to financial statements 2012 93,325
2011 83,856
2010 39,821
(47,678) 2,269 (8,343) (4,046) (6,030) (5,626) 2,271 3,075
17,177 2,139 8,841 (4,448) 57 (3,413) 2,311 6,912
(6,498) 2,471 9,091 (13,926) (2,346) 2,099 7,597
14,338 14,537 349 3,786
29,766 46,866 (7,058) (7,498)
(135) 30,284 (5,549) (24,409)
26,720 6,153 2,250 (256) 97,094 9,475 30,000 (909,019) 146,211 (10,823) 8,023 15,277 254,772 7,050 (39,982) (14,811) (3) (503,830)
1,647 1,706 1,126 200 180,187 (7,919) (30,000) (901,103) 9,261 (2,220) 19,484 264,997 13,500 (364,993) (7,050) (88) (1,006,131)
786 (1,207) 30,747 213 69,039 6,507 (1,308,935) 20,000 (1,281) 33,074 151,267 (93,009) (33,196) (12) (1,225,585)
13,754
482,581
564,679
(93,071) 817,827 (399,835) (39,714) 1,773 (4,045) 13,136 309,825
340,141 824,139 (411,731) (29,505) 531 (14,610) 4,101 1,195,647
961,195 212,960 (528,207) (22,720) 9,900 (23,427) 834 (3) 1,175,211
(68)
(852)
-
(96,979) 789,490 692,511
368,851 420,639 789,490
18,665 401,974 420,639
81,307
54,717
46,182
1. 1.
Organization Organization Banco de de Comercio Exterior, S. A. S. (“Bladex Head Office” and together its with its Banco Latinoamericano Latinoamericano Comercio Exterior, A. (“Bladex Head Office” and with together subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the specialized The supranational bank established to afinance trade in Latin America the Caribbean (the “Region”). Bank was established pursuant to May 1975 proposal presented to theand Assembly of “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 Governors to of increase CentraltheBanks thefinancing Region,capacity whichofrecommended creation of a multinational organization foreignin trade the Region. Thethe Bank was organized in organization to increase trade financing wasand organized in 1977, incorporated in 1978the asforeign a corporation pursuant tocapacity the lawsofofthetheRegion. RepublicThe of Bank Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and of Panama initiated and Bladex, the Bank on wasJanuary granted 2, certain privileges the Republic of Panama, officially operations 1979. Under by a contract signed in 1978 including between an the Republic exemption from payment of income taxes in Panama. 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 Superintendency of Banks of Panama (the “SBP”).
The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency Banks Panama (the “SBP”). In the Republic of Panama, banks are regulated byofthe SBP of through Executive Decree No. 52 of April
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. are also regulated by resolutions and agreements issued In the Republic of Panama, banksBanks are regulated by the SBP through Executive Decree No.by52 of April this entity. The main aspects of this law and its regulations include: the authorization of banking 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law licenses, minimum capital and liquidity requirements, consolidated supervision, and procedures for issued by Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions agreements management of credit and market risks, measures to prevent money laundering, the financing this entity. The main aspects of this law and its regulations include: the authorizationofof banking terrorism and related illicit activities, and procedures for banking intervention and liquidation, among licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for others.
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Bladex Head Office’s subsidiaries are the following: others. -
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. exercises Bladex Head Office’s subsidiaries are the following:
-
-
-
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, serves owned as investment manager for Bladex Offshore Feeder Bladex HoldingsUSA, Inc., which is a wholly subsidiary, incorporated under the laws Fund of the State of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Delaware, United States of America (USA), on May 30, 2000. Bladex HoldingsAsset Inc. exercises Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a State ofentity Delaware, USA, which serves to as establish investment manager for Bladex Offshore Feeder Fund foreign in the Republic of Panama, a branch in Panama, which is mainly (the “Feeder”) and administrative Bladex Capital (theto“Fund”). In February 2012, Asset engaged in providing andGrowth operatingFund services Bladex Asset Management Inc.Bladex in Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an USA.
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a
The Feederentity is an entity which Bladex officetoowns 98.06%aand 95.84%inasPanama, of December 31, is mainly foreign in thein Republic of Head Panama, establish branch which 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of engaged in providing administrative and operating services to Bladex Asset Management Inc. in the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated USA. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The The Feeder is an entity in which office owns 98.06%inand 95.84% as ofdebt December 31, objective of the Fund is to achieveBladex capital Head appreciation by investing Latin American 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of securities, stock indexes, currencies, and trading derivative instruments.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments. -7-
The accompanying notes are an integral part of these consolidated financial statements.
46
-7-
47
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano de Comercio Exterior, S. A. and Subsidiaries Consolidated statements of cash flows Years ended December 31, 2012, 2011 and 2010 (in US$ thousand)
Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Activities of derivative financial instruments and hedging Depreciation and amortization of premises and equipment Provision (reversal of provision) for loan losses Provision (reversal of provision) for losses on off-balance sheet credit risk Impairment loss on assets Net gain on sale of securities available-for-sale Gain on sale of premises and equipment Compensation cost - compensation plans Amortization of premium and discounts on investments Net decrease (increase) in operating assets: Trading assets Investment fund Accrued interest receivable Other assets Net increase (decrease) in operating liabilities: Trading liabilities Accrued interest payable Other liabilities Net change from discontinued operating activities Net cash provided by operating activities Cash flows from investing activities: Net decrease (increase) in pledged deposits Net decrease (increase) in deposits with original maturities greater than three months Net increase in loans Proceeds from the sale of loans Acquisition of equipment and leasehold improvements Proceeds from the sale of premises and equipment Proceeds from the redemption of securities available-for-sale Proceeds from the sale of securities available-for-sale Proceeds from the redemption of securities held to maturity Purchases of investments available-for-sale Purchases of investments held-to-maturity Net change from discontinued investing activities Net cash used in investing activities Cash flows from financing activities: Net increase in due to depositors Net increase (decrease) in short-term borrowings and securities sold under repurchase agreements Proceeds from borrowings and long-term debt Repayments of borrowings and long-term debt Dividends paid Subscriptions of redeemable noncontrolling interest Redemptions of redeemable noncontrolling interest Exercised stock options Repurchase of common stock Net cash provided by financing activities Effect of exchange rate fluctuations on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Supplemental disclosures of cash flow information: Cash paid during the year for interest
Notes toconsolidated consolidated financial statements Notes to financial statements 2012 93,325
2011 83,856
2010 39,821
(47,678) 2,269 (8,343) (4,046) (6,030) (5,626) 2,271 3,075
17,177 2,139 8,841 (4,448) 57 (3,413) 2,311 6,912
(6,498) 2,471 9,091 (13,926) (2,346) 2,099 7,597
14,338 14,537 349 3,786
29,766 46,866 (7,058) (7,498)
(135) 30,284 (5,549) (24,409)
26,720 6,153 2,250 (256) 97,094 9,475 30,000 (909,019) 146,211 (10,823) 8,023 15,277 254,772 7,050 (39,982) (14,811) (3) (503,830)
1,647 1,706 1,126 200 180,187 (7,919) (30,000) (901,103) 9,261 (2,220) 19,484 264,997 13,500 (364,993) (7,050) (88) (1,006,131)
786 (1,207) 30,747 213 69,039 6,507 (1,308,935) 20,000 (1,281) 33,074 151,267 (93,009) (33,196) (12) (1,225,585)
13,754
482,581
564,679
(93,071) 817,827 (399,835) (39,714) 1,773 (4,045) 13,136 309,825
340,141 824,139 (411,731) (29,505) 531 (14,610) 4,101 1,195,647
961,195 212,960 (528,207) (22,720) 9,900 (23,427) 834 (3) 1,175,211
(68)
(852)
-
(96,979) 789,490 692,511
368,851 420,639 789,490
18,665 401,974 420,639
81,307
54,717
46,182
1. 1.
Organization Organization Banco de de Comercio Exterior, S. A. S. (“Bladex Head Office” and together its with its Banco Latinoamericano Latinoamericano Comercio Exterior, A. (“Bladex Head Office” and with together subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the specialized The supranational bank established to afinance trade in Latin America the Caribbean (the “Region”). Bank was established pursuant to May 1975 proposal presented to theand Assembly of “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 Governors to of increase CentraltheBanks thefinancing Region,capacity whichofrecommended creation of a multinational organization foreignin trade the Region. Thethe Bank was organized in organization to increase trade financing wasand organized in 1977, incorporated in 1978the asforeign a corporation pursuant tocapacity the lawsofofthetheRegion. RepublicThe of Bank Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and of Panama initiated and Bladex, the Bank on wasJanuary granted 2, certain privileges the Republic of Panama, officially operations 1979. Under by a contract signed in 1978 including between an the Republic exemption from payment of income taxes in Panama. 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 Superintendency of Banks of Panama (the “SBP”).
The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency Banks Panama (the “SBP”). In the Republic of Panama, banks are regulated byofthe SBP of through Executive Decree No. 52 of April
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. are also regulated by resolutions and agreements issued In the Republic of Panama, banksBanks are regulated by the SBP through Executive Decree No.by52 of April this entity. The main aspects of this law and its regulations include: the authorization of banking 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law licenses, minimum capital and liquidity requirements, consolidated supervision, and procedures for issued by Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions agreements management of credit and market risks, measures to prevent money laundering, the financing this entity. The main aspects of this law and its regulations include: the authorizationofof banking terrorism and related illicit activities, and procedures for banking intervention and liquidation, among licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for others.
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Bladex Head Office’s subsidiaries are the following: others. -
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. exercises Bladex Head Office’s subsidiaries are the following:
-
-
-
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, serves owned as investment manager for Bladex Offshore Feeder Bladex HoldingsUSA, Inc., which is a wholly subsidiary, incorporated under the laws Fund of the State of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Delaware, United States of America (USA), on May 30, 2000. Bladex HoldingsAsset Inc. exercises Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a State ofentity Delaware, USA, which serves to as establish investment manager for Bladex Offshore Feeder Fund foreign in the Republic of Panama, a branch in Panama, which is mainly (the “Feeder”) and administrative Bladex Capital (theto“Fund”). In February 2012, Asset engaged in providing andGrowth operatingFund services Bladex Asset Management Inc.Bladex in Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an USA.
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a
The Feederentity is an entity which Bladex officetoowns 98.06%aand 95.84%inasPanama, of December 31, is mainly foreign in thein Republic of Head Panama, establish branch which 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of engaged in providing administrative and operating services to Bladex Asset Management Inc. in the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated USA. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The The Feeder is an entity in which office owns 98.06%inand 95.84% as ofdebt December 31, objective of the Fund is to achieveBladex capital Head appreciation by investing Latin American 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of securities, stock indexes, currencies, and trading derivative instruments.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments. -7-
The accompanying notes are an integral part of these consolidated financial statements.
46
-7-
47
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. 2.
Organization - Bladex Representacao Ltda., incorporated under the laws of Brazil on January 7, 2000, acts as the
Bank’s representative office in Brazil. Bladex Representacao Ltda. is 99.999% owned by Bladex
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Head Office and the remaining 0.001% owned by Bladex Holdings Inc. subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the - Bladex Ltda. was incorporated underproposal the laws of Brazil on Assembly May 3, 2011. Bladex “Region”). TheInvestimentos Bank was established pursuant to a May 1975 presented to the of Headof Office Bladexwhich Investimentos Ltda. Bladex Inc. owns the Governors Central owns Banks 99% in theofRegion, recommended theand creation of aHoldings multinational remaining 1%. the This company has invested substantially all its Bladex Latam organization to increase foreign trade financing capacity of the Region. Theassets Bank in was organized in Fundo de 1977, incorporated 1978 as a corporation the laws of the Republic of Panama, andon July 26, Investimentoin Multimercado, which pursuant was alsotoincorporated under the laws of Brazil officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 2011. 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 objective of Bladex Latam Fundo de Investimento Multimercado (the “Brazilian Fund”) is to achieve capital gains by dealing in the interest, currency, securities, commodities and debt markets, The Bank operates under a general banking license issued by the National Banking Commission of by trading instruments available in theofspot and(the derivative Panama,and predecessor of the Superintendency of Banks Panama “SBP”). markets. Bladex Latam Fundo de Investimento Multimercado is registered with the Brazilian Securities Commission (“CVM”). This fund is aofvariable entity (“VIE”), and hasthrough been consolidated in these In the Republic Panama,interest banks are regulated by the SBP Executive Decree No. consolidated 52 of April financial 30, 2008, which adopts text of the Law No. 2011, 9 of February 1998, modified by the Law82.90% and statements. As the of December 31, Decree 2012 and Bladex 26, Investimentos Ltda. holds Decree 91.99%, No. 2 of February 22, 2008. are also regulated by resolutions respectively, of theBanks Brazilian Fund’s net asset value. and agreements issued by
Organization Summary of significant accounting policies Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its a) Basis of presentation subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the These consolidated been accounting principles “Region”). The Bank wasfinancial establishedstatements pursuant tohave a May 1975prepared proposal under presented to the Assembly of generally accepted the United Americawhich (“U.S. GAAP”). All in the consolidated Governors of in Central BanksStates in theofRegion, recommended theamounts creation presented of a multinational financialto statements notes arefinancing expressed in dollars of the United Stated of America organization increase the and foreign trade capacity of the Region. The Bank was organized in (“US$”), 1977,which incorporated in 1978functional as a corporation pursuant to the laws of consolidated the Republic of Panama,statements and is the Bank’s currency. The accompanying financial have officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic been translated from Spanish to English for users outside of the Republic of Panama. 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 Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standards Board (the “FASB”) constitute the single official source of authoritative, non-governmental GAAP, The Bank operates under a general banking license issued by the National Banking Commission of otherpredecessor than guidance issued by theofSecurities and Exchange Panama, of the Superintendency Banks of Panama (the “SBP”).Commission (“SEC”). All other literature is considered non-authoritative.
this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, minimum and incorporated liquidity requirements, consolidated supervision, procedures for 5, 2010. - BLX Brazil capital Ltd., was under the laws of the Cayman Islands on October management of credit and market risks, measures to prevent money laundering, the financing of Bladex Head Office owns 99.80% of BLX Brazil Ltd. In turn, BLX Brazil Ltd. owns 99.9999% of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others. Bladex Asset Management Brazil – Gestora de Recursos Ltda. and Bladex Asset Management Inc.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, which of adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law b) 2008, Principles consolidation Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by this The entity.consolidated The main aspects of this law and itsinclude regulations of banking financial statements the include: accountstheofauthorization Bladex Head Office and its licenses, minimum capital and liquidity requirements, consolidated supervision, procedures subsidiaries. Bladex Head Office consolidates its subsidiaries in which it holds for a controlling management of credit and market risks, measures to prevent money laundering, the financing of financial interest. The usual condition for a controlling financial interest is ownership of a majority terrorism and related illicit activities, and procedures for banking intervention and liquidation, among voting interest. All intercompany balances and transactions have been eliminated for consolidation others.
under the are laws Brazil on January 6, 2011, and provides investment advisory Bladex incorporated Head Office’s subsidiaries the of following:
Bladex Head Office’s subsidiaries are the following:
owns the remaining 0.0001%. Bladex Asset Management Brazil – Gestora de Recursos Ltda. was
services to Bladex Latam Fundo de Investimento Multimercado.
purposes.
When Bladex holds an interest in investment companies under the “Feeder-Master” structure where
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States Americain(USA), on May 30, USA 2000. (the Bladex Holdings Inc. exercises Bladex Head Office has anofagency New York City, “New York Agency”), which began control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of thetransactions operations on March 27, 1989. The New York Agency is principally engaged in financing State Delaware, USA, serves investment manager for Bladex Offshore Fund related to of international trade,which mostly the as confirmation and financing of letters of Feeder credit for customers of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset the Region. The New York Agency is also licensed by the State of New York Banking Department, Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an USA,investment to operateadviser. an International Banking Facility (“IBF”). On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly The engaged Bank has offices inandBuenos Aires, Argentina, in Asset Mexico City, D.F.Inc. and in representative providing administrative operating services to Bladex Management in Monterrey, USA.in Porto Alegre, Brazil, in Lima, Peru, in Bogota, Colombia, and an international administrative Mexico,
- the Bladex Holdings Inc., is a wholly owned incorporated under laws offund the State Feeder’s shareholding is diluted andsubsidiary, such entity is registered as the a mutual withofa regulatory Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises body, it is considered an investment company. In those cases, the Feeder, and thereby Bladex control over Bladex AssetitsManagement Inc., May 24,item 2006, the lawssheet, of theas required indirectly, consolidates participation in incorporated the Fund inon one line in under the balance State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder by the specialized accounting in the ASC Topic 946 - Financial Services – InvestmentFund Companies. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an c) Variable interest investment adviser.entities On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Variable interest entities (“VIE”) and areoperating entities services that have either Asset a total equity investment that is engaged in providing administrative to Bladex Management Inc. in insufficient to permit the entity to finance its activities without additional subordinated financial USA.
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, Feeder wasshares incorporated on PA February 2006 underincorporated the laws of under the Bladex Head Officerespectively. owns 50% The of the equity of BCG LLC,21, a company the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated laws of the State of Delaware, USA. This company owns “Class C” shares of the Fund that entitle it to under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman receive a performance allocation on third-party investments in the in the Fund.The Island Monetary Authority (“CIMA”), under the Mutual Funds LawFeeder of the and Cayman Islands. objective of the Fund is to achieve capital appreciation by investing in Latin American debt Clavex LLC, astock former subsidiary of Bladex Holdings, was dissolved on April 7, 2011, and its net assets securities, indexes, currencies, and trading derivative instruments.
- Investors The Feeder is an entity in which Head office owns 98.06% and or 95.84% of December 31, that finance the VIEBladex through debt or equity interests otherascounterparties that provide 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of other forms of support, such as guarantees, or certain types of derivative contracts, are variable the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated interest holders in the entity. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The The variable if any, capital that hasappreciation a controlling interest a VIE isdebt deemed to be objective of interest the Fundholder, is to achieve by financial investing in Latin in American the primary beneficiary and must consolidate the VIE. The Bank would be deemed to have a securities, stock indexes, currencies, and trading derivative instruments.
-
office in Miami, Florida, USA. -
were transferred to its controlling entity. Clavex S. A., a former subsidiary of Bladex Head Office, was dissolved on August 30, 2011, and its net assets were transferred to its Head Office.
support, or whose equity investors lack the characteristics of a controlling financial interest.
controlling financial interest and be the primary beneficiary if it has both of the following characteristics:
-7-
48
-8-
power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and -7obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.
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49
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. 2.
Organization - Bladex Representacao Ltda., incorporated under the laws of Brazil on January 7, 2000, acts as the
Bank’s representative office in Brazil. Bladex Representacao Ltda. is 99.999% owned by Bladex
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Head Office and the remaining 0.001% owned by Bladex Holdings Inc. subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the - Bladex Ltda. was incorporated underproposal the laws of Brazil on Assembly May 3, 2011. Bladex “Region”). TheInvestimentos Bank was established pursuant to a May 1975 presented to the of Headof Office Bladexwhich Investimentos Ltda. Bladex Inc. owns the Governors Central owns Banks 99% in theofRegion, recommended theand creation of aHoldings multinational remaining 1%. the This company has invested substantially all its Bladex Latam organization to increase foreign trade financing capacity of the Region. Theassets Bank in was organized in Fundo de 1977, incorporated 1978 as a corporation the laws of the Republic of Panama, andon July 26, Investimentoin Multimercado, which pursuant was alsotoincorporated under the laws of Brazil officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 2011. 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 objective of Bladex Latam Fundo de Investimento Multimercado (the “Brazilian Fund”) is to achieve capital gains by dealing in the interest, currency, securities, commodities and debt markets, The Bank operates under a general banking license issued by the National Banking Commission of by trading instruments available in theofspot and(the derivative Panama,and predecessor of the Superintendency of Banks Panama “SBP”). markets. Bladex Latam Fundo de Investimento Multimercado is registered with the Brazilian Securities Commission (“CVM”). This fund is aofvariable entity (“VIE”), and hasthrough been consolidated in these In the Republic Panama,interest banks are regulated by the SBP Executive Decree No. consolidated 52 of April financial 30, 2008, which adopts text of the Law No. 2011, 9 of February 1998, modified by the Law82.90% and statements. As the of December 31, Decree 2012 and Bladex 26, Investimentos Ltda. holds Decree 91.99%, No. 2 of February 22, 2008. are also regulated by resolutions respectively, of theBanks Brazilian Fund’s net asset value. and agreements issued by
Organization Summary of significant accounting policies Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its a) Basis of presentation subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the These consolidated been accounting principles “Region”). The Bank wasfinancial establishedstatements pursuant tohave a May 1975prepared proposal under presented to the Assembly of generally accepted the United Americawhich (“U.S. GAAP”). All in the consolidated Governors of in Central BanksStates in theofRegion, recommended theamounts creation presented of a multinational financialto statements notes arefinancing expressed in dollars of the United Stated of America organization increase the and foreign trade capacity of the Region. The Bank was organized in (“US$”), 1977,which incorporated in 1978functional as a corporation pursuant to the laws of consolidated the Republic of Panama,statements and is the Bank’s currency. The accompanying financial have officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic been translated from Spanish to English for users outside of the Republic of Panama. 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 Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standards Board (the “FASB”) constitute the single official source of authoritative, non-governmental GAAP, The Bank operates under a general banking license issued by the National Banking Commission of otherpredecessor than guidance issued by theofSecurities and Exchange Panama, of the Superintendency Banks of Panama (the “SBP”).Commission (“SEC”). All other literature is considered non-authoritative.
this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, minimum and incorporated liquidity requirements, consolidated supervision, procedures for 5, 2010. - BLX Brazil capital Ltd., was under the laws of the Cayman Islands on October management of credit and market risks, measures to prevent money laundering, the financing of Bladex Head Office owns 99.80% of BLX Brazil Ltd. In turn, BLX Brazil Ltd. owns 99.9999% of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others. Bladex Asset Management Brazil – Gestora de Recursos Ltda. and Bladex Asset Management Inc.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, which of adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law b) 2008, Principles consolidation Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by this The entity.consolidated The main aspects of this law and itsinclude regulations of banking financial statements the include: accountstheofauthorization Bladex Head Office and its licenses, minimum capital and liquidity requirements, consolidated supervision, procedures subsidiaries. Bladex Head Office consolidates its subsidiaries in which it holds for a controlling management of credit and market risks, measures to prevent money laundering, the financing of financial interest. The usual condition for a controlling financial interest is ownership of a majority terrorism and related illicit activities, and procedures for banking intervention and liquidation, among voting interest. All intercompany balances and transactions have been eliminated for consolidation others.
under the are laws Brazil on January 6, 2011, and provides investment advisory Bladex incorporated Head Office’s subsidiaries the of following:
Bladex Head Office’s subsidiaries are the following:
owns the remaining 0.0001%. Bladex Asset Management Brazil – Gestora de Recursos Ltda. was
services to Bladex Latam Fundo de Investimento Multimercado.
purposes.
When Bladex holds an interest in investment companies under the “Feeder-Master” structure where
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States Americain(USA), on May 30, USA 2000. (the Bladex Holdings Inc. exercises Bladex Head Office has anofagency New York City, “New York Agency”), which began control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of thetransactions operations on March 27, 1989. The New York Agency is principally engaged in financing State Delaware, USA, serves investment manager for Bladex Offshore Fund related to of international trade,which mostly the as confirmation and financing of letters of Feeder credit for customers of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset the Region. The New York Agency is also licensed by the State of New York Banking Department, Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an USA,investment to operateadviser. an International Banking Facility (“IBF”). On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly The engaged Bank has offices inandBuenos Aires, Argentina, in Asset Mexico City, D.F.Inc. and in representative providing administrative operating services to Bladex Management in Monterrey, USA.in Porto Alegre, Brazil, in Lima, Peru, in Bogota, Colombia, and an international administrative Mexico,
- the Bladex Holdings Inc., is a wholly owned incorporated under laws offund the State Feeder’s shareholding is diluted andsubsidiary, such entity is registered as the a mutual withofa regulatory Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises body, it is considered an investment company. In those cases, the Feeder, and thereby Bladex control over Bladex AssetitsManagement Inc., May 24,item 2006, the lawssheet, of theas required indirectly, consolidates participation in incorporated the Fund inon one line in under the balance State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder by the specialized accounting in the ASC Topic 946 - Financial Services – InvestmentFund Companies. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an c) Variable interest investment adviser.entities On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Variable interest entities (“VIE”) and areoperating entities services that have either Asset a total equity investment that is engaged in providing administrative to Bladex Management Inc. in insufficient to permit the entity to finance its activities without additional subordinated financial USA.
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, Feeder wasshares incorporated on PA February 2006 underincorporated the laws of under the Bladex Head Officerespectively. owns 50% The of the equity of BCG LLC,21, a company the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated laws of the State of Delaware, USA. This company owns “Class C” shares of the Fund that entitle it to under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman receive a performance allocation on third-party investments in the in the Fund.The Island Monetary Authority (“CIMA”), under the Mutual Funds LawFeeder of the and Cayman Islands. objective of the Fund is to achieve capital appreciation by investing in Latin American debt Clavex LLC, astock former subsidiary of Bladex Holdings, was dissolved on April 7, 2011, and its net assets securities, indexes, currencies, and trading derivative instruments.
- Investors The Feeder is an entity in which Head office owns 98.06% and or 95.84% of December 31, that finance the VIEBladex through debt or equity interests otherascounterparties that provide 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of other forms of support, such as guarantees, or certain types of derivative contracts, are variable the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated interest holders in the entity. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The The variable if any, capital that hasappreciation a controlling interest a VIE isdebt deemed to be objective of interest the Fundholder, is to achieve by financial investing in Latin in American the primary beneficiary and must consolidate the VIE. The Bank would be deemed to have a securities, stock indexes, currencies, and trading derivative instruments.
-
office in Miami, Florida, USA. -
were transferred to its controlling entity. Clavex S. A., a former subsidiary of Bladex Head Office, was dissolved on August 30, 2011, and its net assets were transferred to its Head Office.
support, or whose equity investors lack the characteristics of a controlling financial interest.
controlling financial interest and be the primary beneficiary if it has both of the following characteristics:
-7-
48
-8-
power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and -7obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.
-9-
49
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1.
Organization d) Equity method Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Investments in companies in which Bladex Head Office exercises significant influence, but not subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a control over its financial and operating policies, and equityand participation of at(the least 20% but specialized supranational bank established to finance trade in holds Latin an America the Caribbean not more than 50%, are initially accounted for at cost, which is subsequently adjusted to record the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of participation of the investment in gainswhich (losses) of the investee the acquisition date. Governors of Central Banks in the Region, recommended the after creation of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporatedaccounting in 1978 as for a corporation to the laws of the Republic of Panama, and e) Specialized investmentpursuant companies officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank certain privileges by the Republicstructure. of Panama,Under including The Feeder and the Fund was are granted organized under a “Feeder-Master” thisan structure, the exemption from payment of income taxes in Panama.
Feeder invests all its assets in the Fund which in turn invests in various assets on behalf of its investor. Specialized accounting for investment companies requires the Feeder to reflect its The Bank operates under a general banking license issued by the National Banking Commission of investment in the Fund in a single line itemofequal to its share of the net assets of the Panama, predecessor of the Superintendency of Banks Panama (theproportionate “SBP”). Fund, regardless of the level of Feeder’s interest in the Fund. The Feeder records the Fund’s results accounting for its banks participation in thebynet income and expenses as well as its In theby Republic of Panama, are regulated theinterest SBP through Executive Decree of No.the 52 Fund, of April 30, 2008, which adopts text of the Decree gains No. 9 or of losses February participation in thetherealized andLaw unrealized of 26, the 1998, Fund.modified by the Law
be repurchased is continuously monitored, and additional collateral is obtained or provided where
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its appropriate, to protect against credit exposure. subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the The Bank’s policy to relinquish possession of1975 the securities sold under agreements “Region”). The Bank wasisestablished pursuant to a May proposal presented to the Assembly to of repurchase. Despite relinquishment possession, agreements qualify secured financings if Governors of such Central Banks in the ofRegion, which repurchase recommended the creation of a as multinational and only if all of following conditions areofmet: the repurchase must organization to increase the the foreign trade financing capacity the Region. The Bank agreement was organized in grant the 1977,transferor incorporated 1978and as obligation a corporation pursuant to or theredeem laws ofthe thetransferred Republic of Panama,assets; and the assets theinright to repurchase financial officially operations January Under a contract signed in 1978transferred; between the the Republic to beinitiated repurchased areonthe same2,or1979. substantially the same as those agreement is to of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including repurchase or redeem them before maturity, at a fixed and determinable price; and theanagreement is exemption from payment of income taxes in Panama.
entered into concurrently at the transfer date.
The Bank operates under a general banking license issued by the National Banking Commission of When repurchase do not meetofthe above-noted conditions, they qualify as sales of Panama, predecessor of theagreements Superintendency of Banks Panama (the “SBP”).
securities, for which the related security is removed from the balance sheet and a forward purchase agreement recognized obligation toSBP repurchase security. Changes In the Republic ofisPanama, banksfor arethe regulated by the through the Executive Decree No. 52 in of fair Aprilvalue of the 30, 2008, which adopts the text of theasLaw 9 oforFebruary 26, 1998, modified by the Law forward purchase agreement wellDecree as anyNo. gain loss resulting from the sale of securities under Decree No. 2 of February 22, 2008. Banks areinalso regulated and agreements repurchase agreements are reported earnings of by theresolutions period within net gain issued (loss) by from trading this entity. The main aspects of this law and its regulations include: the authorization of banking securities.
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 Bladex authorization of banking As permitted by ASC Topic 810-10-25-15 Consolidation, when consolidates its investment licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for in the Feeder, it retains the specialized accounting for investment companies applied by the Feeder in management of credit and market risks, measures to prevent money laundering, the financing of the Fund, reporting it within the “Investment fund” line item in the consolidated balance sheet, and terrorism and related illicit activities, and procedures for banking intervention and liquidation, among presenting the third party investments in the Feeder in the “Redeemable noncontrolling interest” line others.
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of i) Trading assets and liabilities terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
from the Fund subsidiaries in the Investment fund line item within interest income and expense, realized and Bladex Head Office’s are the following:
(unrealized gains) and payables Bladex Head Office’s subsidiaries are the (unrealized following: losses) related to derivative financial instruments which
item between liabilities and stockholders’ equity. The Bank reports interest income and expense
unrealized gains and losses in the “Net gain (loss) from investment fund trading” line item, and
- expenses Bladex Holdings Inc.,Fund is a wholly owned subsidiary, incorporated under the laws offund” the State from the are reported in “Expenses from the investment lineofitem in the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises consolidated statements of income. control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Stateofofestimates Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund f) Use (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc.,ofwas with financial the Securities and Exchange (“SEC”) as an The preparation theregistered consolidated statements requiresCommission Management to make estimates and investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly liabilities the date administrative of the consolidated financial statements andAsset the reported amounts engaged inatproviding and operating services to Bladex Management Inc. inof revenues and expenses during the period. Material estimates that are particularly susceptible to significant USA.
changes relate to the determination of the allowances for credit losses, impairment of securities andinheld-to-maturity, theowns fair 98.06% value of Actual results - available-for-sale The Feeder is an entity which Bladex Headand office andfinancial 95.84% asinstruments. of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006are under the laws of could differ from those estimates. Management believes these estimates adequate.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman g) Cash equivalents Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Cash equivalents include demand deposits in banks and interest-bearing deposits in banks with securities, stock indexes, currencies, and trading derivative instruments.
original maturities of three months or less, excluding pledged deposits.
h) Repurchase agreements Repurchase agreements are generally treated as collateralized financing transactions. When the -7criteria set forth in the following paragraph are met to account for the transaction as secured financing, the transaction is recorded at the amounts at which the securities will be subsequently reacquired including interest paid, as specified in the respective agreements. Interest is recognized
50
Organization in the consolidated statement of income over the life of the transaction. The fair value of securities to
-10-
Trading assets and liabilities include bonds acquired for trading purposes, and receivables
-
j)
-
are not designated as hedges or which do not qualify for hedge accounting. These amounts include Bladex Holdings assets Inc., is and a wholly owned net subsidiary, incorporated the laws of the State under of the derivative liabilities of cash received under or paid, respectively, legally Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises enforceable master netting agreements.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, which are serves as investment manager for Bladexand Offshore Feeder Fund Trading assets andUSA, liabilities carried at fair value. Unrealized realized gains and losses on (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset trading assets and liabilities are recorded in earnings as net gain (loss) from trading securities. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Investment securities foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Securities are classified at the date of purchase based on the ability and intent to sell or hold them as USA.
investments. These securities consist of debt securities such as: negotiable commercial paper, bonds The floating Feeder israte an entity and notes.in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Interest on securities is recognized based on the interest method. Amortization of premiums and under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman discounts are included in interest income as an adjustment to the yield. Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Securities available-for-sale securities, stock indexes, currencies, and trading derivative instruments.
These securities consist of debt instruments that the Bank buys with the intention of selling them prior to maturity and are subject to the same approval criteria as the rest of the credit portfolio. These securities are carried at fair value. Unrealized gains and losses are reported as net increases or decreases to other comprehensive income (loss) (OCI) in stockholders’ equity until they are realized. -7Realized gains and losses from the sale of securities which are included in net gain on sale of securities are determined using the specific identification method.
-11-
51
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1.
Organization d) Equity method Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Investments in companies in which Bladex Head Office exercises significant influence, but not subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a control over its financial and operating policies, and equityand participation of at(the least 20% but specialized supranational bank established to finance trade in holds Latin an America the Caribbean not more than 50%, are initially accounted for at cost, which is subsequently adjusted to record the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of participation of the investment in gainswhich (losses) of the investee the acquisition date. Governors of Central Banks in the Region, recommended the after creation of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporatedaccounting in 1978 as for a corporation to the laws of the Republic of Panama, and e) Specialized investmentpursuant companies officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank certain privileges by the Republicstructure. of Panama,Under including The Feeder and the Fund was are granted organized under a “Feeder-Master” thisan structure, the exemption from payment of income taxes in Panama.
Feeder invests all its assets in the Fund which in turn invests in various assets on behalf of its investor. Specialized accounting for investment companies requires the Feeder to reflect its The Bank operates under a general banking license issued by the National Banking Commission of investment in the Fund in a single line itemofequal to its share of the net assets of the Panama, predecessor of the Superintendency of Banks Panama (theproportionate “SBP”). Fund, regardless of the level of Feeder’s interest in the Fund. The Feeder records the Fund’s results accounting for its banks participation in thebynet income and expenses as well as its In theby Republic of Panama, are regulated theinterest SBP through Executive Decree of No.the 52 Fund, of April 30, 2008, which adopts text of the Decree gains No. 9 or of losses February participation in thetherealized andLaw unrealized of 26, the 1998, Fund.modified by the Law
be repurchased is continuously monitored, and additional collateral is obtained or provided where
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its appropriate, to protect against credit exposure. subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the The Bank’s policy to relinquish possession of1975 the securities sold under agreements “Region”). The Bank wasisestablished pursuant to a May proposal presented to the Assembly to of repurchase. Despite relinquishment possession, agreements qualify secured financings if Governors of such Central Banks in the ofRegion, which repurchase recommended the creation of a as multinational and only if all of following conditions areofmet: the repurchase must organization to increase the the foreign trade financing capacity the Region. The Bank agreement was organized in grant the 1977,transferor incorporated 1978and as obligation a corporation pursuant to or theredeem laws ofthe thetransferred Republic of Panama,assets; and the assets theinright to repurchase financial officially operations January Under a contract signed in 1978transferred; between the the Republic to beinitiated repurchased areonthe same2,or1979. substantially the same as those agreement is to of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including repurchase or redeem them before maturity, at a fixed and determinable price; and theanagreement is exemption from payment of income taxes in Panama.
entered into concurrently at the transfer date.
The Bank operates under a general banking license issued by the National Banking Commission of When repurchase do not meetofthe above-noted conditions, they qualify as sales of Panama, predecessor of theagreements Superintendency of Banks Panama (the “SBP”).
securities, for which the related security is removed from the balance sheet and a forward purchase agreement recognized obligation toSBP repurchase security. Changes In the Republic ofisPanama, banksfor arethe regulated by the through the Executive Decree No. 52 in of fair Aprilvalue of the 30, 2008, which adopts the text of theasLaw 9 oforFebruary 26, 1998, modified by the Law forward purchase agreement wellDecree as anyNo. gain loss resulting from the sale of securities under Decree No. 2 of February 22, 2008. Banks areinalso regulated and agreements repurchase agreements are reported earnings of by theresolutions period within net gain issued (loss) by from trading this entity. The main aspects of this law and its regulations include: the authorization of banking securities.
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 Bladex authorization of banking As permitted by ASC Topic 810-10-25-15 Consolidation, when consolidates its investment licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for in the Feeder, it retains the specialized accounting for investment companies applied by the Feeder in management of credit and market risks, measures to prevent money laundering, the financing of the Fund, reporting it within the “Investment fund” line item in the consolidated balance sheet, and terrorism and related illicit activities, and procedures for banking intervention and liquidation, among presenting the third party investments in the Feeder in the “Redeemable noncontrolling interest” line others.
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of i) Trading assets and liabilities terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
from the Fund subsidiaries in the Investment fund line item within interest income and expense, realized and Bladex Head Office’s are the following:
(unrealized gains) and payables Bladex Head Office’s subsidiaries are the (unrealized following: losses) related to derivative financial instruments which
item between liabilities and stockholders’ equity. The Bank reports interest income and expense
unrealized gains and losses in the “Net gain (loss) from investment fund trading” line item, and
- expenses Bladex Holdings Inc.,Fund is a wholly owned subsidiary, incorporated under the laws offund” the State from the are reported in “Expenses from the investment lineofitem in the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises consolidated statements of income. control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Stateofofestimates Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund f) Use (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc.,ofwas with financial the Securities and Exchange (“SEC”) as an The preparation theregistered consolidated statements requiresCommission Management to make estimates and investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly liabilities the date administrative of the consolidated financial statements andAsset the reported amounts engaged inatproviding and operating services to Bladex Management Inc. inof revenues and expenses during the period. Material estimates that are particularly susceptible to significant USA.
changes relate to the determination of the allowances for credit losses, impairment of securities andinheld-to-maturity, theowns fair 98.06% value of Actual results - available-for-sale The Feeder is an entity which Bladex Headand office andfinancial 95.84% asinstruments. of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006are under the laws of could differ from those estimates. Management believes these estimates adequate.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman g) Cash equivalents Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Cash equivalents include demand deposits in banks and interest-bearing deposits in banks with securities, stock indexes, currencies, and trading derivative instruments.
original maturities of three months or less, excluding pledged deposits.
h) Repurchase agreements Repurchase agreements are generally treated as collateralized financing transactions. When the -7criteria set forth in the following paragraph are met to account for the transaction as secured financing, the transaction is recorded at the amounts at which the securities will be subsequently reacquired including interest paid, as specified in the respective agreements. Interest is recognized
50
Organization in the consolidated statement of income over the life of the transaction. The fair value of securities to
-10-
Trading assets and liabilities include bonds acquired for trading purposes, and receivables
-
j)
-
are not designated as hedges or which do not qualify for hedge accounting. These amounts include Bladex Holdings assets Inc., is and a wholly owned net subsidiary, incorporated the laws of the State under of the derivative liabilities of cash received under or paid, respectively, legally Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises enforceable master netting agreements.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, which are serves as investment manager for Bladexand Offshore Feeder Fund Trading assets andUSA, liabilities carried at fair value. Unrealized realized gains and losses on (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset trading assets and liabilities are recorded in earnings as net gain (loss) from trading securities. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Investment securities foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Securities are classified at the date of purchase based on the ability and intent to sell or hold them as USA.
investments. These securities consist of debt securities such as: negotiable commercial paper, bonds The floating Feeder israte an entity and notes.in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Interest on securities is recognized based on the interest method. Amortization of premiums and under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman discounts are included in interest income as an adjustment to the yield. Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Securities available-for-sale securities, stock indexes, currencies, and trading derivative instruments.
These securities consist of debt instruments that the Bank buys with the intention of selling them prior to maturity and are subject to the same approval criteria as the rest of the credit portfolio. These securities are carried at fair value. Unrealized gains and losses are reported as net increases or decreases to other comprehensive income (loss) (OCI) in stockholders’ equity until they are realized. -7Realized gains and losses from the sale of securities which are included in net gain on sale of securities are determined using the specific identification method.
-11-
51
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1.
Organization Securities held-to-maturity Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Securities classified as held-to-maturity represent securities that the Bank has the ability and the subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a intent hold until bank maturity. Theseto securities are incarried at amortized cost and are (the subject to the specialized to supranational established finance trade Latin America and the Caribbean same approval criteria as the rest of the credit portfolio. “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 Impairment of securities 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 officially initiated operations on January 2, 1979. Under a contract signed in 1978 losses betweentothe Republicwhether the The Bank conducts periodic reviews of all securities with unrealized evaluate of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an numerous impairment is other-than-temporary. Impairment of securities is evaluated considering exemption from payment of income taxes in Panama. factors, and their relative significance varies case by case. Factors considered in determining
whether unrealized losses are temporary include: the length of time and extent to which the fair The Bank operates under a general banking license issued by the National Banking Commission of value has beenofless cost, the severity impairment, the cause of the impairment and the Panama, predecessor the than Superintendency of Banksofofthe Panama (the “SBP”). financial condition of the issuer, activity in the market of the issuer which may indicate adverse credit conditions, the banks intentare and ability by of the theSBP Bank to retain the security In the Republic of Panama, regulated through Executive Decree for No. a52sufficient of April period of 30, 2008, which adopts theanticipated text of the Law Decree of February 1998, modified by the Law time to allow of an recovery in No. the 9market value26, (with respect to equity securities) and Decree 2 ofand February 22, 2008. Banks are to alsosell regulated by resolutions and recovery agreementsofissued by theNo. intent probability of the Bank the security before the its amortized cost this (with entity. respect The main aspects of this lawIf,and its regulations include:it the authorizationthat of banking to debt securities). based on the analysis, is determined the impairment is licenses, minimum capital the and security liquidityis requirements, supervision, procedures for through other-than-temporary, written downconsolidated to its fair value, and a loss is recognized management of credit and market risks, measures to prevent money laundering, the financing of earnings as impairment loss on assets.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Other investments that mainly consist of unlisted stock are recorded at cost and are included in other subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a assets. supranational The Bank determined that it to is not practicable obtain the fair of these investments, as specialized bank established finance trade in to Latin America andvalue the Caribbean (the these shares are not traded in a secondary market. Performance of these investments is evaluated “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of periodically and declines determined be other-than-temporary charged to earnings as Governors of Central Banks inthat the are Region, which to recommended the creation ofare a multinational impairment on assets (See Note organization to increase the foreign trade11). 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 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic m) Loans 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.
Loans are reported at their amortized cost considering the principal outstanding amounts net of unearned income, deferred fees and allowance for loan losses. Interest income is recognized using The Bank operates under a general banking license issued by the National Banking Commission of the interest method. amortization net unearned and deferred fees are recognized as an Panama, predecessor of the The Superintendency of of Banks of Panama income (the “SBP”). adjustment to the related loan yield using the effective interest method.
terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which loans adoptsare the recorded text of the at Law Decree No.cost. 9 of February 26, 1998,between modified the by the Law and the Purchased acquisition The difference principal Decree No. 2 of February 22, 2008. are also by resolutions andover agreements by loan as an acquisition cost of loans, the Banks premiums andregulated discounts, is amortized the lifeissued of the this adjustment entity. Thetomain aspectsAll of other this law andrelated its regulations include: authorization of banking the yield. costs to acquisition of the loans are expensed when incurred. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of The Bank identifies loans as delinquent when no debt service and/or interest payment has been terrorism and related illicit activities, and procedures for banking intervention and liquidation, among received for 30 days after such payments were due. The outstanding balance of a loan is considered others.
required to sell subsidiaries the security the recovery of its amortized cost basis, the Bank periodically Bladex Head Office’s arebefore the following:
within days after such payment was due, or when no agreed-upon periodical payment has been Bladex Head30 Office’s subsidiaries are the following:
In cases where the Bank does not intend to sell a debt security and estimates that it will not be
estimates if it will recover the amortized cost of the security through the present value of expected
past due when the total principal balance with one single balloon payment has not been received received for a period of 90 days after the agreed-upon date.
- cash Bladex Holdings Inc.,present is a wholly owned subsidiary,cash incorporated laws the State ofcost of the flows. If the value of expected flows isunder less the than theofamortized Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. security, it is determined that an other-than-temporary impairment has occurred. exercises The amount of this control over representing Bladex Asset Management Inc., incorporated on Mayearnings 24, 2006, and underthe theresidual laws of the impairment credit loss is recognized through of the otherState of Delaware, USA, whichrelated serves as Offshore than-temporary impairment to investment non-creditmanager factorsforis Bladex recognized in Feeder other Fund comprehensive (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset income (loss). Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Inforeign periods subsequent to the of recognition the other-than-temporary the difference entity in the Republic Panama, toofestablish a branch in Panama,impairment, which is mainly between new amortized cost and expected cashtoflows to Asset be collected is accreted engaged the in providing administrative andthe operating services Bladex Management Inc. in as interest income. USA. The present value of the expected cash flows is estimated over the life of the debt security.
-
- The The other-than-temporary Feeder is an entity in which Bladex Head owns 98.06% and 95.84%that as ofhas December 31, impairment of office securities held-to-maturity been recognized in 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of security other comprehensive income (loss) is accreted to the amortized cost of the debt the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated prospectively over its remaining life. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Interest suspended on securities that are inbydefault, or in onLatin which it is likely objectiveaccrual of the is Fund is to achieve capital appreciation investing American debt that future interest payments will not be received as scheduled. securities, stock indexes, currencies, and trading derivative instruments.
- AThe Feeder loan is an entity in which aBladex Headdebt office owns 98.06% and 95.84% as ofisDecember 31, financial modified is considered troubled restructuring when the debtor experiencing 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws difficulties and if the restructuring constitutes a concession to the debtor. A concession of may include the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated modification of terms such as an extension of maturity date, reduction in the stated interest rate, under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman rescheduling of future cash flows, and reduction in the face amount of the debt or reduction of Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The accrued interest, Marketable securities received in exchange for loans debt under troubled objective of the among Fund is others. to achieve capital appreciation by investing in Latin American debt restructurings are initially recorded at fair value, with any gain or loss recorded as a recovery or securities, stock indexes, currencies, and trading derivative instruments.
k) Investment Fund The Feeder records its investment in the Fund at fair value, which is the Feeder’s proportionate interest in the net assets of the Fund. The Fund invests in trading assets and liabilities that are -7carried at fair value. The Fund reports trading gains and losses from negotiation of these instruments as realized and unrealized gains and losses on investments.
52
Organization l) Other investments
-12-
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United in States of Americastatus (USA), on May 30, 2000. BladexisHoldings exercises Loans are placed a non-accrual when interest or principal overdue Inc. for 90 days or more, or control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws before if the Bank’s Management believes there is an uncertainty with respect oftothe the ultimate State of Delaware, USA,orwhich servesAny as investment manager foron Bladex Offshore Feeder collection of principal interest. interest receivable non-accruing loans Fund is reversed and (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset charged-off against earnings. Interest on these loans is only recorded as earned when collected. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Non-accruing loans On are September returned to8, an accrual status (1) all contractual principal investment adviser. 2009, Bladex Assetwhen Management Inc. was registered as aand interest amounts are current; (2) there is a sustained period of repayment performance in accordance foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly with the contractual of at least six months; and (3) if in the Bank Asset Management’s opinion engaged in terms providing administrative and operating services to Bladex Management Inc. in the loan is fully USA.collectible.
charge to the allowance, and are subsequently accounted for as securities available-for-sale.
A loan is considered impaired, and also placed on a non-accrual basis, when based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to original contractual terms of the loan agreement. Factors considered by the Bank’s -7Management in determining impairment include collection status, collateral value, and economic conditions in the borrower’s country of residence. Impaired loans also include those modified loans considered troubled debt restructurings. When current events or available information confirm that -13-
53
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1.
Organization Securities held-to-maturity Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Securities classified as held-to-maturity represent securities that the Bank has the ability and the subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a intent hold until bank maturity. Theseto securities are incarried at amortized cost and are (the subject to the specialized to supranational established finance trade Latin America and the Caribbean same approval criteria as the rest of the credit portfolio. “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 Impairment of securities 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 officially initiated operations on January 2, 1979. Under a contract signed in 1978 losses betweentothe Republicwhether the The Bank conducts periodic reviews of all securities with unrealized evaluate of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an numerous impairment is other-than-temporary. Impairment of securities is evaluated considering exemption from payment of income taxes in Panama. factors, and their relative significance varies case by case. Factors considered in determining
whether unrealized losses are temporary include: the length of time and extent to which the fair The Bank operates under a general banking license issued by the National Banking Commission of value has beenofless cost, the severity impairment, the cause of the impairment and the Panama, predecessor the than Superintendency of Banksofofthe Panama (the “SBP”). financial condition of the issuer, activity in the market of the issuer which may indicate adverse credit conditions, the banks intentare and ability by of the theSBP Bank to retain the security In the Republic of Panama, regulated through Executive Decree for No. a52sufficient of April period of 30, 2008, which adopts theanticipated text of the Law Decree of February 1998, modified by the Law time to allow of an recovery in No. the 9market value26, (with respect to equity securities) and Decree 2 ofand February 22, 2008. Banks are to alsosell regulated by resolutions and recovery agreementsofissued by theNo. intent probability of the Bank the security before the its amortized cost this (with entity. respect The main aspects of this lawIf,and its regulations include:it the authorizationthat of banking to debt securities). based on the analysis, is determined the impairment is licenses, minimum capital the and security liquidityis requirements, supervision, procedures for through other-than-temporary, written downconsolidated to its fair value, and a loss is recognized management of credit and market risks, measures to prevent money laundering, the financing of earnings as impairment loss on assets.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Other investments that mainly consist of unlisted stock are recorded at cost and are included in other subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a assets. supranational The Bank determined that it to is not practicable obtain the fair of these investments, as specialized bank established finance trade in to Latin America andvalue the Caribbean (the these shares are not traded in a secondary market. Performance of these investments is evaluated “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of periodically and declines determined be other-than-temporary charged to earnings as Governors of Central Banks inthat the are Region, which to recommended the creation ofare a multinational impairment on assets (See Note organization to increase the foreign trade11). 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 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic m) Loans 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.
Loans are reported at their amortized cost considering the principal outstanding amounts net of unearned income, deferred fees and allowance for loan losses. Interest income is recognized using The Bank operates under a general banking license issued by the National Banking Commission of the interest method. amortization net unearned and deferred fees are recognized as an Panama, predecessor of the The Superintendency of of Banks of Panama income (the “SBP”). adjustment to the related loan yield using the effective interest method.
terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which loans adoptsare the recorded text of the at Law Decree No.cost. 9 of February 26, 1998,between modified the by the Law and the Purchased acquisition The difference principal Decree No. 2 of February 22, 2008. are also by resolutions andover agreements by loan as an acquisition cost of loans, the Banks premiums andregulated discounts, is amortized the lifeissued of the this adjustment entity. Thetomain aspectsAll of other this law andrelated its regulations include: authorization of banking the yield. costs to acquisition of the loans are expensed when incurred. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of The Bank identifies loans as delinquent when no debt service and/or interest payment has been terrorism and related illicit activities, and procedures for banking intervention and liquidation, among received for 30 days after such payments were due. The outstanding balance of a loan is considered others.
required to sell subsidiaries the security the recovery of its amortized cost basis, the Bank periodically Bladex Head Office’s arebefore the following:
within days after such payment was due, or when no agreed-upon periodical payment has been Bladex Head30 Office’s subsidiaries are the following:
In cases where the Bank does not intend to sell a debt security and estimates that it will not be
estimates if it will recover the amortized cost of the security through the present value of expected
past due when the total principal balance with one single balloon payment has not been received received for a period of 90 days after the agreed-upon date.
- cash Bladex Holdings Inc.,present is a wholly owned subsidiary,cash incorporated laws the State ofcost of the flows. If the value of expected flows isunder less the than theofamortized Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. security, it is determined that an other-than-temporary impairment has occurred. exercises The amount of this control over representing Bladex Asset Management Inc., incorporated on Mayearnings 24, 2006, and underthe theresidual laws of the impairment credit loss is recognized through of the otherState of Delaware, USA, whichrelated serves as Offshore than-temporary impairment to investment non-creditmanager factorsforis Bladex recognized in Feeder other Fund comprehensive (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset income (loss). Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Inforeign periods subsequent to the of recognition the other-than-temporary the difference entity in the Republic Panama, toofestablish a branch in Panama,impairment, which is mainly between new amortized cost and expected cashtoflows to Asset be collected is accreted engaged the in providing administrative andthe operating services Bladex Management Inc. in as interest income. USA. The present value of the expected cash flows is estimated over the life of the debt security.
-
- The The other-than-temporary Feeder is an entity in which Bladex Head owns 98.06% and 95.84%that as ofhas December 31, impairment of office securities held-to-maturity been recognized in 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of security other comprehensive income (loss) is accreted to the amortized cost of the debt the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated prospectively over its remaining life. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Interest suspended on securities that are inbydefault, or in onLatin which it is likely objectiveaccrual of the is Fund is to achieve capital appreciation investing American debt that future interest payments will not be received as scheduled. securities, stock indexes, currencies, and trading derivative instruments.
- AThe Feeder loan is an entity in which aBladex Headdebt office owns 98.06% and 95.84% as ofisDecember 31, financial modified is considered troubled restructuring when the debtor experiencing 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws difficulties and if the restructuring constitutes a concession to the debtor. A concession of may include the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated modification of terms such as an extension of maturity date, reduction in the stated interest rate, under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman rescheduling of future cash flows, and reduction in the face amount of the debt or reduction of Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The accrued interest, Marketable securities received in exchange for loans debt under troubled objective of the among Fund is others. to achieve capital appreciation by investing in Latin American debt restructurings are initially recorded at fair value, with any gain or loss recorded as a recovery or securities, stock indexes, currencies, and trading derivative instruments.
k) Investment Fund The Feeder records its investment in the Fund at fair value, which is the Feeder’s proportionate interest in the net assets of the Fund. The Fund invests in trading assets and liabilities that are -7carried at fair value. The Fund reports trading gains and losses from negotiation of these instruments as realized and unrealized gains and losses on investments.
52
Organization l) Other investments
-12-
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United in States of Americastatus (USA), on May 30, 2000. BladexisHoldings exercises Loans are placed a non-accrual when interest or principal overdue Inc. for 90 days or more, or control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws before if the Bank’s Management believes there is an uncertainty with respect oftothe the ultimate State of Delaware, USA,orwhich servesAny as investment manager foron Bladex Offshore Feeder collection of principal interest. interest receivable non-accruing loans Fund is reversed and (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset charged-off against earnings. Interest on these loans is only recorded as earned when collected. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Non-accruing loans On are September returned to8, an accrual status (1) all contractual principal investment adviser. 2009, Bladex Assetwhen Management Inc. was registered as aand interest amounts are current; (2) there is a sustained period of repayment performance in accordance foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly with the contractual of at least six months; and (3) if in the Bank Asset Management’s opinion engaged in terms providing administrative and operating services to Bladex Management Inc. in the loan is fully USA.collectible.
charge to the allowance, and are subsequently accounted for as securities available-for-sale.
A loan is considered impaired, and also placed on a non-accrual basis, when based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to original contractual terms of the loan agreement. Factors considered by the Bank’s -7Management in determining impairment include collection status, collateral value, and economic conditions in the borrower’s country of residence. Impaired loans also include those modified loans considered troubled debt restructurings. When current events or available information confirm that -13-
53
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization specific impaired loans or portions thereof are uncollectible, such impaired loans are charged-off
against the allowance for loan losses.
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 The reserve for losses on established impaired loans is determined considering evidence, specialized supranational bank to finance trade in Latin America all andavailable the Caribbean (the including the present value of expected future cash flows discounted at the loan's original contractual “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of interest rate and/or the fairBanks valueinof the the Region, collateral, if applicable. If the repayment is dependent on the Governors of Central which recommended theloan’s creation of a multinational sale of the collateral, fair trade valuefinancing considers costs to organization to increase thethe foreign capacity of sell. the Region. The Bank was organized in 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operationsaon Januaryof2,internal 1979. Under in 1978 These betweenindicators the Republic The Bank maintains system credita contract quality signed indicators. are assigned of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including depending on several factors which include: profitability, quality of assets, liquidity andancash flows, exemption from payment of income taxes in Panama.
capitalization and indebtedness, economic environment and positioning, regulatory framework and/or industry, sensitivity scenarios and the quality of debtor’s management and shareholders. A The Bank operates under a general banking license issued by the National Banking Commission of description of these is as follows: Panama, predecessor of theindicators Superintendency of Banks of Panama (the “SBP”). Rating In the RepublicClassification of Panama, banks are regulated by the SBP throughDescription Executive Decree No. 52 of April
1 to 6which Normal Clients with Decree paymentNo. ability satisfy their commitments. 30, 2008, adopts the text of the Law 9 oftoFebruary 26,financial 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 7 Special Clients exposed risksinclude: specificthe to the country or of thebanking industry in which this entity. The main aspects of this law and to its systemic regulations authorization Mention are located, facing adverse situations supervision, in their operation or financial licenses, minimum capital andthey liquidity requirements, consolidated procedures for condition. At this level, access totonew fundingmoney is uncertain. management of credit and market risks, measures prevent laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Substandard Clients whose primary source of payment (operating cash flow) is inadequate and others. 8 who show evidence of deterioration in their working capital that does not allow them satisfy payments on the agreed terms, endangering recovery of unpaid balances. Bladex Head Office’s subsidiariestoare the following:
-
-
9 DoubtfulInc., is a Clients cash flow continuously shows Bladex Holdings wholly whose owned operating subsidiary, incorporated under the lawsinsufficiency of the State to of service the debt on the originally agreed terms. Due to the fact that the debtor presents an Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises impaired financial and economic situation, the likelihood of recovery is low. control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 10 Unrecoverable Clients with operating cash flow that does not cover their costs, are in suspension of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset payments, presumably they will also have difficulties to fulfill possible restructuring Management Inc., was registered with are theinSecurities and Exchange Commission (“SEC”) asamong an others. agreements, a state of insolvency, or have filed for bankruptcy, investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Inengaged order to maintain administrative a periodical and monitoring the quality of Asset the portfolio, loans ratings in providing operating of services to Bladex Management Inc. with in between 1 and 5 are reviewed annually, ratings 6 are reviewed semi-annually, and those with ratings USA.
above 6 are reviewed quarterly.
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. TheisFeeder was incorporated on Februarysegments: 21, 2006 under the laws of sovereign, The Bank's lending portfolio summarized in the following corporations, the Cayman Islands, and invests in theinstitutions. Fund, which is The also incorporated middle-market companies andsubstantially banking all andits assets financial distinction between under the laws the Cayman Islands. The Feeder and the are registered with the Cayman corporations andof middle-market companies depends on Fund the client’s level of annual sales in relation Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. Theare broken to the country risk, among other criteria. Except for the sovereign segment, segments objective of the Fund is to achieve capital appreciation by investing in Latin American debt down into state-owned and private. securities, stock indexes, currencies, and trading derivative instruments.
The Bank's lending policy is applicable to all classes of loans. n) Transfer of financial assets -7Transfers of financial assets, primarily loans, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Bank even in bankruptcy or other receivership; (2) the transferee
54
-14-
1.
Organization obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or
exchange the transferred assets; and (3) the Bank does not maintain effective control over the
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its transferred assets through an agreement to repurchase them before their maturity or does not have subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a the right to cause thebank assets to be returned. of a transfer assets that specialized supranational established to financeUpon tradecompletion in Latin America and theofCaribbean (thesatisfies the conditions described above to be accounted for as a sale, the Bank recognizes the assets “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly ofas sold and recordsofinCentral earnings any gain loss onwhich the sale. The Bankthe may retain of interest in loans sold in the Governors Banks in theorRegion, recommended creation a multinational form of to servicing Gains losses on sale of dependThe in Bank part on carrying organization increase rights. the foreign tradeorfinancing capacity of loans the Region. wasthe organized in amount of 1977, in 1978 asinvolved a corporation theitslaws the at Republic theincorporated financial instrument in thepursuant transfer,toand fair of value the dateofofPanama, transfer.and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an o) Panama Allowance for credit losses exemption from payment of income taxes in Panama.
The allowance for credit losses is provided for losses derived from the credit extension process,
The Bank operates under a general banking license issued by the National Banking Commission of inherent in the of loan and off-balance financial instruments, using the reserve method Panama, predecessor the portfolio Superintendency of Banks ofsheet Panama (the “SBP”).
of providing for credit losses. Additions to the allowance for credit losses are made by debiting earnings. losses are deducted from allowance, subsequent added. The In the Republic Credit of Panama, banks are regulated by the the SBP throughand Executive Decreerecoveries No. 52 of are April 30, 2008, which is adopts text of theby Law Decree No. of February 26, back 1998, to modified by theThe Law allowance allowance alsothe decreased reversals of 9the allowance earnings. Decree No. 2 of February 2008. Banks are also regulated resolutions and agreements issued bysheet credit attributable to loans 22, is reported as a deduction of loansbyand the allowance for off-balance this risk, entity.such The aspects of this and its regulations the authorization of banking as,main letters of credit andlaw guarantees, is reportedinclude: as a liability.
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of The allowance for possible credit losses includes an asset-specific component and a formula-based terrorism and related illicit activities, and procedures for banking intervention and liquidation, among component. The asset-specific component, or specific allowance, relates to the provision for losses others.
on credits considered impaired and measured on a case-by-case basis. A specific allowance is
established whensubsidiaries the discounted flows (or observable market price of collateral) of the credit is Bladex Head Office’s are thecash following:
lower than the carrying value of that credit. The formula-based component, or generic allowance,
- covers Bladexthe Holdings is a wholly owned subsidiary, under theinlaws of the State of Bank’sInc., performing credit portfolio and incorporated is established based a process that estimates the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises probable loss inherent in the portfolio, based on statistical analysis and management’s qualitative control overThe Bladex Asset Management May 24,risk 2006,classifications, under the laws of the judgment. statistical calculationInc., is aincorporated product ofoninternal probabilities of State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund default and loss given default. The probability of default is supported by Bladex’s historical (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset portfolio performance complemented by probabilities of default provided by external sources, in Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an view of the greater robustness of this external data for Management some cases. Inc. Thewas lossregistered given default investment adviser. On September 8, 2009, Bladex Asset as a is based onforeign Bladex’s historical losses experience and best practices. The reserve balances, for both on and entity in the Republic of Panama, to establish a branch in Panama, which is mainly off-balance credit exposures, and are calculated applying following formula: Inc. in engaged in sheet providing administrative operating services to the Bladex Asset Management Reserves USA. = ∑(E x PD x LGD); where:
- - The Feeder is(E) an entity which Bladex Head office (on ownsand 98.06% and 95.84% as ofatDecember Exposure = the intotal accounting balance off-balance sheet) the end 31, of the period 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of under review. Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated - the Probabilities of Default (PD) = one-year probability of default applied to the portfolio. Default under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman rates are based on Bladex’s historical portfolio performance category, complemented by Island Monetary Authority (“CIMA”), under the Mutual Funds Lawper of rating the Cayman Islands. The Standardof&the Poor’s probabilities of default for 7 andAmerican 8, in viewdebt of the greater objective Fund(“S&P”) is to achieve capital appreciation by categories investing in6, Latin robustness of S&P data for such cases. securities, stock indexes, currencies, and trading derivative instruments.
- Loss Given Default (LGD) = a factor is utilized, based on historical information, same as based on best practices in the banking industry. Management applies judgment and historical loss experience. Management can also apply complementary judgment to capture elements of prospective nature or -7loss expectations based on risks identified in the environment that are not necessarily reflected in the historical data.
-15-
55
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization specific impaired loans or portions thereof are uncollectible, such impaired loans are charged-off
against the allowance for loan losses.
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 The reserve for losses on established impaired loans is determined considering evidence, specialized supranational bank to finance trade in Latin America all andavailable the Caribbean (the including the present value of expected future cash flows discounted at the loan's original contractual “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of interest rate and/or the fairBanks valueinof the the Region, collateral, if applicable. If the repayment is dependent on the Governors of Central which recommended theloan’s creation of a multinational sale of the collateral, fair trade valuefinancing considers costs to organization to increase thethe foreign capacity of sell. the Region. The Bank was organized in 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operationsaon Januaryof2,internal 1979. Under in 1978 These betweenindicators the Republic The Bank maintains system credita contract quality signed indicators. are assigned of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including depending on several factors which include: profitability, quality of assets, liquidity andancash flows, exemption from payment of income taxes in Panama.
capitalization and indebtedness, economic environment and positioning, regulatory framework and/or industry, sensitivity scenarios and the quality of debtor’s management and shareholders. A The Bank operates under a general banking license issued by the National Banking Commission of description of these is as follows: Panama, predecessor of theindicators Superintendency of Banks of Panama (the “SBP”). Rating In the RepublicClassification of Panama, banks are regulated by the SBP throughDescription Executive Decree No. 52 of April
1 to 6which Normal Clients with Decree paymentNo. ability satisfy their commitments. 30, 2008, adopts the text of the Law 9 oftoFebruary 26,financial 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 7 Special Clients exposed risksinclude: specificthe to the country or of thebanking industry in which this entity. The main aspects of this law and to its systemic regulations authorization Mention are located, facing adverse situations supervision, in their operation or financial licenses, minimum capital andthey liquidity requirements, consolidated procedures for condition. At this level, access totonew fundingmoney is uncertain. management of credit and market risks, measures prevent laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Substandard Clients whose primary source of payment (operating cash flow) is inadequate and others. 8 who show evidence of deterioration in their working capital that does not allow them satisfy payments on the agreed terms, endangering recovery of unpaid balances. Bladex Head Office’s subsidiariestoare the following:
-
-
9 DoubtfulInc., is a Clients cash flow continuously shows Bladex Holdings wholly whose owned operating subsidiary, incorporated under the lawsinsufficiency of the State to of service the debt on the originally agreed terms. Due to the fact that the debtor presents an Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises impaired financial and economic situation, the likelihood of recovery is low. control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 10 Unrecoverable Clients with operating cash flow that does not cover their costs, are in suspension of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset payments, presumably they will also have difficulties to fulfill possible restructuring Management Inc., was registered with are theinSecurities and Exchange Commission (“SEC”) asamong an others. agreements, a state of insolvency, or have filed for bankruptcy, investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Inengaged order to maintain administrative a periodical and monitoring the quality of Asset the portfolio, loans ratings in providing operating of services to Bladex Management Inc. with in between 1 and 5 are reviewed annually, ratings 6 are reviewed semi-annually, and those with ratings USA.
above 6 are reviewed quarterly.
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. TheisFeeder was incorporated on Februarysegments: 21, 2006 under the laws of sovereign, The Bank's lending portfolio summarized in the following corporations, the Cayman Islands, and invests in theinstitutions. Fund, which is The also incorporated middle-market companies andsubstantially banking all andits assets financial distinction between under the laws the Cayman Islands. The Feeder and the are registered with the Cayman corporations andof middle-market companies depends on Fund the client’s level of annual sales in relation Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. Theare broken to the country risk, among other criteria. Except for the sovereign segment, segments objective of the Fund is to achieve capital appreciation by investing in Latin American debt down into state-owned and private. securities, stock indexes, currencies, and trading derivative instruments.
The Bank's lending policy is applicable to all classes of loans. n) Transfer of financial assets -7Transfers of financial assets, primarily loans, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Bank even in bankruptcy or other receivership; (2) the transferee
54
-14-
1.
Organization obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or
exchange the transferred assets; and (3) the Bank does not maintain effective control over the
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its transferred assets through an agreement to repurchase them before their maturity or does not have subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a the right to cause thebank assets to be returned. of a transfer assets that specialized supranational established to financeUpon tradecompletion in Latin America and theofCaribbean (thesatisfies the conditions described above to be accounted for as a sale, the Bank recognizes the assets “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly ofas sold and recordsofinCentral earnings any gain loss onwhich the sale. The Bankthe may retain of interest in loans sold in the Governors Banks in theorRegion, recommended creation a multinational form of to servicing Gains losses on sale of dependThe in Bank part on carrying organization increase rights. the foreign tradeorfinancing capacity of loans the Region. wasthe organized in amount of 1977, in 1978 asinvolved a corporation theitslaws the at Republic theincorporated financial instrument in thepursuant transfer,toand fair of value the dateofofPanama, transfer.and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an o) Panama Allowance for credit losses exemption from payment of income taxes in Panama.
The allowance for credit losses is provided for losses derived from the credit extension process,
The Bank operates under a general banking license issued by the National Banking Commission of inherent in the of loan and off-balance financial instruments, using the reserve method Panama, predecessor the portfolio Superintendency of Banks ofsheet Panama (the “SBP”).
of providing for credit losses. Additions to the allowance for credit losses are made by debiting earnings. losses are deducted from allowance, subsequent added. The In the Republic Credit of Panama, banks are regulated by the the SBP throughand Executive Decreerecoveries No. 52 of are April 30, 2008, which is adopts text of theby Law Decree No. of February 26, back 1998, to modified by theThe Law allowance allowance alsothe decreased reversals of 9the allowance earnings. Decree No. 2 of February 2008. Banks are also regulated resolutions and agreements issued bysheet credit attributable to loans 22, is reported as a deduction of loansbyand the allowance for off-balance this risk, entity.such The aspects of this and its regulations the authorization of banking as,main letters of credit andlaw guarantees, is reportedinclude: as a liability.
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of The allowance for possible credit losses includes an asset-specific component and a formula-based terrorism and related illicit activities, and procedures for banking intervention and liquidation, among component. The asset-specific component, or specific allowance, relates to the provision for losses others.
on credits considered impaired and measured on a case-by-case basis. A specific allowance is
established whensubsidiaries the discounted flows (or observable market price of collateral) of the credit is Bladex Head Office’s are thecash following:
lower than the carrying value of that credit. The formula-based component, or generic allowance,
- covers Bladexthe Holdings is a wholly owned subsidiary, under theinlaws of the State of Bank’sInc., performing credit portfolio and incorporated is established based a process that estimates the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises probable loss inherent in the portfolio, based on statistical analysis and management’s qualitative control overThe Bladex Asset Management May 24,risk 2006,classifications, under the laws of the judgment. statistical calculationInc., is aincorporated product ofoninternal probabilities of State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund default and loss given default. The probability of default is supported by Bladex’s historical (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset portfolio performance complemented by probabilities of default provided by external sources, in Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an view of the greater robustness of this external data for Management some cases. Inc. Thewas lossregistered given default investment adviser. On September 8, 2009, Bladex Asset as a is based onforeign Bladex’s historical losses experience and best practices. The reserve balances, for both on and entity in the Republic of Panama, to establish a branch in Panama, which is mainly off-balance credit exposures, and are calculated applying following formula: Inc. in engaged in sheet providing administrative operating services to the Bladex Asset Management Reserves USA. = ∑(E x PD x LGD); where:
- - The Feeder is(E) an entity which Bladex Head office (on ownsand 98.06% and 95.84% as ofatDecember Exposure = the intotal accounting balance off-balance sheet) the end 31, of the period 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of under review. Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated - the Probabilities of Default (PD) = one-year probability of default applied to the portfolio. Default under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman rates are based on Bladex’s historical portfolio performance category, complemented by Island Monetary Authority (“CIMA”), under the Mutual Funds Lawper of rating the Cayman Islands. The Standardof&the Poor’s probabilities of default for 7 andAmerican 8, in viewdebt of the greater objective Fund(“S&P”) is to achieve capital appreciation by categories investing in6, Latin robustness of S&P data for such cases. securities, stock indexes, currencies, and trading derivative instruments.
- Loss Given Default (LGD) = a factor is utilized, based on historical information, same as based on best practices in the banking industry. Management applies judgment and historical loss experience. Management can also apply complementary judgment to capture elements of prospective nature or -7loss expectations based on risks identified in the environment that are not necessarily reflected in the historical data.
-15-
55
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization The allowance policy is applicable to all classes of loans and off-balance sheet financial instruments
of the Bank.
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 supranational bank established to finance trade in Latin America and the Caribbean (the p) Fees and commissions “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 Loan origination net of direct loan capacity origination areThe deferred, and the netin amount is organization to increase fees, the foreign trade financing of thecosts, Region. Bank was organized 1977, incorporated in 1978 over as a the corporation pursuant of to Panama, and These net recognized as revenue contractual term to of the the laws loansofasthe an Republic adjustment the yield. officially initiated operations onas January 2, 1979. Under a contract signedinterest in 1978income betweenon the loans Republic fees are not recognized revenue during periods in which is suspended of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an fees are because of concerns about the realization of loan principal or interest. Underwriting exemption from payment of income taxes in Panama. recognized as revenue when the Bank has rendered all services to the issuer and is entitled to collect
the fee from the issuer, when there are no contingencies related to the fee. Underwriting fees are The Bank operates under a general banking license issued by the National Banking Commission of recognized net of ofthe syndicate expenses. In addition, recognizes credit arrangement and Panama, predecessor Superintendency of Banks of Panamathe (theBank “SBP”). syndication fees as revenue after satisfying certain retention, timing and yield criteria. Fees received in Republic connection with a modification of terms troubled debt restructuring as a reduction In the of Panama, banks are regulated by of theaSBP through Executive Decreeare No.applied 52 of April thewhich recorded in Law the loan. on letters of modified credit, guarantees 30, of 2008, adoptsinvestment the text of the Decree Fees No. 9 earned of February 26, 1998, by the Law and other Decree No. 2 of February 22, 2008.using Banks also regulated by resolutions issued by commitments are amortized theare straight-line method over the and life agreements of such instruments.
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 q) Premises and equipment management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Premises and equipment, including the electronic data processing equipment, are carried at cost less others.
accumulated depreciation and amortization, except land, which was carried at acquisition cost. Depreciation andsubsidiaries amortization arefollowing: charged to operations using the straight-line method, over the Bladex Head Office’s are the estimated useful life of the related asset. The estimated original useful life for furniture and - equipment Bladex Holdings is a and wholly subsidiary,isincorporated under thebuilding laws of the of is 3 to Inc., 5 years forowned improvements 3 to 15 years. The wasState depreciated in a Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises period of 40 years.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, serves as investment foraBladex Feeder Fund The Bank defers the costwhich of internal-use softwaremanager that has usefulOffshore life in excess of one year in (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset accordance with ASC Topic 350-40 - Intangibles – Goodwill and Other – Internal-Use Software. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an These costs consist payments made to third parties related to the use licenses and as installation of investment adviser. ofOn September 8, 2009, Bladex Asset Management Inc.ofwas registered a both, software and hardware. Subsequent additions, modifications or upgrades to internal-use foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly software capitalized only to the and extent that they allowtothe software perform a task engaged are in providing administrative operating services Bladex AssettoManagement Inc. itinpreviously did not perform. Software maintenance and training costs are expensed in the period in which they USA.
are incurred. Capitalized internal use software costs are amortized using the straight-line method
- over Thetheir Feeder is an entity in which Bladex Head consisting office ownsof 98.06% and 95.84% as of December 31, estimated useful lives, generally 5 years. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated r) Borrowings and debt under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Short and long-term borrowings and capital debt are accountedby forinvesting at amortized cost.American debt objective of the Fund is to achieve appreciation in Latin securities, stock indexes, currencies, and trading derivative instruments.
s) Capital reserves
Capital reserves are established as a segregation of retained earnings and are, as such, a form of retained earnings. Even though the constitution of capital reserves is not required by the SBP, their reductions require the approval of the Bank’s Board of Directors and the SBP. -7-
56
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1.
Organization t) Stock-based compensation and stock options plans Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The Bank applies ASC Topic 718 – Compensation - Stock Compensation to account for subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a compensation costs bank on restricted stock and stock plans. Compensation cost is(the based on the specialized supranational established to finance tradeoption in Latin America and the Caribbean grant date fair value of both stock and options and is recognized over the requisite service “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of period of the employee, using the in straight-line method. The fair valuethe of creation each option estimated at the grant Governors of Central Banks the Region, which recommended of aismultinational date using a binomial option-pricing model. Forofthe 2010, options’ expected organization to increase the foreign trade financing capacity the year Region. Thethe Bank was organized in term was 1977, incorporated in the 1978simplified as a corporation pursuant to the laws because of the Republic of did Panama, and sufficient calculated using weighted average method the Bank not have officially initiated operations 1979. Under a contract signed in 1978 betweenterm. the Republic historical exercise dataon toJanuary provide2,for a reasonable basis to estimate expected 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.
When options and stock are exercised, the Bank’s policy is to reissue shares from treasury stock.
The Bank operates under a general banking license issued by the National Banking Commission of
u) Derivative financial andofhedge Panama, predecessor of the instruments Superintendency Banks accounting of Panama (the “SBP”).
The Bank of uses derivative financial instruments its management of interest and foreign In the Republic Panama, banks are regulated by the SBPfor through Executive Decree No. 52 ofrate April 30, 2008, whichrisks. adopts Interest the text of theswap Law Decree No. 9cross-currency of February 26,swap 1998,contracts modified by Law exchange rate contracts, andtheforward foreign Decree No. 2 ofcontracts February have 22, 2008. regulated by resolutions and agreements issued by associated exchange beenBanks used are to also manage interest rate and foreign exchange risks this with entity.debt The main aspects of this law with and its regulations include: securities and borrowings fixed rates, and loansthe andauthorization borrowingsofin banking foreign currency. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for These contracts can be classified as fair value and cash flow hedges. In addition, forward foreign management of credit and market risks, measures to prevent money laundering, the financing of exchange contracts are used to hedge exposures to changes in foreign currency in subsidiary terrorism and related illicit activities, and procedures for banking intervention and liquidation, among companies with functional currencies other than US dollar. These contracts are classified as net others. investment hedges.
Bladex Head Office’s subsidiaries are the following:
The accounting for changes in value of a derivative depends on whether the contract is for trading
- purposes Bladex Holdings Inc.,designated is a wholly and owned subsidiary, incorporated under the laws of the State of or has been qualifies for hedge accounting. Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over held Bladexfor Asset Management Inc.,include incorporated on May 2006,cross-currency under the laws ofswap, the forward Derivatives trading purposes interest rate 24, swap, State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund foreign exchange and future contracts used for risk management purposes that do not qualify for (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset hedge accounting. The fair value of trading derivatives is reported as trading assets or trading Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an liabilities, applicable. Changes 8, in 2009, realized and Asset unrealized gains and and interest investmentasadviser. On September Bladex Management Inc.losses was registered as afrom these trading instruments are included in net gain (loss) from trading securities. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Derivatives for hedging purposes primarily include forward foreign exchange contracts and interest USA.
rate swap contracts in US dollars and cross-currency swaps. Derivative contracts designated and
- qualifying The Feederfor is an entityaccounting in which Bladex Head office owns 98.06% and balance 95.84% as of December 31, financial hedge are reported in the consolidated sheet as derivative 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of instruments used for hedging - receivable and payable, as applicable, and hedge accounting is the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated applied. In order to qualify for hedge accounting, a derivative must be considered highly effective at under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman reducing the risk associated with the exposure being hedged. Each derivative must be designated as Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The a objective hedge, with documentation of the capital risk management and in strategy, includingdebt identification of the Fund is to achieve appreciationobjective by investing Latin American ofsecurities, the hedging instrument, the hedged item and the risk exposure, as well as how effectiveness will stock indexes, currencies, and trading derivative instruments.
be assessed prospectively and retrospectively. The extent to which a hedging instrument is effective at achieving offsetting changes in fair value or cash flows must be assessed at least quarterly. Any ineffectiveness must be reported in current-period earnings. The Bank discontinues hedge accounting prospectively in the following situations: -7-
1. It is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item. 2. The derivative expires or is sold, terminated or exercised. -17-
57
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization The allowance policy is applicable to all classes of loans and off-balance sheet financial instruments
of the Bank.
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 supranational bank established to finance trade in Latin America and the Caribbean (the p) Fees and commissions “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 Loan origination net of direct loan capacity origination areThe deferred, and the netin amount is organization to increase fees, the foreign trade financing of thecosts, Region. Bank was organized 1977, incorporated in 1978 over as a the corporation pursuant of to Panama, and These net recognized as revenue contractual term to of the the laws loansofasthe an Republic adjustment the yield. officially initiated operations onas January 2, 1979. Under a contract signedinterest in 1978income betweenon the loans Republic fees are not recognized revenue during periods in which is suspended of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an fees are because of concerns about the realization of loan principal or interest. Underwriting exemption from payment of income taxes in Panama. recognized as revenue when the Bank has rendered all services to the issuer and is entitled to collect
the fee from the issuer, when there are no contingencies related to the fee. Underwriting fees are The Bank operates under a general banking license issued by the National Banking Commission of recognized net of ofthe syndicate expenses. In addition, recognizes credit arrangement and Panama, predecessor Superintendency of Banks of Panamathe (theBank “SBP”). syndication fees as revenue after satisfying certain retention, timing and yield criteria. Fees received in Republic connection with a modification of terms troubled debt restructuring as a reduction In the of Panama, banks are regulated by of theaSBP through Executive Decreeare No.applied 52 of April thewhich recorded in Law the loan. on letters of modified credit, guarantees 30, of 2008, adoptsinvestment the text of the Decree Fees No. 9 earned of February 26, 1998, by the Law and other Decree No. 2 of February 22, 2008.using Banks also regulated by resolutions issued by commitments are amortized theare straight-line method over the and life agreements of such instruments.
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 q) Premises and equipment management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Premises and equipment, including the electronic data processing equipment, are carried at cost less others.
accumulated depreciation and amortization, except land, which was carried at acquisition cost. Depreciation andsubsidiaries amortization arefollowing: charged to operations using the straight-line method, over the Bladex Head Office’s are the estimated useful life of the related asset. The estimated original useful life for furniture and - equipment Bladex Holdings is a and wholly subsidiary,isincorporated under thebuilding laws of the of is 3 to Inc., 5 years forowned improvements 3 to 15 years. The wasState depreciated in a Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises period of 40 years.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, serves as investment foraBladex Feeder Fund The Bank defers the costwhich of internal-use softwaremanager that has usefulOffshore life in excess of one year in (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset accordance with ASC Topic 350-40 - Intangibles – Goodwill and Other – Internal-Use Software. Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an These costs consist payments made to third parties related to the use licenses and as installation of investment adviser. ofOn September 8, 2009, Bladex Asset Management Inc.ofwas registered a both, software and hardware. Subsequent additions, modifications or upgrades to internal-use foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly software capitalized only to the and extent that they allowtothe software perform a task engaged are in providing administrative operating services Bladex AssettoManagement Inc. itinpreviously did not perform. Software maintenance and training costs are expensed in the period in which they USA.
are incurred. Capitalized internal use software costs are amortized using the straight-line method
- over Thetheir Feeder is an entity in which Bladex Head consisting office ownsof 98.06% and 95.84% as of December 31, estimated useful lives, generally 5 years. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated r) Borrowings and debt under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Short and long-term borrowings and capital debt are accountedby forinvesting at amortized cost.American debt objective of the Fund is to achieve appreciation in Latin securities, stock indexes, currencies, and trading derivative instruments.
s) Capital reserves
Capital reserves are established as a segregation of retained earnings and are, as such, a form of retained earnings. Even though the constitution of capital reserves is not required by the SBP, their reductions require the approval of the Bank’s Board of Directors and the SBP. -7-
56
-16-
1.
Organization t) Stock-based compensation and stock options plans Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The Bank applies ASC Topic 718 – Compensation - Stock Compensation to account for subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a compensation costs bank on restricted stock and stock plans. Compensation cost is(the based on the specialized supranational established to finance tradeoption in Latin America and the Caribbean grant date fair value of both stock and options and is recognized over the requisite service “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of period of the employee, using the in straight-line method. The fair valuethe of creation each option estimated at the grant Governors of Central Banks the Region, which recommended of aismultinational date using a binomial option-pricing model. Forofthe 2010, options’ expected organization to increase the foreign trade financing capacity the year Region. Thethe Bank was organized in term was 1977, incorporated in the 1978simplified as a corporation pursuant to the laws because of the Republic of did Panama, and sufficient calculated using weighted average method the Bank not have officially initiated operations 1979. Under a contract signed in 1978 betweenterm. the Republic historical exercise dataon toJanuary provide2,for a reasonable basis to estimate expected 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.
When options and stock are exercised, the Bank’s policy is to reissue shares from treasury stock.
The Bank operates under a general banking license issued by the National Banking Commission of
u) Derivative financial andofhedge Panama, predecessor of the instruments Superintendency Banks accounting of Panama (the “SBP”).
The Bank of uses derivative financial instruments its management of interest and foreign In the Republic Panama, banks are regulated by the SBPfor through Executive Decree No. 52 ofrate April 30, 2008, whichrisks. adopts Interest the text of theswap Law Decree No. 9cross-currency of February 26,swap 1998,contracts modified by Law exchange rate contracts, andtheforward foreign Decree No. 2 ofcontracts February have 22, 2008. regulated by resolutions and agreements issued by associated exchange beenBanks used are to also manage interest rate and foreign exchange risks this with entity.debt The main aspects of this law with and its regulations include: securities and borrowings fixed rates, and loansthe andauthorization borrowingsofin banking foreign currency. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for These contracts can be classified as fair value and cash flow hedges. In addition, forward foreign management of credit and market risks, measures to prevent money laundering, the financing of exchange contracts are used to hedge exposures to changes in foreign currency in subsidiary terrorism and related illicit activities, and procedures for banking intervention and liquidation, among companies with functional currencies other than US dollar. These contracts are classified as net others. investment hedges.
Bladex Head Office’s subsidiaries are the following:
The accounting for changes in value of a derivative depends on whether the contract is for trading
- purposes Bladex Holdings Inc.,designated is a wholly and owned subsidiary, incorporated under the laws of the State of or has been qualifies for hedge accounting. Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over held Bladexfor Asset Management Inc.,include incorporated on May 2006,cross-currency under the laws ofswap, the forward Derivatives trading purposes interest rate 24, swap, State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund foreign exchange and future contracts used for risk management purposes that do not qualify for (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset hedge accounting. The fair value of trading derivatives is reported as trading assets or trading Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an liabilities, applicable. Changes 8, in 2009, realized and Asset unrealized gains and and interest investmentasadviser. On September Bladex Management Inc.losses was registered as afrom these trading instruments are included in net gain (loss) from trading securities. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Derivatives for hedging purposes primarily include forward foreign exchange contracts and interest USA.
rate swap contracts in US dollars and cross-currency swaps. Derivative contracts designated and
- qualifying The Feederfor is an entityaccounting in which Bladex Head office owns 98.06% and balance 95.84% as of December 31, financial hedge are reported in the consolidated sheet as derivative 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of instruments used for hedging - receivable and payable, as applicable, and hedge accounting is the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated applied. In order to qualify for hedge accounting, a derivative must be considered highly effective at under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman reducing the risk associated with the exposure being hedged. Each derivative must be designated as Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The a objective hedge, with documentation of the capital risk management and in strategy, includingdebt identification of the Fund is to achieve appreciationobjective by investing Latin American ofsecurities, the hedging instrument, the hedged item and the risk exposure, as well as how effectiveness will stock indexes, currencies, and trading derivative instruments.
be assessed prospectively and retrospectively. The extent to which a hedging instrument is effective at achieving offsetting changes in fair value or cash flows must be assessed at least quarterly. Any ineffectiveness must be reported in current-period earnings. The Bank discontinues hedge accounting prospectively in the following situations: -7-
1. It is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item. 2. The derivative expires or is sold, terminated or exercised. -17-
57
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization 3. The Bank otherwise determines that designation of the derivative as a hedging instrument is
no longer appropriate.
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 The Bank carries allbank derivative financial instruments the America consolidated balance sheet(the at fair value. specialized supranational established to finance trade in in Latin and the Caribbean For qualifying fair value hedges, all changes in the fair value of the derivative and the fair value of “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of the itemoffor the risk beinginhedged are recognized in earnings.theIf the hedgeofrelationship is terminated, Governors Central Banks the Region, which recommended creation a multinational then the tofair value the adjustment to the hedgedcapacity item continues to beThe reported as part of theinbasis of the organization increase foreign trade financing of the Region. Bank was organized 1977, incorporated in 1978 to as earnings a corporation to the laws The of the Republic of the Panama, and method of item and is amortized as a pursuant yield adjustment. Bank applies shortcut officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic hedge accounting that does not recognize ineffectiveness in hedges of interest rate swap that meet of Panama and Bladex, of theASC BankTopic was granted certain privileges by the Republic Panama, including the requirements 815-20-25-104. For qualifying cash of flow hedges and netaninvestment exemption from payment of income taxes in Panama.
hedges, the effective portion of the change in the fair value of the derivative is recorded in OCI and recognized in the consolidated statement of income when the hedged cash flows affect earnings. The Bank operates under a general banking license issued by the National Banking Commission of The predecessor ineffectiveofportion is recognized in the consolidated statement of income as activities of Panama, the Superintendency of Banks of Panama (the “SBP”). derivative financial instruments and hedging. If the cash flow hedge relationship is terminated, related amounts in OCIbanks are reclassified earnings when hedged cash flows occur. In the Republic of Panama, are regulatedinto by the SBP through Executive Decree No. 52 of April
Organization x) Redeemable noncontrolling interest Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its ASC Topic 810 - Consolidation requires that a noncontrolling interest, previously referred to as a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a minority interest, in abank consolidated reported a separate of equity specialized supranational establishedsubsidiary to finance be trade in LatinasAmerica andcomponent the Caribbean (the and the amount of consolidated net income specifically attributable to the noncontrolling “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly ofinterest be presented below the consolidated of income. Governors of separately, Central Banks in net the income Region, in which recommendedstatement the creation of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporatedininaccordance 1978 as a with corporation pursuant to the lawssecurities of the Republic Panama, and Furthermore, ASC 480-10-S99, equity that areofredeemable at the option officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of the holder and not solely within the control of the issuer must be classified outside of equity. The of Panama and Bladex, theinvestments Bank was granted privilegesfunds by thecontain Republic of Panama, including an terms of third party in thecertain consolidated a redemption clause which allows exemption from payment of income taxes in Panama.
the holders the option to redeem their investment at fair value. Accordingly, the Bank presents the noncontrolling interest between liabilities and stockholders’ equity in the consolidated balance The Bank operates under a general banking license issued by the National Banking Commission of sheets. Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
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 Assets and liabilities of foreign subsidiaries whose local currency is considered their functional management of credit and market risks, measures to prevent money laundering, the financing of currency, are translated into the dollars, and using period-end spot foreign terrorism and related illicit activities, and reporting procedures currency, for bankingUS intervention liquidation, among exchange rates. The Bank uses monthly-averaged exchange rates to translate revenues and expenses others.
NetRepublic assets of Feeder andare theregulated Brazilian arethrough measured and presented at 52 fairofvalue, In the of the Panama, banks by Fund the SBP Executive Decree No. April given the 30, nature 2008, which adopts the text(i.e. of the Law Decree No. 9 by of February 1998, modified by the Law Therefore, of their net assets represented mainly cash and26, investments in securities). Decree No.calculating 2 of February 2008.of Banks are also regulated by resolutions and agreements issued by 810, such when the22, value the redeemable noncontrolling interest under ASC Topic thisamount entity. is The main aspects of at thisitslaw its regulations include: the authorization of banking already recorded fairand value and no further adjustments under ASC 480-10-S99 are licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for necessary. management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among y) Earnings per share others.
reported as a component of are the the Other comprehensive income (loss) in the stockholders’ equity. Bladex Head Office’s subsidiaries following:
Basic earnings share is by dividing the net income attributable to Bladex (the Bladex Head Office’s per subsidiaries are computed the following:
- Transactions Bladex Holdings Inc., terms is a wholly owned subsidiary, lawsthe of the State of currency, whose are denominated in incorporated a currency under other the than functional Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises including transactions denominated in local currency of the foreign entity with the US dollar as their control over Bladex Asset on May 24, 2006, the laws of thetransaction. functional currency, are Management recorded at Inc., the incorporated exchange rate prevailing atunder the date of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Assets and liabilities in foreign currency are translated into US dollars using period-end spot foreign (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset exchange rates. of with translation of monetary assets Commission and liabilities into as USandollars are Management Inc.,The was effects registered the Securities and Exchange (“SEC”) included in current year’s earnings in the Gain (loss) on foreign currency exchange item. investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly w) Income engagedtaxes in providing administrative and operating services to Bladex Asset Management Inc. in USA.
- theBladex is a wholly ownedmeasure subsidiary, incorporated incorporating under the laws the of the Statethat of potential year. Holdings DilutedInc., earnings per share performance effect Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises common shares, such as stock options and restricted stock units outstanding during the same period, control overonBladex Asset Management 24, 2006, underper theshare laws of would have net earnings per share. Inc., The incorporated computationonofMay diluted earnings is the similar to the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund to include computation of basic earnings per share, except for the denominator, which is increased (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset theManagement number of Inc., additional common shares that would have been issued if the beneficiaries of stock was registered with the Securities and Exchange Commission (“SEC”) as an purchase options and other stock 8,plans their options. The numberas of investment adviser. On September 2009,could Bladexexercise Asset Management Inc. was registered a potential common shares that would be issued is determined using the treasury stock method. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. issued accounting standards z) Recently
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law
Decree No. 2 currency of February 22, 2008. Banks are also regulated by resolutions and agreements issued by v) Foreign translation
from local functional currency into US dollars. The effects of those translations adjustments are
-
Bladex Head Office is exempted from payment of income taxes in Panama in accordance with
The Feeder is an entity in which Bladex Head officeofowns 98.06% 95.84% as of December 31, the contract signed between the Republic Panama andand Bladex. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of The Feeder, the Fund, and BLX Brazil Ltd. are not subject to income taxes in accordance with the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated CaymanIslands. Islands.TheThese received an undertaking exempting them underthe thelaws laws of of the the Cayman Feedercompanies and the Fund are registered with the Cayman from taxation of all future profits until March 7, 2026 for the Feeder and the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands.Fund, The and until November 23, 2030 for BLX Brazil Ltd. objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, trading derivative instruments. Bladex Representacao Ltda.,andBladex Investimentos Ltda., and Bladex Asset Management
Brazil – Gestora de Recursos Ltda. are subject to income taxes in Brazil. The New York Agency and Bladex’s subsidiaries incorporated in USA are subject to federal and local taxation in USA based on the portion of income that is effectively connected with its operations in that country. -7-
Such amounts of income taxes have been immaterial to date.
58
1.
-18-
numerator) by the weighted average number of common shares outstanding (the denominator) during
- During The Feeder an entity in which Bladex Headstandards, office owns modifications, 98.06% and 95.84% as of December 31,updates to 2012isand 2011, new accounting interpretations, and 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of standards standards (“ASU”), applicable to the Bank, have been issued and are not in effect. These the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated establish the following: under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The ASU 2011-11 – Balance (Topic 210) appreciation by investing in Latin American debt objective of the Fund is Sheet to achieve capital securities, stock indexes, currencies, and trading derivative instruments.
This update requires an entity to disclose information about financial instruments and derivative instruments that are either offset in the balance sheet or subject to enforceable master netting arrangements or similar agreements, irrespective of whether they are offset. Entities are required to disclose both gross and net information about instruments and transactions eligible for offset and instruments and transactions subject to an agreement similar to a master netting arrangement. -7-
This update is effective for interim and annual periods beginning on or after January 1, 2013. Entities should provide the disclosures required by this update retrospectively for all comparative -19-
59
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization 3. The Bank otherwise determines that designation of the derivative as a hedging instrument is
no longer appropriate.
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 The Bank carries allbank derivative financial instruments the America consolidated balance sheet(the at fair value. specialized supranational established to finance trade in in Latin and the Caribbean For qualifying fair value hedges, all changes in the fair value of the derivative and the fair value of “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of the itemoffor the risk beinginhedged are recognized in earnings.theIf the hedgeofrelationship is terminated, Governors Central Banks the Region, which recommended creation a multinational then the tofair value the adjustment to the hedgedcapacity item continues to beThe reported as part of theinbasis of the organization increase foreign trade financing of the Region. Bank was organized 1977, incorporated in 1978 to as earnings a corporation to the laws The of the Republic of the Panama, and method of item and is amortized as a pursuant yield adjustment. Bank applies shortcut officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic hedge accounting that does not recognize ineffectiveness in hedges of interest rate swap that meet of Panama and Bladex, of theASC BankTopic was granted certain privileges by the Republic Panama, including the requirements 815-20-25-104. For qualifying cash of flow hedges and netaninvestment exemption from payment of income taxes in Panama.
hedges, the effective portion of the change in the fair value of the derivative is recorded in OCI and recognized in the consolidated statement of income when the hedged cash flows affect earnings. The Bank operates under a general banking license issued by the National Banking Commission of The predecessor ineffectiveofportion is recognized in the consolidated statement of income as activities of Panama, the Superintendency of Banks of Panama (the “SBP”). derivative financial instruments and hedging. If the cash flow hedge relationship is terminated, related amounts in OCIbanks are reclassified earnings when hedged cash flows occur. In the Republic of Panama, are regulatedinto by the SBP through Executive Decree No. 52 of April
Organization x) Redeemable noncontrolling interest Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its ASC Topic 810 - Consolidation requires that a noncontrolling interest, previously referred to as a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a minority interest, in abank consolidated reported a separate of equity specialized supranational establishedsubsidiary to finance be trade in LatinasAmerica andcomponent the Caribbean (the and the amount of consolidated net income specifically attributable to the noncontrolling “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly ofinterest be presented below the consolidated of income. Governors of separately, Central Banks in net the income Region, in which recommendedstatement the creation of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, incorporatedininaccordance 1978 as a with corporation pursuant to the lawssecurities of the Republic Panama, and Furthermore, ASC 480-10-S99, equity that areofredeemable at the option officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of the holder and not solely within the control of the issuer must be classified outside of equity. The of Panama and Bladex, theinvestments Bank was granted privilegesfunds by thecontain Republic of Panama, including an terms of third party in thecertain consolidated a redemption clause which allows exemption from payment of income taxes in Panama.
the holders the option to redeem their investment at fair value. Accordingly, the Bank presents the noncontrolling interest between liabilities and stockholders’ equity in the consolidated balance The Bank operates under a general banking license issued by the National Banking Commission of sheets. Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
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 Assets and liabilities of foreign subsidiaries whose local currency is considered their functional management of credit and market risks, measures to prevent money laundering, the financing of currency, are translated into the dollars, and using period-end spot foreign terrorism and related illicit activities, and reporting procedures currency, for bankingUS intervention liquidation, among exchange rates. The Bank uses monthly-averaged exchange rates to translate revenues and expenses others.
NetRepublic assets of Feeder andare theregulated Brazilian arethrough measured and presented at 52 fairofvalue, In the of the Panama, banks by Fund the SBP Executive Decree No. April given the 30, nature 2008, which adopts the text(i.e. of the Law Decree No. 9 by of February 1998, modified by the Law Therefore, of their net assets represented mainly cash and26, investments in securities). Decree No.calculating 2 of February 2008.of Banks are also regulated by resolutions and agreements issued by 810, such when the22, value the redeemable noncontrolling interest under ASC Topic thisamount entity. is The main aspects of at thisitslaw its regulations include: the authorization of banking already recorded fairand value and no further adjustments under ASC 480-10-S99 are licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for necessary. management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among y) Earnings per share others.
reported as a component of are the the Other comprehensive income (loss) in the stockholders’ equity. Bladex Head Office’s subsidiaries following:
Basic earnings share is by dividing the net income attributable to Bladex (the Bladex Head Office’s per subsidiaries are computed the following:
- Transactions Bladex Holdings Inc., terms is a wholly owned subsidiary, lawsthe of the State of currency, whose are denominated in incorporated a currency under other the than functional Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises including transactions denominated in local currency of the foreign entity with the US dollar as their control over Bladex Asset on May 24, 2006, the laws of thetransaction. functional currency, are Management recorded at Inc., the incorporated exchange rate prevailing atunder the date of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Assets and liabilities in foreign currency are translated into US dollars using period-end spot foreign (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset exchange rates. of with translation of monetary assets Commission and liabilities into as USandollars are Management Inc.,The was effects registered the Securities and Exchange (“SEC”) included in current year’s earnings in the Gain (loss) on foreign currency exchange item. investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly w) Income engagedtaxes in providing administrative and operating services to Bladex Asset Management Inc. in USA.
- theBladex is a wholly ownedmeasure subsidiary, incorporated incorporating under the laws the of the Statethat of potential year. Holdings DilutedInc., earnings per share performance effect Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises common shares, such as stock options and restricted stock units outstanding during the same period, control overonBladex Asset Management 24, 2006, underper theshare laws of would have net earnings per share. Inc., The incorporated computationonofMay diluted earnings is the similar to the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund to include computation of basic earnings per share, except for the denominator, which is increased (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset theManagement number of Inc., additional common shares that would have been issued if the beneficiaries of stock was registered with the Securities and Exchange Commission (“SEC”) as an purchase options and other stock 8,plans their options. The numberas of investment adviser. On September 2009,could Bladexexercise Asset Management Inc. was registered a potential common shares that would be issued is determined using the treasury stock method. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. issued accounting standards z) Recently
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law
Decree No. 2 currency of February 22, 2008. Banks are also regulated by resolutions and agreements issued by v) Foreign translation
from local functional currency into US dollars. The effects of those translations adjustments are
-
Bladex Head Office is exempted from payment of income taxes in Panama in accordance with
The Feeder is an entity in which Bladex Head officeofowns 98.06% 95.84% as of December 31, the contract signed between the Republic Panama andand Bladex. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of The Feeder, the Fund, and BLX Brazil Ltd. are not subject to income taxes in accordance with the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated CaymanIslands. Islands.TheThese received an undertaking exempting them underthe thelaws laws of of the the Cayman Feedercompanies and the Fund are registered with the Cayman from taxation of all future profits until March 7, 2026 for the Feeder and the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands.Fund, The and until November 23, 2030 for BLX Brazil Ltd. objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, trading derivative instruments. Bladex Representacao Ltda.,andBladex Investimentos Ltda., and Bladex Asset Management
Brazil – Gestora de Recursos Ltda. are subject to income taxes in Brazil. The New York Agency and Bladex’s subsidiaries incorporated in USA are subject to federal and local taxation in USA based on the portion of income that is effectively connected with its operations in that country. -7-
Such amounts of income taxes have been immaterial to date.
58
1.
-18-
numerator) by the weighted average number of common shares outstanding (the denominator) during
- During The Feeder an entity in which Bladex Headstandards, office owns modifications, 98.06% and 95.84% as of December 31,updates to 2012isand 2011, new accounting interpretations, and 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of standards standards (“ASU”), applicable to the Bank, have been issued and are not in effect. These the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated establish the following: under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The ASU 2011-11 – Balance (Topic 210) appreciation by investing in Latin American debt objective of the Fund is Sheet to achieve capital securities, stock indexes, currencies, and trading derivative instruments.
This update requires an entity to disclose information about financial instruments and derivative instruments that are either offset in the balance sheet or subject to enforceable master netting arrangements or similar agreements, irrespective of whether they are offset. Entities are required to disclose both gross and net information about instruments and transactions eligible for offset and instruments and transactions subject to an agreement similar to a master netting arrangement. -7-
This update is effective for interim and annual periods beginning on or after January 1, 2013. Entities should provide the disclosures required by this update retrospectively for all comparative -19-
59
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. 4.
Organization periods presented. The Bank does not anticipate any material impact on its financial statements as a
result of those disclosures.
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 supranational bank established to finance trade in Latin America and the Caribbean (the ASU 2012-04 – Technical Corrections “Region”). The Bank was established pursuantand to aImprovements May 1975 proposal presented to the Assembly of Governors of Central Banks in the Region, which recommended the creation of a multinational The amendments in foreign this update are intended minor The improvements to the inAccounting organization to increase the trade financing capacitytoofmake the Region. Bank was organized 1977,Standard incorporated in 1978 asthat a corporation pursuant to laws of the Republic of on Panama, and accounting Codification are not expected to the have a significant effect current officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic practice. Additionally, these amendments will make the Codification easier to understand and the of Panama and Bladex, the Bank guidance was grantedeasier certainto privileges Republic ofinconsistencies Panama, includingand an providing fair value measurement apply by by the eliminating exemption from payment of income taxes in Panama. needed clarifications.
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 supranational bank established to finance trade in Latin America and the Caribbean (the December “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of 31, (In thousands US$) Banks in the Region, which recommended the creation of a multinational 2012 2011 Governors of of Central organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 6,718 Cash due from in banks 12,814 1977,and incorporated 1978 as a corporation pursuant to the laws of the Republic of Panama, and 700,312 Interest-bearing deposits in banks 830,670 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 707,030 an 843,484 Total of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including Less: exemption from payment of income taxes in Panama.
Cash and cash equivalents are as follows:
Interest-bearing deposits with original maturities of more than three months
The Bank operates under a general banking license issued by the National Banking Commission of Thispredecessor update is effective for annual periods after December 15, 2012. The Bank is Panama, of the Superintendency of Banksbeginning of Panama on (theor“SBP”).
3.
20 – Presentation of Financial Statements – Discontinued Operations. Amounts reported in the
consolidated financial statements of income and cash flows for the years ended December 31, 2011 Bladex Head Office’s subsidiaries are the following:
and 2010 have been reclassified to conform to the presentation of discontinued operations in 2012. - The Bladex Holdings Inc.,ofisamounts a wholly in owned subsidiary, incorporated the flows laws offor thethe State of 2011 and reclassification the consolidated statementsunder of cash years Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 2010 did not affect the totals of operating, investing and financing activities. The book value of controlofover Asset Management 24,not 2006, under the laws the held-forassets the Bladex Asset Management unit Inc., is notincorporated significant;onsoMay have been reported asofassets State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund sale in the consolidated balance sheet. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an The following table summarizes results ofManagement the discontinued operations: investment adviser. On Septemberthe 8, operating 2009, Bladex Asset Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Year Bladexended Asset December Management31 Inc. in (In thousands of US$) 2012 2011 2010 USA.
Other income: - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, (1) Fees and commissions 2,683 2,942 3,621 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under Other income 20 - the laws of 181 the Cayman Islands, and invests substantially all its assets in the Fund, which is2,942 also incorporated 2,703 3,802 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Operating expenses: Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman The Salaries and other employee expenses (1,535) (1,443)Islands. (1,247) objective of the Fund is to achieve capital appreciation by investing in Latin American debt Depreciation and amortization (21) (27) (39) securities, stockservices indexes, currencies, and trading derivative instruments. Professional (699) (731) (968) Maintenance and repairs (7) (5) (1) Other operating expenses (1,122) (1,156) (1,341) Total operating expenses (3,384) (3,362) (3,596) Net gain (loss) from discontinued operations (681) 206 (420) (1)
60
-7-
Includes management fees from the investment fund for $2,588 thousand, $2,832 thousand, and $3,106 thousand in years 2012, 2011 y 2010, respectively.
-20-
-
The Bank deposits operates under a general banking license issued by the National Banking Commission 14,519 of Pledged Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 692,511
evaluating the potential impact of this update in its financial statements.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Discontinued operations this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, capital of and2012, liquidity requirements, consolidated In theminimum fourth quarter the Bank established a plan tosupervision, divest the procedures operations for of the Asset management of credit and market risks, measures to prevent money laundering, the financing of Management unit. The Bank applied discontinued operations accounting to the operations of the terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Asset Management unit for the year ended December 31, 2012, in accordance with ASC Topic 250others.
Organization Cash and cash equivalents
30,000 23,994 789,490
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
On December 31, 2012 and 2011, the New York Agency had a pledged deposit with a carrying value of 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law $3.0 million the New Banking as requiredand by agreements law since March 1994. As of Decree No. 2with of February 22,York 2008.State Banks are alsoDepartment, regulated by resolutions issued by December 31, 2012 and 2011, the Bank had pledged deposits of $11.5 million and $21.0 million, this entity. The main aspects of this law and its regulations include: the authorization of banking respectively, to secure derivative financialrequirements, instruments transactions repurchase agreements. licenses, minimum capital and liquidity consolidated and supervision, procedures for
5.
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Trading assets and liabilities others.
The fair value of trading assets and liabilities is as follows: Bladex Head Office’s subsidiaries are the following:
- Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of theDecember State of 31, (In thousands of US$) 2012 2011 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Trading assets: State ofbonds Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Sovereign 5,146 20,415 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Cross-currency interest rate swaps 49 21 Management was registered with the Securities and Exchange Commission (“SEC”) as Forward foreign Inc., exchange 50 an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered20 as a Future contracts mainly Total foreign entity in the Republic of Panama, to establish a branch in Panama, which is5,265 20,436 engaged in providing administrative and operating services to Bladex Asset Management Inc. in
Trading liabilities: USA. Interest rate swaps 100 Cross-currency interest rate swaps 32,182 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Future contracts 22 of 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws Total the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated 32,304 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman
748 4,836 5,584
Islandbonds Monetary Authority as (“CIMA”), under the the Cayman Islands. The Sovereign outstanding of December 31,Mutual 2012, Funds 2011 Law and of 2010, have generated gains of $0.1 objective the Fund is to achieve capital and appreciation investing Latin American debt have been million during of2012 and 2010, respectively, loss of by $0.7 millionin during 2011 which securities, stock indexes, currencies, and trading derivative instruments. recorded in earnings.
As of December 31, 2012 and 2011, bonds with a carrying value of $1.3 million and $19.0 million, respectively, secured repurchase agreements accounted for as secured borrowings and derivative financial instruments transactions. -7-
During 2012, 2011 and 2010, the Bank recognized the following gains and losses related to trading derivative financial instruments:
-21-
61
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. 4.
Organization periods presented. The Bank does not anticipate any material impact on its financial statements as a
result of those disclosures.
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 supranational bank established to finance trade in Latin America and the Caribbean (the ASU 2012-04 – Technical Corrections “Region”). The Bank was established pursuantand to aImprovements May 1975 proposal presented to the Assembly of Governors of Central Banks in the Region, which recommended the creation of a multinational The amendments in foreign this update are intended minor The improvements to the inAccounting organization to increase the trade financing capacitytoofmake the Region. Bank was organized 1977,Standard incorporated in 1978 asthat a corporation pursuant to laws of the Republic of on Panama, and accounting Codification are not expected to the have a significant effect current officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic practice. Additionally, these amendments will make the Codification easier to understand and the of Panama and Bladex, the Bank guidance was grantedeasier certainto privileges Republic ofinconsistencies Panama, includingand an providing fair value measurement apply by by the eliminating exemption from payment of income taxes in Panama. needed clarifications.
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 supranational bank established to finance trade in Latin America and the Caribbean (the December “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of 31, (In thousands US$) Banks in the Region, which recommended the creation of a multinational 2012 2011 Governors of of Central organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 6,718 Cash due from in banks 12,814 1977,and incorporated 1978 as a corporation pursuant to the laws of the Republic of Panama, and 700,312 Interest-bearing deposits in banks 830,670 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 707,030 an 843,484 Total of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including Less: exemption from payment of income taxes in Panama.
Cash and cash equivalents are as follows:
Interest-bearing deposits with original maturities of more than three months
The Bank operates under a general banking license issued by the National Banking Commission of Thispredecessor update is effective for annual periods after December 15, 2012. The Bank is Panama, of the Superintendency of Banksbeginning of Panama on (theor“SBP”).
3.
20 – Presentation of Financial Statements – Discontinued Operations. Amounts reported in the
consolidated financial statements of income and cash flows for the years ended December 31, 2011 Bladex Head Office’s subsidiaries are the following:
and 2010 have been reclassified to conform to the presentation of discontinued operations in 2012. - The Bladex Holdings Inc.,ofisamounts a wholly in owned subsidiary, incorporated the flows laws offor thethe State of 2011 and reclassification the consolidated statementsunder of cash years Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 2010 did not affect the totals of operating, investing and financing activities. The book value of controlofover Asset Management 24,not 2006, under the laws the held-forassets the Bladex Asset Management unit Inc., is notincorporated significant;onsoMay have been reported asofassets State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund sale in the consolidated balance sheet. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an The following table summarizes results ofManagement the discontinued operations: investment adviser. On Septemberthe 8, operating 2009, Bladex Asset Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Year Bladexended Asset December Management31 Inc. in (In thousands of US$) 2012 2011 2010 USA.
Other income: - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, (1) Fees and commissions 2,683 2,942 3,621 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under Other income 20 - the laws of 181 the Cayman Islands, and invests substantially all its assets in the Fund, which is2,942 also incorporated 2,703 3,802 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Operating expenses: Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman The Salaries and other employee expenses (1,535) (1,443)Islands. (1,247) objective of the Fund is to achieve capital appreciation by investing in Latin American debt Depreciation and amortization (21) (27) (39) securities, stockservices indexes, currencies, and trading derivative instruments. Professional (699) (731) (968) Maintenance and repairs (7) (5) (1) Other operating expenses (1,122) (1,156) (1,341) Total operating expenses (3,384) (3,362) (3,596) Net gain (loss) from discontinued operations (681) 206 (420) (1)
60
-7-
Includes management fees from the investment fund for $2,588 thousand, $2,832 thousand, and $3,106 thousand in years 2012, 2011 y 2010, respectively.
-20-
-
The Bank deposits operates under a general banking license issued by the National Banking Commission 14,519 of Pledged Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 692,511
evaluating the potential impact of this update in its financial statements.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Discontinued operations this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, capital of and2012, liquidity requirements, consolidated In theminimum fourth quarter the Bank established a plan tosupervision, divest the procedures operations for of the Asset management of credit and market risks, measures to prevent money laundering, the financing of Management unit. The Bank applied discontinued operations accounting to the operations of the terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Asset Management unit for the year ended December 31, 2012, in accordance with ASC Topic 250others.
Organization Cash and cash equivalents
30,000 23,994 789,490
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
On December 31, 2012 and 2011, the New York Agency had a pledged deposit with a carrying value of 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law $3.0 million the New Banking as requiredand by agreements law since March 1994. As of Decree No. 2with of February 22,York 2008.State Banks are alsoDepartment, regulated by resolutions issued by December 31, 2012 and 2011, the Bank had pledged deposits of $11.5 million and $21.0 million, this entity. The main aspects of this law and its regulations include: the authorization of banking respectively, to secure derivative financialrequirements, instruments transactions repurchase agreements. licenses, minimum capital and liquidity consolidated and supervision, procedures for
5.
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Trading assets and liabilities others.
The fair value of trading assets and liabilities is as follows: Bladex Head Office’s subsidiaries are the following:
- Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of theDecember State of 31, (In thousands of US$) 2012 2011 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Trading assets: State ofbonds Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Sovereign 5,146 20,415 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Cross-currency interest rate swaps 49 21 Management was registered with the Securities and Exchange Commission (“SEC”) as Forward foreign Inc., exchange 50 an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered20 as a Future contracts mainly Total foreign entity in the Republic of Panama, to establish a branch in Panama, which is5,265 20,436 engaged in providing administrative and operating services to Bladex Asset Management Inc. in
Trading liabilities: USA. Interest rate swaps 100 Cross-currency interest rate swaps 32,182 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Future contracts 22 of 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws Total the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated 32,304 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman
748 4,836 5,584
Islandbonds Monetary Authority as (“CIMA”), under the the Cayman Islands. The Sovereign outstanding of December 31,Mutual 2012, Funds 2011 Law and of 2010, have generated gains of $0.1 objective the Fund is to achieve capital and appreciation investing Latin American debt have been million during of2012 and 2010, respectively, loss of by $0.7 millionin during 2011 which securities, stock indexes, currencies, and trading derivative instruments. recorded in earnings.
As of December 31, 2012 and 2011, bonds with a carrying value of $1.3 million and $19.0 million, respectively, secured repurchase agreements accounted for as secured borrowings and derivative financial instruments transactions. -7-
During 2012, 2011 and 2010, the Bank recognized the following gains and losses related to trading derivative financial instruments:
-21-
61
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization
Year ended December 31, (In thousands of US$) 2012 2011 2010 Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Interest rate swaps (299) is a (2,091) subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, (310) Republic of Panama, Cross-currency interest rate swaps 11,537 (4,858) specialized supranational bank established to finance trade in Latin America and the Caribbean (the (1,662) Credit default - to the Assembly 13 “Region”). Theswap Bank was established pursuant to a May 1975 proposal presented of Forward foreign exchange 27 93 Governors of Central Banks in the Region, which recommended the creation of a multinational Future contracts 207 (29) organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Total 11,461 (5,093) (3,740) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic
of Panama and Bladex, the Bankinwas certain privileges by the Republic of Panama, an from the These amounts are reported thegranted Net gain (loss) from trading securities and Netincluding gain (loss) exemption from income taxes in Panama.statements of income. investment fundpayment trading of lines in the consolidated Bank operates a general banking licenseinstruments, issued by thethe National Commission of financial InTheaddition to the under trading derivative financial Bank Banking has hedging derivative Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). instruments that are disclosed in Note 21. In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
As December 31, 2012 andof2011, trading liabilities26,include interest by ratetheswap 30,of 2008, which adopts the text the Law Decreederivative No. 9 of February 1998, modified Law and crosscurrency interest rate swap contracts that were previously designated as fair value hedges of securities Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by available-for-sale, andaspects foreign-currency loansitsand borrowings, respectively that no this entity. The main of this law and regulations include: the authorization of longer banking qualify for licenses,accounting. minimum capital liquidity requirements, consolidated supervision, procedures during for of certain fair value hedges was discontinued 2012. hedge Hedgeandaccounting management of credit and market risks, measures to prevent money laundering, the financing Adjustments to the carrying value of the hedged underlying transactions are amortized inofthe interest terrorismline and over related activities, andofprocedures for bankingChanges intervention andfair liquidation, expense theillicit remaining term these transactions. in the value ofamong these derivative others. instruments after discontinuation of fair value hedge accounting are recorded in Net gain (loss) from trading Bladex securities. Head Office’s subsidiaries are the following: As- ofBladex December 31,Inc., 2012 2011, information the nominal Holdings is aand wholly owned subsidiary, on incorporated under amounts the laws ofofthederivative State of financial instruments heldUnited for trading is as follows: Delaware, Statespurposes of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises
6.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 2012 manager for Bladex Offshore Feeder 2011 Fund State of Delaware, USA, which serves as investment (In thousands of US$) Fair Value Fair Value Nominal Nominal (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Amount Amount Asset Liability Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Liability 2009, Bladex Asset Management Inc. was registered as -a Interestinvestment rate swaps adviser. On September 8, 35,291 100 17,000 748 Cross-currency interestinrate 155,081 to establish 49 a branch 32,182in Panama,85,163 21 4,836 foreign entity theswaps Republic of Panama, which is mainly Forward foreignin exchange 7,152 50 22 Asset Management engaged providing administrative and operating services to Bladex Inc. inFuture USA. contracts 6,896 20 139 204,420 119 32,304 102,302 21 5,584 Total - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Investment securities under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Securities available-for-sale objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
The amortized cost, related unrealized gross gain (loss) and fair value of securities available-for-sale by country risk and type of debt, are as follows:
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62
1.
Organization December 31, 2012 Banco Latinoamericano de Comercio Exterior, S. A.Amortized (“Bladex Head Office” and together with its Fair (In thousands of US$) Unrealized Unrealized subsidiaries “Bladex” or the “Bank”), headquartered in Republic of Panama, Gross Gain Gross Loss is a Value CostPanama City, Corporate debt:supranational bank established to finance trade in Latin America and the Caribbean (the specialized Brazil 158 “Region”). The Bank was established pursuant to a May 13,581 1975 proposal presented to the Assembly of 13,739 Colombia 986 60 1,046 Governors of Central Banks in the Region, which recommended the creation of a multinational Chile 1,967 87 2,054 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Peru 530 17 547 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 17,064 322 17,386
officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Sovereign debt: exemption from payment of income taxes in Panama.
Brazil 28,783 1,965 Colombia 15,489 199 The Bank operates under a general banking license issued by the National Banking Commission of Chile 1,061 (the “SBP”). 1 Panama, predecessor of the Superintendency of Banks of Panama Honduras 15,986 224 Mexico 20,553 1,779 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Panama 37,845 1,828 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Venezuela 39,548 801 33 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 159,265 6,598 232
30,748 15,290 1,062 16,210 22,332 39,673 40,316 165,631
Total 6,920 232 licenses, minimum capital and liquidity requirements,176,329 consolidated supervision, procedures for
183,017
(In thousands of US$)
Fair Value
this entity. The main aspects of this law and its regulations include: the authorization of banking
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among December 31, 2011 others. Bladex Head Office’s subsidiaries are the following:
Amortized Cost
Unrealized Gross Gain
Unrealized Gross Loss
Corporate debt: Brazil 45,937 152 2,094 43,995 - Bladex Holdings Inc., is a wholly owned subsidiary,28,169 incorporated under of 28,258 Colombia 89 the laws of the State 30, 2000. Bladex 29 Holdings Inc. exercises 14,945 Peru Delaware, United States of America (USA), on May 14,916 89,022on May 24, 270 control over Bladex Asset Management Inc., incorporated 2006, under the2,094 laws of the 87,198 Sovereign debt:of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund State Brazil (the “Feeder”) and Bladex Capital Growth Fund (the 44,541 2,401 376 Asset 46,566 “Fund”). In February 2012, Bladex Colombia 59,204 1,682 230 as an 60,656 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) Guatemala 5,469 19 5,450 investment adviser. On September 8, 2009, Bladex16,384 Asset Management- Inc. was registered Honduras 166 as a 16,218 foreign entity in the Republic of Panama, to establish Panama, which is62 mainly 65,488 Mexico 63,094a branch in 2,456 engaged in providing administrative and operating services Asset Management Panama 46,796 to Bladex 2,227 61 Inc. in 48,962 Peru USA. 25,487 602 26,089 577 195 59,673 Venezuela 59,291 320,266 9,945 1,109 329,102 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. The Feeder was incorporated 21, 2006 under3,203 the laws of 416,300 409,288 on February 10,215 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws the Cayman Islands. The Feeder and the Fund with are registered with the Cayman As of December 31, of2012 and 2011, securities available-for-sale a carrying value of $152.3 million Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. and $375.5 million, respectively, were pledged to secure repurchase transactions accounted The for as secured objective of the Fund is to achieve capital appreciation by investing in Latin American debt financings. securities, stock indexes, currencies, and trading derivative instruments. Total
The following table discloses those securities that have had unrealized losses for less than 12 months and for 12 months or longer: -7-
-22-
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63
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization
Year ended December 31, (In thousands of US$) 2012 2011 2010 Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Interest rate swaps (299) is a (2,091) subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, (310) Republic of Panama, Cross-currency interest rate swaps 11,537 (4,858) specialized supranational bank established to finance trade in Latin America and the Caribbean (the (1,662) Credit default - to the Assembly 13 “Region”). Theswap Bank was established pursuant to a May 1975 proposal presented of Forward foreign exchange 27 93 Governors of Central Banks in the Region, which recommended the creation of a multinational Future contracts 207 (29) organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Total 11,461 (5,093) (3,740) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic
of Panama and Bladex, the Bankinwas certain privileges by the Republic of Panama, an from the These amounts are reported thegranted Net gain (loss) from trading securities and Netincluding gain (loss) exemption from income taxes in Panama.statements of income. investment fundpayment trading of lines in the consolidated Bank operates a general banking licenseinstruments, issued by thethe National Commission of financial InTheaddition to the under trading derivative financial Bank Banking has hedging derivative Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). instruments that are disclosed in Note 21. In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
As December 31, 2012 andof2011, trading liabilities26,include interest by ratetheswap 30,of 2008, which adopts the text the Law Decreederivative No. 9 of February 1998, modified Law and crosscurrency interest rate swap contracts that were previously designated as fair value hedges of securities Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by available-for-sale, andaspects foreign-currency loansitsand borrowings, respectively that no this entity. The main of this law and regulations include: the authorization of longer banking qualify for licenses,accounting. minimum capital liquidity requirements, consolidated supervision, procedures during for of certain fair value hedges was discontinued 2012. hedge Hedgeandaccounting management of credit and market risks, measures to prevent money laundering, the financing Adjustments to the carrying value of the hedged underlying transactions are amortized inofthe interest terrorismline and over related activities, andofprocedures for bankingChanges intervention andfair liquidation, expense theillicit remaining term these transactions. in the value ofamong these derivative others. instruments after discontinuation of fair value hedge accounting are recorded in Net gain (loss) from trading Bladex securities. Head Office’s subsidiaries are the following: As- ofBladex December 31,Inc., 2012 2011, information the nominal Holdings is aand wholly owned subsidiary, on incorporated under amounts the laws ofofthederivative State of financial instruments heldUnited for trading is as follows: Delaware, Statespurposes of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises
6.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 2012 manager for Bladex Offshore Feeder 2011 Fund State of Delaware, USA, which serves as investment (In thousands of US$) Fair Value Fair Value Nominal Nominal (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Amount Amount Asset Liability Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Liability 2009, Bladex Asset Management Inc. was registered as -a Interestinvestment rate swaps adviser. On September 8, 35,291 100 17,000 748 Cross-currency interestinrate 155,081 to establish 49 a branch 32,182in Panama,85,163 21 4,836 foreign entity theswaps Republic of Panama, which is mainly Forward foreignin exchange 7,152 50 22 Asset Management engaged providing administrative and operating services to Bladex Inc. inFuture USA. contracts 6,896 20 139 204,420 119 32,304 102,302 21 5,584 Total - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Investment securities under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Securities available-for-sale objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
The amortized cost, related unrealized gross gain (loss) and fair value of securities available-for-sale by country risk and type of debt, are as follows:
-7-
62
1.
Organization December 31, 2012 Banco Latinoamericano de Comercio Exterior, S. A.Amortized (“Bladex Head Office” and together with its Fair (In thousands of US$) Unrealized Unrealized subsidiaries “Bladex” or the “Bank”), headquartered in Republic of Panama, Gross Gain Gross Loss is a Value CostPanama City, Corporate debt:supranational bank established to finance trade in Latin America and the Caribbean (the specialized Brazil 158 “Region”). The Bank was established pursuant to a May 13,581 1975 proposal presented to the Assembly of 13,739 Colombia 986 60 1,046 Governors of Central Banks in the Region, which recommended the creation of a multinational Chile 1,967 87 2,054 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Peru 530 17 547 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 17,064 322 17,386
officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Sovereign debt: exemption from payment of income taxes in Panama.
Brazil 28,783 1,965 Colombia 15,489 199 The Bank operates under a general banking license issued by the National Banking Commission of Chile 1,061 (the “SBP”). 1 Panama, predecessor of the Superintendency of Banks of Panama Honduras 15,986 224 Mexico 20,553 1,779 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Panama 37,845 1,828 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Venezuela 39,548 801 33 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 159,265 6,598 232
30,748 15,290 1,062 16,210 22,332 39,673 40,316 165,631
Total 6,920 232 licenses, minimum capital and liquidity requirements,176,329 consolidated supervision, procedures for
183,017
(In thousands of US$)
Fair Value
this entity. The main aspects of this law and its regulations include: the authorization of banking
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among December 31, 2011 others. Bladex Head Office’s subsidiaries are the following:
Amortized Cost
Unrealized Gross Gain
Unrealized Gross Loss
Corporate debt: Brazil 45,937 152 2,094 43,995 - Bladex Holdings Inc., is a wholly owned subsidiary,28,169 incorporated under of 28,258 Colombia 89 the laws of the State 30, 2000. Bladex 29 Holdings Inc. exercises 14,945 Peru Delaware, United States of America (USA), on May 14,916 89,022on May 24, 270 control over Bladex Asset Management Inc., incorporated 2006, under the2,094 laws of the 87,198 Sovereign debt:of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund State Brazil (the “Feeder”) and Bladex Capital Growth Fund (the 44,541 2,401 376 Asset 46,566 “Fund”). In February 2012, Bladex Colombia 59,204 1,682 230 as an 60,656 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) Guatemala 5,469 19 5,450 investment adviser. On September 8, 2009, Bladex16,384 Asset Management- Inc. was registered Honduras 166 as a 16,218 foreign entity in the Republic of Panama, to establish Panama, which is62 mainly 65,488 Mexico 63,094a branch in 2,456 engaged in providing administrative and operating services Asset Management Panama 46,796 to Bladex 2,227 61 Inc. in 48,962 Peru USA. 25,487 602 26,089 577 195 59,673 Venezuela 59,291 320,266 9,945 1,109 329,102 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,
2012 and 2011, respectively. The Feeder was incorporated 21, 2006 under3,203 the laws of 416,300 409,288 on February 10,215 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws the Cayman Islands. The Feeder and the Fund with are registered with the Cayman As of December 31, of2012 and 2011, securities available-for-sale a carrying value of $152.3 million Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. and $375.5 million, respectively, were pledged to secure repurchase transactions accounted The for as secured objective of the Fund is to achieve capital appreciation by investing in Latin American debt financings. securities, stock indexes, currencies, and trading derivative instruments. Total
The following table discloses those securities that have had unrealized losses for less than 12 months and for 12 months or longer: -7-
-22-
-23-
63
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1.
Organization December 31, 2012 (In thousands of US$) Less than 12 months 12 months or longer Total Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Unrealized Unrealized Unrealized subsidiaries “Bladex” or theFair “Bank”), headquartered in Panama City, Republic of Panama, is a Gross Fair Gross Fair Gross specialized supranational bank established to finance trade in Latin America and the Caribbean (the Value Losses Value Losses Value Losses “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Sovereign 10,188 79 recommended 10,009 the creation 153 Governorsdebt of Central Banks in the Region, which of a20,197 multinational232 10,188 79 10,009 153 20,197 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in232 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 31, 2011 officially initiated operations on January 2, 1979. Under a December contract signed in 1978 between the Republic (In thousands of US$) Less than 12 months 12 months or longerof Panama, including Total an of Panama and Bladex, the Bank was granted certain privileges by the Republic Unrealized Unrealized Unrealized exemption from payment of income taxes in Panama. Fair Gross Fair Gross Fair Gross Value Losses Value Losses Value Losses The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of2,094 Banks of Panama (the Corporate debt 33,366 - “SBP”). 33,366 2,094 Sovereign debt 110,589 1,109 110,589 1,109 In the Republic of Panama, banks are regulated3,203 by the SBP through No. 52 of April 143,955 - Executive - Decree 143,955 3,203 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decreeunrealized No. 2 of February 22, related 2008. Banks regulated by resolutions agreements by factors and Gross losses are mainlyaretoalso changes in market interestand rates and otherissued market this entity. The main aspects of this law and its regulations include: the authorization of banking not due to underlying credit concerns by the Bank about the issuers. The sovereign debt that shows an licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for unrealized loss for than twelve months a counterparty paymentofperformance managementgross of credit andmore market risks, measures to relates preventtomoney laundering,whose the financing isterrorism and continues to illicit be strong. of theforbond in question hasandseen a recovery during 2012. and related activities,The andprice procedures banking intervention liquidation, among Historically, this counterparty has not failed to perform on its obligations. As of December 31, 2012 the others.
Bank does not intent to sell and will not be required to sell this security available-for-sale showing gross Bladex Headlosses Office’s subsidiaries are the following: unrealized before the recovery of its amortized cost. As a result, the Bank does not consider this exposure to be other-than temporary impaired. 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. exercises The following table presents the realized gains and losses on sale of securities available-for-sale: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (In thousands of US$) Year ended December 31, (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2012 2011 2010 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an was registered Gains investment adviser. On September 8, 2009, Bladex Asset Management Inc. 6,141 3,825as a 2,346 mainly Lossesforeign entity in the Republic of Panama, to establish a branch in Panama, (111) which is(412) Management Inc. in Net engaged in providing administrative and operating services to Bladex Asset 6,030 3,413 2,346 USA. -
The amortized cost and fair value of securities available-for-sale by contractual maturity as of December The Feeder is an in entity which Bladex 31,- 2012, are shown the in following table:Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Amortized the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated (In thousands of US$) Cost under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Due within year 34,574 Island1 Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The After 1objective year but within 5 years 133,298 of the Fund is to achieve capital appreciation by investing in Latin American debt After 5securities, years but stock withinindexes, 10 yearscurrencies, and trading derivative instruments. 8,457 176,329
-7-
64
Fair Value
34,815 139,661 8,541 183,017
Organization Securities held-to-maturity Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
The amortized cost, related unrealized gross gain (loss) and fair value of securities held-to-maturity by subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a country risksupranational and type of bank debt are as follows: specialized established to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of December Governors of Central Banks in the Region, which recommended the creation31,of2012 a multinational Amortized Unrealized Unrealized organization to increase the foreign trade financing capacity of the Region. The Bank was organized in (In thousands of US$) Cost Gross Gain Gross Loss and 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Corporate debt: ofPanama Panama and Bladex, the Bank was granted certain privileges by the Republic of -Panama, including- an 12,660 exemption from payment of income taxes in Panama. Sovereign debt: 13,011 4 3 Colombia The Bank operates under a general banking license issued6,442 by the National Banking Commission 9 19 of Honduras Panama, 2,000 (the “SBP”). 45 Panamapredecessor of the Superintendency of Banks of Panama 21,453
58
22
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Total 30, 2008, which adopts the text of the Law Decree No. 9 34,113 of February 26, 1998,58modified by the22Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by December 31, 2011 of banking this entity. The main aspects of this law and its regulations include: the authorization Amortized Unrealized for licenses, minimum capital and liquidity requirements, consolidatedUnrealized supervision, procedures (In thousands of Cost Gain theGross Loss of management ofUS$) credit and market risks, measures to prevent moneyGross laundering, financing terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Corporate debt: others. 7,050 Panama
Fair Value 12,660 13,012 6,432 2,045 21,489 34,149
Fair Value 7,050
Sovereign debt: Bladex Head Office’s subsidiaries are the following: 13,015 40 13,055 Colombia 4,471 1 4,472 Honduras - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 2,000 60 2,060 Panama Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 19,486 101 19,587 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 26,637 Total State of Delaware, USA, which serves as investment26,536 manager for Bladex101 Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Securities that show unrealizedwith losses have had and losses for less than 12 months. Management Inc.,gross was registered the Securities Exchange Commission (“SEC”) These as an losses are related mainly to changes market interest other market factors and not dueastoa underlying investment adviser. On in September 8, 2009, rates Bladexand Asset Management Inc. was registered creditforeign concerns by the Bank about the issuers therefore, such losses in arePanama, considered temporary. entity in the Republic of Panama, to establish a branch which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. The amortized cost and fair value of securities held-to-maturity by contractual maturity as of December
31, 2012, are shown in the following table:
- The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Amortized 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of (In thousands of US$) Cost the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Due under withinthe 1 year 18,960 laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman AfterIsland 1 yearMonetary but withinAuthority 5 years (“CIMA”), under the Mutual Funds Law of the Cayman Islands. 15,153 The 34,113debt objective of the Fund is to achieve capital appreciation by investing in Latin American securities, stock indexes, currencies, and trading derivative instruments.
Fair Value 19,014 15,135 34,149
As of December 31, 2012 and 2011, securities held-to-maturity with a carrying value of $19.4 million and $17.5 million, respectively, were pledged to secure repurchase transactions accounted for as secured financings. -7-
-24-
-25-
65
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1.
Organization December 31, 2012 (In thousands of US$) Less than 12 months 12 months or longer Total Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Unrealized Unrealized Unrealized subsidiaries “Bladex” or theFair “Bank”), headquartered in Panama City, Republic of Panama, is a Gross Fair Gross Fair Gross specialized supranational bank established to finance trade in Latin America and the Caribbean (the Value Losses Value Losses Value Losses “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Sovereign 10,188 79 recommended 10,009 the creation 153 Governorsdebt of Central Banks in the Region, which of a20,197 multinational232 10,188 79 10,009 153 20,197 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in232 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 31, 2011 officially initiated operations on January 2, 1979. Under a December contract signed in 1978 between the Republic (In thousands of US$) Less than 12 months 12 months or longerof Panama, including Total an of Panama and Bladex, the Bank was granted certain privileges by the Republic Unrealized Unrealized Unrealized exemption from payment of income taxes in Panama. Fair Gross Fair Gross Fair Gross Value Losses Value Losses Value Losses The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of2,094 Banks of Panama (the Corporate debt 33,366 - “SBP”). 33,366 2,094 Sovereign debt 110,589 1,109 110,589 1,109 In the Republic of Panama, banks are regulated3,203 by the SBP through No. 52 of April 143,955 - Executive - Decree 143,955 3,203 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decreeunrealized No. 2 of February 22, related 2008. Banks regulated by resolutions agreements by factors and Gross losses are mainlyaretoalso changes in market interestand rates and otherissued market this entity. The main aspects of this law and its regulations include: the authorization of banking not due to underlying credit concerns by the Bank about the issuers. The sovereign debt that shows an licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for unrealized loss for than twelve months a counterparty paymentofperformance managementgross of credit andmore market risks, measures to relates preventtomoney laundering,whose the financing isterrorism and continues to illicit be strong. of theforbond in question hasandseen a recovery during 2012. and related activities,The andprice procedures banking intervention liquidation, among Historically, this counterparty has not failed to perform on its obligations. As of December 31, 2012 the others.
Bank does not intent to sell and will not be required to sell this security available-for-sale showing gross Bladex Headlosses Office’s subsidiaries are the following: unrealized before the recovery of its amortized cost. As a result, the Bank does not consider this exposure to be other-than temporary impaired. 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. exercises The following table presents the realized gains and losses on sale of securities available-for-sale: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (In thousands of US$) Year ended December 31, (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2012 2011 2010 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an was registered Gains investment adviser. On September 8, 2009, Bladex Asset Management Inc. 6,141 3,825as a 2,346 mainly Lossesforeign entity in the Republic of Panama, to establish a branch in Panama, (111) which is(412) Management Inc. in Net engaged in providing administrative and operating services to Bladex Asset 6,030 3,413 2,346 USA. -
The amortized cost and fair value of securities available-for-sale by contractual maturity as of December The Feeder is an in entity which Bladex 31,- 2012, are shown the in following table:Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Amortized the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated (In thousands of US$) Cost under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Due within year 34,574 Island1 Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The After 1objective year but within 5 years 133,298 of the Fund is to achieve capital appreciation by investing in Latin American debt After 5securities, years but stock withinindexes, 10 yearscurrencies, and trading derivative instruments. 8,457 176,329
-7-
64
Fair Value
34,815 139,661 8,541 183,017
Organization Securities held-to-maturity Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
The amortized cost, related unrealized gross gain (loss) and fair value of securities held-to-maturity by subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a country risksupranational and type of bank debt are as follows: specialized established to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of December Governors of Central Banks in the Region, which recommended the creation31,of2012 a multinational Amortized Unrealized Unrealized organization to increase the foreign trade financing capacity of the Region. The Bank was organized in (In thousands of US$) Cost Gross Gain Gross Loss and 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Corporate debt: ofPanama Panama and Bladex, the Bank was granted certain privileges by the Republic of -Panama, including- an 12,660 exemption from payment of income taxes in Panama. Sovereign debt: 13,011 4 3 Colombia The Bank operates under a general banking license issued6,442 by the National Banking Commission 9 19 of Honduras Panama, 2,000 (the “SBP”). 45 Panamapredecessor of the Superintendency of Banks of Panama 21,453
58
22
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Total 30, 2008, which adopts the text of the Law Decree No. 9 34,113 of February 26, 1998,58modified by the22Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by December 31, 2011 of banking this entity. The main aspects of this law and its regulations include: the authorization Amortized Unrealized for licenses, minimum capital and liquidity requirements, consolidatedUnrealized supervision, procedures (In thousands of Cost Gain theGross Loss of management ofUS$) credit and market risks, measures to prevent moneyGross laundering, financing terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Corporate debt: others. 7,050 Panama
Fair Value 12,660 13,012 6,432 2,045 21,489 34,149
Fair Value 7,050
Sovereign debt: Bladex Head Office’s subsidiaries are the following: 13,015 40 13,055 Colombia 4,471 1 4,472 Honduras - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 2,000 60 2,060 Panama Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 19,486 101 19,587 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 26,637 Total State of Delaware, USA, which serves as investment26,536 manager for Bladex101 Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Securities that show unrealizedwith losses have had and losses for less than 12 months. Management Inc.,gross was registered the Securities Exchange Commission (“SEC”) These as an losses are related mainly to changes market interest other market factors and not dueastoa underlying investment adviser. On in September 8, 2009, rates Bladexand Asset Management Inc. was registered creditforeign concerns by the Bank about the issuers therefore, such losses in arePanama, considered temporary. entity in the Republic of Panama, to establish a branch which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. The amortized cost and fair value of securities held-to-maturity by contractual maturity as of December
31, 2012, are shown in the following table:
- The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Amortized 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of (In thousands of US$) Cost the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Due under withinthe 1 year 18,960 laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman AfterIsland 1 yearMonetary but withinAuthority 5 years (“CIMA”), under the Mutual Funds Law of the Cayman Islands. 15,153 The 34,113debt objective of the Fund is to achieve capital appreciation by investing in Latin American securities, stock indexes, currencies, and trading derivative instruments.
Fair Value 19,014 15,135 34,149
As of December 31, 2012 and 2011, securities held-to-maturity with a carrying value of $19.4 million and $17.5 million, respectively, were pledged to secure repurchase transactions accounted for as secured financings. -7-
-24-
-25-
65
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
composition of the loan portfolio by industry is as follows: 7. The Investment fund
1. December 31,
(In thousands of US$)
The balance in the investment fund for $105.9 million as of December 31, 2012 2012 and $120.4 2011 million as of December 31, 2011 represents the participation of the Feeder in the net asset value (NAV) of the Fund. Banking and financial institutions 2,192,023 2,164,163
Industrial 1,108,223 967,929 Theand Fund’s net derived assets products are mainly composed by cash, investments in equity and debt instruments, and Oil petroleum 894,368 645,875 Agricultural 853,377 730,119 derivative financial instruments that are quoted and traded in active markets. For financial instruments for Services 210,925 264,895providers that which quoted prices are not available, the Fund uses independent valuations from pricing Mining 22,122 37,723 use valuation models considering market information. Sovereign 100,370 27,266 Others 334,148 121,603 As of December 31, 2012, the Feeder owns 97.95% of the Fund with a5,715,556 total of 79,335.7 shares issued, Total 4,959,573
divided in 839.0 “Class A” shares, 846.4 “Class A1” shares and 77,650.3 “Class B” shares.
Loans classified by debtor’s credit quality indicators are as follows:
As of December 31, 2011, the Feeder owns 98.03% of the Fund with a total of 93,094.3 shares issued, (In thousands of US$) December 2012 shares, 89,040.3 “Class B” shares and 708.1 divided in 2,948.0 “Class A” shares, 397.9 “Class31,A1” Banking and financial Middle-market “Class RatingE1” shares. Corporations institutions companies Sovereign Total (1)
Private
State-owned
Private
State-owned
Private
2,202,613“Class 538,638 1,775,938 416,085 681,912 100,370 5,715,556 The1-6 Fund has issued A”, “Class A1”, “Class B”, “Class C”, “Class D”, “Class E” and “Class E1” 7 shares8 and administrative shares.- “Class A”, “Class A1” and “Class B” shares- are participating shares in the net to certain administrative fees. 9 gains (losses) -of the Fund,- and only- differ in relation - “Class C” and 10 D” shares do - not participate - entitled to the “Class in the- net gains -(losses) of- the Fund; they are only Total 2,202,613 538,638 1,775,938 416,085 681,912 100,370 5,715,556 performance allocation from “Class A”, “Class A1” and “Class B” shares. The “Class E” and “Class E1” shares are not subject to either administrative fees or performance allocation. The Bank owns the Feeder’s and the Fund’s administrative shares. (In thousands of US$)
8.
December 31, 2011 Banking and financial Middle-market (1) Corporations institutions companies Total RatingA”, “Class “Class A1” and “Class E” shares can be redeemed monthlySovereign by investors with Private State-owned Private State-owned Private $1001-6million of2,057,520 the “Class B” shares can be redeemed starting in 2013. 232,893 1,716,406 447,757 445,731 27,266 4,927,573 7 8 24,000 24,000 Loans 9 8,000 8,000 10 -
The Total
following table set forth232,893 details 1,716,406 of the Bank’s447,757 loan portfolio: 2,089,520 445,731
4,959,573
December 31, 2012 2011
(In thousands of US$) Current ratings as of December 31, 2012 and 2011, respectively.
(1)
Corporations: The remaining loan maturities are summarized as follows: Private State-owned Banking and financial institutions: Private State-owned Middle-market companies: Private Sovereign Total -27-
66
27,266
30 days’ notice.
2,202,613 2,089,520 538,638 232,893 1,775,938 1,716,406 416,085 447,757
Organization The composition of the loan portfolio by industry is as follows:
(In thousands of US$) de Comercio Exterior, S. A. (“Bladex Head Office” and togetherDecember Banco Latinoamericano with its 31, subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, 2012 is a 2011 specialized supranational bank established to finance trade in Latin America and the Caribbean (the Banking and financial institutions 2,192,023 2,164,163 “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Industrial 1,108,223 Governors of Central Banks in the Region, which recommended the creation of a multinational 967,929 Oil and petroleum derived products 894,368 in 645,875 organization to increase the foreign trade financing capacity of the Region. The Bank was organized Agricultural 853,377and 730,119 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 264,895 Services 210,925 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including Mining 22,122an 37,723 exemption from payment of income taxes in Panama. Sovereign 100,370 27,266 Others 334,148 121,603 The Bank operates under a general banking license issued by the National Banking Commission of Total 5,715,556 4,959,573 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Loans byPanama, debtor’sbanks creditare quality indicators follows:Executive Decree No. 52 of April In the classified Republic of regulated by the are SBPasthrough
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law December 31, 2012 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Banking and financialinclude: Middle-market this entity.(1) The main aspects of this law and its regulations the authorization of banking Rating Corporations institutions companies Sovereign Total licenses, minimum capital and liquidity requirements, consolidated Private supervision, procedures for Privateand market State-owned Private to State-owned management of credit risks, measures prevent money laundering, the financing of 1-6 and related 2,202,613 538,638 1,775,938 for banking 416,085intervention 681,912 100,370among 5,715,556 terrorism illicit activities, and procedures and liquidation, 7 others.8 -
(In thousands of US$)
9
-
-
-
-
-
-
-
2,202,613
538,638
1,775,938
416,085
681,912
100,370
5,715,556
Bladex10Head Office’s subsidiaries are the-following: Total
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. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the (In thousands of US$) December 31, 2011 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Banking and financial (the (1)“Feeder”) and Bladex Capital Growth Fund (the “Fund”). Middle-market In February 2012, Bladex Asset institutions companies Corporations Sovereign Total Rating ManagementPrivate Inc., was registered with the Securities and Exchange Commission (“SEC”) as an State-owned Private State-owned Private investment adviser. 2009, Bladex Asset Management Inc. was registered a 1-6 2,057,520On September 232,893 8, 1,716,406 447,757 445,731 27,266 as4,927,573 foreign entity in the- Republic of -Panama, to- establish a branch in Panama, 7 - which is -mainly 8 24,000 administrative - and operating - Inc. in 24,000 engaged in providing services to- Bladex Asset Management 9 8,000 8,000 USA. -
10
Total - The Feeder is2,089,520 an entity in which Bladex1,716,406 Head office owns 98.06% and 95.84% 31, 232,893 447,757 445,731 as of December 27,266 4,959,573
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and31,invests substantially all its assets in the Fund, which is also incorporated Current ratings as of December 2012 and 2011, respectively. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt The remaining loan maturities are summarized as follows: securities, stock indexes, currencies, and trading derivative instruments. (1)
681,912 445,731 100,370 27,266 5,715,556 4,959,573 -7-
-26-
-27-
67
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
composition of the loan portfolio by industry is as follows: 7. The Investment fund
1. December 31,
(In thousands of US$)
The balance in the investment fund for $105.9 million as of December 31, 2012 2012 and $120.4 2011 million as of December 31, 2011 represents the participation of the Feeder in the net asset value (NAV) of the Fund. Banking and financial institutions 2,192,023 2,164,163
Industrial 1,108,223 967,929 Theand Fund’s net derived assets products are mainly composed by cash, investments in equity and debt instruments, and Oil petroleum 894,368 645,875 Agricultural 853,377 730,119 derivative financial instruments that are quoted and traded in active markets. For financial instruments for Services 210,925 264,895providers that which quoted prices are not available, the Fund uses independent valuations from pricing Mining 22,122 37,723 use valuation models considering market information. Sovereign 100,370 27,266 Others 334,148 121,603 As of December 31, 2012, the Feeder owns 97.95% of the Fund with a5,715,556 total of 79,335.7 shares issued, Total 4,959,573
divided in 839.0 “Class A” shares, 846.4 “Class A1” shares and 77,650.3 “Class B” shares.
Loans classified by debtor’s credit quality indicators are as follows:
As of December 31, 2011, the Feeder owns 98.03% of the Fund with a total of 93,094.3 shares issued, (In thousands of US$) December 2012 shares, 89,040.3 “Class B” shares and 708.1 divided in 2,948.0 “Class A” shares, 397.9 “Class31,A1” Banking and financial Middle-market “Class RatingE1” shares. Corporations institutions companies Sovereign Total (1)
Private
State-owned
Private
State-owned
Private
2,202,613“Class 538,638 1,775,938 416,085 681,912 100,370 5,715,556 The1-6 Fund has issued A”, “Class A1”, “Class B”, “Class C”, “Class D”, “Class E” and “Class E1” 7 shares8 and administrative shares.- “Class A”, “Class A1” and “Class B” shares- are participating shares in the net to certain administrative fees. 9 gains (losses) -of the Fund,- and only- differ in relation - “Class C” and 10 D” shares do - not participate - entitled to the “Class in the- net gains -(losses) of- the Fund; they are only Total 2,202,613 538,638 1,775,938 416,085 681,912 100,370 5,715,556 performance allocation from “Class A”, “Class A1” and “Class B” shares. The “Class E” and “Class E1” shares are not subject to either administrative fees or performance allocation. The Bank owns the Feeder’s and the Fund’s administrative shares. (In thousands of US$)
8.
December 31, 2011 Banking and financial Middle-market (1) Corporations institutions companies Total RatingA”, “Class “Class A1” and “Class E” shares can be redeemed monthlySovereign by investors with Private State-owned Private State-owned Private $1001-6million of2,057,520 the “Class B” shares can be redeemed starting in 2013. 232,893 1,716,406 447,757 445,731 27,266 4,927,573 7 8 24,000 24,000 Loans 9 8,000 8,000 10 -
The Total
following table set forth232,893 details 1,716,406 of the Bank’s447,757 loan portfolio: 2,089,520 445,731
4,959,573
December 31, 2012 2011
(In thousands of US$) Current ratings as of December 31, 2012 and 2011, respectively.
(1)
Corporations: The remaining loan maturities are summarized as follows: Private State-owned Banking and financial institutions: Private State-owned Middle-market companies: Private Sovereign Total -27-
66
27,266
30 days’ notice.
2,202,613 2,089,520 538,638 232,893 1,775,938 1,716,406 416,085 447,757
Organization The composition of the loan portfolio by industry is as follows:
(In thousands of US$) de Comercio Exterior, S. A. (“Bladex Head Office” and togetherDecember Banco Latinoamericano with its 31, subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, 2012 is a 2011 specialized supranational bank established to finance trade in Latin America and the Caribbean (the Banking and financial institutions 2,192,023 2,164,163 “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Industrial 1,108,223 Governors of Central Banks in the Region, which recommended the creation of a multinational 967,929 Oil and petroleum derived products 894,368 in 645,875 organization to increase the foreign trade financing capacity of the Region. The Bank was organized Agricultural 853,377and 730,119 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 264,895 Services 210,925 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including Mining 22,122an 37,723 exemption from payment of income taxes in Panama. Sovereign 100,370 27,266 Others 334,148 121,603 The Bank operates under a general banking license issued by the National Banking Commission of Total 5,715,556 4,959,573 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Loans byPanama, debtor’sbanks creditare quality indicators follows:Executive Decree No. 52 of April In the classified Republic of regulated by the are SBPasthrough
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law December 31, 2012 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Banking and financialinclude: Middle-market this entity.(1) The main aspects of this law and its regulations the authorization of banking Rating Corporations institutions companies Sovereign Total licenses, minimum capital and liquidity requirements, consolidated Private supervision, procedures for Privateand market State-owned Private to State-owned management of credit risks, measures prevent money laundering, the financing of 1-6 and related 2,202,613 538,638 1,775,938 for banking 416,085intervention 681,912 100,370among 5,715,556 terrorism illicit activities, and procedures and liquidation, 7 others.8 -
(In thousands of US$)
9
-
-
-
-
-
-
-
2,202,613
538,638
1,775,938
416,085
681,912
100,370
5,715,556
Bladex10Head Office’s subsidiaries are the-following: Total
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. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the (In thousands of US$) December 31, 2011 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Banking and financial (the (1)“Feeder”) and Bladex Capital Growth Fund (the “Fund”). Middle-market In February 2012, Bladex Asset institutions companies Corporations Sovereign Total Rating ManagementPrivate Inc., was registered with the Securities and Exchange Commission (“SEC”) as an State-owned Private State-owned Private investment adviser. 2009, Bladex Asset Management Inc. was registered a 1-6 2,057,520On September 232,893 8, 1,716,406 447,757 445,731 27,266 as4,927,573 foreign entity in the- Republic of -Panama, to- establish a branch in Panama, 7 - which is -mainly 8 24,000 administrative - and operating - Inc. in 24,000 engaged in providing services to- Bladex Asset Management 9 8,000 8,000 USA. -
10
Total - The Feeder is2,089,520 an entity in which Bladex1,716,406 Head office owns 98.06% and 95.84% 31, 232,893 447,757 445,731 as of December 27,266 4,959,573
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and31,invests substantially all its assets in the Fund, which is also incorporated Current ratings as of December 2012 and 2011, respectively. under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt The remaining loan maturities are summarized as follows: securities, stock indexes, currencies, and trading derivative instruments. (1)
681,912 445,731 100,370 27,266 5,715,556 4,959,573 -7-
-26-
-27-
67
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1. (In Organization thousands of US$)
December 31, 2012 2011
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Current: subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Up to 1 month 1,155,222 (the specialized supranational bank established to finance trade in Latin America and the Caribbean From 1 month to 3 months 1,475,201 “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of From 3 months to 6 Banks monthsin the Region, which recommended the creation of a multinational 962,377 Governors of Central organization to increase the foreign trade financing capacity of the Region. The Bank was752,822 organized in From 6 months to 1 year 1977, 1978 as a corporation pursuant to the laws of the Republic of Panama, Fromincorporated 1 year to 2 inyears 662,511 and officially the Republic From 2initiated years tooperations 5 years on January 2, 1979. Under a contract signed in 1978 between 692,884 ofMore Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including than 5 years 14,539 an exemption from payment of income taxes in Panama. 5,715,556
395,091 1,110,307 1,095,632 767,526 539,077 1,000,486 18,654 4,926,773
The Bank operates under a general banking license issued by the National Banking Commission - of Delinquent
800
Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Restructured and impaired: balances with impairment 32,000 InCurrent the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Past due balances with impairment 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 32,000 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 4,959,573 Total 5,715,556 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management credit and market risks, measures to country prevent risk: money laundering, the financing of The following of table provides a breakdown of loans by terrorism and related illicit activities, and procedures for banking intervention and liquidation, among (In thousands of US$) December 31, others.
2012
Bladex Head Office’s subsidiaries are the following: Country:
2011
Argentina 222,159 389,591 Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 30,692 Belgium Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 1,773,401 Brazil 1,852,152 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 309,712 Chile State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 376,297 450,037 Colombia (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 734,213 196,857 Costa Rica Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an 109,263 110,688as a 118,275 investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered Dominican Republic foreign entity in the Republic of Panama, to establish a branch in Panama, which173,782 is mainly Ecuador 21,676 engaged in providing administrative and operating services to Bladex Asset Management Inc. in 66,013 El Salvador 21,098 USA. France 59,501 Germany 5,000 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 273,051 Guatemala 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 161,107 70,701 Honduras 45,509 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated 9,772 Jamaica 1,768 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman 495,954 Mexico Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The 416,353 77,336debt objective of the Fund is to achieve capital appreciation by investing in Latin American Netherlands 20,000 securities, stock indexes, currencies, and trading derivative instruments. 10,169 Nicaragua 9,995 277,144 Panama 118,526 27,060 Paraguay 30,286 841,032 Peru 341,784 9,695 Spain 340 119,347 Trinidad and Tobago 76,340 -72,925 United States 108,528 Uruguay 110,000 5,715,556 4,959,573 -
68
-28-
1.
Organization The fixed and floating interest rate distribution of the loan portfolio is as follows: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its (In thousands of US$) December 31, subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a 2012(the 2011 specialized supranational bank established to finance trade in Latin America and the Caribbean
“Region”). The Bank was established pursuant to a May 1975 proposal presented to the3,282,876 Assembly of 2,360,115 Fixed interest rates Governors of Central Banks in the Region, which recommended the creation of a multinational Floating interest rates 2,432,680 2,599,458 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 4,959,573 5,715,556
1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic As of December 31, 2012 andwas 2011, 92%certain and 84%, respectively, of theofloan portfolio at fixed interest of Panama and Bladex, the Bank granted privileges by the Republic Panama, including an rates has remaining maturities of less than 180 days. exemption from payment of income taxes in Panama.
The is a summary of information in non-accruing loans, and Banking interest amounts on non-accruing Thefollowing Bank operates under a general banking license issued by the National Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). loans: (In thousands December In the RepublicofofUS$) Panama, banks are regulated by the SBP through Executive Decree No. 52 of 31, April 2012modified by 2011 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Loans in non-accrual status this entity. The main aspects of this law and its regulations include: the authorization of banking Private - procedures 32,000 for licenses,corporations minimum capital and liquidity requirements, consolidated supervision, Private middle-market companies management of credit and market risks, measures to prevent money laundering, the financing - of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Total loans in non-accrual status 32,000 others.
Interest which would have been recorded if the loans had not been in a non-accrual status are the following: Bladex Head Office’s subsidiaries Interest income collected on non-accruing loans
2,288
2,325 2,375
2010 28,000 1,002 29,002 3,403 3,335
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises An analysis of non-accruing loans with impaired balances as of December 31, 2012 and 2011 is detailed control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the as follows: State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Securities and Exchange Commission (“SEC”) as an (In thousands of US$) Inc., was registered with the December 31, 2012 2012 investment adviser. On September 8, 2009, Bladex Asset Management Inc. wasAverage registered as a Interest Unpaid foreign entity in the Republic Recorded of Panama, toprincipal establish a branch in Panama,principal which is mainly income Related loan engaged in providing administrative and operating services toallowance Bladex Asset Management investment balance balance Inc. in recognized With anUSA. allowance recorded -
Private corporations Total - 98.06% and 95.84% - 31, - The Feeder is an entity in which Bladex- Head office owns as of December
2,288 2,288
2012 and 2011, respectively. The Feeder December was incorporated (In thousands of US$) 31, 2011 on February 21, 2006 under the laws 2011 of the Cayman Islands, and invests substantially allUnpaid its assets in the Fund, which is also incorporated Interest Average under the laws of the Cayman Islands. and the Fund are registeredprincipal with theloan Cayman income Recorded The Feeder principal Related investment balance allowance balance Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The recognized With anobjective allowance recorded of the Fund is to achieve capital appreciation by investing in Latin American debt Private corporations 32,000 instruments. 14,800 26,860 2,375 securities, stock indexes, currencies,32,000 and trading derivative Total 32,000 32,000 14,800 26,860 2,375
As of December 31, 2012 and 2011, there were no impaired loans without related allowance. As of December 31, 2012 and 2011, the Bank -7-did not have any troubled debt restructurings.
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69
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1. (In Organization thousands of US$)
December 31, 2012 2011
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Current: subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Up to 1 month 1,155,222 (the specialized supranational bank established to finance trade in Latin America and the Caribbean From 1 month to 3 months 1,475,201 “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of From 3 months to 6 Banks monthsin the Region, which recommended the creation of a multinational 962,377 Governors of Central organization to increase the foreign trade financing capacity of the Region. The Bank was752,822 organized in From 6 months to 1 year 1977, 1978 as a corporation pursuant to the laws of the Republic of Panama, Fromincorporated 1 year to 2 inyears 662,511 and officially the Republic From 2initiated years tooperations 5 years on January 2, 1979. Under a contract signed in 1978 between 692,884 ofMore Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including than 5 years 14,539 an exemption from payment of income taxes in Panama. 5,715,556
395,091 1,110,307 1,095,632 767,526 539,077 1,000,486 18,654 4,926,773
The Bank operates under a general banking license issued by the National Banking Commission - of Delinquent
800
Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Restructured and impaired: balances with impairment 32,000 InCurrent the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Past due balances with impairment 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 32,000 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 4,959,573 Total 5,715,556 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management credit and market risks, measures to country prevent risk: money laundering, the financing of The following of table provides a breakdown of loans by terrorism and related illicit activities, and procedures for banking intervention and liquidation, among (In thousands of US$) December 31, others.
2012
Bladex Head Office’s subsidiaries are the following: Country:
2011
Argentina 222,159 389,591 Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 30,692 Belgium Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises 1,773,401 Brazil 1,852,152 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 309,712 Chile State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 376,297 450,037 Colombia (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 734,213 196,857 Costa Rica Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an 109,263 110,688as a 118,275 investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered Dominican Republic foreign entity in the Republic of Panama, to establish a branch in Panama, which173,782 is mainly Ecuador 21,676 engaged in providing administrative and operating services to Bladex Asset Management Inc. in 66,013 El Salvador 21,098 USA. France 59,501 Germany 5,000 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 273,051 Guatemala 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 161,107 70,701 Honduras 45,509 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated 9,772 Jamaica 1,768 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman 495,954 Mexico Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The 416,353 77,336debt objective of the Fund is to achieve capital appreciation by investing in Latin American Netherlands 20,000 securities, stock indexes, currencies, and trading derivative instruments. 10,169 Nicaragua 9,995 277,144 Panama 118,526 27,060 Paraguay 30,286 841,032 Peru 341,784 9,695 Spain 340 119,347 Trinidad and Tobago 76,340 -72,925 United States 108,528 Uruguay 110,000 5,715,556 4,959,573 -
68
-28-
1.
Organization The fixed and floating interest rate distribution of the loan portfolio is as follows: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its (In thousands of US$) December 31, subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a 2012(the 2011 specialized supranational bank established to finance trade in Latin America and the Caribbean
“Region”). The Bank was established pursuant to a May 1975 proposal presented to the3,282,876 Assembly of 2,360,115 Fixed interest rates Governors of Central Banks in the Region, which recommended the creation of a multinational Floating interest rates 2,432,680 2,599,458 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 4,959,573 5,715,556
1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic As of December 31, 2012 andwas 2011, 92%certain and 84%, respectively, of theofloan portfolio at fixed interest of Panama and Bladex, the Bank granted privileges by the Republic Panama, including an rates has remaining maturities of less than 180 days. exemption from payment of income taxes in Panama.
The is a summary of information in non-accruing loans, and Banking interest amounts on non-accruing Thefollowing Bank operates under a general banking license issued by the National Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). loans: (In thousands December In the RepublicofofUS$) Panama, banks are regulated by the SBP through Executive Decree No. 52 of 31, April 2012modified by 2011 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by Loans in non-accrual status this entity. The main aspects of this law and its regulations include: the authorization of banking Private - procedures 32,000 for licenses,corporations minimum capital and liquidity requirements, consolidated supervision, Private middle-market companies management of credit and market risks, measures to prevent money laundering, the financing - of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Total loans in non-accrual status 32,000 others.
Interest which would have been recorded if the loans had not been in a non-accrual status are the following: Bladex Head Office’s subsidiaries Interest income collected on non-accruing loans
2,288
2,325 2,375
2010 28,000 1,002 29,002 3,403 3,335
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises An analysis of non-accruing loans with impaired balances as of December 31, 2012 and 2011 is detailed control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the as follows: State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Securities and Exchange Commission (“SEC”) as an (In thousands of US$) Inc., was registered with the December 31, 2012 2012 investment adviser. On September 8, 2009, Bladex Asset Management Inc. wasAverage registered as a Interest Unpaid foreign entity in the Republic Recorded of Panama, toprincipal establish a branch in Panama,principal which is mainly income Related loan engaged in providing administrative and operating services toallowance Bladex Asset Management investment balance balance Inc. in recognized With anUSA. allowance recorded -
Private corporations Total - 98.06% and 95.84% - 31, - The Feeder is an entity in which Bladex- Head office owns as of December
2,288 2,288
2012 and 2011, respectively. The Feeder December was incorporated (In thousands of US$) 31, 2011 on February 21, 2006 under the laws 2011 of the Cayman Islands, and invests substantially allUnpaid its assets in the Fund, which is also incorporated Interest Average under the laws of the Cayman Islands. and the Fund are registeredprincipal with theloan Cayman income Recorded The Feeder principal Related investment balance allowance balance Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The recognized With anobjective allowance recorded of the Fund is to achieve capital appreciation by investing in Latin American debt Private corporations 32,000 instruments. 14,800 26,860 2,375 securities, stock indexes, currencies,32,000 and trading derivative Total 32,000 32,000 14,800 26,860 2,375
As of December 31, 2012 and 2011, there were no impaired loans without related allowance. As of December 31, 2012 and 2011, the Bank -7-did not have any troubled debt restructurings.
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69
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1. 9.
Organization The following table presents an aging analysis of the loan portfolio: Banco Latinoamericano de Comercio Exterior, S. A. (“BladexDecember Head Office” (In thousands of US$) 31, 2012and together with its subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Greater specialized supranational bank91-120 established to finance trade than in Latin 121-150 151-180 180 America Total and the Caribbean (the “Region”). The Bank was established pursuant May 1975days proposalPast presented to the Assembly of Delinquent Current days days to adays Due Corporations - the creation - of a multinational - 2,741,251 Governors of Central Banks in the- Region, -which recommended Banking and financial organization to increase the foreign trade financing capacity of the Region. The Bank was organized in institutions - 2,192,023 1977, incorporated in 1978 as a corporation pursuant to the laws - of the Republic of Panama, and Middle-market companies 681,912 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Sovereign 100,370 ofTotal Panama and Bladex, the Bank was- granted certain privileges by the- Republic of- Panama, including an - 5,715,556 exemption from payment of income taxes in Panama.
(In thousands of US$)
Banco Latinoamericano ComercioforExterior, S. A. into (“Bladex Head Office” and together with its The Bank classifies the de allowance credit losses two components:
Total Loans 2,741,251 2,192,023 681,912 100,370 5,715,556
December 31, 2011
The Bank operates under a general banking license issued Greater by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama 91-120 121-150 151-180 than (the 180 “SBP”). Total days
days
days
days
Past Due Delinquent Current Corporations 2,322,413 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Banking andwhich financial 30, 2008, adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law institutions - 2,164,163 Decree No. 2 of February 22, 2008. - Banks are- also regulated by resolutions and- agreements by Middle-market companies 800 issued 444,931 this entity. The main aspects of this include: the authorization of- banking Sovereign - law and - its regulations 27,266 licenses, minimum capital and liquidity requirements, supervision, procedures for Total - consolidated 800 4,958,773
Total Loans 2,322,413 2,164,163 445,731 27,266 4,959,573
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related and the procedures for credit bankingtransactions intervention in andtheliquidation, among of business As of December 31,illicit 2012activities, and 2011, Bank has normal course others. with 29% of its Class “A” and “B” stockholders (see Note 16). All transactions are made based on arm’s-
length terms and subject to prevailing commercial criteria and market rates and are subject to all of the Bladex Head Office’s subsidiaries are the following: Bank’s Corporate Governance and control procedures. As of December 31, 2012 and 2011, approximately 18% and respectively, of the outstanding loan portfolio with - Bladex Holdings Inc.,19%, is a wholly owned subsidiary, incorporated under the lawsisofplaced the State of the Bank’s Class Delaware, “A” and “B” stockholders and their related parties. As ofBladex December 31, 2012, the Bank was not United States of America (USA), on May 30, 2000. Holdings Inc. exercises directly or indirectly owned controlled by corporation foreign and no Class control over Bladex AssetorManagement Inc.,another incorporated on Mayor 24,any 2006, undergovernment, the laws of the Delaware, USA, which serves asowner investment manager for Bladex Feeder Fundshares of the “A” orState “B”ofshareholder was the registered of more than 3.5% of theOffshore total outstanding “Feeder”) Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset voting(the capital stock and of the Bank.
Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a During the years 2012, 2011 and 2010, the Bank sold loans with a book value of $146.2 million, $9.3 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly million and $20 million, respectively, with a net gain of $1,147 thousand, $64 thousand and $201 engaged in providing administrative and operating services to Bladex Asset Management Inc. in thousand USA.in 2012, 2011 and 2010, respectively. -
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
-7-
70
Organization Allowance for credit losses subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the Allowance for loan losses: a) “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Governors Central Banks in the Region, which of a multinational (In thousands of of US$) Yearrecommended ended Decemberthe 31, creation 2012 organization to increase the foreign trade financingBanking capacityand of the MiddleRegion. The Bank was organized in financial market 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Corporations institutions Sovereign officially initiated operations on January 2, 1979. Under a contractcompanies signed in 1978 between Total the Republic Balance at beginning of the year 48,864 30,524 8,952 207 88,547 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Provision (reversal of provision) for exemption from payment of income taxes in Panama. (1) loan losses (8,886) (1,705) 1,690 558 (8,343) Loan recoveries and other 17 245 262 The Bank operates under Loans written-off against the a general banking license issued by the National Banking Commission of Panama, of the Superintendency of Banks of Panama allowancepredecessor for loan losses (7,490) - (the “SBP”). (7,490) Balance at end of the year 32,488 28,836 10,887 765 72,976
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Components: 30, 2008, which adopts the text of the Law Decree No. 928,836 of February 26, 1998, modified by the Law Generic allowance 32,488 10,887 765 72,976 Specific - and agreements Decree allowance No. 2 of February 22, 2008. Banks are- also regulated -by resolutions issued by Total allowance for loan losses 32,488 28,836 10,887 765 72,976 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 and market risks, measures to prevent money laundering, the financing ofYear ended December 31, terrorism and related illicit activities, and procedures for banking intervention and liquidation, among (In thousands of US$) Year ended December 31, 2011 2010 others. Banking and Middlefinancial market Bladex Head Office’s subsidiariesCorporations are the following: institutions companies Sovereign Total Balance at beginning of the year 54,160 18,790 5,265 400 78,615 Provision (reversal of provision) - Bladex Holdings Inc., for is a wholly owned subsidiary, incorporated under the laws of the State of (1) loan losses (5,295) (193) Inc. 8,841 Delaware, United States of America (USA), on10,017 May 30, 2000.4,312 Bladex Holdings exercises Loan recoveries and other 1,716 - the 2,156 control over Bladex Asset Management -Inc., incorporated on May440 24, 2006, under laws of the Loans written-off against the State of Delaware, USA, which serves -as investment- manager(1,065) for Bladex Offshore Feeder Fund allowance for loan losses (1,065) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Balance at end of the year 48,865 30,523 8,952 207 88,547
Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an
Components: investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Generic allowance 34,065 30,523 8,952 207 73,747 entity in the Republic of14,800 Panama, to establish a branch - in Panama,- which is mainly Specificforeign allowance 14,800 engaged in providing administrative and operating services to Bladex Asset Management Total allowance for loan losses 48,865 30,523 8,952 207 88,547 Inc. in
USA.
(1)
-
73,789 9,091 996 (5,261) 78,615 67,115 11,500 78,615
It includes releases of specific reserves for $7,931 thousand during 2012, $1,600 thousand during The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2011, and $1,031 thousand during 2010. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated
Provision of the provision) of generic losses are mostly related to changes in under(reversal the laws of Cayman Islands. Theallowance Feeder andfor thecredit Fund are registered with the Cayman volume and composition of the credit portfolio. The decrease in the generic allowance for loan losses in Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The 2012 objective was primarily exposure in countries, customers and type of transactions with of the due Fundtoisantoincreased achieve capital appreciation by investing in Latin American debt stock indexes, currencies, tradingwith derivative bettersecurities, ratings and a decreased exposureand in those lowerinstruments. ratings.
-7-
-30-
-31-
71
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1. 9.
Organization The following table presents an aging analysis of the loan portfolio: Banco Latinoamericano de Comercio Exterior, S. A. (“BladexDecember Head Office” (In thousands of US$) 31, 2012and together with its subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Greater specialized supranational bank91-120 established to finance trade than in Latin 121-150 151-180 180 America Total and the Caribbean (the “Region”). The Bank was established pursuant May 1975days proposalPast presented to the Assembly of Delinquent Current days days to adays Due Corporations - the creation - of a multinational - 2,741,251 Governors of Central Banks in the- Region, -which recommended Banking and financial organization to increase the foreign trade financing capacity of the Region. The Bank was organized in institutions - 2,192,023 1977, incorporated in 1978 as a corporation pursuant to the laws - of the Republic of Panama, and Middle-market companies 681,912 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Sovereign 100,370 ofTotal Panama and Bladex, the Bank was- granted certain privileges by the- Republic of- Panama, including an - 5,715,556 exemption from payment of income taxes in Panama.
(In thousands of US$)
Banco Latinoamericano ComercioforExterior, S. A. into (“Bladex Head Office” and together with its The Bank classifies the de allowance credit losses two components:
Total Loans 2,741,251 2,192,023 681,912 100,370 5,715,556
December 31, 2011
The Bank operates under a general banking license issued Greater by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama 91-120 121-150 151-180 than (the 180 “SBP”). Total days
days
days
days
Past Due Delinquent Current Corporations 2,322,413 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Banking andwhich financial 30, 2008, adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law institutions - 2,164,163 Decree No. 2 of February 22, 2008. - Banks are- also regulated by resolutions and- agreements by Middle-market companies 800 issued 444,931 this entity. The main aspects of this include: the authorization of- banking Sovereign - law and - its regulations 27,266 licenses, minimum capital and liquidity requirements, supervision, procedures for Total - consolidated 800 4,958,773
Total Loans 2,322,413 2,164,163 445,731 27,266 4,959,573
management of credit and market risks, measures to prevent money laundering, the financing of terrorism and related and the procedures for credit bankingtransactions intervention in andtheliquidation, among of business As of December 31,illicit 2012activities, and 2011, Bank has normal course others. with 29% of its Class “A” and “B” stockholders (see Note 16). All transactions are made based on arm’s-
length terms and subject to prevailing commercial criteria and market rates and are subject to all of the Bladex Head Office’s subsidiaries are the following: Bank’s Corporate Governance and control procedures. As of December 31, 2012 and 2011, approximately 18% and respectively, of the outstanding loan portfolio with - Bladex Holdings Inc.,19%, is a wholly owned subsidiary, incorporated under the lawsisofplaced the State of the Bank’s Class Delaware, “A” and “B” stockholders and their related parties. As ofBladex December 31, 2012, the Bank was not United States of America (USA), on May 30, 2000. Holdings Inc. exercises directly or indirectly owned controlled by corporation foreign and no Class control over Bladex AssetorManagement Inc.,another incorporated on Mayor 24,any 2006, undergovernment, the laws of the Delaware, USA, which serves asowner investment manager for Bladex Feeder Fundshares of the “A” orState “B”ofshareholder was the registered of more than 3.5% of theOffshore total outstanding “Feeder”) Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset voting(the capital stock and of the Bank.
Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a During the years 2012, 2011 and 2010, the Bank sold loans with a book value of $146.2 million, $9.3 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly million and $20 million, respectively, with a net gain of $1,147 thousand, $64 thousand and $201 engaged in providing administrative and operating services to Bladex Asset Management Inc. in thousand USA.in 2012, 2011 and 2010, respectively. -
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
-7-
70
Organization Allowance for credit losses subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the Allowance for loan losses: a) “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Governors Central Banks in the Region, which of a multinational (In thousands of of US$) Yearrecommended ended Decemberthe 31, creation 2012 organization to increase the foreign trade financingBanking capacityand of the MiddleRegion. The Bank was organized in financial market 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Corporations institutions Sovereign officially initiated operations on January 2, 1979. Under a contractcompanies signed in 1978 between Total the Republic Balance at beginning of the year 48,864 30,524 8,952 207 88,547 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Provision (reversal of provision) for exemption from payment of income taxes in Panama. (1) loan losses (8,886) (1,705) 1,690 558 (8,343) Loan recoveries and other 17 245 262 The Bank operates under Loans written-off against the a general banking license issued by the National Banking Commission of Panama, of the Superintendency of Banks of Panama allowancepredecessor for loan losses (7,490) - (the “SBP”). (7,490) Balance at end of the year 32,488 28,836 10,887 765 72,976
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Components: 30, 2008, which adopts the text of the Law Decree No. 928,836 of February 26, 1998, modified by the Law Generic allowance 32,488 10,887 765 72,976 Specific - and agreements Decree allowance No. 2 of February 22, 2008. Banks are- also regulated -by resolutions issued by Total allowance for loan losses 32,488 28,836 10,887 765 72,976 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 and market risks, measures to prevent money laundering, the financing ofYear ended December 31, terrorism and related illicit activities, and procedures for banking intervention and liquidation, among (In thousands of US$) Year ended December 31, 2011 2010 others. Banking and Middlefinancial market Bladex Head Office’s subsidiariesCorporations are the following: institutions companies Sovereign Total Balance at beginning of the year 54,160 18,790 5,265 400 78,615 Provision (reversal of provision) - Bladex Holdings Inc., for is a wholly owned subsidiary, incorporated under the laws of the State of (1) loan losses (5,295) (193) Inc. 8,841 Delaware, United States of America (USA), on10,017 May 30, 2000.4,312 Bladex Holdings exercises Loan recoveries and other 1,716 - the 2,156 control over Bladex Asset Management -Inc., incorporated on May440 24, 2006, under laws of the Loans written-off against the State of Delaware, USA, which serves -as investment- manager(1,065) for Bladex Offshore Feeder Fund allowance for loan losses (1,065) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Balance at end of the year 48,865 30,523 8,952 207 88,547
Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an
Components: investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Generic allowance 34,065 30,523 8,952 207 73,747 entity in the Republic of14,800 Panama, to establish a branch - in Panama,- which is mainly Specificforeign allowance 14,800 engaged in providing administrative and operating services to Bladex Asset Management Total allowance for loan losses 48,865 30,523 8,952 207 88,547 Inc. in
USA.
(1)
-
73,789 9,091 996 (5,261) 78,615 67,115 11,500 78,615
It includes releases of specific reserves for $7,931 thousand during 2012, $1,600 thousand during The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2011, and $1,031 thousand during 2010. 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated
Provision of the provision) of generic losses are mostly related to changes in under(reversal the laws of Cayman Islands. Theallowance Feeder andfor thecredit Fund are registered with the Cayman volume and composition of the credit portfolio. The decrease in the generic allowance for loan losses in Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The 2012 objective was primarily exposure in countries, customers and type of transactions with of the due Fundtoisantoincreased achieve capital appreciation by investing in Latin American debt stock indexes, currencies, tradingwith derivative bettersecurities, ratings and a decreased exposureand in those lowerinstruments. ratings.
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BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1. Organization 10. Premises and equipment
Organization Following is a summary of loan balances and reserves for loan losses: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and31,together with its (In thousands of US$) December 2012 subsidiaries “Bladex” or the “Bank”), headquartered in PanamaBanking City, and Republic of Panama, is a Middlespecialized supranational bank established to finance trade in Latinfinancial America andmarket the Caribbean (the “Region”). The Bank was established pursuant to aCorporations May 1975 proposal presented to the Assembly of institutions companies Sovereign Allowance losses Banks in the Region, which recommended the creation of a multinational GovernorsforofloanCentral Generic allowance 28,836The Bank 10,887 organization to increase the foreign trade financing capacity32,488 of the Region. was organized 765 in Specific allowance 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of -Panama, and Total of allowance for loan losses 32,488 28,836 10,887 765 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Loans exemption from payment Loans with generic allowanceof income taxes in Panama. 2,741,251 2,192,023 681,912 100,370
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Total 72,976 72,976
5,715,556 Loans with specific allowance Total 2,741,251 681,912 100,370 The loans Bank operates under a general banking license issued by the 2,192,023 National Banking Commission of 5,715,556
Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
(In thousands of US$)
December 31, 2011 Banking and Decree MiddleIn the Republic of Panama, banks are regulated by the SBP through Executive No. 52 of April financial market by the Law 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified Corporations institutions companies Sovereign Decree No. of losses February 22, 2008. Banks are also regulated by resolutions and agreements issued by Allowance for2loan this entity. The main aspects of this law and its regulations the authorization Generic allowance 34,065 include:30,523 8,952 of banking 207 licenses, minimum capital and liquidity requirements,14,800 consolidated supervision, procedures forSpecific allowance Total of allowance loan losses 48,865 money30,523 8,952 management of for credit and market risks, measures to prevent laundering, the financing 207 of Loans terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Loans with generic allowance 2,290,413 2,164,163 445,731 27,266 others. Loans with specific allowance 32,000 Total loans 2,322,413 2,164,163 445,731 27,266
Bladex Head Office’s subsidiaries are the following:
Total 73,747 14,800 88,547 4,927,573 32,000 4,959,573
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (In thousands of US$) Year December 31, control over Bladex Asset Management Inc., incorporated on May 24, 2006, underended the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 2012 2011 2010 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Balance at beginning of the year 8,887 13,335 27,261 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Reversal of provision for losses on off-balance sheet credit risk (4,046) (4,448) (13,926) investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Balance at end of the 4,841which is 8,887 13,335 foreign entity in year the Republic of Panama, to establish a branch in Panama, mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in The reserve USA. for losses on off-balance sheet credit risk reflects the Bank’s Management estimate of
probable losses on off-balance sheet credit risk items such as: confirmed letters of credit, stand-by letters The guarantees Feeder is an and entitycredit in which Bladex Head(see office owns 98.06% and 95.84% as of December 31, for losses of -credit, commitments Note 19). The 2012’s decrease in the reserve 2012 and 2011, The Feeder wasdue incorporated on February 21, 2006 under the and laws risk of profile of on off-balance sheetrespectively. credit risk was primarily to changes in volume, composition, the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated the portfolio.
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“Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
(In thousands of US$)Banks in the Region, which recommended the creation of a multinational December 31, Governors of Central 2011 organization to increase the foreign trade financing capacity of the Region. The Bank 2012 was organized in 1977, Land incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, - and 462 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between7,194 the Republic Leasehold improvements 1,646 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 3,750 Building exemption fromequipment payment of income taxes in Panama. Furniture and 17,302 18,696 24,496 24,554 The operates under a generaland banking license issued by the National Banking Commission of Less:Bank accumulated depreciation amortization 11,688 17,881 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 12,808 6,673 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of b) - Reserve for losses on off-balance sheet credit risk:
under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
A breakdown of cost and accumulated depreciation and amortization for premises and equipment as of subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a December 2012 and bank 2011 established is as follows: specialized 31, supranational to finance trade in Latin America and the Caribbean (the
In Banktherecorded a gain sale of and equipment of $5.6 million due to the sale 30,June 2008,2012, whichthe adopts text of the Lawon Decree No.premises 9 of February 26, 1998, modified by the Law of its former head office’s premises. The Bank’s new head office is located in leased premises Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by at Business Park Tower The V, inmain Panama City. this entity. aspects of this law and its regulations include: the authorization of banking
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management credit andliabilities market risks, measures to prevent money laundering, the financing of 11. Other assetsof and other terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others. Following is a summary of other assets and other liabilities as of December 31, 2012 and 2011: Bladex Head Office’s subsidiaries are the following: Other assets
December 31,
(In thousands of US$)
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 2012 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Prepaid commissions 10,193 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Accounts State receivable of Delaware, USA, which serves as investment manager for Bladex Offshore 1,749 Feeder Fund Equity investment fund (atGrowth cost) Fund (the “Fund”). In February 2012, Bladex 961 Asset (the “Feeder”) in anda private Bladex Capital 1,677 as an OtherManagement Inc., was registered with the Securities and Exchange Commission (“SEC”) 14,580 as a investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly in providing administrative and operating services to Bladex Asset Management Inc. in Otherengaged liabilities USA. (In thousands of US$) December 31, -
2012 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Accruals and provisions 20,345 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 6,045 Accounts payable the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Otherunder the laws of the Cayman Islands. The Feeder and the Fund are registered with1,958 the Cayman 28,348 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The
2011 10,357 1,260 1,415 5,380 18,412
2011 14,773 5,417 2,378 22,568
objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1.
1. Organization 10. Premises and equipment
Organization Following is a summary of loan balances and reserves for loan losses: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and31,together with its (In thousands of US$) December 2012 subsidiaries “Bladex” or the “Bank”), headquartered in PanamaBanking City, and Republic of Panama, is a Middlespecialized supranational bank established to finance trade in Latinfinancial America andmarket the Caribbean (the “Region”). The Bank was established pursuant to aCorporations May 1975 proposal presented to the Assembly of institutions companies Sovereign Allowance losses Banks in the Region, which recommended the creation of a multinational GovernorsforofloanCentral Generic allowance 28,836The Bank 10,887 organization to increase the foreign trade financing capacity32,488 of the Region. was organized 765 in Specific allowance 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of -Panama, and Total of allowance for loan losses 32,488 28,836 10,887 765 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Loans exemption from payment Loans with generic allowanceof income taxes in Panama. 2,741,251 2,192,023 681,912 100,370
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Total 72,976 72,976
5,715,556 Loans with specific allowance Total 2,741,251 681,912 100,370 The loans Bank operates under a general banking license issued by the 2,192,023 National Banking Commission of 5,715,556
Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
(In thousands of US$)
December 31, 2011 Banking and Decree MiddleIn the Republic of Panama, banks are regulated by the SBP through Executive No. 52 of April financial market by the Law 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified Corporations institutions companies Sovereign Decree No. of losses February 22, 2008. Banks are also regulated by resolutions and agreements issued by Allowance for2loan this entity. The main aspects of this law and its regulations the authorization Generic allowance 34,065 include:30,523 8,952 of banking 207 licenses, minimum capital and liquidity requirements,14,800 consolidated supervision, procedures forSpecific allowance Total of allowance loan losses 48,865 money30,523 8,952 management of for credit and market risks, measures to prevent laundering, the financing 207 of Loans terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Loans with generic allowance 2,290,413 2,164,163 445,731 27,266 others. Loans with specific allowance 32,000 Total loans 2,322,413 2,164,163 445,731 27,266
Bladex Head Office’s subsidiaries are the following:
Total 73,747 14,800 88,547 4,927,573 32,000 4,959,573
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (In thousands of US$) Year December 31, control over Bladex Asset Management Inc., incorporated on May 24, 2006, underended the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund 2012 2011 2010 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Balance at beginning of the year 8,887 13,335 27,261 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Reversal of provision for losses on off-balance sheet credit risk (4,046) (4,448) (13,926) investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Balance at end of the 4,841which is 8,887 13,335 foreign entity in year the Republic of Panama, to establish a branch in Panama, mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in The reserve USA. for losses on off-balance sheet credit risk reflects the Bank’s Management estimate of
probable losses on off-balance sheet credit risk items such as: confirmed letters of credit, stand-by letters The guarantees Feeder is an and entitycredit in which Bladex Head(see office owns 98.06% and 95.84% as of December 31, for losses of -credit, commitments Note 19). The 2012’s decrease in the reserve 2012 and 2011, The Feeder wasdue incorporated on February 21, 2006 under the and laws risk of profile of on off-balance sheetrespectively. credit risk was primarily to changes in volume, composition, the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated the portfolio.
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“Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
(In thousands of US$)Banks in the Region, which recommended the creation of a multinational December 31, Governors of Central 2011 organization to increase the foreign trade financing capacity of the Region. The Bank 2012 was organized in 1977, Land incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, - and 462 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between7,194 the Republic Leasehold improvements 1,646 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 3,750 Building exemption fromequipment payment of income taxes in Panama. Furniture and 17,302 18,696 24,496 24,554 The operates under a generaland banking license issued by the National Banking Commission of Less:Bank accumulated depreciation amortization 11,688 17,881 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 12,808 6,673 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of b) - Reserve for losses on off-balance sheet credit risk:
under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
A breakdown of cost and accumulated depreciation and amortization for premises and equipment as of subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a December 2012 and bank 2011 established is as follows: specialized 31, supranational to finance trade in Latin America and the Caribbean (the
In Banktherecorded a gain sale of and equipment of $5.6 million due to the sale 30,June 2008,2012, whichthe adopts text of the Lawon Decree No.premises 9 of February 26, 1998, modified by the Law of its former head office’s premises. The Bank’s new head office is located in leased premises Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by at Business Park Tower The V, inmain Panama City. this entity. aspects of this law and its regulations include: the authorization of banking
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management credit andliabilities market risks, measures to prevent money laundering, the financing of 11. Other assetsof and other terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others. Following is a summary of other assets and other liabilities as of December 31, 2012 and 2011: Bladex Head Office’s subsidiaries are the following: Other assets
December 31,
(In thousands of US$)
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of 2012 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Prepaid commissions 10,193 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Accounts State receivable of Delaware, USA, which serves as investment manager for Bladex Offshore 1,749 Feeder Fund Equity investment fund (atGrowth cost) Fund (the “Fund”). In February 2012, Bladex 961 Asset (the “Feeder”) in anda private Bladex Capital 1,677 as an OtherManagement Inc., was registered with the Securities and Exchange Commission (“SEC”) 14,580 as a investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly in providing administrative and operating services to Bladex Asset Management Inc. in Otherengaged liabilities USA. (In thousands of US$) December 31, -
2012 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Accruals and provisions 20,345 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 6,045 Accounts payable the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Otherunder the laws of the Cayman Islands. The Feeder and the Fund are registered with1,958 the Cayman 28,348 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The
2011 10,357 1,260 1,415 5,380 18,412
2011 14,773 5,417 2,378 22,568
objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1. Organization 12. Deposits
1. Organizationborrowings 14. Short-term
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The remaining maturity profile of the Bank’s deposits is as follows:
subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the (In thousands US$)was established pursuant to a May 1975 proposal presented to the Assembly December “Region”). TheofBank of 31, 2012 2011 Governors of Central Banks in the Region, which recommended the creation of a multinational Demand 131,875in 67,586 organization to increase the foreign trade financing capacity of the Region. The Bank was organized Up to 1incorporated month 1,194,102 1977, in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 1,474,088 officially initiated Republic From 1 month to operations 3 months on January 2, 1979. Under a contract signed in 1978 between the540,619 402,472 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an From 3 months to 6 months 281,120 196,016 exemption from payment From 6 months to 1 yearof income taxes in Panama. 152,000 151,800
From 1 year to 2 years 7,000 The Bank operates under a general banking license issued by the National Banking Commission of From 2 years to 5 years 10,544 11,544 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 2,317,260 2,303,506 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
The following presents deposits: 30, 2008, whichtable adopts the textadditional of the Lawinformation Decree No. about 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by
thisthousands entity. The banking 31, (In of main US$) aspects of this law and its regulations include: the authorization ofDecember licenses, minimum capital and liquidity requirements, consolidated supervision, procedures 2012 for 2011 managementamounts of creditofand risks, measures or to more prevent money laundering, the 2,185,277 financing of 2,233,044 Aggregate timemarket deposits of $100,000 terrorism and related of illicit activities, and procedures for banking intervention and liquidation, among Aggregate amounts deposits in offices outside Panama 229,170 220,340 others. Interest expense paid to deposits in offices outside Panama 1,332 983 Bladex Head Office’s subsidiaries are the following: Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladextransactions Asset Management incorporated on May amounted 24, 2006, under the laws of the and $377.0 The Bank’s financing under Inc., repurchase agreements to $158.4 million State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund million as of December 31, 2012 and 2011, respectively. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an During the years ended December 31, 2012, 2011 and 2010, interest expense related to financing investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a transactions underin repurchase totaled $1.7 million, $2.1 million, $1.5 million, foreign entity the Republicagreements of Panama, to establish a branch in Panama, which isand mainly respectively. These expenses are included in the interest expense – borrowings line in the engaged in providing administrative and operating services to Bladex Asset Management Inc. inconsolidated statements USA. of income. The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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this entity. The main aspects of this law and its regulations include: the authorization of banking Fixed interest rate on borrowings in Euros 0.70%procedures for 2.98% licenses, minimum capital and liquidity requirements, consolidated supervision, management of credit and market risks, measures to prevent money laundering, the financing of Fixed interest rate on borrowings in Renminbis 6.65% terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Floating interest rate on borrowings in Mexican pesos 5.14% to 5.25% 5.70% others.
Weighted average interest rate at end of the year
Bladex Head Office’s subsidiaries are the following:
13. Securities underInc., repurchase agreements - Bladexsold Holdings is a wholly owned subsidiary, incorporated under the laws of the State of
-
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The breakdown of short-term borrowings due to financial institutions, together with contractual interest subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a rates, is as follows: specialized supranational bank established to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly December 31, of Governors of Central of a multinational (In thousands of US$)Banks in the Region, which recommended the creation 2011 2012 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Advances from financial institutions: 1977, incorporated 1978 as a corporation pursuant to the laws of the Republic of Panama, and At fixed interest in rates 1,181,133 1,005,357 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 318,109 At floating interest rates 267,890 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Total short-term borrowings 1,449,023 1,323,466 exemption from payment of income taxes in Panama. Average outstanding balance during the year 967,629 1,100,059 The Bank operates under a general banking license issued by the National Banking Commission of Maximum balance at any month-end 1,449,023 1,323,466 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Range of fixed interest rates on borrowings in U.S. dollars 0.75% toDecree 1.92%No. 52 0.84% In the Republic of Panama, banks are regulated by the SBP through Executive of Aprilto 2.64% 30, 2008,ofwhich adoptsinterest the textrates of theon Law Decree No.in 9 of February 26, 1998, modified by the Law Range floating borrowings U.S. Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions agreements issued 1.11%byto 2.01% dollars 1.06%and to 1.99%
Weighted average interest rate during the year
1.48%
1.79%
1.84%
1.22%
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. exercises The balances of short-term borrowings by currency, is as follows: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder December 31, Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset (In thousands of US$) 2011 2012 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Currency investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a U.S. foreign dollar entity in the Republic of Panama, to establish a branch in Panama, 1,365,500 which is mainly1,181,200 Euroengaged in providing administrative and operating services to Bladex Asset 39,633 Management Inc. in 38,850 USA.peso Mexican 43,890 93,109 -
10,307 Renminbis - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,1,323,466 Total 1,449,023 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1. Organization 12. Deposits
1. Organizationborrowings 14. Short-term
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The remaining maturity profile of the Bank’s deposits is as follows:
subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the (In thousands US$)was established pursuant to a May 1975 proposal presented to the Assembly December “Region”). TheofBank of 31, 2012 2011 Governors of Central Banks in the Region, which recommended the creation of a multinational Demand 131,875in 67,586 organization to increase the foreign trade financing capacity of the Region. The Bank was organized Up to 1incorporated month 1,194,102 1977, in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 1,474,088 officially initiated Republic From 1 month to operations 3 months on January 2, 1979. Under a contract signed in 1978 between the540,619 402,472 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an From 3 months to 6 months 281,120 196,016 exemption from payment From 6 months to 1 yearof income taxes in Panama. 152,000 151,800
From 1 year to 2 years 7,000 The Bank operates under a general banking license issued by the National Banking Commission of From 2 years to 5 years 10,544 11,544 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). 2,317,260 2,303,506 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
The following presents deposits: 30, 2008, whichtable adopts the textadditional of the Lawinformation Decree No. about 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by
thisthousands entity. The banking 31, (In of main US$) aspects of this law and its regulations include: the authorization ofDecember licenses, minimum capital and liquidity requirements, consolidated supervision, procedures 2012 for 2011 managementamounts of creditofand risks, measures or to more prevent money laundering, the 2,185,277 financing of 2,233,044 Aggregate timemarket deposits of $100,000 terrorism and related of illicit activities, and procedures for banking intervention and liquidation, among Aggregate amounts deposits in offices outside Panama 229,170 220,340 others. Interest expense paid to deposits in offices outside Panama 1,332 983 Bladex Head Office’s subsidiaries are the following: Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladextransactions Asset Management incorporated on May amounted 24, 2006, under the laws of the and $377.0 The Bank’s financing under Inc., repurchase agreements to $158.4 million State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund million as of December 31, 2012 and 2011, respectively. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an During the years ended December 31, 2012, 2011 and 2010, interest expense related to financing investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a transactions underin repurchase totaled $1.7 million, $2.1 million, $1.5 million, foreign entity the Republicagreements of Panama, to establish a branch in Panama, which isand mainly respectively. These expenses are included in the interest expense – borrowings line in the engaged in providing administrative and operating services to Bladex Asset Management Inc. inconsolidated statements USA. of income. The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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74
this entity. The main aspects of this law and its regulations include: the authorization of banking Fixed interest rate on borrowings in Euros 0.70%procedures for 2.98% licenses, minimum capital and liquidity requirements, consolidated supervision, management of credit and market risks, measures to prevent money laundering, the financing of Fixed interest rate on borrowings in Renminbis 6.65% terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Floating interest rate on borrowings in Mexican pesos 5.14% to 5.25% 5.70% others.
Weighted average interest rate at end of the year
Bladex Head Office’s subsidiaries are the following:
13. Securities underInc., repurchase agreements - Bladexsold Holdings is a wholly owned subsidiary, incorporated under the laws of the State of
-
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The breakdown of short-term borrowings due to financial institutions, together with contractual interest subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a rates, is as follows: specialized supranational bank established to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly December 31, of Governors of Central of a multinational (In thousands of US$)Banks in the Region, which recommended the creation 2011 2012 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Advances from financial institutions: 1977, incorporated 1978 as a corporation pursuant to the laws of the Republic of Panama, and At fixed interest in rates 1,181,133 1,005,357 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic 318,109 At floating interest rates 267,890 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Total short-term borrowings 1,449,023 1,323,466 exemption from payment of income taxes in Panama. Average outstanding balance during the year 967,629 1,100,059 The Bank operates under a general banking license issued by the National Banking Commission of Maximum balance at any month-end 1,449,023 1,323,466 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Range of fixed interest rates on borrowings in U.S. dollars 0.75% toDecree 1.92%No. 52 0.84% In the Republic of Panama, banks are regulated by the SBP through Executive of Aprilto 2.64% 30, 2008,ofwhich adoptsinterest the textrates of theon Law Decree No.in 9 of February 26, 1998, modified by the Law Range floating borrowings U.S. Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions agreements issued 1.11%byto 2.01% dollars 1.06%and to 1.99%
Weighted average interest rate during the year
1.48%
1.79%
1.84%
1.22%
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. exercises The balances of short-term borrowings by currency, is as follows: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder December 31, Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset (In thousands of US$) 2011 2012 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Currency investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a U.S. foreign dollar entity in the Republic of Panama, to establish a branch in Panama, 1,365,500 which is mainly1,181,200 Euroengaged in providing administrative and operating services to Bladex Asset 39,633 Management Inc. in 38,850 USA.peso Mexican 43,890 93,109 -
10,307 Renminbis - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31,1,323,466 Total 1,449,023 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
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BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1. Organizationand long-term debt 15. Borrowings
1.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Borrowings consist of long-term and syndicated loans obtained from international banks. Debt subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a instruments consist of Euro-Notes and to issuances in Latin America. The of borrowings and specialized supranational bank established finance trade in Latin America andbreakdown the Caribbean (the ), together with contractual interest rates , is as long-term debt (original maturity of more than one year “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of follows: 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 December 31, 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and (In thousands of US$) 2011 officially initiated operations on January 2, 1979. Under a contract signed in 2012 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Borrowings: exemption from payment of income taxes from in Panama. At fixed interest rates with due dates April 2013 to
September 2013 15,696 1,435 The Bank operates under a general banking license issued by the National Banking Commission of At floating interest rates with due dates from January 2013 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). to September 2014 1,426,237 1,296,785 Total 1,441,933 1,298,220 In theborrowings Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Debt: Decree 2 of February 2008. also regulated At fixedNo. interest rates with22, due datesBanks from are November 2014 by resolutions and agreements issued by thisto entity. The main aspects of this law and its regulations include: the authorization of banking 45,615 April 2017 453,373 licenses, capital requirements, procedures for At floatingminimum interest rates withand due liquidity dates in March 2015 consolidated supervision, 153,947 management of credit and market risks, measures to prevent money laundering, the financing of Total debt 45,615 607,320 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among
Total others.borrowings and long-term debt outstanding
1,905,540
1,487,548
2,152,584
1,548,404
1,893,580
Average outstanding balance during the year
Bladex Head Office’s subsidiaries are the following:
Maximum outstanding balance at any month-end
1,391,440
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Fixed Delaware, interest rates on debt in U.S. dollars(USA), on May 30, 2000. Bladex Holdings 3.75% Inc. exercises 1.50% United States of America control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Range of floating interest rates on borrowings in U.S. dollars 0.62% to 2.30% 0.68% to 2.40% State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund “Feeder”) andrates Bladex Capital Growth Fund (the “Fund”). 7.60% In February 2012, Bladex Assetto 9.90% Range(the of fixed interest on borrowings in Mexican pesos 7.50% to 9.90% Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Rangeinvestment of floating interestOnrates on borrowings and debt in Management Inc. was registered as a adviser. September 8, 2009, Bladex Asset Mexican 5.50% to 6.34%which is 5.66% foreignpesos entity in the Republic of Panama, to establish a branch in Panama, mainlyto 6.30% engaged in providing administrative and operating services to Bladex Asset Management Inc. in Fixed interest rate on debt in Peruvian nuevos soles 6.50% 6.50% USA. -
Weighted average interest rate at the end of the year
2.92%
2.16%
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Weighted interest rate during yearwas incorporated on February 21, 2.74% 2012average and 2011, respectively. The the Feeder 2006 under the laws of 1.94% the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority under by the currency, Mutual Funds of the Cayman Islands. The The balances of long-term debt (“CIMA”), and borrowings is asLaw follows: objective of the Fund is to achieve capital appreciation by investing in Latin American debt December 31, securities, stock indexes, currencies, and trading derivative instruments. -
(In thousands of US$) Currency U.S. dollar Mexican peso Peruvian nuevo sol Total
76
2012
1,518,592 338,760 48,188 1,905,540
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2011
1,269,575 172,358 45,615 1,487,548
Organization The Bank's funding activities include: (i) Euro Medium Term Note Program (“EMTN”), which may be used to issue notes for up to $2.3 billion, with maturities from 7 days up to a maximum of 30 years, at Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its fixed or floating interest rates, or at discount, and in various currencies. The notes are generally issued in subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a bearer or registered formbank through one ortomore authorized institutions; Short-and specialized supranational established finance trade in financial Latin America and the (ii) Caribbean (the Long-Term Notes “Certificados Bursatiles” Program (the “Mexico Program”) in the Mexican local market, “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of registered with the Mexican National Registry of Securities maintained the by the National and Securities Governors of Central Banks in the Region, which recommended creation of a Banking multinational Commission Mexico its initials inofSpanish), forThe an Bank authorized aggregate organization toin increase the (“CNBV”, foreign trade for financing capacity the Region. was organized in principal 1977, incorporated in 1978 as a pesos corporation pursuant tofrom the laws of the Panama, and in Peru to amount of 10 billion Mexican with maturities one day to Republic 30 years;of(iii) a Program officially initiated bonds operations on January 2, 1979. a contract signed soles in 1978 between the Republic issue corporate under a private offer Under in Peruvian nuevos (“PEN”), offered exclusively to of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including institutional investors domiciled in the Republic of Peru, for an maximum aggregate anlimit of the exemption from payment of income taxes in Panama. equivalent of $300 million, with different maturities and interest rate structures. The Bank operates under a general banking license issued by the National Banking Commission of
Some borrowing agreements include various events of default covenants related to minimum capital Panama, predecessor of the Superintendency of Banks of Panama (the and “SBP”). adequacy ratios, incurrence of additional liens, and asset sales, as well as other customary covenants, representations warranties. of December 2012,Executive the Bank wasNo. in 52 compliance with all In the Republic ofand Panama, banks are As regulated by the SBP31, through Decree of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law covenants. Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by
this entity. The main maturities aspects of this law and its regulations include: outstanding the authorization banking 31, 2012, The future remaining of long-term debt and borrowings as ofofDecember licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for are as follows: management of credit and market risks, measures to prevent money laundering, the financing of (In thousands of US$) terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Due in: Outstanding others. 2013 412,151 Bladex Head Office’s subsidiaries are the following: 2014 934,257 2015 153,947 - Bladex Holdings Inc., is 2016 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. exercises 2017 405,185 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 1,905,540 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset
16. Common stock Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Management
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a
foreign common entity in stock the Republic of into Panama, establish a branch in Panama, which is mainly The Bank’s is divided four tocategories:
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. 1) “Class A”; shares may only be issued to Latin American Central Banks or banks in which the state or
other government agency is the majority shareholder. The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2) “Class may only beThe issued to was banks or financial institutions. 2012 B”; and shares 2011, respectively. Feeder incorporated on February 21, 2006 under the laws of 3) “Class E”; shares may be issued to any person whether a natural person legalincorporated entity. the Cayman Islands, and invests substantially all its assets in the Fund, whichorisa also 4) “Class F”; can only be issued to state entities and agencies of non-Latin American under the laws of the Cayman Islands. The Feeder and the Fund are registered with thecountries, Cayman including, among others, central banks and majority state-owned banks in those countries, Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands.and The multilateral objective of the Fund is tointernational achieve capital appreciation by investing in Latin American debt financial institutions either or regional institutions. -
securities, stock indexes, currencies, and trading derivative instruments.
The holders of “Class B” shares have the right to convert or exchange their “Class B” shares, at any time, and without restriction, for “Class E” shares, at a rate of one to one.
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77
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
BancoLatinoamericano Latinoamericano Comercio Exterior, Banco de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notestotoconsolidated consolidated financial statements Notes financial statements
Notestotoconsolidated consolidated financial statements Notes financial statements
1. Organizationand long-term debt 15. Borrowings
1.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
Borrowings consist of long-term and syndicated loans obtained from international banks. Debt subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a instruments consist of Euro-Notes and to issuances in Latin America. The of borrowings and specialized supranational bank established finance trade in Latin America andbreakdown the Caribbean (the ), together with contractual interest rates , is as long-term debt (original maturity of more than one year “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of follows: 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 December 31, 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and (In thousands of US$) 2011 officially initiated operations on January 2, 1979. Under a contract signed in 2012 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Borrowings: exemption from payment of income taxes from in Panama. At fixed interest rates with due dates April 2013 to
September 2013 15,696 1,435 The Bank operates under a general banking license issued by the National Banking Commission of At floating interest rates with due dates from January 2013 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). to September 2014 1,426,237 1,296,785 Total 1,441,933 1,298,220 In theborrowings Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Debt: Decree 2 of February 2008. also regulated At fixedNo. interest rates with22, due datesBanks from are November 2014 by resolutions and agreements issued by thisto entity. The main aspects of this law and its regulations include: the authorization of banking 45,615 April 2017 453,373 licenses, capital requirements, procedures for At floatingminimum interest rates withand due liquidity dates in March 2015 consolidated supervision, 153,947 management of credit and market risks, measures to prevent money laundering, the financing of Total debt 45,615 607,320 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among
Total others.borrowings and long-term debt outstanding
1,905,540
1,487,548
2,152,584
1,548,404
1,893,580
Average outstanding balance during the year
Bladex Head Office’s subsidiaries are the following:
Maximum outstanding balance at any month-end
1,391,440
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Fixed Delaware, interest rates on debt in U.S. dollars(USA), on May 30, 2000. Bladex Holdings 3.75% Inc. exercises 1.50% United States of America control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Range of floating interest rates on borrowings in U.S. dollars 0.62% to 2.30% 0.68% to 2.40% State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund “Feeder”) andrates Bladex Capital Growth Fund (the “Fund”). 7.60% In February 2012, Bladex Assetto 9.90% Range(the of fixed interest on borrowings in Mexican pesos 7.50% to 9.90% Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Rangeinvestment of floating interestOnrates on borrowings and debt in Management Inc. was registered as a adviser. September 8, 2009, Bladex Asset Mexican 5.50% to 6.34%which is 5.66% foreignpesos entity in the Republic of Panama, to establish a branch in Panama, mainlyto 6.30% engaged in providing administrative and operating services to Bladex Asset Management Inc. in Fixed interest rate on debt in Peruvian nuevos soles 6.50% 6.50% USA. -
Weighted average interest rate at the end of the year
2.92%
2.16%
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Weighted interest rate during yearwas incorporated on February 21, 2.74% 2012average and 2011, respectively. The the Feeder 2006 under the laws of 1.94% the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority under by the currency, Mutual Funds of the Cayman Islands. The The balances of long-term debt (“CIMA”), and borrowings is asLaw follows: objective of the Fund is to achieve capital appreciation by investing in Latin American debt December 31, securities, stock indexes, currencies, and trading derivative instruments. -
(In thousands of US$) Currency U.S. dollar Mexican peso Peruvian nuevo sol Total
76
2012
1,518,592 338,760 48,188 1,905,540
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2011
1,269,575 172,358 45,615 1,487,548
Organization The Bank's funding activities include: (i) Euro Medium Term Note Program (“EMTN”), which may be used to issue notes for up to $2.3 billion, with maturities from 7 days up to a maximum of 30 years, at Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its fixed or floating interest rates, or at discount, and in various currencies. The notes are generally issued in subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a bearer or registered formbank through one ortomore authorized institutions; Short-and specialized supranational established finance trade in financial Latin America and the (ii) Caribbean (the Long-Term Notes “Certificados Bursatiles” Program (the “Mexico Program”) in the Mexican local market, “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of registered with the Mexican National Registry of Securities maintained the by the National and Securities Governors of Central Banks in the Region, which recommended creation of a Banking multinational Commission Mexico its initials inofSpanish), forThe an Bank authorized aggregate organization toin increase the (“CNBV”, foreign trade for financing capacity the Region. was organized in principal 1977, incorporated in 1978 as a pesos corporation pursuant tofrom the laws of the Panama, and in Peru to amount of 10 billion Mexican with maturities one day to Republic 30 years;of(iii) a Program officially initiated bonds operations on January 2, 1979. a contract signed soles in 1978 between the Republic issue corporate under a private offer Under in Peruvian nuevos (“PEN”), offered exclusively to of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including institutional investors domiciled in the Republic of Peru, for an maximum aggregate anlimit of the exemption from payment of income taxes in Panama. equivalent of $300 million, with different maturities and interest rate structures. The Bank operates under a general banking license issued by the National Banking Commission of
Some borrowing agreements include various events of default covenants related to minimum capital Panama, predecessor of the Superintendency of Banks of Panama (the and “SBP”). adequacy ratios, incurrence of additional liens, and asset sales, as well as other customary covenants, representations warranties. of December 2012,Executive the Bank wasNo. in 52 compliance with all In the Republic ofand Panama, banks are As regulated by the SBP31, through Decree of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law covenants. Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by
this entity. The main maturities aspects of this law and its regulations include: outstanding the authorization banking 31, 2012, The future remaining of long-term debt and borrowings as ofofDecember licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for are as follows: management of credit and market risks, measures to prevent money laundering, the financing of (In thousands of US$) terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Due in: Outstanding others. 2013 412,151 Bladex Head Office’s subsidiaries are the following: 2014 934,257 2015 153,947 - Bladex Holdings Inc., is 2016 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. exercises 2017 405,185 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 1,905,540 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset
16. Common stock Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Management
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a
foreign common entity in stock the Republic of into Panama, establish a branch in Panama, which is mainly The Bank’s is divided four tocategories:
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. 1) “Class A”; shares may only be issued to Latin American Central Banks or banks in which the state or
other government agency is the majority shareholder. The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2) “Class may only beThe issued to was banks or financial institutions. 2012 B”; and shares 2011, respectively. Feeder incorporated on February 21, 2006 under the laws of 3) “Class E”; shares may be issued to any person whether a natural person legalincorporated entity. the Cayman Islands, and invests substantially all its assets in the Fund, whichorisa also 4) “Class F”; can only be issued to state entities and agencies of non-Latin American under the laws of the Cayman Islands. The Feeder and the Fund are registered with thecountries, Cayman including, among others, central banks and majority state-owned banks in those countries, Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands.and The multilateral objective of the Fund is tointernational achieve capital appreciation by investing in Latin American debt financial institutions either or regional institutions. -
securities, stock indexes, currencies, and trading derivative instruments.
The holders of “Class B” shares have the right to convert or exchange their “Class B” shares, at any time, and without restriction, for “Class E” shares, at a rate of one to one.
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77
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization The following table provides detailed information on the Bank’s common stock activity per class for each of the years in the three-year period ended December 31, 2012: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or the “Bank”), headquartered in “Class Panama City,“Class Republic of“Class Panama, is a Total (Share units) “Class A” B” E” F” specialized supranational bank established to finance trade in Latin America and the Caribbean (the Authorized 40,000,000 100,000,000 “Region”). The Bank was established pursuant to a May 40,000,000 1975 proposal presented to100,000,000 the Assembly280,000,000 of Governors of Central Banks in the Region, which recommended the creation of a multinational 6,342,189 2,584,882 27,618,545 36,545,616 Outstanding at January 1, 2010 organization of(42,861) the Region. 42,860 The Bank was organized in Conversions to increase the foreign trade financing capacity (1) 1977, incorporated 1978 as a corporation pursuant of Panama, and (200) Repurchase of common in stock - to the laws - of the Republic (200) Restrictedinitiated stock issued - directors on January 2, 1979. Under - a contract signed officially operations in38,115 1978 between the -Republic 38,115 Exercised stock options - compensation plans 82,106 ofRestricted Panamastock andunits Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 82,106 - vested 44,904 44,904 exemption from payment of income taxes in Panama. 6,342,189 2,542,021 27,826,330 36,710,540 Outstanding at December 31, 2010
Governors of Central Banks in the Region, which recommended the creation of a multinational
exemption from payment of income taxes in Panama.
During 2012, 2011 and 2010, the Board of Directors approved the grant of restricted stock to Directors The Bank operates under a general banking license issued by the National Banking Commission of and stockpredecessor options andofrestricted stock unitsoftoBanks certain Executives of the Bank, as follows: Panama, the Superintendency of Panama (the “SBP”).
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management creditpresents and market risks, measures to shares prevent repurchased money laundering, financing of Bank and The followingoftable information regarding but nottheretired by the terrorism and related illicit activities, and procedures for banking intervention and liquidation, among accordingly classified as treasury stock: others. “Class A”
“Class B” “Class E” Amount Shares Amount 568,010 15,655 4,548,075 103,239 200 3 subsidiary, incorporated under of (38,115)the laws(909)
Shares areAmount Shares Bladex Head Office’s subsidiaries the following:
Total Shares Amount 5,434,225 129,602 200 3 State of (38,115) (909)
Outstanding at January 1, 2010 318,140 10,708 Repurchase of common stock - Bladex owned the Restricted stock issuedHoldings - directors Inc., is a wholly Exercised Delaware, stock options - United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises compensation plans (82,106) (1,958) (82,106) on- May 24,(44,904) 2006, under the laws of the Restrictedcontrol stock units over - vestedBladex Asset Management - Inc., incorporated (1,071) (44,904) Outstanding at December 31, 2010 USA, 318,140 10,708 as investment 568,010 15,655 99,304 Feeder5,269,300 State of Delaware, which serves manager for 4,383,150 Bladex Offshore Fund Restricted(the stock issued - directorsand Bladex Capital (25,541) (609) (25,541) “Feeder”) Growth Fund - (the “Fund”). In February 2012, Bladex Asset Exercised stock options Management Inc., was registered with- the Securities and Exchange Commission (“SEC”) (325,996) as an compensation plans (325,996) (7,775) Restrictedinvestment stock units - vested (69,865) (1,666) adviser. On September 8, - 2009, Bladex Asset Management Inc. was registered(69,865) as a Outstanding at December 31, 2011 318,140 10,708 568,010 15,655 3,961,748 89,254 4,847,898 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Restricted stock issued - directors (32,317) (771) (32,317) Asset Management Inc. in Exercised engaged stock optionsin - providing administrative and operating services to Bladex (895,674) (21,361) (895,674) compensation USA.plans Restricted stock units - vested (85,249) (2,033) (85,249) Outstanding at December 31, 2012 318,140 10,708 568,010 15,655 2,948,508 65,089 3,834,658
(1,958) (1,071) 125,667 (609) (7,775) (1,666) 115,617 (771) (21,361) (2,033) 91,452
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 17. Cash and stock-based compensation plans the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman The Bank equity compensation plans administers restricted Islandestablished Monetary Authority (“CIMA”), under the under Mutualwhich Funds it Law of the Cayman Islands.stock, The restricted stock units and stock purchase option plans to attract, retain and motivate Directors and top objective of the Fund is to achieve capital appreciation by investing in Latin American debt employees and compensate them for their contributions the growth and profitability of the Bank. Vesting securities, stock indexes, currencies, and tradingtoderivative instruments. -
conditions for each of the Bank’s plans are only comprised of specified requisite service periods.
A. 2008 Stock Incentive Plan – Directors and Executives In February 2008, the Board of Directors -7of the Bank approved an incentive plan for Directors and Executives allowing the Bank to grant restricted stock, restricted stock units, stock purchase options, and/or other similar compensation instruments. Until the year 2011, the maximum aggregate number of shares which may be issued under this plan was two million “Class E” common shares. During 2012, the 78
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Organization Board of Directors of the Bank approved to increase this maximum to three million “Class E” common shares. The 2008 Stock Incentive Plan is administered by the Board of Directors which has the authority Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its in its discretion to select the Directors and Executives to whom the Award may be granted; to determine subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a whether andsupranational to what extent are granted, andtrade to amend terms of award under specialized bankawards established to finance in Latinthe America andany the outstanding Caribbean (the this plan. “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
Restricted stocks are issued at the date,capacity but areof withheld theBank Bank the vesting date. organization to increase the foreign tradegrant financing the Region.byThe wasuntil organized in 1977, incorporated 1978 astoa receive corporation pursuantAtorestricted the laws stock of theunit Republic of Panama, and Restricted stocks areinentitled dividends. is a grant valued in terms of the officially initiated Januaryat2,the 1979. Under signed in 1978 Republic Bank’s stock, but operations no stock isonissued grant date.a contract Restricted stock unitsbetween are notthe entitled to dividends. of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including The Bank issues and delivers common stock at the vesting date of the restricted stock units. an
Conversions (10,095) 10,095 Restricted stock issued directors 25,541 25,541 The Bank operates under a general banking license issued by the National Banking Commission of Exercised stock options - compensation plans 325,996 325,996 Panama, of the Superintendency of Banks -of Panama (the Restrictedpredecessor stock units - vested - “SBP”). 69,865 69,865 6,342,189 2,531,926 28,257,827 37,131,942 Outstanding at December 31, 2011 - Executive Decree InConversions the Republic of Panama, banks are regulated by the- SBP through No. 52 -of April Restricted stock issued - directors 32,317 32,317 30,Exercised 2008, stock which adopts the text plans of the Law Decree No. 26, 895,674 1998, modified by -the Law895,674 options - compensation - 9 of February Decree No.stock 2 of February by resolutions and agreements issued by 85,249 Restricted units - vested 22, 2008. Banks are also regulated 85,249 6,342,189 2,531,926 38,145,182 Outstanding 31, aspects 2012 this entity.at December The main of this law and its regulations include:29,271,067 the authorization of - banking
(In thousands, except for share data)
1.
stock – Directors InRestricted the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree 2 of2012, February 2008. Banks are alsoofregulated bygranted resolutions and agreements by “Class E” In theNo. years 201122,and 2010, the Board Directors 32,317, 25,541 andissued 38,115 this entity. shares. The main aspects of this and itsstock regulations include: the authorization bankingprice in the common The fair value of law restricted granted was based on the stockofclosing licenses, minimum capital andofliquidity requirements, consolidated supervision, for 15, 2011 New York Stock Exchange the “Class E” shares on July 17, 2012, Octoberprocedures 16, 2012, July management of credit and market risks, measures to prevent money laundering, the financing of and July 9, 2010 and July 10, 2009. Until the year 2011, the restricted stock vested in five years at a terrorism and related illicit activities, and procedures for banking intervention and liquidation, among rate of 20% each year, beginning the year following the grant date. For grants beginning 2012, the others. Board of Directors of the Bank established a vesting period of four years, at a rate of 25% each year on
the grant’s date anniversary. Thethefair value of restricted stock granted totaled $714 thousand in 2012, Bladex Head Office’s subsidiaries are following:
$462 thousand in 2011 and $475 thousand in 2010, of which $428 thousand, $414 thousand and $270 - Bladexwere Holdings Inc., against is a wholly owned subsidiary, underrespectively. the laws of theThe State of thousand charged income during 2012, incorporated 2011 and 2010, remaining cost Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises pending amortization of $1,326 thousand will be amortized over 3.20 years.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves for Bladex Offshore during Feeder Fund A summary as of December 31, 2012 ofastheinvestment restrictedmanager stock granted to Directors the years 2010, (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2011 and 2012 is presented below: Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Weighted average foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly grant date fair engaged in providing administrative and operating services to Bladex Asset Management Inc. in Shares value USA. at January 1, 2010 Outstanding 62,938 $13.58 Granted 38,115 -Vested The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84%(13,026) as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Outstanding at December 31, 2010 88,027 the Cayman Islands, and invests substantially all its assets in the Fund, which is also Granted 25,541 incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Vested (31,563) Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Outstanding at December 31, 2011 82,005 Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Granted 32,317 securities, stock indexes, currencies, and trading derivative instruments. Vested (23,493) Outstanding at December 31, 2012 90,829 Expected to vest 90,829
12.46 13.80 13.07 18.07 13.14 14.59 22.09 14.35 $17.32 $17.32
The fair value of vested stock during the years 2012, 2011 and 2010 was $337 thousand, $415 thousand and $180 thousand, respectively.-7-
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79
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization The following table provides detailed information on the Bank’s common stock activity per class for each of the years in the three-year period ended December 31, 2012: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or the “Bank”), headquartered in “Class Panama City,“Class Republic of“Class Panama, is a Total (Share units) “Class A” B” E” F” specialized supranational bank established to finance trade in Latin America and the Caribbean (the Authorized 40,000,000 100,000,000 “Region”). The Bank was established pursuant to a May 40,000,000 1975 proposal presented to100,000,000 the Assembly280,000,000 of Governors of Central Banks in the Region, which recommended the creation of a multinational 6,342,189 2,584,882 27,618,545 36,545,616 Outstanding at January 1, 2010 organization of(42,861) the Region. 42,860 The Bank was organized in Conversions to increase the foreign trade financing capacity (1) 1977, incorporated 1978 as a corporation pursuant of Panama, and (200) Repurchase of common in stock - to the laws - of the Republic (200) Restrictedinitiated stock issued - directors on January 2, 1979. Under - a contract signed officially operations in38,115 1978 between the -Republic 38,115 Exercised stock options - compensation plans 82,106 ofRestricted Panamastock andunits Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 82,106 - vested 44,904 44,904 exemption from payment of income taxes in Panama. 6,342,189 2,542,021 27,826,330 36,710,540 Outstanding at December 31, 2010
Governors of Central Banks in the Region, which recommended the creation of a multinational
exemption from payment of income taxes in Panama.
During 2012, 2011 and 2010, the Board of Directors approved the grant of restricted stock to Directors The Bank operates under a general banking license issued by the National Banking Commission of and stockpredecessor options andofrestricted stock unitsoftoBanks certain Executives of the Bank, as follows: Panama, the Superintendency of Panama (the “SBP”).
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management creditpresents and market risks, measures to shares prevent repurchased money laundering, financing of Bank and The followingoftable information regarding but nottheretired by the terrorism and related illicit activities, and procedures for banking intervention and liquidation, among accordingly classified as treasury stock: others. “Class A”
“Class B” “Class E” Amount Shares Amount 568,010 15,655 4,548,075 103,239 200 3 subsidiary, incorporated under of (38,115)the laws(909)
Shares areAmount Shares Bladex Head Office’s subsidiaries the following:
Total Shares Amount 5,434,225 129,602 200 3 State of (38,115) (909)
Outstanding at January 1, 2010 318,140 10,708 Repurchase of common stock - Bladex owned the Restricted stock issuedHoldings - directors Inc., is a wholly Exercised Delaware, stock options - United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises compensation plans (82,106) (1,958) (82,106) on- May 24,(44,904) 2006, under the laws of the Restrictedcontrol stock units over - vestedBladex Asset Management - Inc., incorporated (1,071) (44,904) Outstanding at December 31, 2010 USA, 318,140 10,708 as investment 568,010 15,655 99,304 Feeder5,269,300 State of Delaware, which serves manager for 4,383,150 Bladex Offshore Fund Restricted(the stock issued - directorsand Bladex Capital (25,541) (609) (25,541) “Feeder”) Growth Fund - (the “Fund”). In February 2012, Bladex Asset Exercised stock options Management Inc., was registered with- the Securities and Exchange Commission (“SEC”) (325,996) as an compensation plans (325,996) (7,775) Restrictedinvestment stock units - vested (69,865) (1,666) adviser. On September 8, - 2009, Bladex Asset Management Inc. was registered(69,865) as a Outstanding at December 31, 2011 318,140 10,708 568,010 15,655 3,961,748 89,254 4,847,898 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Restricted stock issued - directors (32,317) (771) (32,317) Asset Management Inc. in Exercised engaged stock optionsin - providing administrative and operating services to Bladex (895,674) (21,361) (895,674) compensation USA.plans Restricted stock units - vested (85,249) (2,033) (85,249) Outstanding at December 31, 2012 318,140 10,708 568,010 15,655 2,948,508 65,089 3,834,658
(1,958) (1,071) 125,667 (609) (7,775) (1,666) 115,617 (771) (21,361) (2,033) 91,452
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of 17. Cash and stock-based compensation plans the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman The Bank equity compensation plans administers restricted Islandestablished Monetary Authority (“CIMA”), under the under Mutualwhich Funds it Law of the Cayman Islands.stock, The restricted stock units and stock purchase option plans to attract, retain and motivate Directors and top objective of the Fund is to achieve capital appreciation by investing in Latin American debt employees and compensate them for their contributions the growth and profitability of the Bank. Vesting securities, stock indexes, currencies, and tradingtoderivative instruments. -
conditions for each of the Bank’s plans are only comprised of specified requisite service periods.
A. 2008 Stock Incentive Plan – Directors and Executives In February 2008, the Board of Directors -7of the Bank approved an incentive plan for Directors and Executives allowing the Bank to grant restricted stock, restricted stock units, stock purchase options, and/or other similar compensation instruments. Until the year 2011, the maximum aggregate number of shares which may be issued under this plan was two million “Class E” common shares. During 2012, the 78
-38-
Organization Board of Directors of the Bank approved to increase this maximum to three million “Class E” common shares. The 2008 Stock Incentive Plan is administered by the Board of Directors which has the authority Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its in its discretion to select the Directors and Executives to whom the Award may be granted; to determine subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a whether andsupranational to what extent are granted, andtrade to amend terms of award under specialized bankawards established to finance in Latinthe America andany the outstanding Caribbean (the this plan. “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
Restricted stocks are issued at the date,capacity but areof withheld theBank Bank the vesting date. organization to increase the foreign tradegrant financing the Region.byThe wasuntil organized in 1977, incorporated 1978 astoa receive corporation pursuantAtorestricted the laws stock of theunit Republic of Panama, and Restricted stocks areinentitled dividends. is a grant valued in terms of the officially initiated Januaryat2,the 1979. Under signed in 1978 Republic Bank’s stock, but operations no stock isonissued grant date.a contract Restricted stock unitsbetween are notthe entitled to dividends. of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including The Bank issues and delivers common stock at the vesting date of the restricted stock units. an
Conversions (10,095) 10,095 Restricted stock issued directors 25,541 25,541 The Bank operates under a general banking license issued by the National Banking Commission of Exercised stock options - compensation plans 325,996 325,996 Panama, of the Superintendency of Banks -of Panama (the Restrictedpredecessor stock units - vested - “SBP”). 69,865 69,865 6,342,189 2,531,926 28,257,827 37,131,942 Outstanding at December 31, 2011 - Executive Decree InConversions the Republic of Panama, banks are regulated by the- SBP through No. 52 -of April Restricted stock issued - directors 32,317 32,317 30,Exercised 2008, stock which adopts the text plans of the Law Decree No. 26, 895,674 1998, modified by -the Law895,674 options - compensation - 9 of February Decree No.stock 2 of February by resolutions and agreements issued by 85,249 Restricted units - vested 22, 2008. Banks are also regulated 85,249 6,342,189 2,531,926 38,145,182 Outstanding 31, aspects 2012 this entity.at December The main of this law and its regulations include:29,271,067 the authorization of - banking
(In thousands, except for share data)
1.
stock – Directors InRestricted the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree 2 of2012, February 2008. Banks are alsoofregulated bygranted resolutions and agreements by “Class E” In theNo. years 201122,and 2010, the Board Directors 32,317, 25,541 andissued 38,115 this entity. shares. The main aspects of this and itsstock regulations include: the authorization bankingprice in the common The fair value of law restricted granted was based on the stockofclosing licenses, minimum capital andofliquidity requirements, consolidated supervision, for 15, 2011 New York Stock Exchange the “Class E” shares on July 17, 2012, Octoberprocedures 16, 2012, July management of credit and market risks, measures to prevent money laundering, the financing of and July 9, 2010 and July 10, 2009. Until the year 2011, the restricted stock vested in five years at a terrorism and related illicit activities, and procedures for banking intervention and liquidation, among rate of 20% each year, beginning the year following the grant date. For grants beginning 2012, the others. Board of Directors of the Bank established a vesting period of four years, at a rate of 25% each year on
the grant’s date anniversary. Thethefair value of restricted stock granted totaled $714 thousand in 2012, Bladex Head Office’s subsidiaries are following:
$462 thousand in 2011 and $475 thousand in 2010, of which $428 thousand, $414 thousand and $270 - Bladexwere Holdings Inc., against is a wholly owned subsidiary, underrespectively. the laws of theThe State of thousand charged income during 2012, incorporated 2011 and 2010, remaining cost Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises pending amortization of $1,326 thousand will be amortized over 3.20 years.
control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves for Bladex Offshore during Feeder Fund A summary as of December 31, 2012 ofastheinvestment restrictedmanager stock granted to Directors the years 2010, (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2011 and 2012 is presented below: Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Weighted average foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly grant date fair engaged in providing administrative and operating services to Bladex Asset Management Inc. in Shares value USA. at January 1, 2010 Outstanding 62,938 $13.58 Granted 38,115 -Vested The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84%(13,026) as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Outstanding at December 31, 2010 88,027 the Cayman Islands, and invests substantially all its assets in the Fund, which is also Granted 25,541 incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Vested (31,563) Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Outstanding at December 31, 2011 82,005 Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Granted 32,317 securities, stock indexes, currencies, and trading derivative instruments. Vested (23,493) Outstanding at December 31, 2012 90,829 Expected to vest 90,829
12.46 13.80 13.07 18.07 13.14 14.59 22.09 14.35 $17.32 $17.32
The fair value of vested stock during the years 2012, 2011 and 2010 was $337 thousand, $415 thousand and $180 thousand, respectively.-7-
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79
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization Restricted Stock Units and Stock Purchase Options granted to certain Executives Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The Board of Directors approved the grant of stock purchase options and restricted stock units to subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a certain Executives of bank the Bank with atogrant date fairinvalue $3.7 million 2012, $1.7 specialized supranational established finance trade Latin of America and the in Caribbean (the million in 2011 and $2.4 million in 2010. In 2012, the distribution of the fair value in restricted stock “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of units and stock purchase options $3.2Region, million and recommended $0.5 million,therespectively. the year 2011, the Governors of Central Bankswas in the which creation of a In multinational distribution the fair intrade restricted stock units of and purchase options was $1.5inmillion and organization to of increase thevalue foreign financing capacity thestock Region. The Bank was organized 1977, in 1978 as In a corporation pursuant to of thethe laws of grant the Republic of in Panama, andstock units $0.2 incorporated million, respectively. 2010, the distribution total was 50% restricted officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic and 50% in stock purchase options. 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 grants one “Class E” share per each exercised option or vested restricted stock unit.
The Bank operates under a general banking license issued by the National Banking Commission of Restricted stock units: Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
fair value of thebanks stockareunits was based thethrough “ClassExecutive E” stockDecree closingNo. price inApril the New York In the The Republic of Panama, regulated by the on SBP 52 of 30, 2008, which adopts the the Law Decree No. stock 9 of February 26, 25% 1998, each modified Law Stock Exchange on text the ofgrants date. These units vest yearbyonthethe grant date’s Decreeanniversary. 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 andthe liquidity requirements, supervision, procedures forrestriction. Compensation costs of restricted stock unitsconsolidated are amortized during the period of management of credit and market risks, measures to prevent money laundering, the financing of Costs charged against income during 2012, 2011 and 2010 due to the amortization of these grants terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.totaled $1,317 thousand, $1,020 thousand and $742 thousand, respectively. The remaining compensation cost pending amortization of $3,076 thousand will be amortized over 2.26 years.
Bladex Head Office’s subsidiaries are the following: -
-
A summary as of December 31, 2012, 2011 and 2010 of the status of the restricted stock units
Bladex Inc.,Executives is a wholly and owned subsidiary, incorporated the2011 laws and of the2012 Stateare of presented grantedHoldings to certain changes during the yearsunder 2010, Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises below: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Weighted (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Weighted average Management Inc., was registered with the Securities andaverage Exchange Commission (“SEC”) as Aggregate an grant remaining investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a date fair contractual intrinsic value foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Stock units value term (thousands) engaged in providing and operating services to Bladex Outstanding at Januaryadministrative 1, 2010 166,118 $10.20Asset Management Inc. in USA. Granted 101,496 12.04 Forfeited The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Vested (44,904) 10.59 2012 and 2011, respectively. The Feeder was incorporated on February Outstanding at December 31, 2010 222,710 10.9621, 2006 under the laws of Granted 15.84which is also incorporated the Cayman Islands, and invests substantially all94,496 its assets in the Fund, Forfeited (20,931) 12.63 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman VestedMonetary Authority (“CIMA”), under the (69,865) 11.09 Island Mutual Funds Law of the Cayman Islands. The Outstanding 226,410 12.80 in Latin American debt objective of at theDecember Fund is 31, to 2011 achieve capital appreciation by investing Granted 181,598 17.52 securities, stock indexes, currencies, and trading derivative instruments. Forfeited (54,367) 13.88 Vested (85,249) 12.31 $578 Outstanding at December 31, 2012 268,392 $15.93 2.11 years $1,510 Expected to vest 268,392 $15.93 $1,510
The fair value of vested stock during-7the years 2012, 2011 and 2010 was $1,050 thousand, $775 thousand and $476 thousand, respectively.
80
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1.
Organization Stock purchase options: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The fair value of stock purchase options granted to certain Executives during 2012, 2011 and 2010 subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a was estimated using a binomial model for America 2012 andand 2011 the “Black-Scholes” specialized supranational bank establishedoption-pricing to finance trade in Latin the and Caribbean (the option-pricing model for 2010, based on the following factors: “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 2012Bank was organized 2011 organization to increase the foreign trade financing capacity of the Region. The in 2010 average fair value option 1977, Weighted incorporated in 1978 as aper corporation pursuant to the laws of the$3.01 Republic of $2.92 Panama, and $2.91 Weighted average expected term, in 2, years officially initiated operations on January 1979. Under a contract signed in5.50 1978 between 5.50 the Republic 4.75 Expected volatility 33.35% 30% of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 37% Risk-free rate 0.18% to 1.34% 2.52% 2.32% exemption from payment of income taxes in Panama. Expected dividend 5.30% 4.50% 5.00% The Bank operates under a general banking license issued by the National Banking Commission of These optionsofexpire seven years after the grant date and exercisable at a rate of 25% each year Panama, predecessor the Superintendency of Banks of Panama (the are “SBP”).
on the grant date’s anniversary.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, whichcost adopts the text of theincome Law Decree No. 9 of 2011 February 1998, theamortization Law Related charged against during 2012, and26, 2010 as amodified result ofbythe of Decreethese No. 2plans of February 22, 2008. Banks are also regulated by resolutions and agreements issued by amounted to $485 thousand, $765 thousand and $742 thousand, respectively. The this entity. The main aspects of this law and its regulations include: the authorization of banking remaining compensation cost pending amortization of $474 thousand will be amortized over a licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for period of A summary stock options granted is presented management of 2.04 credityears. and market risks, of measures to prevent money laundering,below: the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Weighted others. average Aggregate Weighted remaining intrinsic Bladex Head Office’s subsidiaries are the following: average contractual value Options exercise price term (thousands) - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Outstanding at January 1, 2010 803,994 Delaware, United States of America (USA), on May 30, 2000. $11.58 Bladex Holdings Inc. exercises Granted 420,777 13.52 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Forfeited (646) 15.43 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Exercised (82,106) 10.15 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Outstanding at December 31, 2010 1,142,019 12.39 Management Inc., was registered with the Securities Commission (“SEC”) as an Granted 72,053 and Exchange 17.81 investment adviser. On September 8, 2009, Bladex Asset Management Forfeited (58,067) 12.16 Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Exercised (240,439) 12.27 engaged in providing administrative and operating services to Bladex Outstanding at December 31, 2011 915,566 12.87Asset Management Inc. in USA. Granted 182,420 18.93 Forfeited (231,639) 15.82 - The Feeder is an entity in which Bladex Head(442,675) office owns 98.06% 12.90 and 95.84% as of December 31, Exercised 2012 and 2011, respectively. The Feeder was incorporated on February under the laws of Outstanding at December 31, 2012 423,672 $13.83 21, 2006 4.15 years $3,273 the Cayman Islands, and invests substantially all92,316 its assets in the $12.45 Fund, which is also incorporated$841 Exercisable 2.12 years under the laws of the Cayman Islands. The Feeder and the Fund$14.22 are registered with the Cayman Expected to vest 331,356 4.43 years $2,432 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of thevalue Fund is achieve capital investing in Latin debt The intrinsic of toexercised optionsappreciation during theby years 2012, 2011American and 2010 was $3,375 securities, stock indexes, currencies, and trading derivative instruments.
thousand, $1,322 thousand and $383 thousand, respectively. During the years 2012, 2011 and 2010 the Bank received $5,709 thousand, $2,949 thousand and $834 thousand, respectively, from exercised options.
B. Restricted Stock – Directors (Discontinued) -7-
During 2003, the Board of Directors approved a restricted stock award plan for Directors of the Bank that was amended in 2007 and subsequently terminated in 2008. No grants were made after the 2007’s grant. The restricted stock vests at a rate of 20% each year on the grant date’s anniversary. -41-
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Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes consolidatedfinancial financial statements Notes to consolidated statements
1.
Organization Restricted Stock Units and Stock Purchase Options granted to certain Executives Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The Board of Directors approved the grant of stock purchase options and restricted stock units to subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a certain Executives of bank the Bank with atogrant date fairinvalue $3.7 million 2012, $1.7 specialized supranational established finance trade Latin of America and the in Caribbean (the million in 2011 and $2.4 million in 2010. In 2012, the distribution of the fair value in restricted stock “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of units and stock purchase options $3.2Region, million and recommended $0.5 million,therespectively. the year 2011, the Governors of Central Bankswas in the which creation of a In multinational distribution the fair intrade restricted stock units of and purchase options was $1.5inmillion and organization to of increase thevalue foreign financing capacity thestock Region. The Bank was organized 1977, in 1978 as In a corporation pursuant to of thethe laws of grant the Republic of in Panama, andstock units $0.2 incorporated million, respectively. 2010, the distribution total was 50% restricted officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic and 50% in stock purchase options. 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 grants one “Class E” share per each exercised option or vested restricted stock unit.
The Bank operates under a general banking license issued by the National Banking Commission of Restricted stock units: Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
fair value of thebanks stockareunits was based thethrough “ClassExecutive E” stockDecree closingNo. price inApril the New York In the The Republic of Panama, regulated by the on SBP 52 of 30, 2008, which adopts the the Law Decree No. stock 9 of February 26, 25% 1998, each modified Law Stock Exchange on text the ofgrants date. These units vest yearbyonthethe grant date’s Decreeanniversary. 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 andthe liquidity requirements, supervision, procedures forrestriction. Compensation costs of restricted stock unitsconsolidated are amortized during the period of management of credit and market risks, measures to prevent money laundering, the financing of Costs charged against income during 2012, 2011 and 2010 due to the amortization of these grants terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.totaled $1,317 thousand, $1,020 thousand and $742 thousand, respectively. The remaining compensation cost pending amortization of $3,076 thousand will be amortized over 2.26 years.
Bladex Head Office’s subsidiaries are the following: -
-
A summary as of December 31, 2012, 2011 and 2010 of the status of the restricted stock units
Bladex Inc.,Executives is a wholly and owned subsidiary, incorporated the2011 laws and of the2012 Stateare of presented grantedHoldings to certain changes during the yearsunder 2010, Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises below: control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Weighted (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Weighted average Management Inc., was registered with the Securities andaverage Exchange Commission (“SEC”) as Aggregate an grant remaining investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a date fair contractual intrinsic value foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Stock units value term (thousands) engaged in providing and operating services to Bladex Outstanding at Januaryadministrative 1, 2010 166,118 $10.20Asset Management Inc. in USA. Granted 101,496 12.04 Forfeited The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Vested (44,904) 10.59 2012 and 2011, respectively. The Feeder was incorporated on February Outstanding at December 31, 2010 222,710 10.9621, 2006 under the laws of Granted 15.84which is also incorporated the Cayman Islands, and invests substantially all94,496 its assets in the Fund, Forfeited (20,931) 12.63 under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman VestedMonetary Authority (“CIMA”), under the (69,865) 11.09 Island Mutual Funds Law of the Cayman Islands. The Outstanding 226,410 12.80 in Latin American debt objective of at theDecember Fund is 31, to 2011 achieve capital appreciation by investing Granted 181,598 17.52 securities, stock indexes, currencies, and trading derivative instruments. Forfeited (54,367) 13.88 Vested (85,249) 12.31 $578 Outstanding at December 31, 2012 268,392 $15.93 2.11 years $1,510 Expected to vest 268,392 $15.93 $1,510
The fair value of vested stock during-7the years 2012, 2011 and 2010 was $1,050 thousand, $775 thousand and $476 thousand, respectively.
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1.
Organization Stock purchase options: Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The fair value of stock purchase options granted to certain Executives during 2012, 2011 and 2010 subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a was estimated using a binomial model for America 2012 andand 2011 the “Black-Scholes” specialized supranational bank establishedoption-pricing to finance trade in Latin the and Caribbean (the option-pricing model for 2010, based on the following factors: “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 2012Bank was organized 2011 organization to increase the foreign trade financing capacity of the Region. The in 2010 average fair value option 1977, Weighted incorporated in 1978 as aper corporation pursuant to the laws of the$3.01 Republic of $2.92 Panama, and $2.91 Weighted average expected term, in 2, years officially initiated operations on January 1979. Under a contract signed in5.50 1978 between 5.50 the Republic 4.75 Expected volatility 33.35% 30% of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an 37% Risk-free rate 0.18% to 1.34% 2.52% 2.32% exemption from payment of income taxes in Panama. Expected dividend 5.30% 4.50% 5.00% The Bank operates under a general banking license issued by the National Banking Commission of These optionsofexpire seven years after the grant date and exercisable at a rate of 25% each year Panama, predecessor the Superintendency of Banks of Panama (the are “SBP”).
on the grant date’s anniversary.
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, whichcost adopts the text of theincome Law Decree No. 9 of 2011 February 1998, theamortization Law Related charged against during 2012, and26, 2010 as amodified result ofbythe of Decreethese No. 2plans of February 22, 2008. Banks are also regulated by resolutions and agreements issued by amounted to $485 thousand, $765 thousand and $742 thousand, respectively. The this entity. The main aspects of this law and its regulations include: the authorization of banking remaining compensation cost pending amortization of $474 thousand will be amortized over a licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for period of A summary stock options granted is presented management of 2.04 credityears. and market risks, of measures to prevent money laundering,below: the financing of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Weighted others. average Aggregate Weighted remaining intrinsic Bladex Head Office’s subsidiaries are the following: average contractual value Options exercise price term (thousands) - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Outstanding at January 1, 2010 803,994 Delaware, United States of America (USA), on May 30, 2000. $11.58 Bladex Holdings Inc. exercises Granted 420,777 13.52 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Forfeited (646) 15.43 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Exercised (82,106) 10.15 (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Outstanding at December 31, 2010 1,142,019 12.39 Management Inc., was registered with the Securities Commission (“SEC”) as an Granted 72,053 and Exchange 17.81 investment adviser. On September 8, 2009, Bladex Asset Management Forfeited (58,067) 12.16 Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Exercised (240,439) 12.27 engaged in providing administrative and operating services to Bladex Outstanding at December 31, 2011 915,566 12.87Asset Management Inc. in USA. Granted 182,420 18.93 Forfeited (231,639) 15.82 - The Feeder is an entity in which Bladex Head(442,675) office owns 98.06% 12.90 and 95.84% as of December 31, Exercised 2012 and 2011, respectively. The Feeder was incorporated on February under the laws of Outstanding at December 31, 2012 423,672 $13.83 21, 2006 4.15 years $3,273 the Cayman Islands, and invests substantially all92,316 its assets in the $12.45 Fund, which is also incorporated$841 Exercisable 2.12 years under the laws of the Cayman Islands. The Feeder and the Fund$14.22 are registered with the Cayman Expected to vest 331,356 4.43 years $2,432 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of thevalue Fund is achieve capital investing in Latin debt The intrinsic of toexercised optionsappreciation during theby years 2012, 2011American and 2010 was $3,375 securities, stock indexes, currencies, and trading derivative instruments.
thousand, $1,322 thousand and $383 thousand, respectively. During the years 2012, 2011 and 2010 the Bank received $5,709 thousand, $2,949 thousand and $834 thousand, respectively, from exercised options.
B. Restricted Stock – Directors (Discontinued) -7-
During 2003, the Board of Directors approved a restricted stock award plan for Directors of the Bank that was amended in 2007 and subsequently terminated in 2008. No grants were made after the 2007’s grant. The restricted stock vests at a rate of 20% each year on the grant date’s anniversary. -41-
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Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
Organization Related costs to outstanding restricted stock were charged against income totaled $41 thousand, $87 thousand and $108 thousand in 2012, 2011 and 2010, respectively. As of December 31, 2012, the Bank Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its has no unrecognized compensation costs related to this plan.
subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the A“Region”). summary The as ofBank December 31, 2012pursuant of restricted stock granted to Directors under this plan of and changes was established to a May 1975 proposal presented to the Assembly during 2010,of2011 and Banks 2012 isinpresented below: Governors Central 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 Weighted average 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and grant date fair officially initiated operations on January 2, 1979. Under a contract signed inShares 1978 between the Republic value of Panama Bladex, the Bank was granted certain privileges by the Republic 14,673 of Panama, including$20.45 an Non and vested at January 1, 2010 exemption from payment of income taxes in Panama. Granted Vested (5,756) 19.95 The Bank a general banking license issued by the National Banking of Non operates vested at under December 31, 2010 8,917 Commission 20.77 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Granted Vested (5,399) 20.39 In the Republic ofatPanama, banks are regulated by the SBP through Executive Decree Non vested December 31, 2011 3,518 No. 52 of April 21.35 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Granted DecreeVested No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued 21.35 by (3,518) this entity. The main aspects31, of 2012 this law and its regulations include: the authorization of banking$ Non vested at December licenses, minimum capital and liquidity requirements, consolidated supervision, Expected to vest - procedures for $ management of credit and market risks, measures to prevent money laundering, the financing of terrorism and value related of illicit activities, procedures for ended banking intervention liquidation, among The total fair vested stock and during the years December 31,and 2012, 2011 and 2010 was $75 others. thousand, $110 thousand and $115 thousand, respectively. Bladex Head Office’s subsidiaries are the following:
C. Stock Option Plan 2006 – Directors and Executives (Discontinued) -
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
The 2006 Stock United OptionStates Plan of was terminated 2008. The2000. options granted underInc. thisexercises plan expire seven Delaware, America (USA),inon May 30, Bladex Holdings years after theover grant date.Asset No grants were made after the 2007’s grant. control Bladex Management Inc., incorporated on May 24, 2006, under the laws of the
State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) andagainst Bladex Capital Fund (the In February Bladex Asset under this Related cost charged incomeGrowth as a result of “Fund”). the amortization of 2012, options granted Management Inc., was registered with the Securities and Exchange Commission (“SEC”) an compensation plan amounted to $25 thousand in 2011 and $221 thousand in 2010. As ofasDecember 31, investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a 2011, there were no compensation costs pending amortization. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in A summary USA. as of December 31, 2012 of the share options granted to Directors and certain Executives and
changes during 2010, 2011 and 2012 is presented below:
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Weighted 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which isaverage also incorporated remaining Aggregate under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Weighted average contractual intrinsic value Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Options exercise price term (thousands) objective of the Fund is to achieve capital appreciation by investing in Latin American debt Outstanding at January 1, 2010 currencies, and trading 207,706 $16.34 securities, stock indexes, derivative instruments. Forfeited Outstanding at December 31, 2010 207,706 16.34 Forfeited Exercised (27,552) 16.34 Outstanding at December 31, 2011 180,154 16.34 Forfeited -7Exercised (130,350) 16.34 Outstanding at December 31, 2012 49,804 $16.34 1.12 years $260 Exercisable at December 31, 2012 49,804 $16.34 1.12 years $260 -
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1.
Organization The intrinsic value of exercised options during the year ended December 31, 2012 and 2011 was $570 thousand and $45 thousand, respectively. During the year ended December 31, 2012 and 2011, the Bank Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its received $2,130 and $450 thousand from exercised options, respectively. All options are available to be subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a exercised of Decemberbank 31, established 2012. specializedassupranational to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
D. IndexedofStock Option Plan Governors Central Banks in (Discontinued) 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 a corporation pursuant to the laws the Republic of Panama, During 2004, the Board of as Directors approved an indexed stockof purchase option plan for and Directors and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic certain executives of the Bank, which was subsequently terminated in April 2006. The indexed stock of Panama and Bladex, the Bank certainThe privileges by the Republic of Panama, including options expire ten years after was the granted grant date. exercise price is adjusted based on theanchange in a exemption from payment of income taxes in Panama. customized Latin American general market index. As of December 31, 2012, there was no compensation cost pending amortization. Related costs charged against income amounted to $17 thousand in 2010. The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
A summary as of December 31, 2012 and changes during the years 2010, 2011 and 2012 of the indexed stock is presented In thepurchase Republic options of Panama, banks are below: regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements Weightedissued by this entity. The main aspects of this law and its regulations include: the authorization averageof banking remaining Aggregate licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Weighted contractual value management of credit and market risks, measures to prevent moneyaverage laundering, the financingintrinsic of Optionsfor banking exercise price and liquidation, term (thousands) terrorism and related illicit activities, and procedures intervention among Outstanding at January 1, 2010 385,469 $17.46 others. Forfeited Exercised Bladex Head Office’s subsidiaries are the following: Outstanding at December 31, 2010 385,469 17.98 Forfeited - Bladex Holdings Inc., is a wholly owned subsidiary,- incorporated under- the laws of the State of Expired 11.87 Holdings Inc. exercises Delaware, United States of America (USA), on(4,100) May 30, 2000. Bladex Exercised (55,433) 12.12 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Outstanding at December 31, 2011 325,936 State of Delaware, USA, which serves as investment manager for 12.86 Bladex Offshore Feeder Fund Forfeited - “Fund”). In February (the “Feeder”) and Bladex Capital Growth Fund (the 2012, Bladex Asset Expired (3,542) $14.48 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Exercised $16.41 investment adviser. On September 8, 2009, (322,394) Bladex Asset Management Inc. was registered as a Outstanding at December 31, 2012 $ $foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Exercisable at December 31, 2012 $ $USA.
The intrinsic value of options exercised during the years ended December 31, 2012 and 2011 was $1,213 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, and $235 respectively. theincorporated years ended December 2011, 2012 thousand, and 2011, respectively. The During Feeder was on February 21, 31, 20062012 under and the laws of the Bank received $5,292 thousand and $672 thousand, respectively, from exercised options. the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman
E. 1995 andMonetary 1999’s Stock Option Plan (Discontinued) Island Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt
stock indexes, currencies, and tradingapproved derivativetwo instruments. Duringsecurities, 1995 and 1999, the Board of Directors stock option plans for employees. Under these plans, stock options were granted at a purchase price equal to the average market value of the common stock at the grant date. One third of the options would have been exercised on each successive year after the grant date and expired on the tenth anniversary after the grant date. These plans were discontinued in 2003; therefore, no additional stock options have been granted. -7-
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Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
Organization Related costs to outstanding restricted stock were charged against income totaled $41 thousand, $87 thousand and $108 thousand in 2012, 2011 and 2010, respectively. As of December 31, 2012, the Bank Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its has no unrecognized compensation costs related to this plan.
subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a specialized supranational bank established to finance trade in Latin America and the Caribbean (the A“Region”). summary The as ofBank December 31, 2012pursuant of restricted stock granted to Directors under this plan of and changes was established to a May 1975 proposal presented to the Assembly during 2010,of2011 and Banks 2012 isinpresented below: Governors Central 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 Weighted average 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and grant date fair officially initiated operations on January 2, 1979. Under a contract signed inShares 1978 between the Republic value of Panama Bladex, the Bank was granted certain privileges by the Republic 14,673 of Panama, including$20.45 an Non and vested at January 1, 2010 exemption from payment of income taxes in Panama. Granted Vested (5,756) 19.95 The Bank a general banking license issued by the National Banking of Non operates vested at under December 31, 2010 8,917 Commission 20.77 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Granted Vested (5,399) 20.39 In the Republic ofatPanama, banks are regulated by the SBP through Executive Decree Non vested December 31, 2011 3,518 No. 52 of April 21.35 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Granted DecreeVested No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued 21.35 by (3,518) this entity. The main aspects31, of 2012 this law and its regulations include: the authorization of banking$ Non vested at December licenses, minimum capital and liquidity requirements, consolidated supervision, Expected to vest - procedures for $ management of credit and market risks, measures to prevent money laundering, the financing of terrorism and value related of illicit activities, procedures for ended banking intervention liquidation, among The total fair vested stock and during the years December 31,and 2012, 2011 and 2010 was $75 others. thousand, $110 thousand and $115 thousand, respectively. Bladex Head Office’s subsidiaries are the following:
C. Stock Option Plan 2006 – Directors and Executives (Discontinued) -
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
The 2006 Stock United OptionStates Plan of was terminated 2008. The2000. options granted underInc. thisexercises plan expire seven Delaware, America (USA),inon May 30, Bladex Holdings years after theover grant date.Asset No grants were made after the 2007’s grant. control Bladex Management Inc., incorporated on May 24, 2006, under the laws of the
State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) andagainst Bladex Capital Fund (the In February Bladex Asset under this Related cost charged incomeGrowth as a result of “Fund”). the amortization of 2012, options granted Management Inc., was registered with the Securities and Exchange Commission (“SEC”) an compensation plan amounted to $25 thousand in 2011 and $221 thousand in 2010. As ofasDecember 31, investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a 2011, there were no compensation costs pending amortization. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in A summary USA. as of December 31, 2012 of the share options granted to Directors and certain Executives and
changes during 2010, 2011 and 2012 is presented below:
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, Weighted 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which isaverage also incorporated remaining Aggregate under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Weighted average contractual intrinsic value Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The Options exercise price term (thousands) objective of the Fund is to achieve capital appreciation by investing in Latin American debt Outstanding at January 1, 2010 currencies, and trading 207,706 $16.34 securities, stock indexes, derivative instruments. Forfeited Outstanding at December 31, 2010 207,706 16.34 Forfeited Exercised (27,552) 16.34 Outstanding at December 31, 2011 180,154 16.34 Forfeited -7Exercised (130,350) 16.34 Outstanding at December 31, 2012 49,804 $16.34 1.12 years $260 Exercisable at December 31, 2012 49,804 $16.34 1.12 years $260 -
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1.
Organization The intrinsic value of exercised options during the year ended December 31, 2012 and 2011 was $570 thousand and $45 thousand, respectively. During the year ended December 31, 2012 and 2011, the Bank Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its received $2,130 and $450 thousand from exercised options, respectively. All options are available to be subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a exercised of Decemberbank 31, established 2012. specializedassupranational to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
D. IndexedofStock Option Plan Governors Central Banks in (Discontinued) 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 a corporation pursuant to the laws the Republic of Panama, During 2004, the Board of as Directors approved an indexed stockof purchase option plan for and Directors and officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic certain executives of the Bank, which was subsequently terminated in April 2006. The indexed stock of Panama and Bladex, the Bank certainThe privileges by the Republic of Panama, including options expire ten years after was the granted grant date. exercise price is adjusted based on theanchange in a exemption from payment of income taxes in Panama. customized Latin American general market index. As of December 31, 2012, there was no compensation cost pending amortization. Related costs charged against income amounted to $17 thousand in 2010. The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
A summary as of December 31, 2012 and changes during the years 2010, 2011 and 2012 of the indexed stock is presented In thepurchase Republic options of Panama, banks are below: regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements Weightedissued by this entity. The main aspects of this law and its regulations include: the authorization averageof banking remaining Aggregate licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Weighted contractual value management of credit and market risks, measures to prevent moneyaverage laundering, the financingintrinsic of Optionsfor banking exercise price and liquidation, term (thousands) terrorism and related illicit activities, and procedures intervention among Outstanding at January 1, 2010 385,469 $17.46 others. Forfeited Exercised Bladex Head Office’s subsidiaries are the following: Outstanding at December 31, 2010 385,469 17.98 Forfeited - Bladex Holdings Inc., is a wholly owned subsidiary,- incorporated under- the laws of the State of Expired 11.87 Holdings Inc. exercises Delaware, United States of America (USA), on(4,100) May 30, 2000. Bladex Exercised (55,433) 12.12 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Outstanding at December 31, 2011 325,936 State of Delaware, USA, which serves as investment manager for 12.86 Bladex Offshore Feeder Fund Forfeited - “Fund”). In February (the “Feeder”) and Bladex Capital Growth Fund (the 2012, Bladex Asset Expired (3,542) $14.48 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Exercised $16.41 investment adviser. On September 8, 2009, (322,394) Bladex Asset Management Inc. was registered as a Outstanding at December 31, 2012 $ $foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Exercisable at December 31, 2012 $ $USA.
The intrinsic value of options exercised during the years ended December 31, 2012 and 2011 was $1,213 - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, and $235 respectively. theincorporated years ended December 2011, 2012 thousand, and 2011, respectively. The During Feeder was on February 21, 31, 20062012 under and the laws of the Bank received $5,292 thousand and $672 thousand, respectively, from exercised options. the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman
E. 1995 andMonetary 1999’s Stock Option Plan (Discontinued) Island Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt
stock indexes, currencies, and tradingapproved derivativetwo instruments. Duringsecurities, 1995 and 1999, the Board of Directors stock option plans for employees. Under these plans, stock options were granted at a purchase price equal to the average market value of the common stock at the grant date. One third of the options would have been exercised on each successive year after the grant date and expired on the tenth anniversary after the grant date. These plans were discontinued in 2003; therefore, no additional stock options have been granted. -7-
-43-
83
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
AOrganization summary of the status as of December 31, 2011 of the stock options granted and changes during 2010 and 2011 of these option plans is presented below: 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 Weighted specialized supranational bank established to finance trade in Latin America and the Caribbean (the average “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of remaining Aggregate Governors of Central Banks in the Region, which recommended the creation contractual of a multinational Weighted average intrinsic value organization to increase the foreign trade financing capacity of the Region. The Bank was in Options exercise price termorganized(thousands) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed 29.89 in 1978 between the Republic Outstanding at January 1, 2010 11,735 ofForfeited Panama and Bladex, the Bank was granted certain privileges by the Republic - of Panama, including an exemption from payment of income taxes in Panama. Expired (3,615) 23.16 Outstanding at December 31, 2010 8,120 32.88 The Bank operates under a general banking license issued Forfeited - by the National -Banking Commission of Panama, of Panama (the “SBP”). Expired predecessor of the Superintendency of Banks(8,120) 32.88 Outstanding at December 31, 2011 $ $In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 2008, which adopts the text the Law F.30,Deferred Compensation Planof(the “DCDecree Plan”) No. 9 of February 26, 1998, modified by the 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 Inlicenses, 1999, the Board ofcapital Directors the DC Plan, consolidated which was subsequently minimum and approved liquidity requirements, supervision, terminated procedures in for2003. The Bank could grant a number of deferred units (“DEU”). Eligible employees would vest management of credit and market risks, equity measures to prevent money laundering, the financing of the DEU after threeand years of service, and distributions were for made on the later of (i)and theliquidation, date the vested terrorism related illicit activities, and procedures banking intervention amongDEU were credited others. to the employee’s account, and (ii) ten years the employee was first credited with DEU.
Participating employees received dividends with respect to their unvested deferred equity units. A Bladex Head Office’s subsidiaries arebelow: the following: summary on changes is presented
2012 2011 2010 - Bladex at Holdings Inc., is a wholly owned subsidiary, incorporated1,812 under the laws of the State18,755 of Outstanding beginning of year 17,746 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Exercised (1,278) (15,934) (1,009) control at over the laws of 17,746 the Outstanding endBladex of yearAsset Management Inc., incorporated on May 24, 5342006, under 1,812 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) Bladex Capitalrelated GrowthtoFund In to February 2012, Bladex Related cost chargedand against income this (the plan“Fund”). amounted $1 thousand in 2012Asset and 2011, and Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an $11 thousand in 2010. investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly G. Other plansin- providing Expatriateadministrative Officer Planand operating services to Bladex Asset Management Inc. in engaged USA.
The Bank sponsors a defined contribution plan for its expatriate top executives based in Panama, which are- notThe eligible participate in theBladex Panamanian social The Bank’s contributions are Feeder to is an entity in which Head office ownssecurity 98.06% system. and 95.84% as of December 31, 2012 and respectively. Feeder was incorporated on February 21, 2006 under the each laws of determined as a2011, percentage of theThe annual salaries of top executives eligible for the plan, contributing the Cayman Islands, and invests substantially all its Contributions assets in the Fund, whichplan is also an additional amount withheld from their salary. to this areincorporated managed by a fund under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman manager through a trust. The executives are entitled to the Bank’s contributions after completing at least Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The to salaries three years of service in the Bank. During the years 2012, 2011 and 2010, the Bank charged objective of the Fund is to achieve capital appreciation by investing in Latin American debt expense $131 thousand, $119 thousand and $117 thousand, respectively, that correspond to the Bank’s securities, stock indexes, currencies, and trading derivative instruments. contributions to this plan. As of December 31, 2012 and 2011, the accumulated liability payable amounted to $198 thousand and $255 thousand, respectively.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The following table presents a reconciliation of the income and share data used in the basic and diluted subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a earnings persupranational share (“EPS”) computations forfinance the dates indicated: specialized bank established to trade in Latin America and the Caribbean (the
“Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Year ended December 31, Governors of Central Banks in the Region, which recommended the creation of a multinational 2012 2011 2010 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Net1977, incomeincorporated from continuing to Bladex for bothtobasic diluted in operations 1978 as attributable a corporation pursuant the and laws of the Republic of Panama, and EPS 94,111 the Republic 83,600 42,038 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Net income (loss) from discontinued operations (681) (420) 206 exemption from payment of income taxes in Panama. (In thousands of US$, except per share amounts)
Net income attributable to Bladex for both basic and diluted EPS
-44-
93,430
83,180
The Bank operates under a general banking license issued by the National Banking Commission of
Basic earnings per share from operations of Banks of Panama (the “SBP”). Panama, predecessor of continuing the Superintendency Diluted earnings per share from continuing operations
2.49 2.48
2.26 2.25
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30,income 2008, (loss) which the discontinued text of the operations Law Decree No. 9 of February 26, 1998, modified Law Basic peradopts share from (0.02) by the (0.01) Decree No.(loss) 2 of per February 22,discontinued 2008. Banks are also regulated by resolutions and agreements issued (0.02) Diluted income share from operations (0.01)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 Basic earnings per share 2.47 2.25 management of credit and market risks, measures to prevent money laundering, 2.46 the financing of Diluted earnings per share 2.24 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.average common shares outstanding - applicable to basic EPS 37,824 Weighted 36,969 Weighted average common shares outstanding Bladex Head Office’s applicable to diluted EPS subsidiaries are the following: Effect of dilutive securities (1):
-
37,824
36,969
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
Stock options and restricted stock units plans 114 176 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Adjusted weighted average common shares outstanding control overEPS Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws37,145 of the applicable to diluted 37,938
42,244
1.15 1.14 0.01 0.01 1.15 1.15 36,647 36,647 167 36,814
State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (1) (theDecember “Feeder”) Capital Growth Fund (the of “Fund”). In 760,284, Februaryrespectively, 2012, Bladex As of 31, and 2011Bladex and 2010, weighted average options 72,053 and wereAsset excluded from the computation of diluted per share because theSecurities option’s exercise price was greater than the average quoted market price of Management Inc.,earnings was registered with the and Exchange Commission (“SEC”) as an theinvestment Bank’s common stock. OnAsSeptember of December 2012, the computation of earnings Inc. per share not exclude adviser. 8, 31, 2009, Bladex Asset Management was did registered as aany weighted average options. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in 19. Financial USA.instruments with off-balance sheet credit risk
In -the The normal of business, to meet theoffice financing needs of customers, the Bank Feedercourse is an entity in which Bladex Head owns 98.06% andits 95.84% as of December 31,is party to financial instruments with off-balance sheetwas credit risk. These financial involve, 2012 and 2011, respectively. The Feeder incorporated on February 21, instruments 2006 under the laws of to varying the elements Cayman Islands, and invests substantially its assetsofinthe the amount Fund, which is also incorporated degrees, of credit and market risk inallexcess recognized in the consolidated under the laws of the Islands. Feeder and the Fund are registered the Cayman balance sheet. Credit riskCayman represents the The possibility of loss resulting from thewith failure of a customer to Island Monetary Authority the Mutual Funds Law of the Cayman Islands. The perform in accordance with the (“CIMA”), terms of a under contract. objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
The Bank’s outstanding financial instruments with off-balance sheet credit risk were as follows: (In thousands of US$) Confirmed letters of credit Stand-by letters of credit and guarantees - Commercial risk -7Credit commitments
-7-
84
1. Earnings Organization 18. per share
-45-
December 31, 2012 2011 106,415 266,547 25,167 18,899 103,294 75,962 234,876 361,408
85
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
AOrganization summary of the status as of December 31, 2011 of the stock options granted and changes during 2010 and 2011 of these option plans is presented below: 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 Weighted specialized supranational bank established to finance trade in Latin America and the Caribbean (the average “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of remaining Aggregate Governors of Central Banks in the Region, which recommended the creation contractual of a multinational Weighted average intrinsic value organization to increase the foreign trade financing capacity of the Region. The Bank was in Options exercise price termorganized(thousands) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contract signed 29.89 in 1978 between the Republic Outstanding at January 1, 2010 11,735 ofForfeited Panama and Bladex, the Bank was granted certain privileges by the Republic - of Panama, including an exemption from payment of income taxes in Panama. Expired (3,615) 23.16 Outstanding at December 31, 2010 8,120 32.88 The Bank operates under a general banking license issued Forfeited - by the National -Banking Commission of Panama, of Panama (the “SBP”). Expired predecessor of the Superintendency of Banks(8,120) 32.88 Outstanding at December 31, 2011 $ $In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 2008, which adopts the text the Law F.30,Deferred Compensation Planof(the “DCDecree Plan”) No. 9 of February 26, 1998, modified by the 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 Inlicenses, 1999, the Board ofcapital Directors the DC Plan, consolidated which was subsequently minimum and approved liquidity requirements, supervision, terminated procedures in for2003. The Bank could grant a number of deferred units (“DEU”). Eligible employees would vest management of credit and market risks, equity measures to prevent money laundering, the financing of the DEU after threeand years of service, and distributions were for made on the later of (i)and theliquidation, date the vested terrorism related illicit activities, and procedures banking intervention amongDEU were credited others. to the employee’s account, and (ii) ten years the employee was first credited with DEU.
Participating employees received dividends with respect to their unvested deferred equity units. A Bladex Head Office’s subsidiaries arebelow: the following: summary on changes is presented
2012 2011 2010 - Bladex at Holdings Inc., is a wholly owned subsidiary, incorporated1,812 under the laws of the State18,755 of Outstanding beginning of year 17,746 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Exercised (1,278) (15,934) (1,009) control at over the laws of 17,746 the Outstanding endBladex of yearAsset Management Inc., incorporated on May 24, 5342006, under 1,812 State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) Bladex Capitalrelated GrowthtoFund In to February 2012, Bladex Related cost chargedand against income this (the plan“Fund”). amounted $1 thousand in 2012Asset and 2011, and Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an $11 thousand in 2010. investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly G. Other plansin- providing Expatriateadministrative Officer Planand operating services to Bladex Asset Management Inc. in engaged USA.
The Bank sponsors a defined contribution plan for its expatriate top executives based in Panama, which are- notThe eligible participate in theBladex Panamanian social The Bank’s contributions are Feeder to is an entity in which Head office ownssecurity 98.06% system. and 95.84% as of December 31, 2012 and respectively. Feeder was incorporated on February 21, 2006 under the each laws of determined as a2011, percentage of theThe annual salaries of top executives eligible for the plan, contributing the Cayman Islands, and invests substantially all its Contributions assets in the Fund, whichplan is also an additional amount withheld from their salary. to this areincorporated managed by a fund under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman manager through a trust. The executives are entitled to the Bank’s contributions after completing at least Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The to salaries three years of service in the Bank. During the years 2012, 2011 and 2010, the Bank charged objective of the Fund is to achieve capital appreciation by investing in Latin American debt expense $131 thousand, $119 thousand and $117 thousand, respectively, that correspond to the Bank’s securities, stock indexes, currencies, and trading derivative instruments. contributions to this plan. As of December 31, 2012 and 2011, the accumulated liability payable amounted to $198 thousand and $255 thousand, respectively.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its The following table presents a reconciliation of the income and share data used in the basic and diluted subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a earnings persupranational share (“EPS”) computations forfinance the dates indicated: specialized bank established to trade in Latin America and the Caribbean (the
“Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Year ended December 31, Governors of Central Banks in the Region, which recommended the creation of a multinational 2012 2011 2010 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Net1977, incomeincorporated from continuing to Bladex for bothtobasic diluted in operations 1978 as attributable a corporation pursuant the and laws of the Republic of Panama, and EPS 93,713 the Republic 83,600 42,038 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Net income (loss) from discontinued operations (681) (420) 206 exemption from payment of income taxes in Panama. (In thousands of US$, except per share amounts)
Net income attributable to Bladex for both basic and diluted EPS
-44-
93,032
83,180
The Bank operates under a general banking license issued by the National Banking Commission of
Basic earnings per share from operations of Banks of Panama (the “SBP”). Panama, predecessor of continuing the Superintendency Diluted earnings per share from continuing operations
2.48 2.47
2.26 2.25
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30,income 2008, (loss) which the discontinued text of the operations Law Decree No. 9 of February 26, 1998, modified Law Basic peradopts share from (0.02) by the (0.01) Decree No.(loss) 2 of per February 22,discontinued 2008. Banks are also regulated by resolutions and agreements issued (0.02) Diluted income share from operations (0.01)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 2.25 Basic earnings per share 2.46 management of credit and market risks, measures to prevent money laundering, 2.45 the financing of Diluted earnings per share 2.24 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others. 37,824 Weighted average common shares outstanding - applicable to basic EPS 36,969 Weighted average common shares outstanding Bladex Head Office’s applicable to diluted EPS subsidiaries are the following: Effect of dilutive securities (1):
-
37,824
36,969
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
Stock options and restricted stock units plans 114 176 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Adjusted weighted average common shares outstanding control overEPS Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws37,145 of the applicable to diluted 37,938
42,244
1.15 1.14 0.01 0.01 1.15 1.15 36,647 36,647 167 36,814
State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (1) (theDecember “Feeder”) Capital Growth Fund (the of “Fund”). In 760,284, Februaryrespectively, 2012, Bladex As of 31, and 2011Bladex and 2010, weighted average options 72,053 and wereAsset excluded from the computation of diluted per share because theSecurities option’s exercise price was greater than the average quoted market price of Management Inc.,earnings was registered with the and Exchange Commission (“SEC”) as an theinvestment Bank’s common stock.OnAsSeptember of December 2012, the computation of earnings Inc. per share did not exclude adviser. 8, 31, 2009, Bladex Asset Management was registered as aany weighted average options. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in 19. Financial USA.instruments with off-balance sheet credit risk
In -the The normal of business, to meet theoffice financing needs of customers, the Bank Feedercourse is an entity in which Bladex Head owns 98.06% andits 95.84% as of December 31,is party to financial instruments with off-balance sheetwas credit risk. These financial involve, 2012 and 2011, respectively. The Feeder incorporated on February 21, instruments 2006 under the laws of to varying the elements Cayman Islands, and invests substantially its assetsofinthe the amount Fund, which is also incorporated degrees, of credit and market risk inallexcess recognized in the consolidated under the laws of the Islands. Feeder and the Fund are registered the Cayman balance sheet. Credit riskCayman represents the The possibility of loss resulting from thewith failure of a customer to Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The perform in accordance with the terms of a contract. objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
The Bank’s outstanding financial instruments with off-balance sheet credit risk were as follows: (In thousands of US$) Confirmed letters of credit Stand-by letters of credit and guarantees - Commercial risk -7Credit commitments
-7-
84
1. Earnings Organization 18. per share
-45-
December 31, 2012 2011 106,415 266,547 25,167 18,899 75,962 103,294 234,876 361,408
85
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. Leasehold Organization 20. commitments
Organization As of December 31, 2012, the remaining maturity profile of the Bank’s outstanding financial instruments with off-balance sheet credit risk is as follows:
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or (In thethousands “Bank”), of headquartered in Panama City, Republic of Panama, is a US$) specialized supranational Maturities bank established to finance trade in Latin America and the Caribbean (the Amount “Region”). The Bank wasWithin established pursuant to a May 1975 proposal presented 1 year 219,421 to the Assembly of Governors of Central Banks in the Region, which recommended the creation From 1 to 2 years 1,000 of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in From 2 to 5 years 13,791 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic After 5 years 664 of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 234,876between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxesthe in Panama. As of December 31, 2012 and 2011 breakdown of the Bank’s off-balance sheet exposure by country
As of December 31, 2012, leasehold commitments are as follows:
The Bank operates under a general banking license issued by the National Banking Commission of (In thousands of US$) of the Superintendency of Banks of Panama (the “SBP”). Panama, predecessor Country: 2012 2011 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Argentina 92 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the820 Law Bolivia 944 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued Brazil 23,630by 41,116 this entity. The main aspects of this law and its regulations include: the authorization of banking Chile 6,084 12,367 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures Colombia 9,098for 2,396 Costa Rica 1,000of 11,661 management of credit and market risks, measures to prevent money laundering, the financing Dominican Republic 1,603 terrorism and related illicit activities, and procedures for banking intervention and liquidation, 1,535 among Ecuador 79,760 215,272 others. El Salvador 625 2,025 Guatemala 180 501 Bladex Head Office’s subsidiaries are the following: Honduras 562 400 Jamaica 295 - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the 27,289 State of 14,677 Mexico Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Panama 58,219 1,801 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Paraguay 81 Fund Peru State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder 2,843 2,467 Spain (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 9,660 Switzerland 500 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as -an Unitedinvestment States of America adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as- a 21,780 Venezuela foreign entity in the Republic of Panama, to establish a branch in Panama, which is23,231 mainly 21,770 234,876 engaged in providing administrative and operating services to Bladex Asset Management Inc. in 361,408 LettersUSA. of credit and guarantees
The Bank operates under a general banking license the National Banking Commission of Total minimum payments (1) issued by 27,238 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). (1) Minimum payments have not been reduced by minimum sublease rentals $1,318 thousand due through in the future under nonIn the Republic of Panama, banks areofregulated by the SBP Executive Decree No. 52 of April cancelable subleases. 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by this following entity. The main aspectsan ofanalysis this lawofand regulations include: the authorization of banking The table presents allits operating leases: licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent2012 money laundering, 2011 the financing 2010 of terrorism Rent and related illicit activities, and procedures for banking intervention and liquidation, among 2,468 expense 1,403 875 others.
risk is as follows:
The Bank, on behalf of its client base, advises and confirms letters of credit to facilitate foreign trade - The Feeder is an confirming entity in which Bladex office 95.84% as of December 31, that the transactions. When letters ofHead credit, theowns Bank98.06% adds and its own unqualified assurance 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Bank will. issuing bank will pay and that if the issuing bank does not honor drafts drawn on the credit, the the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated The Bank provides stand-by letters of credit and guarantees, which are issued on behalf of institutional under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman customers in connection with financing between its customers and third parties. The Bank applies the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The same objective credit policies its achieve lendingcapital process, and oncebyissued theincommitment is irrevocable and of the used Fund in is to appreciation investing Latin American debt remains valid until expiration. Credit arises from the Bank's obligation to make payment in the securities, stockits indexes, currencies, and risk trading derivative instruments. event of a customer’s contractual default to a third party. Risks associated with stand-by letters of credit and guarantees are included in the evaluation of the Bank’s overall credit risk.
Credit commitments Commitments to extend credit are binding legal agreements to lend to customers. Commitments -7generally have fixed expiration dates or other termination clauses and require payment of a fee to the Bank. As some commitments expire without being drawn down, the total commitment amounts do not necessarily represent future cash requirements. 86
-46-
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 supranational bank established (In thousands of US$) to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Year Governors of Central Banks in the Region, which recommended the creation of a multinational 2013the foreign trade financing capacity of the2,330 organization to increase Region. The Bank was organized in 2,192 1977, incorporated 2014 in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 2015 officially initiated operations on January 2, 1979. Under a contract2,013 signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by1,678 the Republic of Panama, including an 2016 exemption from payment of income taxes in Panama. 2017 1,587
Thereafter
17,438
Less: Sublease rentals
(386) 2,082
Bladex Head Office’s subsidiaries are the following:
(129) 1,274
875
21. Derivative for owned hedging purposes - Bladexfinancial Holdingsinstruments Inc., is a wholly subsidiary, incorporated under the laws of the State of
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises
over 31, Bladex Asset Inc., incorporated on May 24, 2006, under the laws of the held for As of control December 2012 andManagement 2011, quantitative information on derivative financial instruments State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund hedging purposes is as follows: (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2012 and Exchange Commission (“SEC”) 2011 as an Management Inc., was registered with the Securities (1) (1) (In thousands of US$) Fair Value Fair Value Nominal Nominal investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Amount Amount Liability foreign entity in the Republic of Panama, toAsset establish Liability a branch in Panama, which Asset is mainly Fair value hedges: engaged in providing administrative and operating8,319 services to6,600 Bladex Asset Management Inc. Interest rate swaps 480,000 125,000 16 in 10,317 USA. Cross-currency interest rate swaps 236,866 3,525 4,665 215,107 56 40,574
Cash flow hedges: rate swaps - 98.06% -and 95.84% 20,000 512 - Interest The Feeder is an entity in which Bladex Head- office owns as of December- 31, Cross-currency interest rate swaps The Feeder 42,001 7,333 23 42,336 2012 and 2011, respectively. was incorporated on February 21, 2006 under the3,549 laws of Forward foreign exchange 75,733 62 411 53,264 249 2,339 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Net investment hedges: under the laws of the Cayman Islands. 6,196 The Feeder and the Fund48are registered with the Cayman Forward foreign exchange 6,036 289 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. 840,796 19,239 11,747 461,743 4,159 The 53,742 Total
objective of the Fund is to achieve capital appreciation by investing in Latin American debt
Net gain on the ineffective portioncurrencies, of securities, stock indexes, and trading derivative instruments. hedging activities (2) 71 (1) (2)
2,849
The fair value of assets and liabilities is reported within the derivative financial instruments used for hedging - receivable and payable lines in the consolidated balance sheets, respectively. Gains and losses resulting from ineffectiveness and credit risk in hedging activities are reported within the derivative financial instruments and hedging line in the consolidated statements of income.
-7-
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87
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes toconsolidated consolidated financial statements Notes to financial statements
1.
1. Leasehold Organization 20. commitments
Organization As of December 31, 2012, the remaining maturity profile of the Bank’s outstanding financial instruments with off-balance sheet credit risk is as follows:
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or (In thethousands “Bank”), of headquartered in Panama City, Republic of Panama, is a US$) specialized supranational Maturities bank established to finance trade in Latin America and the Caribbean (the Amount “Region”). The Bank wasWithin established pursuant to a May 1975 proposal presented 1 year 219,421 to the Assembly of Governors of Central Banks in the Region, which recommended the creation From 1 to 2 years 1,000 of a multinational organization to increase the foreign trade financing capacity of the Region. The Bank was organized in From 2 to 5 years 13,791 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic After 5 years 664 of Panama, and officially initiated operations on January 2, 1979. Under a contract signed in 1978 234,876between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxesthe in Panama. As of December 31, 2012 and 2011 breakdown of the Bank’s off-balance sheet exposure by country
As of December 31, 2012, leasehold commitments are as follows:
The Bank operates under a general banking license issued by the National Banking Commission of (In thousands of US$) of the Superintendency of Banks of Panama (the “SBP”). Panama, predecessor Country: 2012 2011 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April Argentina 92 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the820 Law Bolivia 944 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued Brazil 23,630by 41,116 this entity. The main aspects of this law and its regulations include: the authorization of banking Chile 6,084 12,367 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures Colombia 9,098for 2,396 Costa Rica 1,000of 11,661 management of credit and market risks, measures to prevent money laundering, the financing Dominican Republic 1,603 terrorism and related illicit activities, and procedures for banking intervention and liquidation, 1,535 among Ecuador 79,760 215,272 others. El Salvador 625 2,025 Guatemala 180 501 Bladex Head Office’s subsidiaries are the following: Honduras 562 400 Jamaica 295 - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the 27,289 State of 14,677 Mexico Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Panama 58,219 1,801 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Paraguay 81 Fund Peru State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder 2,843 2,467 Spain (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 9,660 Switzerland 500 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as -an Unitedinvestment States of America adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as- a 21,780 Venezuela foreign entity in the Republic of Panama, to establish a branch in Panama, which is23,231 mainly 21,770 234,876 engaged in providing administrative and operating services to Bladex Asset Management Inc. in 361,408 LettersUSA. of credit and guarantees
The Bank operates under a general banking license the National Banking Commission of Total minimum payments (1) issued by 27,238 Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). (1) Minimum payments have not been reduced by minimum sublease rentals $1,318 thousand due through in the future under nonIn the Republic of Panama, banks areofregulated by the SBP Executive Decree No. 52 of April cancelable subleases. 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by this following entity. The main aspectsan ofanalysis this lawofand regulations include: the authorization of banking The table presents allits operating leases: licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent2012 money laundering, 2011 the financing 2010 of terrorism Rent and related illicit activities, and procedures for banking intervention and liquidation, among 2,468 expense 1,403 875 others.
risk is as follows:
The Bank, on behalf of its client base, advises and confirms letters of credit to facilitate foreign trade - The Feeder is an confirming entity in which Bladex office 95.84% as of December 31, that the transactions. When letters ofHead credit, theowns Bank98.06% adds and its own unqualified assurance 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of Bank will. issuing bank will pay and that if the issuing bank does not honor drafts drawn on the credit, the the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated The Bank provides stand-by letters of credit and guarantees, which are issued on behalf of institutional under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman customers in connection with financing between its customers and third parties. The Bank applies the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The same objective credit policies its achieve lendingcapital process, and oncebyissued theincommitment is irrevocable and of the used Fund in is to appreciation investing Latin American debt remains valid until expiration. Credit arises from the Bank's obligation to make payment in the securities, stockits indexes, currencies, and risk trading derivative instruments. event of a customer’s contractual default to a third party. Risks associated with stand-by letters of credit and guarantees are included in the evaluation of the Bank’s overall credit risk.
Credit commitments Commitments to extend credit are binding legal agreements to lend to customers. Commitments -7generally have fixed expiration dates or other termination clauses and require payment of a fee to the Bank. As some commitments expire without being drawn down, the total commitment amounts do not necessarily represent future cash requirements. 86
-46-
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 supranational bank established (In thousands of US$) to finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of Year Governors of Central Banks in the Region, which recommended the creation of a multinational 2013the foreign trade financing capacity of the2,330 organization to increase Region. The Bank was organized in 2,192 1977, incorporated 2014 in 1978 as a corporation pursuant to the laws of the Republic of Panama, and 2015 officially initiated operations on January 2, 1979. Under a contract2,013 signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by1,678 the Republic of Panama, including an 2016 exemption from payment of income taxes in Panama. 2017 1,587
Thereafter
17,438
Less: Sublease rentals
(386) 2,082
Bladex Head Office’s subsidiaries are the following:
(129) 1,274
875
21. Derivative for owned hedging purposes - Bladexfinancial Holdingsinstruments Inc., is a wholly subsidiary, incorporated under the laws of the State of
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises
over 31, Bladex Asset Inc., incorporated on May 24, 2006, under the laws of the held for As of control December 2012 andManagement 2011, quantitative information on derivative financial instruments State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund hedging purposes is as follows: (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset 2012 and Exchange Commission (“SEC”) 2011 as an Management Inc., was registered with the Securities (1) (1) (In thousands of US$) Fair Value Fair Value Nominal Nominal investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Amount Amount Liability foreign entity in the Republic of Panama, toAsset establish Liability a branch in Panama, which Asset is mainly Fair value hedges: engaged in providing administrative and operating8,319 services to6,600 Bladex Asset Management Inc. Interest rate swaps 480,000 125,000 16 in 10,317 USA. Cross-currency interest rate swaps 236,866 3,525 4,665 215,107 56 40,574
Cash flow hedges: rate swaps - 98.06% -and 95.84% 20,000 512 - Interest The Feeder is an entity in which Bladex Head- office owns as of December- 31, Cross-currency interest rate swaps The Feeder 42,001 7,333 23 42,336 2012 and 2011, respectively. was incorporated on February 21, 2006 under the3,549 laws of Forward foreign exchange 75,733 62 411 53,264 249 2,339 the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Net investment hedges: under the laws of the Cayman Islands. 6,196 The Feeder and the Fund48are registered with the Cayman Forward foreign exchange 6,036 289 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. 840,796 19,239 11,747 461,743 4,159 The 53,742 Total
objective of the Fund is to achieve capital appreciation by investing in Latin American debt
Net gain on the ineffective portioncurrencies, of securities, stock indexes, and trading derivative instruments. hedging activities (2) 71 (1) (2)
2,849
The fair value of assets and liabilities is reported within the derivative financial instruments used for hedging - receivable and payable lines in the consolidated balance sheets, respectively. Gains and losses resulting from ineffectiveness and credit risk in hedging activities are reported within the derivative financial instruments and hedging line in the consolidated statements of income.
-7-
-47-
87
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization The gains and losses resulting from activities of derivative financial instruments and hedging recognized in the consolidated statements of income are presented below: 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 2012 specialized bank established to finance trade in Latin America andreclassified the Caribbean (the (In thousands supranational of US$) Gain (loss) Gain (loss) “Region”). The Bank was established pursuant to a May 1975 proposal presented to of from accumulatedthe OCIAssembly to recognized on Gain (loss) Governors of Central Banks in the Region, recommended the creation of a multinational Classification of recognized in OCI which the statements of income derivatives gain (loss) portion) (ineffective (effective organization to increase the foreign tradeportion) financing capacity of the Region.(effective The Bank was organized in portion) Derivatives – cash flow 1977, incorporated in hedge 1978 as a corporation pursuant to the laws of the Republic of Panama, and Interest rate swaps operations on January 2,217 officially initiated 1979. Under a contract signed in 1978 between the Republic rate (loss) onby foreign ofCross-currency Panama andinterest Bladex, the Bank was granted certainGain privileges the Republic of Panama, including an swaps 2,481 exemption from payment of income taxes3,740 in Panama.currency exchange
Interest income – loans (564) Forward exchange 1,742 license Interest expense - National Banking Commission of The Bankforeign operates under a general banking issued by the borrowings (169) Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Gain (loss) on foreign In the Republic of Panama, banks are regulated by currency the SBPexchange through Executive Decree 3,679 No. 52 of April 30, 2008, which adopts the text of the Law modified by the Law 5,699Decree No. 9 of February 26, 1998, 5,427 Total
Decree No. –2 net of investment February 22, 2008. Banks are also regulated by resolutions and agreements issued by Derivatives this entity. The main aspects of this law and its regulations include: the authorization of banking hedge licenses, minimum capital and liquidity requirements, supervision, procedures for Gain (loss)consolidated on foreign Forward foreign currency exchange management ofexchange credit and market risks,109measures to prevent money laundering, the- financing of Total terrorism and related illicit activities, and109 procedures for banking intervention and liquidation, among others. Bladex Head Office’s subsidiaries are the following: (In thousands of US$)
2011
Gain (loss) reclassified
-
-
-
2010
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Gain Office” together with Gain its (loss) (In thousands of US$) (loss)and reclassified subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Panama, is a Gain (loss) fromRepublic accumulatedofOCI to recognized on in OCI Classification of the statements of income derivatives specialized supranational bank recognized established to finance trade in Latin America and the Caribbean (the (effectivepursuant portion) to a May gain 1975 (loss) proposal presented (effective portion) (ineffective “Region”). The Bank was established to the Assembly of portion) Derivatives – cash flow hedge Governors of Central Banks in the Region, which recommended the creation of a multinational Interest rate swaps 460 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Cross-currency interest rate Gain (loss) on laws foreignof the Republic of Panama, and 1977, incorporated in 1978 as a corporation pursuant to the swaps 1,690 currency exchange 1,171 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Forward foreign exchange (759) Interest income loans (477) of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Gain (loss) on foreign exemption from payment of income taxes in Panama. Total
88
-48-
currency exchange
Gain (loss)
-
-
478 1,172
-
The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
The Bank recognized in earnings the gain (loss) on derivative financial instruments and the gain (loss) of the hedged assetoforPanama, liabilitybanks related qualifying fairSBP value hedges, as follows: In the Republic areto regulated by the through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 2012 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by (In thousands of US$) Classification in statements of Gain (loss)the on authorization Gain (loss) on Net gain this entity. The main aspects of this law and its regulations include: of banking income derivatives hedged item (loss) licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Derivatives - fair value management of credit and market risks, measures to prevent money laundering, the financing of hedge terrorism and related illicit activities, and –procedures for banking intervention and liquidation, among Interest rate swaps Interest income available-forsale (2,982) 4,776 1,794 others.
-
Derivative financial instruments and hedging (ineffectiveness)
1,564 59
(12,022)
(10,458)
-
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
59
Cross-currency interest rate Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises swaps Interest income – loans (239) 522 283 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Interest expense – borrowings State of Delaware, USA, Bladex Offshore Feeder Fund(3,163) andwhich debt serves as investment manager for8,024 (11,187) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Derivative financial instruments hedging (ineffectiveness) Management Inc., was and registered with the Securities and Exchange 12 Commission (“SEC”) as an 12 (loss) on foreign currency investment adviser. OnGain September 8, 2009, Bladex Asset Management Inc. was registered as a exchange of Panama, to establish a branch5,873 (6,469)is mainly (596) foreign entity in the Republic in Panama, which 12,311 (24,380) (12,069)
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA.
- thousands The Feeder (In of US$)is
2011
an entity in which Bladex Head office andon 95.84% as (loss) of December 31, gain Classification in statements of owns 98.06% Gain (loss) Gain on Net 2012 and 2011, respectively. Theincome Feeder was incorporated onderivatives February 21, 2006 under of hedged itemthe laws (loss) Derivatives - fair value the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated hedgeunder the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Interest rate swaps Interest income – available-forIsland Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The3,409 sale (6,857) 10,266 objective of the Fund Derivative is to achieve capital appreciation by investing in Latin American debt financial instruments securities, stock indexes,and currencies, hedging and trading derivative instruments. 74 74 Cross-currency interest rate swaps
-7-
1,391
Interest expense – borrowings
Gain (loss) accumulated to State recognized on Bladex Holdings Inc., is a wholly owned subsidiary, incorporatedfrom under the lawsOCI of the of recognized in OCI Classification of the statements of income derivatives Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (effective portion) gain (loss) (effective portion) (ineffective portion) control– over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Derivatives cash flow hedge State Delaware, USA, which serves Interest rate of swaps 987 as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Cross-currency interest rate Gain (loss) on foreign Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an swaps 2,270 currency exchange 1,958 investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Forward foreign exchange (2,160) Interest income – loans (124) foreign entity in the Republic of Panama, to establish a -branch in Panama, which is mainly Interest expense engaged in providing administrative and operating services to Bladex Asset Management Inc. in borrowings 172 USA. Gain (loss) on foreign
objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
Organization
and debt Bladex Head Office’s subsidiaries are the following:
-
currency exchange (2,966) 1,097 Head office owns 98.06% and 95.84% as(960) Total - The Feeder is an entity in which Bladex of December 31, 2012 and respectively. The Feeder was incorporated on February 21, 2006 under the laws of Derivatives – net2011, investment hedgethe Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Gain (loss) Forward foreign 289 The Feeder under the exchange laws of the Cayman Islands. andon theforeign Fund are registered with the Cayman currency exchange Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman- Islands. The 289 Total
1.
Derivative financial instruments and hedging (ineffectiveness) Interest income – loans Interest expense – borrowings Gain (loss) on foreign currency exchange -7-
-49-
2,849 (33) 4,352 (17,427) (17,042)
55 (7,874)
2,849 22 (3,522)
17,475 19,922
48 2,880
89
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization The gains and losses resulting from activities of derivative financial instruments and hedging recognized in the consolidated statements of income are presented below: 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 2012 specialized bank established to finance trade in Latin America andreclassified the Caribbean (the (In thousands supranational of US$) Gain (loss) Gain (loss) “Region”). The Bank was established pursuant to a May 1975 proposal presented to of from accumulatedthe OCIAssembly to recognized on Gain (loss) Governors of Central Banks in the Region, recommended the creation of a multinational Classification of recognized in OCI which the statements of income derivatives gain (loss) portion) (ineffective (effective organization to increase the foreign tradeportion) financing capacity of the Region.(effective The Bank was organized in portion) Derivatives – cash flow 1977, incorporated in hedge 1978 as a corporation pursuant to the laws of the Republic of Panama, and Interest rate swaps operations on January 2,217 officially initiated 1979. Under a contract signed in 1978 between the Republic rate (loss) onby foreign ofCross-currency Panama andinterest Bladex, the Bank was granted certainGain privileges the Republic of Panama, including an swaps 2,481 exemption from payment of income taxes3,740 in Panama.currency exchange
Interest income – loans (564) Forward exchange 1,742 license Interest expense - National Banking Commission of The Bankforeign operates under a general banking issued by the borrowings (169) Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Gain (loss) on foreign In the Republic of Panama, banks are regulated by currency the SBPexchange through Executive Decree 3,679 No. 52 of April 30, 2008, which adopts the text of the Law modified by the Law 5,699Decree No. 9 of February 26, 1998, 5,427 Total
Decree No. –2 net of investment February 22, 2008. Banks are also regulated by resolutions and agreements issued by Derivatives this entity. The main aspects of this law and its regulations include: the authorization of banking hedge licenses, minimum capital and liquidity requirements, supervision, procedures for Gain (loss)consolidated on foreign Forward foreign currency exchange management ofexchange credit and market risks,109measures to prevent money laundering, the- financing of Total terrorism and related illicit activities, and109 procedures for banking intervention and liquidation, among others. Bladex Head Office’s subsidiaries are the following: (In thousands of US$)
2011
Gain (loss) reclassified
-
-
-
2010
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Gain Office” together with Gain its (loss) (In thousands of US$) (loss)and reclassified subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Panama, is a Gain (loss) fromRepublic accumulatedofOCI to recognized on in OCI Classification of the statements of income derivatives specialized supranational bank recognized established to finance trade in Latin America and the Caribbean (the (effectivepursuant portion) to a May gain 1975 (loss) proposal presented (effective portion) (ineffective “Region”). The Bank was established to the Assembly of portion) Derivatives – cash flow hedge Governors of Central Banks in the Region, which recommended the creation of a multinational Interest rate swaps 460 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Cross-currency interest rate Gain (loss) on laws foreignof the Republic of Panama, and 1977, incorporated in 1978 as a corporation pursuant to the swaps 1,690 currency exchange 1,171 officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Forward foreign exchange (759) Interest income loans (477) of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Gain (loss) on foreign exemption from payment of income taxes in Panama. Total
88
-48-
currency exchange
Gain (loss)
-
-
478 1,172
-
The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
The Bank recognized in earnings the gain (loss) on derivative financial instruments and the gain (loss) of the hedged assetoforPanama, liabilitybanks related qualifying fairSBP value hedges, as follows: In the Republic areto regulated by the through Executive Decree No. 52 of April 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 2012 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by (In thousands of US$) Classification in statements of Gain (loss)the on authorization Gain (loss) on Net gain this entity. The main aspects of this law and its regulations include: of banking income derivatives hedged item (loss) licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Derivatives - fair value management of credit and market risks, measures to prevent money laundering, the financing of hedge terrorism and related illicit activities, and –procedures for banking intervention and liquidation, among Interest rate swaps Interest income available-forsale (2,982) 4,776 1,794 others.
-
Derivative financial instruments and hedging (ineffectiveness)
1,564 59
(12,022)
(10,458)
-
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of
59
Cross-currency interest rate Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises swaps Interest income – loans (239) 522 283 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Interest expense – borrowings State of Delaware, USA, Bladex Offshore Feeder Fund(3,163) andwhich debt serves as investment manager for8,024 (11,187) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Derivative financial instruments hedging (ineffectiveness) Management Inc., was and registered with the Securities and Exchange 12 Commission (“SEC”) as an 12 (loss) on foreign currency investment adviser. OnGain September 8, 2009, Bladex Asset Management Inc. was registered as a exchange of Panama, to establish a branch5,873 (6,469)is mainly (596) foreign entity in the Republic in Panama, which 12,311 (24,380) (12,069)
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA.
- thousands The Feeder (In of US$)is
2011
an entity in which Bladex Head office andon 95.84% as (loss) of December 31, gain Classification in statements of owns 98.06% Gain (loss) Gain on Net 2012 and 2011, respectively. Theincome Feeder was incorporated onderivatives February 21, 2006 under of hedged itemthe laws (loss) Derivatives - fair value the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated hedgeunder the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Interest rate swaps Interest income – available-forIsland Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The3,409 sale (6,857) 10,266 objective of the Fund Derivative is to achieve capital appreciation by investing in Latin American debt financial instruments securities, stock indexes,and currencies, hedging and trading derivative instruments. 74 74 Cross-currency interest rate swaps
-7-
1,391
Interest expense – borrowings
Gain (loss) accumulated to State recognized on Bladex Holdings Inc., is a wholly owned subsidiary, incorporatedfrom under the lawsOCI of the of recognized in OCI Classification of the statements of income derivatives Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (effective portion) gain (loss) (effective portion) (ineffective portion) control– over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Derivatives cash flow hedge State Delaware, USA, which serves Interest rate of swaps 987 as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Cross-currency interest rate Gain (loss) on foreign Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an swaps 2,270 currency exchange 1,958 investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Forward foreign exchange (2,160) Interest income – loans (124) foreign entity in the Republic of Panama, to establish a -branch in Panama, which is mainly Interest expense engaged in providing administrative and operating services to Bladex Asset Management Inc. in borrowings 172 USA. Gain (loss) on foreign
objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
Organization
and debt Bladex Head Office’s subsidiaries are the following:
-
currency exchange (2,966) 1,097 Head office owns 98.06% and 95.84% as(960) Total - The Feeder is an entity in which Bladex of December 31, 2012 and respectively. The Feeder was incorporated on February 21, 2006 under the laws of Derivatives – net2011, investment hedgethe Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Gain (loss) Forward foreign 289 The Feeder under the exchange laws of the Cayman Islands. andon theforeign Fund are registered with the Cayman currency exchange Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman- Islands. The 289 Total
1.
Derivative financial instruments and hedging (ineffectiveness) Interest income – loans Interest expense – borrowings Gain (loss) on foreign currency exchange -7-
-49-
2,849 (33) 4,352 (17,427) (17,042)
55 (7,874)
2,849 22 (3,522)
17,475 19,922
48 2,880
89
Banco deComercio Comercio Exterior, S. A. BancoLatinoamericano Latinoamericano de Exterior, S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes financialstatements statements Notestotoconsolidated consolidated financial
Notes financial statements Notes to to consolidated consolidated financial statements
1.
Organization
1. agreed-upon Organizationterms. The Bank has designated these derivative instruments as cash flow hedges and net
2010(“Bladex Head Office” and together with its Banco Latinoamericano de Comercio Exterior, S. A. (In thousands of US$) Classification statements of Gain (loss) Gain (loss) on Net subsidiaries “Bladex” or the “Bank”),inheadquartered in Panama City,onRepublic of Panama, is gain a income derivatives hedged item (loss) specialized supranational bank established to finance trade in Latin America and the Caribbean (the Derivatives - fair value “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of hedge Governors of Central Banks in income the Region, which recommended the creation of a multinational Interest rate swaps Interest – available-fororganization to increase thesale foreign trade financing capacity of the Region. was organized in (14,760)The Bank22,000 7,240 financial instruments 1977, incorporated in 1978Derivative as a corporation pursuant to the laws of the Republic of Panama, and - Republic419 officially initiated operationsand onhedging January 2, 1979. Under a contract signed419 in 1978 between the Cross-currency interest rate the Bank Derivative of Panama and Bladex, was financial granted instruments certain privileges by the Republic of Panama, including an swaps hedging (ineffectiveness) (1,865) (1,865) exemption from payment ofand income taxes in Panama.
Interest income – loans (45) 89 44 Interest expense – borrowings 3,812 (7,046) (3,234) The Bank operates under aGain general banking license issued by the National Banking Commission of (loss) on foreign currency Panama, predecessor of the exchange Superintendency of Banks of Panama (the “SBP”). 7,922 (7,994) (72) (4,517) 7,049 2,532
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law For30, control purposes, derivative instruments are recorded at their nominal amount (“notional amount”) in Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by memorandum accounts. Interestofrate areitsmade either include: in a single or cross currency for a this entity. The main aspects this swaps law and regulations the currency authorization of banking prescribed to exchange interest rate flows, whichsupervision, involve fixed for floating licenses, period minimum capital anda series liquidityof requirements, consolidated procedures for interest payments. TheofBank in certain foreign exchange trades to servethecustomers’ transaction management creditalso and engages market risks, measures to prevent money laundering, financing of needs and toand manage foreign currency risk. All for such positions are hedged an offsetting terrorism related the illicit activities, and procedures banking intervention and with liquidation, among contract forothers. the same currency. The Bank manages and controls the risks on these foreign exchange trades by
establishing counterparty credit limits by customer and by adopting policies that do not allow for open Bladex Head subsidiaries are the following:The Bank also uses foreign currency exchange contracts positions in theOffice’s credit and investment portfolio. to hedge the foreign exchange risk associated with the Bank’s equity investment in a non-U.S. dollar - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of functional currency foreign subsidiary. Derivative and foreign exchange instruments negotiated by the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Bank are executed mainly contracts two control over Bladex Assetover-the-counter Management Inc., (OTC). incorporatedThese on May 24, 2006, are underexecuted the laws ofbetween the counterparties that negotiate specific agreement terms, including notional amount, exercise price and State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund maturity.(the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an
investment adviser. On September 8, the 2009,Bank Bladex Management Inc. was registered as a in future The maximum length of time over which hasAsset hedged its exposure to the variability foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly cash flows on forecasted transactions is 1.89 years.
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. The Bank estimates that approximately $42 thousand of gains reported in OCI as of December 31, 2012
related to forward foreign exchange contracts are expected to be reclassified into interest expense as an - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, adjustment yield of respectively. hedged liabilities during theincorporated twelve-month period ending 31, 2013. 2012toand 2011, The Feeder was on February 21, 2006December under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated
The Bank estimates approximately $82 The thousand losses reported in OCI as of the December under the lawsthat of the Cayman Islands. Feederofand the Fund are registered with Cayman 31, 2012 Island Monetary Authority (“CIMA”), under Mutual Funds of the Cayman Islands.income The related to forward foreign exchange contracts aretheexpected to be Law reclassified into interest as an objective of of thehedged Fund isloans to achieve appreciation period by investing Latin American debt adjustment to yield duringcapital the twelve-month endinginDecember 31, 2013. securities, stock indexes, currencies, and trading derivative instruments.
Types of Derivatives and Foreign Exchange Instruments Interest rate swaps are contracts in which a series of interest rate flows in a single currency are exchanged over a prescribed period. The Bank has designated a portion of these derivative instruments as fair value hedges and a portion as cash flow hedges. Cross -7- currency swaps are contracts that generally involve the exchange of both interest and principal amounts in two different currencies. The Bank has designated a portion of these derivative instruments as fair value hedges and a portion as cash flow hedges. Forward foreign exchange contracts represent an agreement to purchase or sell foreign currency at a future date at 90
-50-
investment hedges.
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 Inspecialized addition tosupranational hedging derivative financialtoinstruments, derivative instruments held bank established finance tradethe in Bank Latin has America and thefinancial Caribbean (the for trading purposes that have been disclosed in Note 5. “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 22. Accumulated comprehensive income (loss) organization toother 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 officially initiated 31, operations January 1979. a contract in 1978 between the Republic income As of December 2012, on 2011 and 2, 2010 theUnder breakdown ofsigned accumulated other comprehensive of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an (loss) related to investment securities available-for-sale and derivative financial instruments, and foreign exemption from payment of income taxes in Panama.
currency translation is as follows:
The Bank operates under a general banking license issued by the National Banking Commission Foreign currencyof Panama, predecessor of the Superintendency of Banks ofSecurities Panama (the “SBP”). Derivative translation availablefinancial adjustment, for-sale instruments hedges (In thousands of US$) of Panama, banks are regulated by the SBP In the Republic through Executive Decreenet No.of52 of April Total 30, 2008, adopts the text of the Law Decree No. 9(3,244) of February 26,(2,916) 1998, modified by the- Law (6,160) Balance as ofwhich January 1, 2010 No. gains 2 of February 22, the 2008. and agreements issued - by 3,716 NetDecree unrealized arising from year Banks are also regulated 2,325by resolutions 1,391 this entity. The main aspects this law and its regulations include: the authorization of banking Reclassification adjustment for gainsofincluded (1) minimum capital and liquidity requirements,(2,825) consolidated supervision, procedures inlicenses, net income (1,172) - for (3,997) management of credit and market risks, measures to prevent money laundering, the financing - of (6,441) (3,744) (2,697) Balance as of December 31, 2010 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Net unrealized gains arising from the year 4,095 1,097 5,192 others. Reclassification adjustment for (gains) losses included in net income (1) (2,079) 960 (1,119) Bladex Head Office’s subsidiaries are the following: (744) Foreign currency translation adjustment, net (744) (744) (1,728) (640) (3,112) Balance as of December 31, 2011 - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Net unrealized gainsUnited arising States from the 5,699Holdings Inc. exercises 14,135 Delaware, of year America (USA), on May8,436 30, 2000. Bladex Reclassification adjustment for gains included control(1)over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the in net income (5,775) (5,427) Offshore Feeder- Fund (11,202) State of Delaware, USA, which serves as investment manager for Bladex (551)Asset Foreign currency translation net Growth Fund (the “Fund”). - 2012, Bladex (551) (the “Feeder”) and adjustment, Bladex Capital In February (1,295)as an 933 Exchange Commission (368) (730) Balance Management as of December 31,was 2012registered with the Securities and Inc., (“SEC”) (1) investment adviser. On September 8, in 2009, Bladex Asset Management Inc.been was as a Reclassification adjustments include amounts recognized net income during the current year that had partregistered of other comprehensive income entity years. in the Republic of Panama, to establish a branch in Panama, which is mainly (loss) inforeign this and previous engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. 23. Fair value of financial instruments The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, The- Bank determines the fair value of its financial instruments using the fair value hierarchy established 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of in ASCtheTopic 820 - Fair Value Measurements and Disclosure, which requires the Bank to maximize the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated use of under observable inputs thatIslands. reflect The the assumptions market participants would use in pricing the laws of the(those Cayman Feeder and thethat Fund are registered with the Cayman the asset or liability developed based on market information obtained from sources independent of the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The reporting entity) and to minimize the use of unobservable inputs (those that reflect the reporting entity’s objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, andmarket trading participants derivative instruments. own assumptions about the assumptions would use in pricing the asset or liability developed based on the best information available in the circumstances) when measuring fair value. Fair value is used on a recurring basis to measure assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets and liabilities for impairment or for disclosure purposes. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in -7an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Bank uses some valuation techniques and assumptions when estimating fair value. The Bank applied the following fair value hierarchy: -51-
91
Banco deComercio Comercio Exterior, S. A. BancoLatinoamericano Latinoamericano de Exterior, S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes financialstatements statements Notestotoconsolidated consolidated financial
Notes financial statements Notes to to consolidated consolidated financial statements
1.
Organization
1. agreed-upon Organizationterms. The Bank has designated these derivative instruments as cash flow hedges and net
2010(“Bladex Head Office” and together with its Banco Latinoamericano de Comercio Exterior, S. A. (In thousands of US$) Classification statements of Gain (loss) Gain (loss) on Net subsidiaries “Bladex” or the “Bank”),inheadquartered in Panama City,onRepublic of Panama, is gain a income derivatives hedged item (loss) specialized supranational bank established to finance trade in Latin America and the Caribbean (the Derivatives - fair value “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of hedge Governors of Central Banks in income the Region, which recommended the creation of a multinational Interest rate swaps Interest – available-fororganization to increase thesale foreign trade financing capacity of the Region. was organized in (14,760)The Bank22,000 7,240 financial instruments 1977, incorporated in 1978Derivative as a corporation pursuant to the laws of the Republic of Panama, and - Republic419 officially initiated operationsand onhedging January 2, 1979. Under a contract signed419 in 1978 between the Cross-currency interest rate the Bank Derivative of Panama and Bladex, was financial granted instruments certain privileges by the Republic of Panama, including an swaps hedging (ineffectiveness) (1,865) (1,865) exemption from payment ofand income taxes in Panama.
Interest income – loans (45) 89 44 Interest expense – borrowings 3,812 (7,046) (3,234) The Bank operates under aGain general banking license issued by the National Banking Commission of (loss) on foreign currency Panama, predecessor of the exchange Superintendency of Banks of Panama (the “SBP”). 7,922 (7,994) (72) (4,517) 7,049 2,532
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law For30, control purposes, derivative instruments are recorded at their nominal amount (“notional amount”) in Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by memorandum accounts. Interestofrate areitsmade either include: in a single or cross currency for a this entity. The main aspects this swaps law and regulations the currency authorization of banking prescribed to exchange interest rate flows, whichsupervision, involve fixed for floating licenses, period minimum capital anda series liquidityof requirements, consolidated procedures for interest payments. TheofBank in certain foreign exchange trades to servethecustomers’ transaction management creditalso and engages market risks, measures to prevent money laundering, financing of needs and toand manage foreign currency risk. All for such positions are hedged an offsetting terrorism related the illicit activities, and procedures banking intervention and with liquidation, among contract forothers. the same currency. The Bank manages and controls the risks on these foreign exchange trades by
establishing counterparty credit limits by customer and by adopting policies that do not allow for open Bladex Head subsidiaries are the following:The Bank also uses foreign currency exchange contracts positions in theOffice’s credit and investment portfolio. to hedge the foreign exchange risk associated with the Bank’s equity investment in a non-U.S. dollar - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of functional currency foreign subsidiary. Derivative and foreign exchange instruments negotiated by the Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Bank are executed mainly contracts two control over Bladex Assetover-the-counter Management Inc., (OTC). incorporatedThese on May 24, 2006, are underexecuted the laws ofbetween the counterparties that negotiate specific agreement terms, including notional amount, exercise price and State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund maturity.(the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an
investment adviser. On September 8, the 2009,Bank Bladex Management Inc. was registered as a in future The maximum length of time over which hasAsset hedged its exposure to the variability foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly cash flows on forecasted transactions is 1.89 years.
engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. The Bank estimates that approximately $42 thousand of gains reported in OCI as of December 31, 2012
related to forward foreign exchange contracts are expected to be reclassified into interest expense as an - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, adjustment yield of respectively. hedged liabilities during theincorporated twelve-month period ending 31, 2013. 2012toand 2011, The Feeder was on February 21, 2006December under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated
The Bank estimates approximately $82 The thousand losses reported in OCI as of the December under the lawsthat of the Cayman Islands. Feederofand the Fund are registered with Cayman 31, 2012 Island Monetary Authority (“CIMA”), under Mutual Funds of the Cayman Islands.income The related to forward foreign exchange contracts aretheexpected to be Law reclassified into interest as an objective of of thehedged Fund isloans to achieve appreciation period by investing Latin American debt adjustment to yield duringcapital the twelve-month endinginDecember 31, 2013. securities, stock indexes, currencies, and trading derivative instruments.
Types of Derivatives and Foreign Exchange Instruments Interest rate swaps are contracts in which a series of interest rate flows in a single currency are exchanged over a prescribed period. The Bank has designated a portion of these derivative instruments as fair value hedges and a portion as cash flow hedges. Cross -7- currency swaps are contracts that generally involve the exchange of both interest and principal amounts in two different currencies. The Bank has designated a portion of these derivative instruments as fair value hedges and a portion as cash flow hedges. Forward foreign exchange contracts represent an agreement to purchase or sell foreign currency at a future date at 90
-50-
investment hedges.
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 Inspecialized addition tosupranational hedging derivative financialtoinstruments, derivative instruments held bank established finance tradethe in Bank Latin has America and thefinancial Caribbean (the for trading purposes that have been disclosed in Note 5. “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 22. Accumulated comprehensive income (loss) organization toother 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 officially initiated 31, operations January 1979. a contract in 1978 between the Republic income As of December 2012, on 2011 and 2, 2010 theUnder breakdown ofsigned accumulated other comprehensive of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an (loss) related to investment securities available-for-sale and derivative financial instruments, and foreign exemption from payment of income taxes in Panama.
currency translation is as follows:
The Bank operates under a general banking license issued by the National Banking Commission Foreign currencyof Panama, predecessor of the Superintendency of Banks ofSecurities Panama (the “SBP”). Derivative translation availablefinancial adjustment, for-sale instruments hedges (In thousands of US$) of Panama, banks are regulated by the SBP In the Republic through Executive Decreenet No.of52 of April Total 30, 2008, adopts the text of the Law Decree No. 9(3,244) of February 26,(2,916) 1998, modified by the- Law (6,160) Balance as ofwhich January 1, 2010 No. gains 2 of February 22, the 2008. and agreements issued - by 3,716 NetDecree unrealized arising from year Banks are also regulated 2,325by resolutions 1,391 this entity. The main aspects this law and its regulations include: the authorization of banking Reclassification adjustment for gainsofincluded (1) minimum capital and liquidity requirements,(2,825) consolidated supervision, procedures inlicenses, net income (1,172) - for (3,997) management of credit and market risks, measures to prevent money laundering, the financing - of (6,441) (3,744) (2,697) Balance as of December 31, 2010 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Net unrealized gains arising from the year 4,095 1,097 5,192 others. Reclassification adjustment for (gains) losses included in net income (1) (2,079) 960 (1,119) Bladex Head Office’s subsidiaries are the following: (744) Foreign currency translation adjustment, net (744) (744) (1,728) (640) (3,112) Balance as of December 31, 2011 - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Net unrealized gainsUnited arising States from the 5,699Holdings Inc. exercises 14,135 Delaware, of year America (USA), on May8,436 30, 2000. Bladex Reclassification adjustment for gains included control(1)over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the in net income (5,775) (5,427) Offshore Feeder- Fund (11,202) State of Delaware, USA, which serves as investment manager for Bladex (551)Asset Foreign currency translation net Growth Fund (the “Fund”). - 2012, Bladex (551) (the “Feeder”) and adjustment, Bladex Capital In February (1,295)as an 933 Exchange Commission (368) (730) Balance Management as of December 31,was 2012registered with the Securities and Inc., (“SEC”) (1) investment adviser. On September 8, in 2009, Bladex Asset Management Inc.been was as a Reclassification adjustments include amounts recognized net income during the current year that had partregistered of other comprehensive income entity years. in the Republic of Panama, to establish a branch in Panama, which is mainly (loss) inforeign this and previous engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. 23. Fair value of financial instruments The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, The- Bank determines the fair value of its financial instruments using the fair value hierarchy established 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of in ASCtheTopic 820 - Fair Value Measurements and Disclosure, which requires the Bank to maximize the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated use of under observable inputs thatIslands. reflect The the assumptions market participants would use in pricing the laws of the(those Cayman Feeder and thethat Fund are registered with the Cayman the asset or liability developed based on market information obtained from sources independent of the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The reporting entity) and to minimize the use of unobservable inputs (those that reflect the reporting entity’s objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, andmarket trading participants derivative instruments. own assumptions about the assumptions would use in pricing the asset or liability developed based on the best information available in the circumstances) when measuring fair value. Fair value is used on a recurring basis to measure assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets and liabilities for impairment or for disclosure purposes. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in -7an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Bank uses some valuation techniques and assumptions when estimating fair value. The Bank applied the following fair value hierarchy: -51-
91
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization Level 1 – Assets or liabilities for which an identical instrument is traded in an active market, such as publicly-traded instruments or futures contracts.
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 Level 2 – Assets or liabilities valued based on observable market data and for the similar instruments, quoted specialized supranational bank established to finance trade in Latin America Caribbean (the prices in markets that are not active; or other observable inputs that can be corroborated by observable “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of market dataof forCentral substantially full Region, term of the asset or liability. the creation of a multinational Governors Banks the in the which recommended organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, 3incorporated 1978 as afor corporation pursuant to the lawsassumptions of the Republic Level – Assets orinliabilities which significant valuation are of notPanama, readily and observable in officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic the market; instruments measured based on the best available information, which might include some of Panama and Bladex,data, the Bank was grantedrisk certain privileges Republic of Panama, including an internally-developed and considers premiums thatbyathe market participant would require. exemption from payment of income taxes in Panama.
When determining the fair value measurements for assets and liabilities that are required or permitted to The Bank operates under a general banking license issued by the National Banking Commission of be recorded at fair value, Bank considers the principal or(the most advantageous market in which it would Panama, predecessor of thethe Superintendency of Banks of Panama “SBP”). transact and considers the assumptions that market participants would use when pricing the asset or liability. When ofpossible, the Bank uses active markets to price In the Republic Panama, banks are regulated by theand SBP observable through Executive Decree No. 52identical of April assets or 30, 2008, which the assets text of and the Law Decreeare No. of February 26, 1998, modified by theuses Lawobservable liabilities. When adopts identical liabilities not9 traded in active markets, the Bank Decree information No. 2 of February 22, 2008. Banks also regulated by resolutions and agreements issued market for similar assets and are liabilities. However, certain assets and liabilities arebynot actively this entity. The mainmarkets aspectsand of this law and its use regulations include: the authorization traded in observable the Bank must alternative valuation techniques of to banking determine the fair licenses, minimum capital and liquidity requirements, consolidated supervision, procedures forsize of the value measurement. The frequency of transactions, the size of the bid-ask spread and the management of credit and market risks, measures to prevent money laundering, the financing of investment are factors considered in determining the liquidity of markets and the relevance of observed terrorism and related illicit activities, and procedures for banking intervention and liquidation, among prices others.in those markets. When beensubsidiaries a significant decrease in the volume or level of activity for a financial asset or Bladexthere Head has Office’s are the following: liability, the Bank uses the present value technique which considers market information to determine a - Bladex Holdings Inc., a wholly owned subsidiary, incorporated under the laws of the State of representative fair value in is usual market conditions.
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., used incorporated on May 2006, under the lawsatoffair the value on a A description of the valuation methodologies for assets and 24, liabilities measured State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund recurring basis, including the general classification of such assets and liabilities under the fair value (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset hierarchy is presented below: Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Trading assetsentity and liabilities and securities available-for-sale foreign in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Trading assets and liabilities are carried at fair value, which is based upon quoted prices when available, USA.
or if quoted market prices are not available, on discounted expected cash flows using market rates - The Feederwith is anthe entity in which Bladex office 98.06% and 95.84% as of December 31, commensurate credit quality and Head maturity ofowns the security.
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Securities available for sale are carried at fair value, based on quoted market prices when available, or if under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman quoted market prices are not available, based on discounted expected cash flows using market rates Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The commensurate with credit andcapital maturity of the security. objective of thethe Fund is toquality achieve appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
When quoted prices are available in an active market, available-for-sale securities and trading assets and liabilities are classified in level 1 of the fair value hierarchy. If quoted market prices are not available or they are available in markets that are not active, then fair values are estimated based upon quoted prices of similar instruments, or where these are not available, by using internal valuation techniques, principally discounted cash flows models. Such securities are classified within level 2 of the fair value -7hierarchy.
92
-52-
1.
Organization Investment fund The Fund invests in trading assets and liabilities that are carried at fair value, which is based upon quoted Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its market prices when available. For financial instruments for which quoted prices are not available, the subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Fund uses independent from pricing providers useAmerica their own valuation models specialized supranationalvaluations bank established to finance trade inthat Latin and proprietary the Caribbean (the that take into consideration discounted expected cash flows, using market rates commensurate with the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of credit quality maturity Theserecommended prices are compared to independent valuations from Governors of and Central Banksofinthe thesecurity. Region, which the creation of a multinational counterparties. 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 officially operations on January 2, 1979.and, Under a contractrepresentative signed in 1978 between the Republic The Fundinitiated is not traded in an active market therefore, market quotes are not readily of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, available. Its fair value is adjusted on a monthly basis based on its financial including results, an its operating exemption from payment of income taxes in Panama.
performance, its liquidity and the fair value of its long and short investment portfolio that are quoted and traded in active markets. Such investment is classified within level 2 of the fair value hierarchy. The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Derivative financial instruments
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30, 2008, whichtechniques adopts the and text of the Law Decree of February 26, 1998, by the Lawunderlying The valuation inputs depend on No. the 9type of derivative andmodified the nature of the Decree No. 2Exchange-traded of February 22, 2008. Banks are by resolutions and agreements issuedwithin by instrument. derivatives thatalso areregulated valued using quoted prices are classified level 1 Thehierarchy. main aspects of this law and its regulations include: the authorization of banking ofthis theentity. fair value
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of For those derivative contracts without quoted market prices, fair value is based on internal valuation terrorism and related illicit activities, and procedures for banking intervention and liquidation, among techniques using inputs that are readily observable and that can be validated by information available in others.
the market. The principal technique used to value these instruments is the discounted cash flows model and the Head key inputs technique include interest rate yield curves and foreign exchange Bladex Office’sconsidered subsidiariesin arethis the following: rates. These derivatives are classified within level 2 of the fair value hierarchy.
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United Statesapplied of America (USA), 30, 2000. carrying Bladex Holdings Inc. exercises The fair value adjustments by the BankontoMay its derivative values include credit valuation control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws the the base adjustments (“CVA”), which are applied to over-the-counter derivative instruments, in of which State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund valuation generally discounts expected cash flows using the London Interbank Offered Rate (“LIBOR”) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset interestManagement rate curves. Because not all counterparties have the same credit risk as that implied by the Inc., was registered with the Securities and Exchange Commission (“SEC”) as an relevant LIBOR curve, CVA is necessary to Bladex incorporate market view of both, counterparty credit investment adviser. a On September 8, 2009, Asset the Management Inc. was registered as a risk and the Bank’s own credit risk, in the valuation. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Own-credit USA. and counterparty CVA is determined using a fair value curve consistent with the Bank’s or -
counterparty credit rating. The CVA is designed to incorporate a market view of the credit risk inherent in The Feeder is an entity in which Bladex Head ownsderivative 98.06% andinstruments 95.84% as ofare December 31, bilateral the- derivative portfolio. However, most of theoffice Bank’s negotiated 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of contracts and are not commonly transferred to third parties. Derivative instruments are normally settled the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated contractually, or if terminated early, are terminated at a value negotiated bilaterally between the under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman counterparties. Therefore, the CVA (both counterparty and own-credit) may not be realized upon a Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The settlement or termination business. by In addition, all Latin or a portion of debt the CVA may objective of the Fundinisthe to normal achieve course capital of appreciation investing in American be reversed or otherwise adjusted in future periods in the event of changes in the credit risk of the Bank or securities, stock indexes, currencies, and trading derivative instruments. its counterparties or due to the anticipated termination of the transactions. Transfer of financial assets Gains or losses on sale of loans depend in part on the carrying amount of the financial assets involved in -7the transfer, and its fair value at the date of transfer. The fair value of instruments is determined based upon quoted market prices when available, or are based on the present value of future expected cash
-53-
93
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization Level 1 – Assets or liabilities for which an identical instrument is traded in an active market, such as publicly-traded instruments or futures contracts.
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 Level 2 – Assets or liabilities valued based on observable market data and for the similar instruments, quoted specialized supranational bank established to finance trade in Latin America Caribbean (the prices in markets that are not active; or other observable inputs that can be corroborated by observable “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of market dataof forCentral substantially full Region, term of the asset or liability. the creation of a multinational Governors Banks the in the which recommended organization to increase the foreign trade financing capacity of the Region. The Bank was organized in 1977, 3incorporated 1978 as afor corporation pursuant to the lawsassumptions of the Republic Level – Assets orinliabilities which significant valuation are of notPanama, readily and observable in officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic the market; instruments measured based on the best available information, which might include some of Panama and Bladex,data, the Bank was grantedrisk certain privileges Republic of Panama, including an internally-developed and considers premiums thatbyathe market participant would require. exemption from payment of income taxes in Panama.
When determining the fair value measurements for assets and liabilities that are required or permitted to The Bank operates under a general banking license issued by the National Banking Commission of be recorded at fair value, Bank considers the principal or(the most advantageous market in which it would Panama, predecessor of thethe Superintendency of Banks of Panama “SBP”). transact and considers the assumptions that market participants would use when pricing the asset or liability. When ofpossible, the Bank uses active markets to price In the Republic Panama, banks are regulated by theand SBP observable through Executive Decree No. 52identical of April assets or 30, 2008, which the assets text of and the Law Decreeare No. of February 26, 1998, modified by theuses Lawobservable liabilities. When adopts identical liabilities not9 traded in active markets, the Bank Decree information No. 2 of February 22, 2008. Banks also regulated by resolutions and agreements issued market for similar assets and are liabilities. However, certain assets and liabilities arebynot actively this entity. The mainmarkets aspectsand of this law and its use regulations include: the authorization traded in observable the Bank must alternative valuation techniques of to banking determine the fair licenses, minimum capital and liquidity requirements, consolidated supervision, procedures forsize of the value measurement. The frequency of transactions, the size of the bid-ask spread and the management of credit and market risks, measures to prevent money laundering, the financing of investment are factors considered in determining the liquidity of markets and the relevance of observed terrorism and related illicit activities, and procedures for banking intervention and liquidation, among prices others.in those markets. When beensubsidiaries a significant decrease in the volume or level of activity for a financial asset or Bladexthere Head has Office’s are the following: liability, the Bank uses the present value technique which considers market information to determine a - Bladex Holdings Inc., a wholly owned subsidiary, incorporated under the laws of the State of representative fair value in is usual market conditions.
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., used incorporated on May 2006, under the lawsatoffair the value on a A description of the valuation methodologies for assets and 24, liabilities measured State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund recurring basis, including the general classification of such assets and liabilities under the fair value (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset hierarchy is presented below: Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Trading assetsentity and liabilities and securities available-for-sale foreign in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Trading assets and liabilities are carried at fair value, which is based upon quoted prices when available, USA.
or if quoted market prices are not available, on discounted expected cash flows using market rates - The Feederwith is anthe entity in which Bladex office 98.06% and 95.84% as of December 31, commensurate credit quality and Head maturity ofowns the security.
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Securities available for sale are carried at fair value, based on quoted market prices when available, or if under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman quoted market prices are not available, based on discounted expected cash flows using market rates Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The commensurate with credit andcapital maturity of the security. objective of thethe Fund is toquality achieve appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
When quoted prices are available in an active market, available-for-sale securities and trading assets and liabilities are classified in level 1 of the fair value hierarchy. If quoted market prices are not available or they are available in markets that are not active, then fair values are estimated based upon quoted prices of similar instruments, or where these are not available, by using internal valuation techniques, principally discounted cash flows models. Such securities are classified within level 2 of the fair value -7hierarchy.
92
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1.
Organization Investment fund The Fund invests in trading assets and liabilities that are carried at fair value, which is based upon quoted Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its market prices when available. For financial instruments for which quoted prices are not available, the subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a Fund uses independent from pricing providers useAmerica their own valuation models specialized supranationalvaluations bank established to finance trade inthat Latin and proprietary the Caribbean (the that take into consideration discounted expected cash flows, using market rates commensurate with the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of credit quality maturity Theserecommended prices are compared to independent valuations from Governors of and Central Banksofinthe thesecurity. Region, which the creation of a multinational counterparties. 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 officially operations on January 2, 1979.and, Under a contractrepresentative signed in 1978 between the Republic The Fundinitiated is not traded in an active market therefore, market quotes are not readily of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, available. Its fair value is adjusted on a monthly basis based on its financial including results, an its operating exemption from payment of income taxes in Panama.
performance, its liquidity and the fair value of its long and short investment portfolio that are quoted and traded in active markets. Such investment is classified within level 2 of the fair value hierarchy. The Bank operates under a general banking license issued by the National Banking Commission of Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”).
Derivative financial instruments
In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30, 2008, whichtechniques adopts the and text of the Law Decree of February 26, 1998, by the Lawunderlying The valuation inputs depend on No. the 9type of derivative andmodified the nature of the Decree No. 2Exchange-traded of February 22, 2008. Banks are by resolutions and agreements issuedwithin by instrument. derivatives thatalso areregulated valued using quoted prices are classified level 1 Thehierarchy. main aspects of this law and its regulations include: the authorization of banking ofthis theentity. fair value
licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of For those derivative contracts without quoted market prices, fair value is based on internal valuation terrorism and related illicit activities, and procedures for banking intervention and liquidation, among techniques using inputs that are readily observable and that can be validated by information available in others.
the market. The principal technique used to value these instruments is the discounted cash flows model and the Head key inputs technique include interest rate yield curves and foreign exchange Bladex Office’sconsidered subsidiariesin arethis the following: rates. These derivatives are classified within level 2 of the fair value hierarchy.
Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United Statesapplied of America (USA), 30, 2000. carrying Bladex Holdings Inc. exercises The fair value adjustments by the BankontoMay its derivative values include credit valuation control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws the the base adjustments (“CVA”), which are applied to over-the-counter derivative instruments, in of which State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund valuation generally discounts expected cash flows using the London Interbank Offered Rate (“LIBOR”) (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset interestManagement rate curves. Because not all counterparties have the same credit risk as that implied by the Inc., was registered with the Securities and Exchange Commission (“SEC”) as an relevant LIBOR curve, CVA is necessary to Bladex incorporate market view of both, counterparty credit investment adviser. a On September 8, 2009, Asset the Management Inc. was registered as a risk and the Bank’s own credit risk, in the valuation. foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in Own-credit USA. and counterparty CVA is determined using a fair value curve consistent with the Bank’s or -
counterparty credit rating. The CVA is designed to incorporate a market view of the credit risk inherent in The Feeder is an entity in which Bladex Head ownsderivative 98.06% andinstruments 95.84% as ofare December 31, bilateral the- derivative portfolio. However, most of theoffice Bank’s negotiated 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of contracts and are not commonly transferred to third parties. Derivative instruments are normally settled the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated contractually, or if terminated early, are terminated at a value negotiated bilaterally between the under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman counterparties. Therefore, the CVA (both counterparty and own-credit) may not be realized upon a Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The settlement or termination business. by In addition, all Latin or a portion of debt the CVA may objective of the Fundinisthe to normal achieve course capital of appreciation investing in American be reversed or otherwise adjusted in future periods in the event of changes in the credit risk of the Bank or securities, stock indexes, currencies, and trading derivative instruments. its counterparties or due to the anticipated termination of the transactions. Transfer of financial assets Gains or losses on sale of loans depend in part on the carrying amount of the financial assets involved in -7the transfer, and its fair value at the date of transfer. The fair value of instruments is determined based upon quoted market prices when available, or are based on the present value of future expected cash
-53-
93
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization flows using information related to credit losses, prepayment speeds, forward yield curves, and discounted rates commensurate with the risk involved.
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 Financial instruments measured at fair value on a recurring basisAmerica by caption consolidated specialized supranational bank established to finance trade in Latin and on the the Caribbean (the balance sheets using the fair value hierarchy are described below: “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 2012 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Internally developed developed (In1977, thousands of US$) incorporated in 1978 as a corporation pursuant to the laws of the RepublicInternally of Panama, and Quoted market models with models with officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Total carrying prices in an significant observable significant unobservable value in the of Panama and Bladex, the Bank was granted certain by the information Republic of Panama, an consolidated active privileges market market marketincluding information exemption from payment of income taxes in Panama. (Level 1) (Level 2) (Level 3) balance sheets Assets The Bank Trading assets operates under a general banking license issued by the National Banking Commission of Panama, bonds predecessor of the Superintendency of Banks of Panama (the “SBP”). Sovereign 5,146 Interest rate swap 49 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of -April Forward foreign exchange 50 30, 2008, which adopts the text of the Law Decree No. Future contracts 20 9 of February 26,- 1998, modified by the- Law Decree No. 2 of February 22, 2008. Banks are also5,215 regulated by resolutions 50 and agreements issued - by this The main aspects of this law and its regulations include: the authorization of banking Totalentity. trading assets licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Securities available-for-sale management to prevent money laundering, the financing Corporate debt of credit and market risks, measures 17,386 - of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Sovereign debt 165,355 276 others. Total securities available-for-sale 182,741 276 Investment fund 105,887 Bladex financial Head Office’s subsidiaries are the -following: Derivative instruments used for hedging receivable Interest rate swaps - incorporated 8,319 - of - Bladex Holdings Inc., is a wholly owned subsidiary, under the laws of the State Cross-currency interest rate swaps Delaware, United States of America (USA), on May 30, 2000.10,858 Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws -of the 62 Forward foreign exchange
State of financial Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Total derivative instruments used for (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). 19,239 In February 2012, Bladex -Asset hedging - receivable Management Inc., was registered with the Securities and Exchange Commission (“SEC”) -as an 187,956 125,452 Total assets at fair value investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Liabilities foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Trading liabilities engaged in providing administrative and operating services to Bladex Asset Management Inc. in Interest rate swaps 100 USA. Cross-currency interest rate swaps 32,182 -22 Forward foreign exchange - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 32,304 Total trading liabilities 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Derivative financial instruments used for hedging – payable under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Monetary Authority (“CIMA”), under the Mutual Funds Law InterestIsland rate swaps 6,600of the Cayman Islands. - The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Cross-currency interest rate swaps 4,689 securities, stock indexes, currencies, and trading derivative instruments. Forward foreign exchange Total derivative financial instruments used for hedging - payable
Total liabilities at fair value
17,386 165,631 183,017 105,887 8,319 10,858 62 19,239 313,408
100 32,182 22 32,304
-
459
-
6,600 4,689 459
-
11,748
-
11,748
-
44,052
-
44,052
Organization 2011 Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Internally (InBanco thousands of US$) subsidiaries “Bladex” or the “Bank”), headquartered Internally in Panama City, Republic of models Panama, is a developed developed with withthe significant specialized supranational bank established to finance trade models in Latin America and Caribbean (the Quoted market significant unobservable “Region”). The Bank was established pursuant to a May 1975 proposal presented to the AssemblyTotal of carrying prices in an active value in the observable market Governors of Central Banks in the Region, which recommended the creation market of a multinational information organization to increase the foreign trade market financing capacity information of the Region. The Bank was organizedconsolidated in (Level 1) balance sheets (Level 2) (Level 3) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Assets officially Trading assetsinitiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Sovereign bonds 20,415 20,415 exemption from payment of income taxes in Panama. Cross-currency interest rate swaps 21 21 20,415 21 20,436 Total trading assets The Bank operates under a general banking license issued by the National Banking Commission of Securities available-for-sale Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Corporate debt 87,198 87,198 328,544 558 329,102 Sovereign debt In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 415,742No. 9 of February 26, 5581998, modified by the - Law 416,300 Total securities available-for-sale 30, 2008, which adopts the text of the Law Decree Investment fund 120,425 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 120,425 Derivative financial instruments this entity. The main aspects of this law and its regulations include: the authorization of banking receivable licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Interest rate swaps 16 management of credit and market risks, measures- to prevent money 16 laundering, the financing of Cross-currency interest rate swaps 3,605 3,605 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Forward 538 538 others. foreign exchange Total derivative financial instruments 4,159 4,159 - receivable Bladex Head Office’s subsidiaries are the following: Total assets at fair value 436,157 125,163 561,320 Liabilities - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Trading liabilities Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Interest rate swaps 748 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 4,836 Cross-currency interest rate swaps State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund - (the “Fund”). In 5,584 - Asset Total trading liabilities and Bladex Capital Growth Fund (the “Feeder”) February 2012, Bladex Derivative financial instruments – Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an payable investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Interest rate swaps 10,829 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Cross-currency interest rate swaps 40,574 engaged in providing administrative and operating services to Bladex Asset Management- Inc. in Forward foreign exchange 2,339 USA. Total derivative financial instruments 53,742 - payable
748 4,836 5,584
10,829 40,574 2,339 53,742
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 59,326 59,326 Total liabilities at fair value 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated ASC Topic - Financial Instruments requires disclosure fair value of financial instruments under 825 the laws of the Cayman Islands. The Feeder and theofFund are registered with the Cayman including those assets and liabilities for which the Bank did not elect the fair value option. Bank’s management Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The uses itsobjective best judgment in estimating the fair value of the Bank’s financialininstruments; however, of the Fund is to achieve capital appreciation by investing Latin American debt there are securities, stock indexes, currencies, trading derivative limitations in any estimation technique.and The estimated fair instruments. value amounts have been measured as of their -
respective year-ends, and have not been re-expressed or updated subsequent to the dates of these consolidated financial statements. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end. The following information should not be interpreted as an estimate of the fair value of the Bank. Fair -7value calculations are only provided for a limited portion of the Bank’s financial assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates,
-7-
94
5,146 49 50 20 5,265
1.
-54-
-55-
95
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization flows using information related to credit losses, prepayment speeds, forward yield curves, and discounted rates commensurate with the risk involved.
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 Financial instruments measured at fair value on a recurring basisAmerica by caption consolidated specialized supranational bank established to finance trade in Latin and on the the Caribbean (the balance sheets using the fair value hierarchy are described below: “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 2012 organization to increase the foreign trade financing capacity of the Region. The Bank was organized in Internally developed developed (In1977, thousands of US$) incorporated in 1978 as a corporation pursuant to the laws of the RepublicInternally of Panama, and Quoted market models with models with officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Total carrying prices in an significant observable significant unobservable value in the of Panama and Bladex, the Bank was granted certain by the information Republic of Panama, an consolidated active privileges market market marketincluding information exemption from payment of income taxes in Panama. (Level 1) (Level 2) (Level 3) balance sheets Assets The Bank Trading assets operates under a general banking license issued by the National Banking Commission of Panama, bonds predecessor of the Superintendency of Banks of Panama (the “SBP”). Sovereign 5,146 Interest rate swap 49 In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of -April Forward foreign exchange 50 30, 2008, which adopts the text of the Law Decree No. Future contracts 20 9 of February 26,- 1998, modified by the- Law Decree No. 2 of February 22, 2008. Banks are also5,215 regulated by resolutions 50 and agreements issued - by this The main aspects of this law and its regulations include: the authorization of banking Totalentity. trading assets licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Securities available-for-sale management to prevent money laundering, the financing Corporate debt of credit and market risks, measures 17,386 - of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Sovereign debt 165,355 276 others. Total securities available-for-sale 182,741 276 Investment fund 105,887 Bladex financial Head Office’s subsidiaries are the -following: Derivative instruments used for hedging receivable Interest rate swaps - incorporated 8,319 - of - Bladex Holdings Inc., is a wholly owned subsidiary, under the laws of the State Cross-currency interest rate swaps Delaware, United States of America (USA), on May 30, 2000.10,858 Bladex Holdings Inc. exercises control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws -of the 62 Forward foreign exchange
State of financial Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Total derivative instruments used for (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). 19,239 In February 2012, Bladex -Asset hedging - receivable Management Inc., was registered with the Securities and Exchange Commission (“SEC”) -as an 187,956 125,452 Total assets at fair value investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Liabilities foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Trading liabilities engaged in providing administrative and operating services to Bladex Asset Management Inc. in Interest rate swaps 100 USA. Cross-currency interest rate swaps 32,182 -22 Forward foreign exchange - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 32,304 Total trading liabilities 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated Derivative financial instruments used for hedging – payable under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Monetary Authority (“CIMA”), under the Mutual Funds Law InterestIsland rate swaps 6,600of the Cayman Islands. - The objective of the Fund is to achieve capital appreciation by investing in Latin American debt Cross-currency interest rate swaps 4,689 securities, stock indexes, currencies, and trading derivative instruments. Forward foreign exchange Total derivative financial instruments used for hedging - payable
Total liabilities at fair value
17,386 165,631 183,017 105,887 8,319 10,858 62 19,239 313,408
100 32,182 22 32,304
-
459
-
6,600 4,689 459
-
11,748
-
11,748
-
44,052
-
44,052
Organization 2011 Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its Internally (InBanco thousands of US$) subsidiaries “Bladex” or the “Bank”), headquartered Internally in Panama City, Republic of models Panama, is a developed developed with withthe significant specialized supranational bank established to finance trade models in Latin America and Caribbean (the Quoted market significant unobservable “Region”). The Bank was established pursuant to a May 1975 proposal presented to the AssemblyTotal of carrying prices in an active value in the observable market Governors of Central Banks in the Region, which recommended the creation market of a multinational information organization to increase the foreign trade market financing capacity information of the Region. The Bank was organizedconsolidated in (Level 1) balance sheets (Level 2) (Level 3) 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Assets officially Trading assetsinitiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an Sovereign bonds 20,415 20,415 exemption from payment of income taxes in Panama. Cross-currency interest rate swaps 21 21 20,415 21 20,436 Total trading assets The Bank operates under a general banking license issued by the National Banking Commission of Securities available-for-sale Panama, predecessor of the Superintendency of Banks of Panama (the “SBP”). Corporate debt 87,198 87,198 328,544 558 329,102 Sovereign debt In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 415,742No. 9 of February 26, 5581998, modified by the - Law 416,300 Total securities available-for-sale 30, 2008, which adopts the text of the Law Decree Investment fund 120,425 Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by 120,425 Derivative financial instruments this entity. The main aspects of this law and its regulations include: the authorization of banking receivable licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for Interest rate swaps 16 management of credit and market risks, measures- to prevent money 16 laundering, the financing of Cross-currency interest rate swaps 3,605 3,605 terrorism and related illicit activities, and procedures for banking intervention and liquidation, among Forward 538 538 others. foreign exchange Total derivative financial instruments 4,159 4,159 - receivable Bladex Head Office’s subsidiaries are the following: Total assets at fair value 436,157 125,163 561,320 Liabilities - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Trading liabilities Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Interest rate swaps 748 control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the 4,836 Cross-currency interest rate swaps State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund - (the “Fund”). In 5,584 - Asset Total trading liabilities and Bladex Capital Growth Fund (the “Feeder”) February 2012, Bladex Derivative financial instruments – Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an payable investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Interest rate swaps 10,829 foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly Cross-currency interest rate swaps 40,574 engaged in providing administrative and operating services to Bladex Asset Management- Inc. in Forward foreign exchange 2,339 USA. Total derivative financial instruments 53,742 - payable
748 4,836 5,584
10,829 40,574 2,339 53,742
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 59,326 59,326 Total liabilities at fair value 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated ASC Topic - Financial Instruments requires disclosure fair value of financial instruments under 825 the laws of the Cayman Islands. The Feeder and theofFund are registered with the Cayman including those assets and liabilities for which the Bank did not elect the fair value option. Bank’s management Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The uses itsobjective best judgment in estimating the fair value of the Bank’s financialininstruments; however, of the Fund is to achieve capital appreciation by investing Latin American debt there are securities, stock indexes, currencies, trading derivative limitations in any estimation technique.and The estimated fair instruments. value amounts have been measured as of their -
respective year-ends, and have not been re-expressed or updated subsequent to the dates of these consolidated financial statements. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end. The following information should not be interpreted as an estimate of the fair value of the Bank. Fair -7value calculations are only provided for a limited portion of the Bank’s financial assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates,
-7-
94
5,146 49 50 20 5,265
1.
-54-
-55-
95
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization comparison of fair value information of the Bank and other companies may not be meaningful for comparative analysis.
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 The following methods and used byinthe Bank’s management in estimating specialized supranational bank assumptions established to were finance trade Latin America and the Caribbean (the the fair values of financial instruments whose fair value are not measured on a recurring basis: “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 Financial instruments carrying value that approximates value The Bank was organized in organization to increasewith the foreign trade financing capacity of thefair Region. 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contractcash signed in 1978 the Republic The carrying value of certain financial assets, including and due between from banks, interest-bearing of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an deposits in banks, customers’ liabilities under acceptances, accrued interest receivable and certain exemptionliabilities from payment of income taxes in Panama. financial including customer’s demand and time deposits, securities sold under repurchase
agreements, accrued interest payable, and acceptances outstanding, as a result of their short-term nature, The Bank operates under a general banking license issued by the National Banking Commission of are considered to approximate fair value. of Banks of Panama (the “SBP”). Panama, predecessor of the Superintendency Securities held-to-maturity In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law
Decree 2 ofhas February 22, 2008. are market also regulated by resolutions and agreements issuedmarket by The fair No. value been based uponBanks current quotations, where available. If quoted prices thisnot entity. The main aspects this law and itsbased regulations include: price the authorization of banking or where are available, fair value hasofbeen estimated upon quoted of similar instruments, licenses, minimum capital liquidityexpected requirements, consolidated supervision, for with the these are not available, on and discounted cash flows using market rates procedures commensurate management of credit and market risks, measures to prevent money laundering, the financing of credit quality and maturity of the security. terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
Loans
Bladex Head Office’s subsidiaries are the following:
The fair value of the loan portfolio, including impaired loans, is estimated by discounting future cash - using Bladexthe Holdings is aatwholly incorporated under thewith lawssimilar of the State flows currentInc., rates whichowned loans subsidiary, would be made to borrowers creditofratings and Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises for the same remaining maturities, considering the contractual terms in effect as of December 31 of the control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the relevant period. State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Borrowings and short and long-term debt Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a The fair valueentity of short-term and long-term debttoand borrowings is estimated foreign in the Republic of Panama, establish a branch in Panama,using whichdiscounted is mainly cash flow analysis based inonproviding the current incremental rates for types Management of borrowing engaged administrative andborrowing operating services to similar Bladex Asset Inc.arrangements, in taking USA. into account the changes in the Bank’s credit margin. - The Feeder an entity in which Bladex Headof office owns 98.06% and 95.84% as ofwritten December 31, Commitments to is extend credit, stand-by letters credit, and financial guarantees
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated The fair value of commitments is estimated using the fees currently charged to enter into similar under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman agreements, taking into account the remaining terms of the agreements and the present creditworthiness Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The of the objective counterparties. For loan value also considersinthe difference current of the Fund is to commitments, achieve capital fair appreciation by investing Latin Americanbetween debt levels securities, of intereststock ratesindexes, and thecurrencies, committed rates. The fair value of guarantees and letters of credit is based and trading derivative instruments.
on fees currently charged for similar agreements which consider the counterparty risks; which fair value is calculated based on the present value of the premium to be received or a specific allowance for offbalance sheet credit contingencies, whichever is greater. -7-
96
1.
Organization The following table provides information on the carrying value and estimated fair value of the Bank’s financial instruments that are not measured on a recurring basis:
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic (In thousands of US$) December 31, 2012 of Panama, is a specialized supranational bank established to finance trade in Latin America Internally and the Caribbean (the Internally “Region”). The Bank was established pursuant to a May 1975 proposal presented the Assembly of models Quoted developedtomodels developed market prices with significant with significant Governors of Central Banks in the Region, which recommended the creation of a multinational unobservable organization to increase the foreign trade financing capacity in of an theactive Region. observable The Bankmarket was organized in Carrying Fair market information market 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, andinformation Value (Level 1) (Level 2) (Level 3) officially initiated operations on January 2, 1979. Value Under a contract signed in 1978 between the Republic Financial assets: of Panama and Bladex, Instruments with carrying value the that Bank was granted certain privileges by the Republic of Panama, including an exemptionfair from payment of income taxes in Panama. approximates value 746,006 746,006 746,006 Securities 34,113 license 34,149 19,444 14,705 The held-to-maturity Bank operates under a general banking issued by the National Banking Commission of (1) Loans, net of allowance 5,635,480of Banks 5,784,172 5,784,172 Panama, predecessor of the Superintendency of Panama (the “SBP”).
-
Financial liabilities: In the with Republic of value Panama, Instruments carrying that banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, fair which Law Decree No. 9 of February- 26, 1998, modified approximates valueadopts the text of the 2,494,734 2,494,824 2,494,824 by the Law Short-term borrowings 1,453,159 issued by Decree No. 2 of February 22, 2008.1,449,023 Banks are 1,453,159 also regulated by resolutions and agreements Borrowings and long-term debt 1,905,540 1,922,544 1,922,544 this entity. The main aspects of this law and its regulations include: the authorization of banking Commitments extend credit,capital standby and liquidity requirements, consolidated supervision, procedures for licenses, tominimum letters of credit, and financial guarantees management of credit and market risks, measures to prevent money laundering, 4,841 the financing of written 5,781 4,841 -
-
(1)
terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
-
The carrying value of loans is net of the Allowance for loan losses of $73.0 million for December 31, 2012.
Bladex Head Office’s subsidiaries are the following:
(In thousands of US$)
December 31, 2011 Carrying Fair - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Value Value Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Financial assets: over value Bladex Instrumentscontrol with carrying thatAsset Management Inc., incorporated on May 24, 2006, under the laws of the approximates 882,762 Statefairofvalue Delaware, USA, which882,762 serves as investment manager for Bladex Offshore Feeder Fund Securities held-to-maturity 26,536 26,637(the “Fund”). In February 2012, Bladex Asset (the “Feeder”) and Bladex Capital Growth Fund Loans, net of allowance (1) Inc., was registered 4,864,329 Management with the4,913,473 Securities and Exchange Commission (“SEC”) as an
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Financial liabilities: entityvalue in that the Republic of Panama, to establish a branch in Panama, which is mainly Instrumentsforeign with carrying approximates fair value 2,693,408 2,692,832 services to Bladex Asset Management Inc. in engaged in providing administrative and operating Short-term borrowings 1,323,466 1,319,350 USA. Borrowings and long-term debt 1,487,548 1,441,919 Commitments to extend credit, standby - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, letters of credit, and financial guarantees Feeder was 9,807 incorporated on February 21, 2006 under the laws of written 2012 and 2011, respectively. The10,497
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt 24. Litigation securities, stock indexes, currencies, and trading derivative instruments. (1)
The carrying value of loans is net of the Allowance for loan losses of $88.5 million for December 31, 2011.
Bladex is not engaged in any litigation that is material to the Bank’s business or, to the best of the knowledge of the Bank’s management that is likely to have an adverse effect on its business, financial condition or results of operations. -7-
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97
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes consolidatedfinancial financial statements Notes to consolidated statements
Notes to consolidated consolidated financial statements Notes to financial statements
1.
Organization comparison of fair value information of the Bank and other companies may not be meaningful for comparative analysis.
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 The following methods and used byinthe Bank’s management in estimating specialized supranational bank assumptions established to were finance trade Latin America and the Caribbean (the the fair values of financial instruments whose fair value are not measured on a recurring basis: “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 Financial instruments carrying value that approximates value The Bank was organized in organization to increasewith the foreign trade financing capacity of thefair Region. 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and officially initiated operations on January 2, 1979. Under a contractcash signed in 1978 the Republic The carrying value of certain financial assets, including and due between from banks, interest-bearing of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an deposits in banks, customers’ liabilities under acceptances, accrued interest receivable and certain exemptionliabilities from payment of income taxes in Panama. financial including customer’s demand and time deposits, securities sold under repurchase
agreements, accrued interest payable, and acceptances outstanding, as a result of their short-term nature, The Bank operates under a general banking license issued by the National Banking Commission of are considered to approximate fair value. of Banks of Panama (the “SBP”). Panama, predecessor of the Superintendency Securities held-to-maturity In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April
30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law
Decree 2 ofhas February 22, 2008. are market also regulated by resolutions and agreements issuedmarket by The fair No. value been based uponBanks current quotations, where available. If quoted prices thisnot entity. The main aspects this law and itsbased regulations include: price the authorization of banking or where are available, fair value hasofbeen estimated upon quoted of similar instruments, licenses, minimum capital liquidityexpected requirements, consolidated supervision, for with the these are not available, on and discounted cash flows using market rates procedures commensurate management of credit and market risks, measures to prevent money laundering, the financing of credit quality and maturity of the security. terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
Loans
Bladex Head Office’s subsidiaries are the following:
The fair value of the loan portfolio, including impaired loans, is estimated by discounting future cash - using Bladexthe Holdings is aatwholly incorporated under thewith lawssimilar of the State flows currentInc., rates whichowned loans subsidiary, would be made to borrowers creditofratings and Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises for the same remaining maturities, considering the contractual terms in effect as of December 31 of the control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the relevant period. State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Borrowings and short and long-term debt Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a The fair valueentity of short-term and long-term debttoand borrowings is estimated foreign in the Republic of Panama, establish a branch in Panama,using whichdiscounted is mainly cash flow analysis based inonproviding the current incremental rates for types Management of borrowing engaged administrative andborrowing operating services to similar Bladex Asset Inc.arrangements, in taking USA. into account the changes in the Bank’s credit margin. - The Feeder an entity in which Bladex Headof office owns 98.06% and 95.84% as ofwritten December 31, Commitments to is extend credit, stand-by letters credit, and financial guarantees
2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated The fair value of commitments is estimated using the fees currently charged to enter into similar under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman agreements, taking into account the remaining terms of the agreements and the present creditworthiness Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The of the objective counterparties. For loan value also considersinthe difference current of the Fund is to commitments, achieve capital fair appreciation by investing Latin Americanbetween debt levels securities, of intereststock ratesindexes, and thecurrencies, committed rates. The fair value of guarantees and letters of credit is based and trading derivative instruments.
on fees currently charged for similar agreements which consider the counterparty risks; which fair value is calculated based on the present value of the premium to be received or a specific allowance for offbalance sheet credit contingencies, whichever is greater. -7-
96
1.
Organization The following table provides information on the carrying value and estimated fair value of the Bank’s financial instruments that are not measured on a recurring basis:
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic (In thousands of US$) December 31, 2012 of Panama, is a specialized supranational bank established to finance trade in Latin America Internally and the Caribbean (the Internally “Region”). The Bank was established pursuant to a May 1975 proposal presented the Assembly of models Quoted developedtomodels developed market prices with significant with significant Governors of Central Banks in the Region, which recommended the creation of a multinational unobservable organization to increase the foreign trade financing capacity in of an theactive Region. observable The Bankmarket was organized in Carrying Fair market information market 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, andinformation Value (Level 1) (Level 2) (Level 3) officially initiated operations on January 2, 1979. Value Under a contract signed in 1978 between the Republic Financial assets: of Panama and Bladex, Instruments with carrying value the that Bank was granted certain privileges by the Republic of Panama, including an exemptionfair from payment of income taxes in Panama. approximates value 746,006 746,006 746,006 Securities 34,113 license 34,149 19,444 14,705 The held-to-maturity Bank operates under a general banking issued by the National Banking Commission of (1) Loans, net of allowance 5,635,480of Banks 5,784,172 5,784,172 Panama, predecessor of the Superintendency of Panama (the “SBP”).
-
Financial liabilities: In the with Republic of value Panama, Instruments carrying that banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, fair which Law Decree No. 9 of February- 26, 1998, modified approximates valueadopts the text of the 2,494,734 2,494,824 2,494,824 by the Law Short-term borrowings 1,453,159 issued by Decree No. 2 of February 22, 2008.1,449,023 Banks are 1,453,159 also regulated by resolutions and agreements Borrowings and long-term debt 1,905,540 1,922,544 1,922,544 this entity. The main aspects of this law and its regulations include: the authorization of banking Commitments extend credit,capital standby and liquidity requirements, consolidated supervision, procedures for licenses, tominimum letters of credit, and financial guarantees management of credit and market risks, measures to prevent money laundering, 4,841 the financing of written 5,781 4,841 -
-
(1)
terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
-
The carrying value of loans is net of the Allowance for loan losses of $73.0 million for December 31, 2012.
Bladex Head Office’s subsidiaries are the following:
(In thousands of US$)
December 31, 2011 Carrying Fair - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of Value Value Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises Financial assets: over value Bladex Instrumentscontrol with carrying thatAsset Management Inc., incorporated on May 24, 2006, under the laws of the approximates 882,762 Statefairofvalue Delaware, USA, which882,762 serves as investment manager for Bladex Offshore Feeder Fund Securities held-to-maturity 26,536 26,637(the “Fund”). In February 2012, Bladex Asset (the “Feeder”) and Bladex Capital Growth Fund Loans, net of allowance (1) Inc., was registered 4,864,329 Management with the4,913,473 Securities and Exchange Commission (“SEC”) as an
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a Financial liabilities: entityvalue in that the Republic of Panama, to establish a branch in Panama, which is mainly Instrumentsforeign with carrying approximates fair value 2,693,408 2,692,832 services to Bladex Asset Management Inc. in engaged in providing administrative and operating Short-term borrowings 1,323,466 1,319,350 USA. Borrowings and long-term debt 1,487,548 1,441,919 Commitments to extend credit, standby - The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, letters of credit, and financial guarantees Feeder was 9,807 incorporated on February 21, 2006 under the laws of written 2012 and 2011, respectively. The10,497
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt 24. Litigation securities, stock indexes, currencies, and trading derivative instruments. (1)
The carrying value of loans is net of the Allowance for loan losses of $88.5 million for December 31, 2011.
Bladex is not engaged in any litigation that is material to the Bank’s business or, to the best of the knowledge of the Bank’s management that is likely to have an adverse effect on its business, financial condition or results of operations. -7-
-56-
-57-
97
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1. Capital Organization 25. adequacy
1.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
The Banking Law in the Republic of Panama requires banks with general banking license to maintain a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a total capitalsupranational adequacy index that shall tonot be lower than 8%America of total and off-balance sheet specialized bank established finance trade in Latin andassets the Caribbean (the irrevocable contingency transactions, weighted according to their risk; and primary capital equivalent that “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of shall not beof less thanBanks 4% of its assets off-balance sheettheirrevocable transactions, Governors Central in the Region,and which recommended creation of contingency a multinational weighted according to the their risk. trade As financing of December 31,of2012, the Bank’s capital is 17% organization to increase foreign capacity the Region. The Bank wasadequacy organized ratio in 1977, is incorporated in 1978 a corporation pursuantratios to the laws ofby thethe Republic of Law Panama, andRepublic of which in compliance withasthe capital adequacy required Banking in the officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Panama. 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.
26. Business segment information
The Bank operates under a general banking license issued by the National Banking Commission of
The Bank’s activitiesofare and managed segments, Commercial and Treasury. The Asset Panama, predecessor the operated Superintendency of Banksin of two Panama (the “SBP”). Management unit was discontinued since the fourth quarter of 2012. The segment information reflects this operational and management structure, manner consistent with the requirements In the Republic of Panama, banks are regulatedinbya the SBP through Executive Decree No. 52 ofoutlined April in ASC 30, 2008, adopts Reporting. the text of theThe Lawsegment Decree No. 9 ofare February 26, 1998, modified the Lawmanagerial Topic 280which - Segment results determined based on thebyBank’s Decree No. 2process, of February 22, 2008. are also regulated resolutions and agreements issueditems by to each accounting which assignsBanks consolidated balancebysheets, revenue and expense this entity.division The main of this law and its regulations include: the authorization of banking reportable on aaspects systematic basis. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of In 2011, the Bank made the following changes in the measurement methods used to determine segment terrorism and related illicit activities, and procedures for banking intervention and liquidation, among profit others.or loss. Current interest expense allocation methodology reflects allocated funding on a matched-
funded basis, net of risk adjusted capital by business segment. Current operating expense allocation methodology allocates overheadareexpenses based on resource consumption by business segment. Prior Bladex Head Office’s subsidiaries the following: methodology allocated interest expenses and overhead operating expenses based on the segments average - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of portfolio.
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (3) incorporated on May 24, 2006, under the laws of the control over Bladexnet Asset Management Inc., by business segment in order to disclose the revenue and The Bank incorporates operating income State of Delaware, USA, which serves as for Bladex Feeder Fund expense items related to its normal course ofinvestment business,manager segregating from Offshore the net income, the impact of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset reversals of reserves for loan losses and off-balance sheet credit risk, and recoveries on assets. In Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an addition, the Bank’s net interest income8,represents the Asset main driver of net Inc. operating income;astherefore, the investment adviser. On September 2009, Bladex Management was registered a Bank presents its interest-earning assets by business segment, to give an indication of the size of business foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly generating net in interest income. Interest-earning assetsservices also generate gains losses on sales, engaged providing administrative and operating to Bladex Assetand Management Inc. insuch as for securities USA.available-for-sale and trading assets and liabilities, which are included in net other income, in
the Treasury segment. The Bank also discloses its other assets and contingencies by business segment, to - an The Feeder is an in which Bladex Head office ownsnet 98.06% as of December 31, give indication of entity the size of business that generates fees and and95.84% commissions, also included in net 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of other income, in the Commercial Segment.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman The Bank believes that the presentation of net operating income provides important supplementary Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The information to investors regarding financial and appreciation business trends relating in to the financial objective of the Fund is to achieve capital by investing LatinBank’s American debt condition and results of operations. These measures exclude the impact of reversals (provisions) for loan losses and securities, stock indexes, currencies, and trading derivative instruments.
reversals (provisions) for losses on off-balance sheet credit risk (together referred to as “reversal (provision) for credit losses”) which Bank’s management considers distort trend analysis.
Net operating income disclosed by the Bank should not be considered a substitute for, or superior to, financial measures calculated differently from similar measures used by other companies. These -7measures, therefore, may not be comparable to similar measurements used by other companies.
98
-58-
Organizationincorporates all of the Bank’s financial intermediation and fees generated by the commercial Commercial portfolio. The commercial portfolio includes book value of loans, selected deposits placed, acceptances Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its and contingencies. Operating income from the Commercial Segment includes net interest income from subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a loans, fee income and allocated operatingtoexpenses. specialized supranational bank established finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
Treasury deposits and which all of the Bank’s trading assets, of securities available-for-sale Governorsincorporates of Central Banks in inthebanks Region, recommended the creation a multinational and held-to-maturity, the balance of the capacity Investment and The the Bank assets the Brazilian Fund. organization to increase and the foreign trade financing of theFund Region. wasoforganized in 1977, incorporated in 1978 a corporation pursuant to thenet laws of the income Republicfrom of Panama, Operating income from theasTreasury Segment includes interest depositsandwith banks, officially initiated operations on January 2, 1979. Under a contract signed in 1978 Republic trading securities and securities available-for-sale and held-to-maturity, netbetween interestthe margin related to the of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an net gain Feeder’s participation in the net interest margin of the Fund, derivative and hedging activities, exemption from payment of income taxes in Panama. (loss) from investment fund trading, net gain (loss) from trading securities, net gain on sale of securities available-for-sale, gain (loss) banking on foreign currency exchange, and Banking allocated income and The Bank operates net under a general license issued by the National Commission of operating expenses. Operatingofincome from this segment includes net interest margin from the Brazilian Panama, predecessor the Superintendency of Banksalso of Panama (thethe “SBP”). Fund, as well as net gain (loss) from trading securities, fee income, and allocated operating expenses from the Brazilian Fund. The Treasury segment information yearsExecutive 2011 andDecree 2010 includes results of the In the Republic of Panama, banks are regulated by the SBPfor through No. 52 ofthe April 30, 2008, which the Brazilian text of theFund Law Decree No.years, 9 of February modified the Law Investment Fundadopts and the for those in order26, to 1998, conform to thebypresentation of this Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by segment in 2012. this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, capitalofand liquidity requirements, consolidated Since the minimum fourth quarter 2012, the Bank established a plan tosupervision, divest the procedures operations for of the Asset management of credit and market risks, measures to prevent money laundering, the financing of Management unit, which are reported as discontinued operation in the following segment analysis. terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
The following table provides certain information regarding the Bank’s continuing operations by segment: Bladex Head Office’s subsidiaries are the following:
Business Segment Analysis (1)
- Bladex Holdings (In thousands of US$)
Inc., is a wholly owned subsidiary, incorporated under the State of 2012laws of the2011 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises COMMERCIAL control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Interest income 183,365 140,697 (73,398) (58,969) Interest expense State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Net interest income 109,967 81,728 (the 2012, Bladex Asset Net other“Feeder”) income (2) and Bladex Capital Growth Fund (the “Fund”). In February 12,216 11,001 Operating expenses Inc., was registered with the Securities and Exchange Commission (38,322) (“SEC”) (34,895) Management as an Net operating income (3) 83,861 57,834 investment September 8, 2009, Bladex Asset Management Inc. was registered as a (provision)On for loan and off-balance sheet credit losses 12,389 (4,393) Reversal of provisionadviser. Recoveries, net entity of impairment of assets (57) foreign in the Republic of Panama, to establish a branch in Panama,- which is mainly Net income attributable to Bladex 96,250 53,384 engaged in providing administrative and operating services to Bladex Asset Management Inc. in Commercial USA. assets and(4)contingencies (end of period balances): Interest-earning assets Other assets and contingencies (5) Total interest-earning other assets and contingencies - The Feeder isassets, an entity in which Bladex Head
5,708,456 237,077 5,945,533 95.84% as of
4,982,876 364,016 5,346,89231, December
office owns 98.06% and 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of TREASURY the Cayman is also incorporated Interest income Islands, and invests substantially all its assets in the Fund, which 9,072 16,730 Interest (14,062)with the Cayman 4,252 underexpense the laws of the Cayman Islands. The Feeder and the Fund are registered Net interest income (4,990) 20,982 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The (2) 14,612 25,102 Net other income (expense) objective of (3)the Fund is to achieve capital appreciation by investing in(17,492) Latin American debt Operating expenses (15,192) Net operating income (7,870) 30,892 securities, stock indexes, currencies, and trading derivative instruments. Reversal of provision (provision) for loan and off-balance sheet credit losses Net income (loss) Net income (loss) attributable to the redeemable noncontrolling interest Net income (loss) attributable to Bladex Treasury assets and contingencies (end of period balances): Interest-earning assets (6) Third party participation -7Total interest-earning assets and third participation
-59-
(7,870) 293 (8,163)
30,892 676 30,216
1,035,313 (3,384) 1,031,929
1,397,181 (5,547) 1,391,634
2010 104,822 (50,306) 54,516 10,306 (28,304) 36,518 4,835 233 41,586 4,059,943 382,437 4,442,380 14,656 5,331 19,987 (8,044) (13,914) (1,971) (1,971) (2,423) 452 1,040,848 (18,950) 1,021,898
99
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano dede Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Notes to consolidated consolidated financial statements Notes to financial statements
Notes to consolidated consolidated financial statements Notes to financial statements
1. Capital Organization 25. adequacy
1.
Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its
The Banking Law in the Republic of Panama requires banks with general banking license to maintain a subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a total capitalsupranational adequacy index that shall tonot be lower than 8%America of total and off-balance sheet specialized bank established finance trade in Latin andassets the Caribbean (the irrevocable contingency transactions, weighted according to their risk; and primary capital equivalent that “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of shall not beof less thanBanks 4% of its assets off-balance sheettheirrevocable transactions, Governors Central in the Region,and which recommended creation of contingency a multinational weighted according to the their risk. trade As financing of December 31,of2012, the Bank’s capital is 17% organization to increase foreign capacity the Region. The Bank wasadequacy organized ratio in 1977, is incorporated in 1978 a corporation pursuantratios to the laws ofby thethe Republic of Law Panama, andRepublic of which in compliance withasthe capital adequacy required Banking in the officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Panama. 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.
26. Business segment information
The Bank operates under a general banking license issued by the National Banking Commission of
The Bank’s activitiesofare and managed segments, Commercial and Treasury. The Asset Panama, predecessor the operated Superintendency of Banksin of two Panama (the “SBP”). Management unit was discontinued since the fourth quarter of 2012. The segment information reflects this operational and management structure, manner consistent with the requirements In the Republic of Panama, banks are regulatedinbya the SBP through Executive Decree No. 52 ofoutlined April in ASC 30, 2008, adopts Reporting. the text of theThe Lawsegment Decree No. 9 ofare February 26, 1998, modified the Lawmanagerial Topic 280which - Segment results determined based on thebyBank’s Decree No. 2process, of February 22, 2008. are also regulated resolutions and agreements issueditems by to each accounting which assignsBanks consolidated balancebysheets, revenue and expense this entity.division The main of this law and its regulations include: the authorization of banking reportable on aaspects systematic basis. licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for management of credit and market risks, measures to prevent money laundering, the financing of In 2011, the Bank made the following changes in the measurement methods used to determine segment terrorism and related illicit activities, and procedures for banking intervention and liquidation, among profit others.or loss. Current interest expense allocation methodology reflects allocated funding on a matched-
funded basis, net of risk adjusted capital by business segment. Current operating expense allocation methodology allocates overheadareexpenses based on resource consumption by business segment. Prior Bladex Head Office’s subsidiaries the following: methodology allocated interest expenses and overhead operating expenses based on the segments average - Bladex Holdings Inc., is a wholly owned subsidiary, incorporated under the laws of the State of portfolio.
Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises (3) incorporated on May 24, 2006, under the laws of the control over Bladexnet Asset Management Inc., by business segment in order to disclose the revenue and The Bank incorporates operating income State of Delaware, USA, which serves as for Bladex Feeder Fund expense items related to its normal course ofinvestment business,manager segregating from Offshore the net income, the impact of (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset reversals of reserves for loan losses and off-balance sheet credit risk, and recoveries on assets. In Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an addition, the Bank’s net interest income8,represents the Asset main driver of net Inc. operating income;astherefore, the investment adviser. On September 2009, Bladex Management was registered a Bank presents its interest-earning assets by business segment, to give an indication of the size of business foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly generating net in interest income. Interest-earning assetsservices also generate gains losses on sales, engaged providing administrative and operating to Bladex Assetand Management Inc. insuch as for securities USA.available-for-sale and trading assets and liabilities, which are included in net other income, in
the Treasury segment. The Bank also discloses its other assets and contingencies by business segment, to - an The Feeder is an in which Bladex Head office ownsnet 98.06% as of December 31, give indication of entity the size of business that generates fees and and95.84% commissions, also included in net 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of other income, in the Commercial Segment.
the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman The Bank believes that the presentation of net operating income provides important supplementary Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The information to investors regarding financial and appreciation business trends relating in to the financial objective of the Fund is to achieve capital by investing LatinBank’s American debt condition and results of operations. These measures exclude the impact of reversals (provisions) for loan losses and securities, stock indexes, currencies, and trading derivative instruments.
reversals (provisions) for losses on off-balance sheet credit risk (together referred to as “reversal (provision) for credit losses”) which Bank’s management considers distort trend analysis.
Net operating income disclosed by the Bank should not be considered a substitute for, or superior to, financial measures calculated differently from similar measures used by other companies. These -7measures, therefore, may not be comparable to similar measurements used by other companies.
98
-58-
Organizationincorporates all of the Bank’s financial intermediation and fees generated by the commercial Commercial portfolio. The commercial portfolio includes book value of loans, selected deposits placed, acceptances Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” and together with its and contingencies. Operating income from the Commercial Segment includes net interest income from subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is a loans, fee income and allocated operatingtoexpenses. specialized supranational bank established finance trade in Latin America and the Caribbean (the “Region”). The Bank was established pursuant to a May 1975 proposal presented to the Assembly of
Treasury deposits and which all of the Bank’s trading assets, of securities available-for-sale Governorsincorporates of Central Banks in inthebanks Region, recommended the creation a multinational and held-to-maturity, the balance of the capacity Investment and The the Bank assets the Brazilian Fund. organization to increase and the foreign trade financing of theFund Region. wasoforganized in 1977, incorporated in 1978 a corporation pursuant to thenet laws of the income Republicfrom of Panama, Operating income from theasTreasury Segment includes interest depositsandwith banks, officially initiated operations on January 2, 1979. Under a contract signed in 1978 Republic trading securities and securities available-for-sale and held-to-maturity, netbetween interestthe margin related to the of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an net gain Feeder’s participation in the net interest margin of the Fund, derivative and hedging activities, exemption from payment of income taxes in Panama. (loss) from investment fund trading, net gain (loss) from trading securities, net gain on sale of securities available-for-sale, gain (loss) banking on foreign currency exchange, and Banking allocated income and The Bank operates net under a general license issued by the National Commission of operating expenses. Operatingofincome from this segment includes net interest margin from the Brazilian Panama, predecessor the Superintendency of Banksalso of Panama (thethe “SBP”). Fund, as well as net gain (loss) from trading securities, fee income, and allocated operating expenses from the Brazilian Fund. The Treasury segment information yearsExecutive 2011 andDecree 2010 includes results of the In the Republic of Panama, banks are regulated by the SBPfor through No. 52 ofthe April 30, 2008, which the Brazilian text of theFund Law Decree No.years, 9 of February modified the Law Investment Fundadopts and the for those in order26, to 1998, conform to thebypresentation of this Decree No. 2 of February 22, 2008. Banks are also regulated by resolutions and agreements issued by segment in 2012. this entity. The main aspects of this law and its regulations include: the authorization of banking licenses, capitalofand liquidity requirements, consolidated Since the minimum fourth quarter 2012, the Bank established a plan tosupervision, divest the procedures operations for of the Asset management of credit and market risks, measures to prevent money laundering, the financing of Management unit, which are reported as discontinued operation in the following segment analysis. terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.
The following table provides certain information regarding the Bank’s continuing operations by segment: Bladex Head Office’s subsidiaries are the following:
Business Segment Analysis (1)
- Bladex Holdings (In thousands of US$)
Inc., is a wholly owned subsidiary, incorporated under the State of 2012laws of the2011 Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. exercises COMMERCIAL control over Bladex Asset Management Inc., incorporated on May 24, 2006, under the laws of the Interest income 183,365 140,697 (73,398) (58,969) Interest expense State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Net interest income 109,967 81,728 (the 2012, Bladex Asset Net other“Feeder”) income (2) and Bladex Capital Growth Fund (the “Fund”). In February 12,216 11,001 Operating expenses Inc., was registered with the Securities and Exchange Commission (38,322) (“SEC”) (34,895) Management as an Net operating income (3) 83,861 57,834 investment September 8, 2009, Bladex Asset Management Inc. was registered as a (provision)On for loan and off-balance sheet credit losses 12,389 (4,393) Reversal of provisionadviser. Recoveries, net entity of impairment of assets (57) foreign in the Republic of Panama, to establish a branch in Panama,- which is mainly Net income attributable to Bladex 96,250 53,384 engaged in providing administrative and operating services to Bladex Asset Management Inc. in Commercial USA. assets and(4)contingencies (end of period balances): Interest-earning assets Other assets and contingencies (5) Total interest-earning other assets and contingencies - The Feeder isassets, an entity in which Bladex Head
5,708,456 237,077 5,945,533 95.84% as of
4,982,876 364,016 5,346,89231, December
office owns 98.06% and 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of TREASURY the Cayman is also incorporated Interest income Islands, and invests substantially all its assets in the Fund, which 9,072 16,730 Interest (14,062)with the Cayman 4,252 underexpense the laws of the Cayman Islands. The Feeder and the Fund are registered Net interest income (4,990) 20,982 Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The (2) 14,612 25,102 Net other income (expense) objective of (3)the Fund is to achieve capital appreciation by investing in(17,492) Latin American debt Operating expenses (15,192) Net operating income (7,870) 30,892 securities, stock indexes, currencies, and trading derivative instruments. Reversal of provision (provision) for loan and off-balance sheet credit losses Net income (loss) Net income (loss) attributable to the redeemable noncontrolling interest Net income (loss) attributable to Bladex Treasury assets and contingencies (end of period balances): Interest-earning assets (6) Third party participation -7Total interest-earning assets and third participation
-59-
(7,870) 293 (8,163)
30,892 676 30,216
1,035,313 (3,384) 1,031,929
1,397,181 (5,547) 1,391,634
2010 104,822 (50,306) 54,516 10,306 (28,304) 36,518 4,835 233 41,586 4,059,943 382,437 4,442,380 14,656 5,331 19,987 (8,044) (13,914) (1,971) (1,971) (2,423) 452 1,040,848 (18,950) 1,021,898
99
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes financial statements Notes to to consolidated consolidated financial statements
1.
2012 2011 TOTAL Interest income 192,437 157,427 Interest expense (54,717) Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” (87,460) and together with its Net interest income 104,977 102,710 subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is (2) Net other income 26,828 36,103a Operatingsupranational expenses (55,814) (50,087) specialized bank established to finance trade in Latin America and the Caribbean (the (3) Net operatingThe income 75,991 88,726 “Region”). Bank was established pursuant to a May 1975 proposal presented to the Assembly of Reversal of provision (provision) for loans and off-balance sheet credit losses 12,389 (4,393) Governors Central Banks in the Region, which recommended the creation of - a multinational Recoveries, of net of impairment of assets (57) Net income – to business segment 88,380was organized 84,276in organization increase the foreign trade financing capacity of the Region. The Bank Net income (loss) attributable to the redeemable noncontrolling interest ___293 676 1977, incorporated 1978 –as a corporation pursuant to the laws of the Republic and Net income attributablein to Bladex business segment 88,087of Panama, 83,600 Other income unallocated - Gain onon saleJanuary of premises and equipment 5,626 officially initiated operations 2, 1979. Under a contract signed in 1978 between the Republic Discontinued operations (Note 3) (681) (420) of Net Panama Bladex, the Bank was granted certain privileges by the Republic of 93,032 Panama, including an incomeand attributable to Bladex 83,180 (In thousands of US$) Organization
exemption from payment of income taxes in Panama. Total assets and contingencies (end of period balances):
Interest-earning assets (4 & 6) (5) Other assetsoperates and contingencies The Bank under a general banking license Third party participation Panama, predecessor of the Superintendency of Banks Total interest-earning assets, other assets and contingencies (1)
6,743,769
6,380,057
237,077 Commission 364,016of issued by the National Banking (3,384) (5,547) of Panama (the “SBP”). 6,977,462 6,738,526
2010 119,478 (44,975) 74,503 2,262 (42,218) 34,547 4,835 233 39,615 (2,423) 42,038 (206) 42,244 5,100,791 382,437 (18,950) 5,464,278
The numbers set out in these tables have been rounded and accordingly may not total exactly.
(2) In the Republic of Panama, regulated through No. of and April Net other income excludes banks reversalsare (provisions) for by loansthe andSBP off-balance sheetExecutive credit losses,Decree recoveries on 52 assets, gain on sale of equipment. 30, 2008,premises whichandadopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Reconciliation of Net other income: Decree No. 2Net ofother February 2008.segment Banks are also regulated by resolutions and agreements issued by income 22, – business 26,828 36,103 2,262 of provision losses off-balance sheetregulations credit risk 4,046 4,448 13,926 this entity. Reversal The main aspectsforof thison law and its include: the authorization of banking Recoveries, net of impairment of assets (57) 233 licenses, minimum capital andandliquidity Gain on sale of premises equipment requirements, consolidated supervision, 5,626procedures for income financial statements to prevent money laundering, 36,500 40,494of 16,421 management Net of other credit and– consolidated market risks, measures the financing (3) terrorism related illicit procedures bankingforintervention and liquidation, among Net and operating income refersactivities, to net incomeand excluding reversalsfor (provisions) loans and off-balance sheet credit losses and recoveries on assets. others. (4)
Includes selected deposits placed, and loans, net of unearned income and deferred loan fees. Includes customers’ liabilities under acceptances, letters of credit and guarantees covering commercial and country risk, and credit commitments. Bladex Head Office’s subsidiaries are the following: (6) Includes cash and due from banks, interest-bearing deposits with banks, securities available for sale and held to maturity, trading securities and the balance of the Investment Fund. Reconciliation Total is assets: - Bladex HoldingsofInc., a wholly owned subsidiary, incorporated under the laws of the State of Interest-earning assets – business segment 6,743,769 6,380,057 5,100,791 Delaware, United States of Allowance for loan losses America (USA), on May 30, 2000. Bladex Holdings (72,976) Inc. exercises (88,547) (78,615) liabilities under acceptances Inc., incorporated on May 24, 2006, under 1,157 the laws of 1,110 27,213 controlCustomers’ over Bladex Asset Management the and equipment 12,808 6,673 6,532 State ofPremises Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Accrued interest receivable 37,819 38.168 31,110 Derivative financial instruments used Growth for hedgingFund - receivable 2,103 (the “Feeder”) and Bladex Capital (the “Fund”). In February19,239 2012, Bladex 4,159 Asset Other assets 14,580 18,412 10,953 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Total assets – consolidated financial statements 6,756,396 6,360,032 5,100,087 (5)
1.
Organization 2011 (In thousands of US$) United Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” with its Statesand of together Cayman subsidiaries “Bladex” or the “Bank”), headquartered Panama in Panama Brazil City, Republic America of Panama, Islands is a Total specialized supranational bank established to finance trade in Latin America and the Caribbean (the “Region”). Bank was established pursuant to a May 1975 proposal InterestThe income 144,491 114 presented 10,595to the Assembly 2,227 of 157,427 Governors ofexpense Central Banks in the Region, which recommended - the creation of a multinational Interest (53,411) (983) (323) (54,717) Net interest incomethe foreign trade financing91,080 114 1,904 in 102,710 organization to increase capacity of the Region. The9,612 Bank was organized 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Long-lived assets: officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Premises and equipment, net 6,125 10 538 6,673 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxes in Panama. The Bank operates under a general banking license issued by the National 2010 Banking Commission of (In predecessor thousands ofofUS$) Panama, the Superintendency of Banks of Panama (the “SBP”).United States of Cayman Panama Brazil America In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. Islands 52 of April Total 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 106,673 10,607 2,198 by 119,478 DecreeInterest No. 2 income of February 22, 2008. Banks are also regulated by resolutions and agreements issued Interest expense (41,266) (2,746) this entity. The main aspects of this law and its regulations include: the authorization of (963) banking (44,975) Net interest income 65,407 7,861 1,235 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for 74,503 management of credit Long-lived assets: and market risks, measures to prevent money laundering, the financing of terrorismPremises and related illicit activities, for banking intervention and and equipment, net and procedures 6,039 493liquidation, among 6,532 others.
27.Bladex Subsequent eventssubsidiaries are the following: Head Office’s On -February 2013 Inc., the Bank reached a subsidiary, substantialincorporated agreement under on the Bladex 5, Holdings is a wholly owned the terms laws of of thesale Stateof of the Asset Delaware, America on May 30, 2000. Bladex Holdings Inc. exercises Management UnitUnited (“the States Unit”),ofand is in (USA), the process of completing final documentation. The agreement controlthe oversale Bladex Asset Management incorporated on MayAsset 24, 2006, under the laws the contemplates of the Unit to currentInc., executives of Bladex Management Inc. of together with a State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund third party investor. The transaction is subject to final documentation and regulatory approvals. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA.
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. information is as follows: Geographic -
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% 2012 as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of United (In thousands of US$) the Cayman Islands, and invests substantially all its assets in the Fund, States which of is also incorporated Cayman under the laws of the Cayman Islands. ThePanama Feeder and theBrazil Fund are registered Cayman Islands America with the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital 173,663 appreciation by investing in17,894 Latin American 725 debt Interest income 155 securities, stock indexes, currencies, and trading derivative instruments. (1,332) (109) Interest expense (86,019) Net interest income 87,644 155 16,562 616 Long-lived assets: Premises and equipment, net
12,397 -7-
100
8
403
-
Total 192,437 (87,460) 104,977
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
12,808 -7-
-60-
-61-
101
Banco Latinoamericano Comercio Exterior, Banco Latinoamericano de de Comercio Exterior, S. A. S. A. and Subsidiaries and Subsidiaries
Banco Comercio Exterior, Banco Latinoamericano Latinoamericano dede Comercio Exterior, S. A.S. A. and Subsidiaries and Subsidiaries
Notes toconsolidated consolidated financial statements Notes to financial statements
Notes financial statements Notes to to consolidated consolidated financial statements
1.
2012 2011 TOTAL Interest income 192,437 157,427 Interest expense (54,717) Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” (87,460) and together with its Net interest income 104,977 102,710 subsidiaries “Bladex” or the “Bank”), headquartered in Panama City, Republic of Panama, is (2) Net other income 26,828 36,103a Operatingsupranational expenses (55,814) (50,087) specialized bank established to finance trade in Latin America and the Caribbean (the (3) Net operatingThe income 75,991 88,726 “Region”). Bank was established pursuant to a May 1975 proposal presented to the Assembly of Reversal of provision (provision) for loans and off-balance sheet credit losses 12,389 (4,393) Governors Central Banks in the Region, which recommended the creation of - a multinational Recoveries, of net of impairment of assets (57) Net income – to business segment 88,380was organized 84,276in organization increase the foreign trade financing capacity of the Region. The Bank Net income (loss) attributable to the redeemable noncontrolling interest ___293 676 1977, incorporated 1978 –as a corporation pursuant to the laws of the Republic and Net income attributablein to Bladex business segment 88,087of Panama, 83,600 Other income unallocated - Gain onon saleJanuary of premises and equipment 5,626 officially initiated operations 2, 1979. Under a contract signed in 1978 between the Republic Discontinued operations (Note 3) (681) (420) of Net Panama Bladex, the Bank was granted certain privileges by the Republic of 93,032 Panama, including an incomeand attributable to Bladex 83,180 (In thousands of US$) Organization
exemption from payment of income taxes in Panama. Total assets and contingencies (end of period balances):
Interest-earning assets (4 & 6) (5) Other assetsoperates and contingencies The Bank under a general banking license Third party participation Panama, predecessor of the Superintendency of Banks Total interest-earning assets, other assets and contingencies (1)
6,743,769
6,380,057
237,077 Commission 364,016of issued by the National Banking (3,384) (5,547) of Panama (the “SBP”). 6,977,462 6,738,526
2010 119,478 (44,975) 74,503 2,262 (42,218) 34,547 4,835 233 39,615 (2,423) 42,038 (206) 42,244 5,100,791 382,437 (18,950) 5,464,278
The numbers set out in these tables have been rounded and accordingly may not total exactly.
(2) In the Republic of Panama, regulated through No. of and April Net other income excludes banks reversalsare (provisions) for by loansthe andSBP off-balance sheetExecutive credit losses,Decree recoveries on 52 assets, gain on sale of equipment. 30, 2008,premises whichandadopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law Reconciliation of Net other income: Decree No. 2Net ofother February 2008.segment Banks are also regulated by resolutions and agreements issued by income 22, – business 26,828 36,103 2,262 of provision losses off-balance sheetregulations credit risk 4,046 4,448 13,926 this entity. Reversal The main aspectsforof thison law and its include: the authorization of banking Recoveries, net of impairment of assets (57) 233 licenses, minimum capital andandliquidity Gain on sale of premises equipment requirements, consolidated supervision, 5,626procedures for income financial statements to prevent money laundering, 36,500 40,494of 16,421 management Net of other credit and– consolidated market risks, measures the financing (3) terrorism related illicit procedures bankingforintervention and liquidation, among Net and operating income refersactivities, to net incomeand excluding reversalsfor (provisions) loans and off-balance sheet credit losses and recoveries on assets. others. (4)
Includes selected deposits placed, and loans, net of unearned income and deferred loan fees. Includes customers’ liabilities under acceptances, letters of credit and guarantees covering commercial and country risk, and credit commitments. Bladex Head Office’s subsidiaries are the following: (6) Includes cash and due from banks, interest-bearing deposits with banks, securities available for sale and held to maturity, trading securities and the balance of the Investment Fund. Reconciliation Total is assets: - Bladex HoldingsofInc., a wholly owned subsidiary, incorporated under the laws of the State of Interest-earning assets – business segment 6,743,769 6,380,057 5,100,791 Delaware, United States of Allowance for loan losses America (USA), on May 30, 2000. Bladex Holdings (72,976) Inc. exercises (88,547) (78,615) liabilities under acceptances Inc., incorporated on May 24, 2006, under 1,157 the laws of 1,110 27,213 controlCustomers’ over Bladex Asset Management the and equipment 12,808 6,673 6,532 State ofPremises Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund Accrued interest receivable 37,819 38.168 31,110 Derivative financial instruments used Growth for hedgingFund - receivable 2,103 (the “Feeder”) and Bladex Capital (the “Fund”). In February19,239 2012, Bladex 4,159 Asset Other assets 14,580 18,412 10,953 Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an Total assets – consolidated financial statements 6,756,396 6,360,032 5,100,087 (5)
1.
Organization 2011 (In thousands of US$) United Banco Latinoamericano de Comercio Exterior, S. A. (“Bladex Head Office” with its Statesand of together Cayman subsidiaries “Bladex” or the “Bank”), headquartered Panama in Panama Brazil City, Republic America of Panama, Islands is a Total specialized supranational bank established to finance trade in Latin America and the Caribbean (the “Region”). Bank was established pursuant to a May 1975 proposal InterestThe income 144,491 114 presented 10,595to the Assembly 2,227 of 157,427 Governors ofexpense Central Banks in the Region, which recommended - the creation of a multinational Interest (53,411) (983) (323) (54,717) Net interest incomethe foreign trade financing91,080 114 1,904 in 102,710 organization to increase capacity of the Region. The9,612 Bank was organized 1977, incorporated in 1978 as a corporation pursuant to the laws of the Republic of Panama, and Long-lived assets: officially initiated operations on January 2, 1979. Under a contract signed in 1978 between the Republic Premises and equipment, net 6,125 10 538 6,673 of Panama and Bladex, the Bank was granted certain privileges by the Republic of Panama, including an exemption from payment of income taxes in Panama. The Bank operates under a general banking license issued by the National 2010 Banking Commission of (In predecessor thousands ofofUS$) Panama, the Superintendency of Banks of Panama (the “SBP”).United States of Cayman Panama Brazil America In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. Islands 52 of April Total 30, 2008, which adopts the text of the Law Decree No. 9 of February 26, 1998, modified by the Law 106,673 10,607 2,198 by 119,478 DecreeInterest No. 2 income of February 22, 2008. Banks are also regulated by resolutions and agreements issued Interest expense (41,266) (2,746) this entity. The main aspects of this law and its regulations include: the authorization of (963) banking (44,975) Net interest income 65,407 7,861 1,235 licenses, minimum capital and liquidity requirements, consolidated supervision, procedures for 74,503 management of credit Long-lived assets: and market risks, measures to prevent money laundering, the financing of terrorismPremises and related illicit activities, for banking intervention and and equipment, net and procedures 6,039 493liquidation, among 6,532 others.
27.Bladex Subsequent eventssubsidiaries are the following: Head Office’s On -February 2013 Inc., the Bank reached a subsidiary, substantialincorporated agreement under on the Bladex 5, Holdings is a wholly owned the terms laws of of thesale Stateof of the Asset Delaware, America on May 30, 2000. Bladex Holdings Inc. exercises Management UnitUnited (“the States Unit”),ofand is in (USA), the process of completing final documentation. The agreement controlthe oversale Bladex Asset Management incorporated on MayAsset 24, 2006, under the laws the contemplates of the Unit to currentInc., executives of Bladex Management Inc. of together with a State of Delaware, USA, which serves as investment manager for Bladex Offshore Feeder Fund third party investor. The transaction is subject to final documentation and regulatory approvals. (the “Feeder”) and Bladex Capital Growth Fund (the “Fund”). In February 2012, Bladex Asset Management Inc., was registered with the Securities and Exchange Commission (“SEC”) as an investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA.
investment adviser. On September 8, 2009, Bladex Asset Management Inc. was registered as a foreign entity in the Republic of Panama, to establish a branch in Panama, which is mainly engaged in providing administrative and operating services to Bladex Asset Management Inc. in USA. information is as follows: Geographic -
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% 2012 as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of United (In thousands of US$) the Cayman Islands, and invests substantially all its assets in the Fund, States which of is also incorporated Cayman under the laws of the Cayman Islands. ThePanama Feeder and theBrazil Fund are registered Cayman Islands America with the Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital 173,663 appreciation by investing in17,894 Latin American 725 debt Interest income 155 securities, stock indexes, currencies, and trading derivative instruments. (1,332) (109) Interest expense (86,019) Net interest income 87,644 155 16,562 616 Long-lived assets: Premises and equipment, net
12,397 -7-
100
8
403
-
Total 192,437 (87,460) 104,977
The Feeder is an entity in which Bladex Head office owns 98.06% and 95.84% as of December 31, 2012 and 2011, respectively. The Feeder was incorporated on February 21, 2006 under the laws of the Cayman Islands, and invests substantially all its assets in the Fund, which is also incorporated under the laws of the Cayman Islands. The Feeder and the Fund are registered with the Cayman Island Monetary Authority (“CIMA”), under the Mutual Funds Law of the Cayman Islands. The objective of the Fund is to achieve capital appreciation by investing in Latin American debt securities, stock indexes, currencies, and trading derivative instruments.
12,808 -7-
-60-
-61-
101
www.bladex.com
Business Park, Tower V Ave. La Rotonda, Costa del Este P.O. Box 0819-08730 Panama, Republic of Panama Tel: (507) 210 8500 E-mail: webmaster@bladex.com