Edgar Filing: FOREIGN TRADE BANK OF LATIN AMERICA, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

SECURITIES EXCHANGE ACT OF 1934

Long Form of Press Release

Commission File Number 1-11414

BANCO LATINOAMERICANO DE COMERCIO EXTERIOR, S.A.

(Exact name of Registrant as specified in its Charter)

FOREIGN TRADE BANK OF LATIN AMERICA, INC.

(Translation of Registrant’s name into English)

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

P.O. Box 0819-08730

Panama City, Republic of Panama

(Address of Registrant’s Principal Executive Offices)

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

Form 20-F x Form 40-F ¨

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

Yes ¨ No x

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

Yes ¨ No x

SIGNATURES

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

Date: October 25, 2018

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

	By:	/s/ Ana Graciela de Méndez

	Name: Ana Graciela de Méndez
	Title: CFO

BLADEX REPORTED A $40.7 MILLION LOSS FOR 3Q18, OR -$1.03 PER SHARE, DUE TO HIGHER ALLOCATED CREDIT RESERVES FOR ITS NPL EXPOSURE; ROBUST TIER 1 CAPITALIZATION AT 17.8%

PANAMA CITY, REPUBLIC OF PANAMA, October 25, 2018

Banco Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX, “Bladex”, or “the Bank”), a Panama-based multinational bank originally established by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the region, today announced its results for the third quarter (“3Q18”) and nine months (“9M18”) ended September 30, 2018.

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

FINANCIAL SNAPSHOT

(US$ million, except percentages and per share amounts)	9M18			9M17			3Q18			2Q18			3Q17
Key Income Statement Highlights
Net Interest Income ("NII")	$	81.8		$	91.7		$	27.3		$	27.9		$	27.9
Fees and commissions, net	$	11.8		$	11.8		$	3.7		$	5.0		$	3.6
Impairment loss from ECL on loans, loan commitments and financial guarantees contracts	$	58.9		$	9.0		$	55.1		$	1.8		$	0.6
Operating expenses ⁽¹⁾	$	36.5		$	33.8		$	10.9		$	11.4		$	10.0
(Loss) Profit for the period	$	(9.6	)	$	61.4		$	(40.7	)	$	16.6		$	20.5
Profitability Ratios
Earnings per Share ("EPS") ⁽²⁾	$	(0.24	)	$	1.56		$	(1.03	)	$	0.42		$	0.52
Return on Average Equity (“ROAE”) ⁽³⁾		-1.2	%		8.1	%		-15.5	%		6.4	%		7.9	%
Return on Average Assets (“ROAA”)		-0.20	%		1.26	%		-2.58	%		1.07	%		1.30	%
Net Interest Margin ("NIM") ⁽⁴⁾		1.74	%		1.87	%		1.74	%		1.81	%		1.76	%
Net Interest Spread ("NIS") ⁽⁵⁾		1.26	%		1.51	%		1.20	%		1.31	%		1.37	%
Efficiency Ratio ⁽⁶⁾		39.7	%		32.5	%		36.5	%		36.1	%		32.0	%
Assets, Capital, Liquidity & Credit Quality
Commercial Portfolio ⁽⁷⁾	$	6,305		$	5,706		$	6,305		$	6,054		$	5,706
Treasury Portfolio	$	93		$	88		$	93		$	94		$	88
Total assets	$	6,561		$	6,200		$	6,561		$	6,331		$	6,200
Total stockholders' equity	$	989		$	1,032		$	989		$	1,047		$	1,032
Market capitalization ⁽⁸⁾	$	827		$	1,159		$	827		$	975		$	1,159
Tier 1 Basel III Capital Ratio ⁽⁹⁾		17.8	%		20.3	%		17.8	%		20.0	%		20.3	%
Total assets / Total stockholders' equity (times)		6.6			6.0			6.6			6.0			6.0
Liquid Assets / Total Assets ⁽¹⁰⁾		11.7	%		12.2	%		11.7	%		10.3	%		12.2	%
NPL to Loan Portfolio ⁽¹¹⁾		2.08	%		1.20	%		2.08	%		0.98	%		1.20	%
Total allowance for ECL ⁽¹²⁾ to Commercial Portfolio		2.26	%		2.04	%		2.26	%		1.44	%		2.04	%
Total allowance for ECL ⁽¹²⁾ to NPL (times)		1.2			1.8			1.2			1.6			1.8

3Q18 & 9M18 Highlights

Bladex reported a loss for the 3Q18 of $40.7 million, resulting in a loss of $9.6 million for 9M18, mainly due to higher allocated credit provision from expected credit losses (“ECL”) on non-performing loans (“NPL”).

NPL balance increased to $119.0 million, or 2.08% of total Loan Portfolio at the end of 3Q18. This compares to $54.3 million, or 0.98%, at the end of 2Q18 and $64.1 million, or 1.20%, at the end of 3Q17. The increase was mainly driven by the deterioration of one credit in the sugar industry in Brazil.

Total credit provision charges for ECL in the 3Q18 were $55.1 million which brought allowance for ECL to Commercial Portfolio to 2.26%, compared to 1.44% in 2Q18 and 2.04% last year. Total allowance for ECL covers 1.2 times NPL balances as of the end of 3Q18.

3Q18 end-of-period Commercial Portfolio balances increased to $6.3 billion (+4% QoQ; +10% YoY), which drove average balances up to $6.0 billion in 3Q18 (+3% QoQ; +6% YoY) and 9M18 (+2% YoY). The Bank increased exposure to Financial Institutions (“FIs”) to 52% of total Commercial Portfolio from 50% in the 2Q18 and 44% a year ago.

Net Interest Income (“NII”) for the 3Q18 decreased 2% QoQ to $27.3 million, on lower Net Interest Margin (“NIM”) of 1.74% (-7 bps QoQ), mainly due to the reversal of accrued interest on NPL reclassification. NII for the 9M18 was $81.8 million, a decrease of 11% YoY on lower NIM (-13 bps YoY).

Fee and commissions income totaled $3.7 million in 3Q18 (-27% QoQ; +4% YoY) and $11.8 million in 9M18 (flat YoY), as improved commissions from letters of credit offset lower loan structuring fees, reflecting the uneven nature of the business.

Efficiency Ratio stood at 36.5% in 3Q18 and 39.7% in 9M18. The Bank’s run-rate of quarterly expense base has decreased to $9.8 million in 3Q18, excluding charges related to severance and other one-time expenses. Excluding these items, the adjusted level of Efficiency Ratio stands at 33.2% for 3Q18.

In the effort to continue a comprehensive revision of operating and technology processes and infrastructure, the Bank disposed of obsolete software for a total of $4.1 million in 3Q18, presented within the line items “Impairment loss in other assets” and “Loss on derecognition of intangible assets” of the consolidated statements of profit or loss.

The Bank’s Tier 1 Basel III Capital Ratio was 17.8% at the end of 3Q18, as compared to 20.0% a quarter ago and 20.3% a year ago, on higher level of risk-weighted assets (“RWA”) resulting from Commercial Portfolio growth, coupled with lower equity levels on the quarterly loss.

CEO’s Comments

Mr. N. Gabriel Tolchinsky, Bladex’s Chief Executive Officer, said, “During our last quarter conference call, we identified key events that were impacting emerging markets, Latin America and commodity-related industries, such as sugar. First was the effect of higher US interest rates and a stronger US dollar – often a negative backdrop for emerging markets’ assets. Second was the protectionist rhetoric from the US regarding world trade, along with the negative impact of tariffs. Third was the political and macroeconomic uncertainty and overall lower growth prospects, or outright recession, for some key countries in Latin America.

These trends came to a head in the third quarter.

Specifically, a further deterioration in sugar fundamentals during the quarter, with prices trading significantly below the marginal cost of production, became too much for many Brazilian producers to bear. This included one of our credits and impacted our financial results for the quarter.

Looking forward, we want to highlight the credit strengths of our current portfolio. That strength enhances our capacity to withstand what we expect will continue to be a challenging environment. Bladex’s expertise, through solid credit underwriting, complements our ability to capitalize on opportunities – particularly in these more volatile times.

Bladex continues to improve its origination, with a better mix of medium-term to short-term loans, thereby lengthening the average life of our portfolio and increasing our origination margins. We believe our current portfolio, cost base and allowances for expected credit losses, improve our earnings generation capacity.”

RESULTS BY BUSINESS SEGMENT

The Bank’s activities are managed and executed in two business segments, Commercial and Treasury. The business segment results are determined based on the Bank’s managerial accounting process as defined by IFRS 8 – Operating Segments, which assigns consolidated statement of financial positions, revenue and expense items to each business segment on a systemic basis.

COMMERCIAL BUSINESS SEGMENT

The Commercial Business Segment encompasses the Bank’s core business of financial intermediation and fee generation activities developed to cater to corporations, financial institutions and investors in Latin America. The extensive array of products and services include the origination of bilateral, structured and syndicated credits, short- and medium-term loans, customers’ liabilities under acceptances, loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit, and guarantees covering commercial risk. Profits from the Commercial Business Segment include (i) net interest income from loans; (ii) Fees and Other Income from the issuance, confirmation and negotiation of letters of credit, guarantees and loan commitments, and through loan structuring and syndication activities; and (iii) gain on the sale of loans generated through loan intermediation activities, such as sales in the secondary market and distribution in the primary market; (iv) loss on investment properties at fair value through profit or loss; (v) impairment loss (recovery) from ECL on loans, loan commitments and financial guarantee contracts, as well as impairment loss in other assets; and (vi) direct and allocated operating expenses.

As of September 30, 2018, Commercial Portfolio balances reached $6.3 billion, a 4% increase compared to $6.1 billion as of June 30, 2018 and a 10% increase compared to $5.7 billion as of September 30, 2017, with increased exposure to FIs to 52% of total Commercial Portfolio from 50% in the 2Q18 and 44% a year ago. Consequently, 3Q18 and 9M18 average Commercial Portfolio balances both reached $6.0 billion, a 3% increase from $5.8 billion a quarter ago, and a 6% increase from $5.7 billion a year ago, and a 2% increase from $5.9 billion in the 9M17. As of September 30, 2018, trade finance transactions represented 47% of the Commercial Portfolio, down from 54% a quarter ago and 66% a year ago, while 75% of the Commercial Portfolio was scheduled to mature within a year, compared to 81% a quarter and year ago.

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

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

(US$ million)	9M18			9M17		YoY (%)			3Q18			2Q18			3Q17		QoQ (%)			YoY (%)
Commercial Business Segment:
Net interest income	$	81.4		$	91.6		-11	%	$	26.4		$	27.8		$	28.3		-5	%		-7	%
Fees and commissions, net		11.8			11.9		-1	%		3.7			5.0			3.6		-27	%		4	%
Net other income (loss), excluding fees and commissions ⁽¹³⁾		(1.1	)		0.5		-308	%		0.1			(0.7	)		0.2		120	%		-5	%
Total income		92.1			104.1		-11	%		30.3			32.1			32.1		-6	%		-6	%
Less:
Impairment loss from ECL on loans, loan commitments and financial guarantees contracts		58.9			9.0		552	%		55.1			1.8			0.6		n.m.			n.m.
Impairment loss in other assets		2.1			0.0		n.m.			0.4			1.7			0.0		-78	%		n.m.
Operating expenses		28.1			26.2		7	%		8.6			8.8			7.7		-3	%		11	%
Profit (Loss) for the period	$	3.0		$	68.8		-96	%	$	(33.8	)	$	19.8		$	23.8		-271	%		-242	%

"n.m." means not meaningful.

2018 Third Quarter and Year-to-Date Commercial Business Segment’s results were mainly affected by a $55.1 million impairment loss from ECL recorded in 3Q18 which was primarily associated with higher allocated allowances for ECL on NPL. In addition, year-to-date results were also mainly impacted by lower NII due to narrower net lending spreads on shorter tenor loan origination and higher FIs exposure.

TREASURY BUSINESS SEGMENT

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

Profit from the Treasury Business Segment includes net interest income derived from the above mentioned treasury assets and liabilities and related net other income (net results from derivative financial instruments and foreign currency exchange, gain (loss) per financial instruments at fair value through profit or loss, gain (loss) per financial instruments at fair value through OCI, and other income), impairment loss from ECL on investment securities, and direct and allocated operating expenses.

Liquidity balances amounted to $0.8 billion as of September 30, 2018, of which 97% of the Bank’s liquid assets were held in deposits with the Federal Reserve Bank of New York, compared to $0.6 billion, or the same portion of liquid assets, at the end of 2Q18, and compared to $0.8 billion, or 99% of liquid assets, at the end of 3Q17. As of these quarter-end dates, the liquid assets to total assets ratios were 11.7%, 10.3%, and 12.2%, respectively, while the liquid assets to total deposits ratios were 27.5%, 21.7%, and 25.2%, respectively.

The Investment Securities Portfolio balances totaled $93 million as of September 30, 2018, compared to $94 million as of June 30, 2018, and compared to $88 million as of September 30, 2017. As of these dates, the Investment Securities Portfolio accounted for 1% of total assets, respectively, mostly consisting of readily-quoted Latin American securities, and of which 77% represented sovereign or state-owned risk at the end of the 3Q18 and 2Q18, compared to 85% of sovereign or state-owned risk from a year ago (refer to Exhibit X for a per-country risk distribution of the Investment Securities Portfolio).

On the funding side, deposit balances decreased 7% QoQ and 8% YoY to reach $2.8 billion, or 51% of total funding sources, at the end of 3Q18, compared to 57% and 59% of total funding sources at the end of 2Q18 and 3Q17, respectively. Deposits placed by central banks or designees (i.e.: Class A shareholders of the Bank) were up to 74% of total deposits as of September 30, 2018, compared to 73% and 63%, respectively. As of September 30, 2018, total borrowings and debt increased 20% QoQ and 27% YoY, mainly from an up-size and extension of a three-year credit syndication and several bilateral funding loans with maturities of up to five years. Weighted average funding costs were 2.89% in 3Q18 (up 24 bps QoQ and 83 bps YoY) and 2.62% in 9M18 (up 71 bps YoY), mainly reflecting higher LIBOR-based market rates, partly compensated by lower funding spreads from a year ago.

(US$ million)	9M18			9M17			YoY (%)			3Q18			2Q18			3Q17			QoQ (%)			YoY (%)
Treasury Business Segment:
Net interest income	$	0.3		$	0.0			n.m.		$	0.9		$	0.0		$	(0.4	)		n.m.			295	%
Net other income (loss) ⁽¹³⁾		(0.5	)		(0.3	)		-85	%		(1.4	)		(0.7	)		(0.6	)		-115	%		-161	%
Total income (loss)		(0.2	)		(0.3	)		33	%		(0.6	)		(0.6	)		(1.0	)		6	%		40	%
Less:
(Recovery) Impairment loss from ECL on investment securities		(0.0	)		(0.4	)		88	%		0.0			(0.0	)		0.1			100	%		-100	%
Operating expenses		8.4			7.5			12	%		2.3			2.6			2.2			-10	%		3	%
Loss for the period	$	(8.5	)	$	(7.4	)		-15	%	$	(2.9	)	$	(3.2	)	$	(3.3	)		9	%		12	%

"n.m." means not meaningful.

2018 Third Quarter and Year-to-Date Treasury Business Segment’s results were mainly impacted by higher NII from improved positive gap income in the repricing of the Bank’s assets and liabilities, coupled with lower funding spreads from a year ago.

NET INTEREST INCOME AND MARGINS

(US$ million, except percentages)	9M18			9M17			YoY (%)			3Q18			2Q18			3Q17			QoQ (%)			YoY (%)
Net Interest Income
Interest income	$	184.4		$	170.3			8	%	$	65.0		$	61.9		$	55.1			5	%		18	%
Interest expense		(102.6	)		(78.6	)		31	%		(37.7	)		(34.0	)		(27.2	)		11	%		39	%
Net Interest Income	$	81.8		$	91.7			-11	%	$	27.3		$	27.9		$	27.9			-2	%		-2	%

Net Interest Margin		1.74	%		1.87	%		-7	%		1.74	%		1.81	%		1.76	%		-4	%		-1	%

3Q18 NII and NIM were mainly impacted by the reversal of accrued interest on NPL reclassification, partially offset by higher average lending volumes and the net positive effect in the repricing of the Bank’s assets and liabilities in an increasing interest rate environment. The Bank maintained a narrow interest rate gap structure due to the short-term nature of its loan portfolio, and was able to pass along LIBOR-based market rates increases in its funding to its asset base.

Year-to-date 2018 NII of $81.8 million decreased 11% mainly due to narrower net lending spreads on shorter tenor loan origination and higher FIs exposure.

FEES AND OTHER INCOME

Fees and Other Income includes the fee income associated with letters of credit and other contingent credits, such as guarantees and credit commitments, as well as fee income derived from loan structuring and syndication activities, together with loan intermediation and distribution activities in the primary and secondary markets.

(US$ million)	9M18			9M17		YoY (%)			3Q18		2Q18		3Q17		QoQ (%)			YoY (%)
Fees and Commissions, net	$	11.8		$	11.8		0	%	$	3.7	$	5.0	$	3.6		-27	%		4	%
Letters of credit and other contingent credits		8.8			7.9		11	%		2.8		3.0		2.3		-8	%		22	%
Loan structuring and distribution fees		3.0			3.9		-24	%		0.9		2.0		1.3		-54	%		-29	%
(Loss) gain on sale of loans		(0.6	)		0.1		n.m.			0.0		0.0		0.0		n.m.			n.m.
Other income, net		1.2			0.8		49	%		0.6		0.5		0.2		6	%		180	%
Fees and Other Income	$	12.4		$	12.8		-3	%	$	4.3	$	5.6	$	3.8		-23	%		13	%

"n.m." means not meaningful.

2018 Third Quarter and Year-to-date Fees and Other Income were mainly impacted by improved commissions from letters of credit business and lower loan structuring fees, reflecting the uneven nature of the business. In addition, year-to-date fees and commission from letters of credit and syndication business remained stable at $11.8 million.

PORTFOLIO QUALITY AND ALLOWANCE FOR ECL ON LOANS, LOAN COMMITMENTS AND FINANCIAL GUARANTEE CONTRACTS

(US$ million, except percentages)	30-Sep-18			30-Jun-18			31-Mar-18			31-Dec-17			30-Sep-17
Allowance for ECL on loans
Balance at beginning of the period	$	85.7		$	82.7		$	81.3		$	111.7		$	115.6
Provisions (reversals)		53.6			7.6			1.4			(1.1	)		0.4
Write-offs, net of recoveries		0.0			(4.5	)		0.0			(29.3	)		(4.2	)
End of period balance	$	139.3		$	85.7		$	82.7		$	81.3		$	111.7

Allowance for ECL on loan commitments and financial guarantee contracts:
Balance at beginning of the period	$	1.7		$	7.4		$	6.8		$	4.8		$	4.6
Provisions (reversals)		1.6			(5.8	)		0.6			2.0			0.2
End of period balance	$	3.2		$	1.7		$	7.4		$	6.8		$	4.8

Total allowance for ECL (allowance for ECL on loans plus allowance for ECL on loan commitments and financial guarantee contracts)	$	142.5		$	87.4		$	90.1		$	88.1		$	116.6

Total allowance for ECL to Commercial Portfolio		2.26	%		1.44	%		1.57	%		1.47	%		2.04	%
NPL to gross loan portfolio		2.08	%		0.98	%		1.12	%		1.07	%		1.20	%
Total allowance for ECL to NPL (times)		1.2			1.6			1.5			1.5			1.8

The total allowance for ECL amounted to $142.5 million at September 30, 2018, representing 2.26% of the total Commercial Portfolio, compared to $87.4 million and 1.44%, respectively, as of June 30, 2018, and compared to $116.6 million and 2.04%, respectively, as of September 30, 2017. The $55.1 million QoQ increase was primarily associated with higher allocated allowances for ECL on increased NPL due to a significant deterioration in sugar industry fundamentals during the quarter.

NPL balances stood at $119.0, or 2.08% of total Loan Portfolio balances at the end of 3Q18, versus NPLs of $54.3 million, or 0.98% of total Loan Portfolio balances, at the end of 2Q18, and $64.1 million, or 1.20% of total Loan Portfolio balances, at the end of 3Q17. The increase was mainly driven by the deterioration of one credit in the sugar industry in Brazil in the amount of $61.8 million, which significantly deteriorated and entered a complex restructuring process during the quarter.

OPERATING EXPENSES

Operating expenses reflect the following line items of the consolidated statements of profit or loss:

(US$ million, except percentages)	9M18		9M17		YoY (%)			3Q18		2Q18		3Q17		QoQ (%)			YoY (%)
Operating expenses
Salaries and other employee expenses		21.4		20.3		5	%		5.2		6.1		5.8		-14	%		-11	%
Depreciation of equipment and leasehold improvements		1.0		1.2		-18	%		0.3		0.3		0.4		-1	%		-18	%
Amortization of intangible assets		1.0		0.6		83	%		0.3		0.3		0.2		0	%		93	%
Other expenses		13.2		11.7		12	%		5.0		4.6		3.6		8	%		40	%
Total Operating Expenses	$	36.5	$	33.8		8	%	$	10.9	$	11.4	$	10.0		-5	%		9	%

3Q18 and year-to-date 2018 Operating Expenses were mainly impacted by quarterly decreasing trend in salaries and other employee expenses. In the following table, a run-rate base of operating expenses is presented, segregating severance related employee expenses and other one-time expenses incurred in the Bank’s effort of optimizing personnel, processes and technology infrastructure.

(US$ million, except percentages)	9M18			9M17			YoY (%)			3Q18			2Q18			3Q17			QoQ (%)			YoY (%)
Run-rate base of operating expenses
Salaries and other employee expenses, excluding severance related expenses		19.6			18.7			5	%		4.8			5.2			5.8			-7	%		-18	%
Other expenses, excluding one-time charges		14.2			13.5			5	%		5.0			4.9			4.1			3	%		23	%
Sub-total run-rate operating expenses	$	33.7		$	32.1			5	%	$	9.8		$	10.1		$	10.0			-2	%		-1	%
Severance related expenses		1.8			1.6			11	%		0.4			0.9			0.0			-56	%		n.m.
One-time charges		1.0			0.0			n.m.			0.6			0.4			0.0			57	%		n.m.
Total Operating Expenses	$	36.5		$	33.8			8	%	$	10.9		$	11.4		$	10.0			-5	%		9	%

Adjusted Efficiency Ratio		36.7	%		31.0	%		19	%		33.2	%		32.0	%		32.0	%		4	%		4	%
Efficiency Ratio		39.7	%		32.5	%		22	%		36.5	%		36.1	%		32.0	%		1	%		14	%

"n.m." means not meaningful.

The Bank’s run-rate of quarterly expense base decreased to $9.8 million in 3Q18, excluding charges related to severance and other one-time expenses, resulting in an adjusted Efficiency Ratio of 33.2% for 3Q18.

CAPITAL RATIOS AND CAPITAL MANAGEMENT

The following table shows capital amounts and ratios as of the dates indicated:

(US$ million, except percentages and shares outstanding)	30-Sep-18			30-Jun-18			30-Sep-17			QoQ (%)			YoY (%)
Tier 1 Capital ⁽⁹⁾	$	990		$	1,048		$	1,032			-6	%		-4	%
Risk-Weighted Assets Basel III ⁽⁹⁾	$	5,574		$	5,233		$	5,082			7	%		10	%
Tier 1 Basel III Capital Ratio ⁽⁹⁾		17.8	%		20.0	%		20.3	%		-11	%		-13	%
Total stockholders’ equity	$	989		$	1,047		$	1,032			-6	%		-4	%
Total stockholders’ equity to total assets		15.1	%		16.5	%		16.6	%		-9	%		-9	%
Accumulated other comprehensive income (loss) ("OCI")	$	2		$	2		$	(2	)		-24	%		190	%
Total assets / Total stockholders' equity (times)		6.6			6.0			6.0			10	%		10	%
Shares outstanding (in thousand)		39,539			39,638			39,365			0	%		0	%

The Bank’s equity consists entirely of issued and fully paid ordinary common stock, with 39.5 million common shares outstanding as of September 30, 2018. At the same date, the Bank’s ratio of total assets to stockholders’ equity was 6.6 times, and the Tier 1 Basel III Capital Ratio stood at 17.8%, on higher level of RWA resulting from Commercial Portfolio growth, coupled with lower equity levels on the quarterly loss.

RECENT EVENTS

Quarterly dividend payment: The Bank’s Board of Directors approved a quarterly common dividend of $0.385 per share corresponding to the third quarter 2018. The dividend will be paid on November 20, 2018, to stockholders registered as of November 6, 2018.

Notes:

Numbers and percentages set forth in this earnings release have been rounded and accordingly may not total exactly.

QoQ and YoY refer to quarter-on-quarter and year-on-year variations, respectively.

Footnotes:

Total operating expenses includes the following expenses line items of the consolidated statements of profit or loss: salaries and other employee expenses, depreciation of equipment and leasehold improvements, amortization of intangible assets, and other expenses.

Earnings per Share (“EPS”) calculation is based on the average number of shares outstanding during each period.

ROAE refers to return on average stockholders’ equity which is calculated on the basis of unaudited daily average balances.

NIM refers to net interest margin which constitutes to net interest income divided by the average balance of interest-earning assets.

NIS refers to net interest spread which constitutes the average yield earned on interest-earning assets, less the average yield paid on interest-bearing liabilities.

Efficiency Ratio refers to consolidated operating expenses as a percentage of total income.

The Bank’s “Commercial Portfolio” includes gross loans (or the “Loan Portfolio”), loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit, and guarantees covering commercial risk; and other assets consisting of customers’ liabilities under acceptances.

Market capitalization corresponds to total outstanding common shares multiplied by market close price at the end of each corresponding period.

Tier 1 Capital is calculated according to Basel III capital adequacy guidelines, and is equivalent to stockholders’ equity excluding certain effects such as the OCI effect of the financial instruments at fair value through OCI. Tier 1 Capital ratio is calculated as a percentage of risk-weighted assets. Risk-weighted assets are estimated based on Basel III capital adequacy guidelines.

10)

Liquid assets refer to total cash and cash equivalents, consisting of cash and due from banks, and interest-bearing deposits in banks, excluding pledged deposits and margin calls. Liquidity ratio refers to liquid assets as a percentage of total assets.

11)

Loan Portfolio refers to loans, gross of the allowance for expected credit losses and unearned interest and deferred fess.

12)

Total allowance for ECL refers to allowance for expected credit losses on loans plus allowance for expected credit losses on loan commitments and financial guarantee contracts.

13)

Net other income (loss) by Business Segment consists of the following items:

Commercial Business Segment: gain on sale of loans, loss on investment properties at fair value through profit or loss, and net related other income.

Treasury Business Segment: net other income from derivative financial instruments and foreign currency exchange, gain (loss) per financial instruments at fair value through profit or loss, gain (loss) per financial instruments at fair value through OCI, and net related other income.

SAFE HARBOR STATEMENT

This press release contains forward-looking statements of expected future developments within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this press release include the growth of the credit portfolio, including the trade portfolio, the increase in the number of the Bank’s corporate clients, the trend of lending spreads, changes in activities engaged in by the Bank that are derived from the Bank’s client base, anticipated operating results and return on equity in future periods, including income derived from the Treasury Business Segment, and changes in the financial and performance strength of the Bank. These forward-looking statements reflect the expectations of the Bank’s management and are based on currently available data; however, actual performance and results are subject to future events and uncertainties, which could materially impact the Bank’s expectations. Among the factors that can cause actual performance and results to differ materially are as follows: the anticipated changes in the Bank’s credit portfolio; the continuation of the Bank’s preferred creditor status; the impact of increasing/decreasing interest rates and of the macroeconomic environment in the Region on the Bank’s financial condition; the execution of the Bank’s strategies and initiatives, including its revenue diversification strategy; the adequacy of the Bank’s allowance for expected credit losses; the need for additional allowance for expected credit losses; the Bank’s ability to achieve future growth, to reduce its liquidity levels and increase its leverage; the Bank’s ability to maintain its investment-grade credit ratings; the availability and mix of future sources of funding for the Bank’s lending operations; potential trading losses; the possibility of fraud; and the adequacy of the Bank’s sources of liquidity to replace deposit withdrawals. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

ABOUT BLADEX

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

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

CONFERENCE CALL INFORMATION

There will be a conference call to discuss the Bank’s quarterly results on Thursday, October 25, 2018 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please dial (800) 311-9401 in the United States or, if outside the United States, (334) 323-7224. Participants should use conference ID# 8034, and dial in five minutes before the call is set to begin. There will also be a live audio webcast of the conference at http://www.bladex.com. The webcast presentation will be available for viewing and downloads on http://www.bladex.com.

The conference call will become available for review on Conference Replay one hour after its conclusion, and will remain available for 60 days. Please dial (877) 919-4059 or (334) 323-0140, and follow the instructions. The replay passcode is: 81824564.

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

Mrs. Ana Graciela de Méndez

Chief Financial Officer

Tel: +507 210-8563

E-mail address: amendez@bladex.com

EXHIBIT I

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	AT THE END OF,
	(A)			(B)			(C)			(A) - (B)						(A) - (C)
	September 30, 2018			June 30, 2018			September 30, 2017			CHANGE			%			CHANGE			%
	(In US$ thousand)

ASSETS:
Cash and cash equivalents	$	792,952		$	683,523		$	799,435		$	109,429			16	%	$	(6,483	)		(1	)%
Financial Instruments:
At fair value through OCI		20,971			21,076			16,796			(105	)		(0	)		4,175			25
Securities at amortized cost, net		77,562			78,129			70,697			(567	)		(1	)		6,865			10
Loans		5,724,518			5,555,254			5,343,191			169,264			3			381,327			7
Less:
Allowance for expected credit losses		139,318			85,711			111,728			53,607			63			27,590			25
Unearned interest and deferred fees		7,357			6,660			5,838			697			10			1,519			26
Loans, net		5,577,843			5,462,883			5,225,625			114,960			2			352,218			7

Derivative financial instruments used for hedging – receivable		3,391			6,379			11,034			(2,988	)		(47	)		(7,643	)		(69	)

Investment properties, net		2,289			3,971			0			(1,682	)		(42	)		2,289			n.m.	^(*)

Property and equipment, net		6,692			6,958			7,849			(266	)		(4	)		(1,157	)		(15	)
Intangibles, net		1,798			4,790			2,368			(2,992	)		(62	)		(570	)		(24	)

Other assets:
Customers' liabilities under acceptances		24,232			13,656			4,902			10,576			77			19,330			394
Accrued interest receivable		45,367			38,379			32,869			6,988			18			12,498			38
Other assets		7,661			11,330			28,545			(3,669	)		(32	)		(20,884	)		(73	)
Total of other assets		77,260			63,365			66,316			13,895			22			10,944			17

TOTAL ASSETS	$	6,560,758		$	6,331,074		$	6,200,120		$	229,684			4	%	$	360,638			6	%

LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Demand	$	78,131		$	20,001		$	205,133		$	58,130			291	%	$	(127,002	)		(62	)%
Time		2,699,404			2,969,001			2,797,876			(269,597	)		(9	)		(98,472	)		(4	)
Total deposits		2,777,535			2,989,002			3,003,009			(211,467	)		(7	)		(225,474	)		(8	)

Derivative financial instruments used for hedging – payable		26,394			30,064			25,617			(3,670	)		(12	)		777			3

Securities sold under repurchase agreement		39,767			0			0			39,767			n.m.	^(*)		39,767			n.m.	^(*)
Short-term borrowings and debt		1,237,603			1,048,470			737,129			189,133			18			500,474			68
Long-term borrowings and debt, net		1,423,952			1,169,672			1,357,796			254,280			22			66,156			5

Other liabilities:
Acceptances outstanding		24,232			13,656			4,902			10,576			77			19,330			394
Accrued interest payable		23,427			15,953			18,191			7,474			47			5,236			29
Allowance for expected credit losses on loan commitments and financial guarantee contracts		3,219			1,652			4,830			1,567			95			(1,611	)		(33	)
Other liabilities		15,678			15,226			16,907			452			3			(1,229	)		(7	)
Total other liabilities		66,556			46,487			44,830			20,069			43			21,726			48

TOTAL LIABILITIES	$	5,571,807		$	5,283,695		$	5,168,381		$	288,112			5	%	$	403,426			8	%

STOCKHOLDERS' EQUITY:
Common stock		279,980			279,980			279,980			0			0	%		0			0	%
Treasury stock		(61,076	)		(58,635	)		(64,667	)		(2,441	)		4			3,591			(6	)
Additional paid-in capital in excess of assigned value of common stock		119,523			119,059			119,436			464			0			87			0
Capital reserves		95,210			95,210			95,210			0			0			0			0
Dynamic provision		108,756			108,756			107,392			0			0			1,364			1
Regulatory credit reserve		25			15,201			7,996			(15,176	)		(100	)		(7,971	)		(100	)
Retained earnings		444,959			485,724			488,135			(40,765	)		(8	)		(43,176	)		(9	)
Accumulated other comprehensive income (loss)		1,574			2,084			(1,743	)		(510	)		(24	)		3,317			(190	)

TOTAL STOCKHOLDERS' EQUITY	$	988,951		$	1,047,379		$	1,031,739		$	(58,428	)		(6	)%	$	(42,788	)		(4	)%

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,560,758		$	6,331,074		$	6,200,120		$	229,684			4	%	$	360,638			6	%

^(*)"n.m." means not meaningful.

EXHIBIT II

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

(In US$ thousand, except per share amounts and ratios)

	FOR THE THREE MONTHS ENDED
	(A)			(B)			(C)			(A) - (B)						(A) - (C)
	September 30, 2018			June 30, 2018			September 30, 2017			CHANGE			%			CHANGE			%

NET INTEREST INCOME:
Interest income	$	65,020		$	61,919		$	55,050		$	3,101			5	%	$	9,970			18	%
Interest expense		(37,724	)		(34,030	)		(27,153	)		(3,694	)		11			(10,571	)		39

NET INTEREST INCOME		27,296			27,889			27,897			(593	)		(2	)		(601	)		(2	)

OTHER INCOME:
Fees and commissions, net		3,692			5,032			3,566			(1,340	)		(27	)		126			4
Loss on derivative financial instruments and foreign currency exchange		(1,554	)		(516	)		(616	)		(1,038	)		201			(938	)		152
Gain (Loss) per financial instrument at fair value through profit or loss		109			(280	)		3			389			(139	)		106			3,533
Gain on sale of loans		0			0			15			0			n.m.	^(*)		(15	)		(100	)
Loss on investment properties at fair value through profit or loss		(412	)		(1,148	)		0			736			(64	)		(412	)		n.m.	^(*)
Other income, net		564			530			201			34			6			363			181
NET OTHER INCOME		2,399			3,618			3,169			(1,219	)		(34	)		(770	)		(24	)

TOTAL INCOME		29,695			31,507			31,066			(1,812	)		(6	)		(1,371	)		(4	)

EXPENSES:
Impairment loss from expected credit losses on loans		53,568			7,564			362			46,004			608			53,206			14,698
Impairment loss (recovery) from expected credit losses on investment securities		0			(22	)		75			22			(100	)		(75	)		(100	)
Impairment loss (recovery) from expected credit losses on loan commitments and financial guarantee contracts		1,566			(5,771	)		215			7,337			(127	)		1,351			628
Impairment loss in other assets		1,724			1,740			0			(16	)		(1	)		1,724			n.m.	^(*)
Loss on derecognition of intangible assets		2,705			0			0			2,705			n.m.	^(*)		2,705			n.m.	^(*)
OPERATING EXPENSES:
Salaries and other employee expenses		5,213			6,083			5,842			(870	)		(14	)		(629	)		(11	)
Depreciation of equipment and leasehold improvements		315			319			384			(4	)		(1	)		(69	)		(18	)
Amortization of intangible assets		336			337			174			(1	)		(0	)		162			93
Other expenses		4,987			4,631			3,553			356			8			1,434			40
TOTAL OPERATING EXPENSES		10,851			11,370			9,953			(519	)		(5	)		898			9
TOTAL EXPENSES		70,414			14,881			10,605			55,533			373			59,809			564

(LOSS) PROFIT FOR THE PERIOD	$	(40,719	)	$	16,626		$	20,461		$	(57,345	)		(345	)%	$	(61,180	)		(299	)%

PER COMMON SHARE DATA:
Basic earnings per share	$	(1.03	)	$	0.42		$	0.52
Diluted earnings per share	$	(1.03	)	$	0.42		$	0.52
Book value (period average)	$	26.43		$	26.34		$	26.02
Book value (period end)	$	25.01		$	26.42		$	26.21

Weighted average basic shares		39,540			39,626			39,362
Weighted average diluted shares		39,540			39,651			39,413
Basic shares period end		39,539			39,638			39,365

PERFORMANCE RATIOS:
Return on average assets		-2.58	%		1.07	%		1.30	%
Return on average stockholders' equity		-15.5	%		6.4	%		7.9	%
Net interest margin		1.74	%		1.81	%		1.76	%
Net interest spread		1.20	%		1.31	%		1.37	%
Efficiency Ratio		36.5	%		36.1	%		32.0	%
Operating expenses to total average assets		0.69	%		0.73	%		0.63	%

^(*) "n.m." means not meaningful.

EXHIBIT III

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

(In US$ thousand, except per share amounts and ratios)

	FOR THE NINE MONTHS ENDED
	(A)			(B)			(A) - (B)
	September 30, 2018			September 30, 2017			CHANGE			%

NET INTEREST INCOME:
Interest income	$	184,376		$	170,280		$	14,096			8	%
Interest expense		(102,601	)		(78,606	)		(23,995	)		31

NET INTEREST INCOME		81,775			91,674			(9,899	)		(11	)

OTHER INCOME:
Fees and commissions, net		11,783			11,848			(65	)		(1	)
Loss on derivative financial instruments and foreign currency exchange		(404	)		(12	)		(392	)		3,267
Loss per financial instrument at fair value through profit or loss		(233	)		(706	)		473			(67	)
Gain per financial instrument at fair value through OCI		0			79			(79	)		(100	)
(Loss) gain on sale of loans		(625	)		113			(738	)		(653	)
Loss on investment properties at fair value through profit or loss		(1,560	)		0			(1,560	)		n.m.	^(*)
Other income, net		1,209			810			399			49
NET OTHER INCOME		10,170			12,132			(1,962	)		(16	)

TOTAL INCOME		91,945			103,806			(11,861	)		(11	)

EXPENSES:
Impairment loss from expected credit losses on loans		62,509			9,981			52,528			526
Recovery from expected credit losses on investment securities		(47	)		(390	)		343			(88	)
Recovery from expected credit losses on loan commitments and financial guarantee contracts		(3,626	)		(946	)		(2,680	)		283
Impairment loss in other assets		3,464			0			3,464			n.m.	^(*)
Loss on derecognition of intangible assets		2,705			0			2,705			n.m.	^(*)
OPERATING EXPENSES:
Salaries and other employee expenses		21,390			20,306			1,084			5
Depreciation of equipment and leasehold improvements		957			1,171			(214	)		(18	)
Amortization of intangible assets		1,011			553			458			83
Other expenses		13,177			11,731			1,446			12
TOTAL OPERATING EXPENSES		36,535			33,761			2,774			8
TOTAL EXPENSES		101,540			42,406			59,134			139

(LOSS) PROFIT FOR THE PERIOD	$	(9,595	)	$	61,400		$	(70,995	)		(116	)%

PER COMMON SHARE DATA:
Basic earnings per share	$	(0.24	)	$	1.56
Diluted earnings per share	$	(0.24	)	$	1.56
Book value (period average)	$	26.41		$	25.93
Book value (period end)	$	25.01		$	26.21

Weighted average basic shares		39,544			39,289
Weighted average diluted shares		39,544			39,319
Basic shares period end		39,539			39,365

PERFORMANCE RATIOS:
Return on average assets		-0.20	%		1.26	%
Return on average stockholders' equity		-1.2	%		8.1	%
Net interest margin		1.74	%		1.87	%
Net interest spread		1.26	%		1.51	%
Efficiency Ratio		39.7	%		32.5	%
Operating expenses to total average assets		0.77	%		0.69	%

^(*)"n.m." means not meaningful.

EXHIBIT IV

CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES

	FOR THE THREE MONTHS ENDED
	September 30, 2018								June 30, 2018								September 30, 2017
	AVERAGE					AVG.			AVERAGE					AVG.			AVERAGE					AVG.
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
	(In US$ thousand)

INTEREST EARNING ASSETS
Cash and cash equivalents	$	608,989			3,129		2.01	%	$	689,288			3,225		1.85	%	$	798,466		$	2,995		1.47	%
Financial Instruments at fair value through profit or loss		0			0		0.00			0			0		0.00			1			0		0.00
Securities at fair value through OCI		15,728			150		3.73			16,291			143		3.47			16,823			124		2.89
Securities at amortized cost ⁽¹⁾		77,939			599		3.01			71,467			521		2.88			66,623			474		2.78
Loans, net of unearned interest		5,517,471			61,142		4.34			5,398,233			58,030		4.25			5,389,948			51,457		3.74

TOTAL INTEREST EARNING ASSETS	$	6,220,127		$	65,020		4.09	%	$	6,175,279		$	61,919		3.97	%	$	6,271,861		$	55,050		3.43	%

Allowance for expected credit losses on loans		(84,958	)							(86,664	)							(115,631	)
Non interest earning assets		119,272								132,226								86,060

TOTAL ASSETS	$	6,254,441							$	6,220,841							$	6,242,290

INTEREST BEARING LIABILITIES
Deposits		2,904,153		$	16,767		2.26	%		3,130,345		$	16,388		2.07	%	$	3,301,112		$	12,510		1.48	%
Trading liabilities		0			0		0.00			11			0		0.00			6			0		0.00
Securities sold under repurchase agreement and short-term borrowings and debt		934,653			7,094		2.97			820,052			6,293		3.04			446,652			2,209		1.94
Long-term borrowings and debt, net ⁽²⁾		1,268,857			13,863		4.28			1,121,591			11,349		4.00			1,398,233			12,434		3.48

TOTAL INTEREST BEARING LIABILITIES	$	5,107,663		$	37,724		2.89	%	$	5,071,999		$	34,030		2.65	%	$	5,146,003		$	27,153		2.06	%

Non interest bearing liabilities and other liabilities	$	101,796							$	104,967							$	72,152

TOTAL LIABILITIES		5,209,459								5,176,966								5,218,155

STOCKHOLDERS' EQUITY		1,044,982								1,043,875								1,024,134

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,254,441							$	6,220,841							$	6,242,290

NET INTEREST SPREAD							1.20	%							1.31	%							1.37	%

NET INTEREST INCOME AND NET INTEREST MARGIN				$	27,296		1.74	%				$	27,889		1.81	%				$	27,897		1.76	%

⁽¹⁾

Gross of the allowance for expected credit losses relating to securities at amortized cost.

⁽²⁾

Net of prepaid commissions.

Note: Interest income and/or expense includes the effect of derivative financial instruments used for hedging.

EXHIBIT V

CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCES

	FOR THE NINE MONTHS ENDED
	September 30, 2018								September 30, 2017
	AVERAGE					AVG.			AVERAGE					AVG.
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
	(In US$ thousand)

INTEREST EARNING ASSETS
Cash and cash equivalents	$	683,109		$	9,293		1.79	%	$	968,544		$	7,818		1.06	%
Financial Instruments at fair value through profit or loss		0			0		0.00			1			0		0.00
Securities at fair value through OCI		16,220			416		3.38			19,985			420		2.77
Securities at amortized cost ⁽¹⁾		72,780			1,605		2.91			67,082			1,448		2.85
Loans, net of unearned interest		5,497,234			173,062		4.15			5,513,151			160,594		3.84

TOTAL INTEREST EARNING ASSETS	$	6,269,343		$	184,376		3.88	%	$	6,568,762		$	170,280		3.42	%

Allowance for expected credit losses on loans		(84,378	)							(110,759	)
Non interest earning assets		122,176								81,152

TOTAL ASSETS	$	6,307,141							$	6,539,155

INTEREST BEARING LIABILITIES
Deposits	$	3,084,876		$	47,160		2.02	%	$	3,164,639		$	30,310		1.26	%
Trading liabilities		1			0		0.00			29			0		0.00
Securities sold under repurchase agreement and short-term borrowings and debt		913,032			19,962		2.88			707,348			8,264		1.54
Long-term borrowings and debt, net ⁽²⁾		1,167,928			35,479		4.01			1,566,619			40,032		3.37

TOTAL INTEREST BEARING LIABILITIES	$	5,165,837		$	102,601		2.62	%	$	5,438,634		$	78,606		1.91	%

Non interest bearing liabilities and other liabilities	$	97,072							$	81,676

TOTAL LIABILITIES		5,262,909								5,520,311

STOCKHOLDERS' EQUITY		1,044,232								1,018,844

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,307,141							$	6,539,155

NET INTEREST SPREAD							1.26	%							1.51	%

NET INTEREST INCOME AND NET INTEREST MARGIN				$	81,775		1.74	%				$	91,674		1.87	%

⁽¹⁾	Gross of the allowance for expected credit losses relating to securities at amortized cost.
⁽²⁾	Net of prepaid commissions.

Note: Interest income and/or expense includes the effect of derivative financial instruments used for hedging.

EXHIBIT VI

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(In US$ thousand, except per share amounts and ratios)

	NINE MONTHS			FOR THE THREE MONTHS ENDED															NINE MONTHS
	ENDED																		ENDED
	SEP 30/18			SEP 30/18			JUN 30/18			MAR 31/18			DEC 31/17			SEP 30/17			SEP 30/17

NET INTEREST INCOME:
Interest income	$	184,376		$	65,020		$	61,919		$	57,437		$	55,799		$	55,050		$	170,280
Interest expense		(102,601	)		(37,724	)		(34,030	)		(30,847	)		(27,658	)		(27,153	)		(78,606	)

NET INTEREST INCOME		81,775			27,296			27,889			26,590			28,141			27,897			91,674

OTHER INCOME (LOSS):
Fees and commissions, net		11,783			3,692			5,032			3,059			5,666			3,566			11,848
(Loss) Gain on derivative financial instruments and foreign currency exchange		(404	)		(1,554	)		(516	)		1,666			(425	)		(616	)		(12	)
(Loss) Gain per financial instrument at fair value through profit or loss		(233	)		109			(280	)		(62	)		(26	)		3			(706	)
Gain per financial instrument at fair value through OCI		0			0			0			0			170			0			79
(Loss) Gain on sale of loans		(625	)		0			0			(625	)		68			15			113
Loss on investment properties at fair value through profit or loss		(1,560	)		(412	)		(1,148	)		0			0			0			0
Other income, net		1,209			564			530			115			913			201			810

NET OTHER INCOME		10,170			2,399			3,618			4,153			6,366			3,169			12,132

TOTAL INCOME		91,945			29,695			31,507			30,743			34,507			31,066			103,806

Impairment loss (recovery) from expected credit losses on loans		62,509			53,568			7,564			1,377			(1,122	)		362			9,981
(Recovery) Impairment loss from expected credit losses on investment securities		(47	)		0			(22	)		(25	)		(99	)		75			(390	)
(Recovery) Impairment loss from expected credit losses on loan commitments and financial guarantee contracts		(3,626	)		1,566			(5,771	)		579			2,015			215			(946	)
Impairment loss in other assets		3,464			1,724			1,740			0			0			0			0
Loss on derecognition of intangible assets		2,705			2,705			0			0			0			0			0
Operating expenses		36,535			10,851			11,370			14,314			13,114			9,953			33,761

(LOSS) PROFIT FOR THE PERIOD	$	(9,595	)	$	(40,719	)	$	16,626		$	14,498		$	20,599		$	20,461		$	61,400

SELECTED FINANCIAL DATA

PER COMMON SHARE DATA
Basic earnings per share	$	(0.24	)	$	(1.03	)	$	0.42		$	0.37		$	0.52		$	0.52		$	1.56

PERFORMANCE RATIOS
Return on average assets		-0.20	%		-2.58	%		1.07	%		0.91	%		1.31	%		1.30	%		1.26	%
Return on average stockholders' equity		-1.2	%		-15.5	%		6.4	%		5.6	%		7.9	%		7.9	%		8.1	%
Net interest margin		1.74	%		1.74	%		1.81	%		1.68	%		1.78	%		1.76	%		1.87	%
Net interest spread		1.26	%		1.20	%		1.31	%		1.26	%		1.38	%		1.37	%		1.51	%
Efficiency Ratio		39.7	%		36.0	%		34.8	%		46.6	%		38.0	%		32.0	%		32.5	%
Operating expenses to total average assets		0.77	%		0.69	%		0.73	%		0.90	%		0.83	%		0.63	%		0.69	%

EXHIBIT VII

BUSINESS SEGMENT ANALYSIS

(In US$ thousand)

	FOR THE NINE MONTHS ENDED						FOR THE THREE MONTHS ENDED
	SEP 30/18			SEP 30/17			SEP 30/18			JUN 30/18			SEP 30/17

COMMERCIAL BUSINESS SEGMENT:

Net interest income ⁽¹⁾	$	81,431		$	91,647		$	26,445		$	27,847		$	28,333
Net other income ⁽²⁾		10,683			12,410			3,843			4,289			3,723
Total income		92,114			104,057			30,287			32,136			32,056
Less:
Impairment loss from expected credit losses on loans, loan commitments and financial guarantee contracts		58,883			9,035			55,134			1,793			577
Impairment loss in other assets		2,118			0			378			1,740			0
Operating expenses ⁽³⁾		28,119			26,217			8,553			8,806			7,723

PROFIT FOR THE PERIOD	$	2,994		$	68,805		$	(33,778	)	$	19,797		$	23,756

Average interest-earning assets ⁽⁴⁾		5,497,234			5,513,151			5,517,471			5,398,233			5,389,948
End-of-period interest-earning assets ⁽⁴⁾		5,717,161			5,337,353			5,717,161			5,548,594			5,337,353

TREASURY BUSINESS SEGMENT:

Net interest income ⁽¹⁾	$	344		$	27		$	851		$	42		$	(436	)
Net other income (loss) ⁽²⁾		(513	)		(278	)		(1,444	)		(671	)		(554	)
Total income (loss)		(169	)		(251	)		(593	)		(629	)		(990	)
Less:
(Recovery) Impairment loss from expected credit losses on investment securities		(47	)		(390	)		0			(22	)		75
Operating expenses ⁽³⁾		8,416			7,544			2,298			2,564			2,230

LOSS FOR THE PERIOD	$	(8,538	)	$	(7,405	)	$	(2,891	)	$	(3,171	)	$	(3,295	)

Average interest-earning assets ⁽⁵⁾		772,109			1,055,611			702,656			777,046			881,913
End-of-period interest-earning assets ⁽⁵⁾		886,105			887,149			886,105			777,912			887,149

COMBINED BUSINESS SEGMENT TOTAL:

Net interest income ⁽¹⁾	$	81,775		$	91,674		$	27,296		$	27,889		$	27,897
Net other income ⁽²⁾		10,170			12,132			2,399			3,618			3,169
Total income		91,945			103,806			29,695			31,507			31,066
Less:
Impairment loss from expected credit losses on loans, loan commitments and financial guarantee contracts		58,883			9,035			55,134			1,793			577
Recovery from expected credit losses on investment securities		(47	)		(390	)		0			(22	)		75
Impairment loss in other assets		2,118			0			378			1,740			0
Operating expenses ⁽³⁾		36,535			33,761			10,851			11,370			9,953

TOTAL PROFIT OR LOSS FOR REPORTABLE SEGMENTS		(5,544	)		61,400			(36,668	)		16,626			20,461
Unallocated disposal of intangible and other assets ⁽⁶⁾		(4,051	)		0			(4,051	)		0			0

(LOSS) PROFIT FOR THE PERIOD	$	(9,595	)	$	61,400		$	(40,719	)	$	16,626		$	20,461

Average interest-earning assets		6,269,343			6,568,762			6,220,127			6,175,279			6,271,861
End-of-period interest-earning assets		6,603,266			6,224,502			6,603,266			6,326,506			6,224,502

The Bank’s activities are managed and executed in two business segments, Commercial and Treasury. The business segment results are determined based on the Bank’s managerial accounting process as defined by IFRS 8 - Operating Segments, which assigns consolidated statement of financial positions, revenue and expense items to each business segment on a systematic basis.

(1) Interest income on interest-earning assets, net of allocated cost of funds.

(2) Net other income (loss) by Business Segment consists of the following items:

- Commercial Business Segment: net fees and commissions, loss on investment properties at fair value through profit or loss, gain on sale of loans, and net related other income.

- Treasury Business Segment: net other income from derivative financial instruments and foreign currency exchange, gain (loss) per financial instruments at fair value through profit or loss, gain (loss) per financial instruments at fair value through OCI, and net related other income.

(3) Operating Expenses allocation methodology assigns overhead expenses based on resource consumption by business segment. Total operating expenses includes the following line items of the consolidated statements of profit or loss: salaries and other employee expenses, depreciation of equipment and leasehold improvements, amortization of intangible assets, and other expenses.

(4) Includes loans, net of unearned interest and deferred fees.

(5) Includes cash and cash equivalents, financial instruments at fair value through profit or loss, securities at fair value through OCI and securities at amortized cost, gross of the allowance for expected credit losses.

(6) Includes a loss of $2,705 on disposal of intangible assets and an impairment loss of $1,346 in other assets.

EXHIBIT VIII

CREDIT PORTFOLIO

DISTRIBUTION BY COUNTRY

(In US$ million)

	AT THE END OF,
	(A)						(B)						(C)
	September 30, 2018						June 30, 2018						September 30, 2017						Change in Amount
COUNTRY ^(*)	Amount			% of Total Outstanding			Amount			% of Total Outstanding			Amount			% of Total Outstanding			(A) - (B)			(A) - (C)

ARGENTINA	$	587			9		$	555			9		$	321			6		$	32		$	266
BELGIUM		15			0			13			0			14			0			2			1
BOLIVIA		20			0			10			0			10			0			10			10
BRAZIL		1,230			19			1,049			17			1,023			18			181			207
CHILE		164			3			193			3			214			4			(29	)		(50	)
COLOMBIA		807			13			773			13			734			13			34			73
COSTA RICA		357			6			367			6			415			7			(10	)		(58	)
DOMINICAN REPUBLIC		290			5			270			4			142			2			20			148
ECUADOR		365			6			383			6			307			5			(18	)		58
EL SALVADOR		60			1			31			0			79			1			29			(19	)
GERMANY		23			0			28			0			43			1			(5	)		(20	)
GUATEMALA		265			4			300			5			238			4			(35	)		27
HONDURAS		88			1			79			1			82			1			9			6
JAMAICA		56			1			57			1			14			0			(1	)		42
MEXICO		925			14			906			15			943			16			19			(18	)
NICARAGUA		25			0			25			0			33			1			0			(8	)
PANAMA		668			10			505			8			533			9			163			135
PARAGUAY		125			2			69			1			58			1			56			67
PERU		136			2			233			4			352			6			(97	)		(216	)
SINGAPORE		50			1			43			1			9			0			7			41
SWITZERLAND		1			0			1			0			6			0			0			(5	)
TRINIDAD & TOBAGO		119			2			183			3			166			3			(64	)		(47	)
UNITED STATES		0			0			0			0			23			0			0			(23	)
URUGUAY		2			0			58			1			19			0			(56	)		(17	)
OTHER		20			0			17			0			16			0			3			4

TOTAL CREDIT PORTFOLIO ⁽¹⁾	$	6,398			100	%	$	6,148			100	%	$	5,794			100	%	$	250		$	604

UNEARNED INTEREST AND DEFERRED FEES		(7	)					(7	)					(6	)					0			(1	)

TOTAL CREDIT PORTFOLIO, NET OF UNEARNED INTEREST & DEFERRED FEES	$	6,391					$	6,141					$	5,788					$	250		$	603

⁽¹⁾	Includes gross loans (or the “Loan Portfolio”), securities at fair value through OCI and at amortized cost, gross of the allowance for expected credit losses, loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit, and guarantees covering commercial risk; and other assets consisting of customers’ liabilities under acceptances.
^(*)	Risk in countries outside the Region related to transactions carried out in the Region.

EXHIBIT IX

COMMERCIAL PORTFOLIO

DISTRIBUTION BY COUNTRY

(In US$ million)

	AT THE END OF,
	(A)						(B)						(C)
	September 30, 2018						June 30, 2018						September 30, 2017						Change in Amount
COUNTRY ^(*)	Amount			% of Total Outstanding			Amount			% of Total Outstanding			Amount			% of Total Outstanding			(A) - (B)			(A) - (C)

ARGENTINA	$	587			9		$	555			9		$	321			6		$	32		$	266
BELGIUM		15			0			13			0			14			0			2			1
BOLIVIA		20			0			10			0			10			0			10			10
BRAZIL		1,226			19			1,045			17			1,015			18			181			211
CHILE		159			3			188			3			209			4			(29	)		(50	)
COLOMBIA		779			12			744			12			705			12			35			74
COSTA RICA		357			6			367			6			415			7			(10	)		(58	)
DOMINICAN REPUBLIC		290			5			270			4			142			2			20			148
ECUADOR		365			6			383			6			307			5			(18	)		58
EL SALVADOR		60			1			31			1			79			1			29			(19	)
GERMANY		23			0			28			0			43			1			(5	)		(20	)
GUATEMALA		265			4			300			5			238			4			(35	)		27
HONDURAS		88			1			79			1			82			1			9			6
JAMAICA		56			1			57			1			14			0			(1	)		42
MEXICO		898			14			879			15			923			16			19			(25	)
NICARAGUA		25			0			25			0			33			1			0			(8	)
PANAMA		647			10			484			8			516			9			163			131
PARAGUAY		125			2			69			1			58			1			56			67
PERU		136			2			233			4			352			6			(97	)		(216	)
SINGAPORE		50			1			43			1			9			0			7			41
SWITZERLAND		1			0			1			0			6			0			0			(5	)
TRINIDAD & TOBAGO		111			2			175			3			157			3			(64	)		(46	)
UNITED STATES		0			0			0			0			23			0			0			(23	)
URUGUAY		2			0			58			1			19			0			(56	)		(17	)
OTHER		20			0			17			0			16			0			3			4

TOTAL COMMERCIAL PORTFOLIO ⁽¹⁾	$	6,305			100	%	$	6,054			100	%	$	5,706			100	%	$	251		$	599

UNEARNED INTEREST AND DEFERRED FEES		(7	)					(7	)					(6	)					0			(1	)

TOTAL COMMERCIAL PORTFOLIO, NET OF UNEARNED INTEREST & DEFERRED FEES	$	6,298					$	6,047					$	5,700					$	251		$	598

⁽¹⁾	Includes gross loans (or the “Loan Portfolio”), loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit, and guarantees covering commercial risk; and other assets consisting of customers’ liabilities under acceptances.
^(*)	Risk in countries outside the Region related to transactions carried out in the Region.

EXHIBIT X

TREASURY PORTFOLIO

DISTRIBUTION BY COUNTRY

(In US$ million)

	AT THE END OF,
	(A)					(B)					(C)
	September 30, 2018					June 30, 2018					September 30, 2017					Change in Amount
COUNTRY	Amount		% of Total Outstanding			Amount		% of Total Outstanding			Amount		% of Total Outstanding			(A) - (B)			(A) - (C)

BRAZIL	$	4		5		$	4		5		$	8		9		$	0		$	(4	)
CHILE		5		5			5		5			5		6			0			0
COLOMBIA		28		30			29		30			29		33			(1	)		(1	)
MEXICO		27		29			27		28			20		23			0			7
PANAMA		21		23			21		23			17		19			0			4
TRINIDAD & TOBAGO		8		8			8		9			9		10			0			(1	)

TOTAL TREASURY PORTOFOLIO ⁽¹⁾	$	93		100	%	$	94		100	%	$	88		100	%	$	(1	)	$	5

⁽¹⁾	Includes securities at fair value through OCI and at amortized cost, gross of the allowance for expected credit losses.

EXHIBIT XI

LOAN DISBURSEMENTS

DISTRIBUTION BY COUNTRY

(In US$ million)

	YEAR-TO-DATE				QUARTERLY						Change in Amount
	(A)		(B)		(C)		(D)		(E)
COUNTRY ^(*)	9M18		9M17		3Q18		2Q18		3Q17		(A) - (B)			(C) - (D)			(C) - (E)

ARGENTINA	$	704	$	288	$	247	$	326	$	150	$	416		$	(79	)	$	97
BELGIUM		13		10		3		6		1		3			(3	)		2
BOLIVIA		20		10		10		10		10		10			0			0
BRAZIL		774		686		331		327		171		88			4			160
CHILE		369		374		41		143		70		(5	)		(102	)		(29	)
COLOMBIA		991		1,048		326		385		374		(57	)		(59	)		(48	)
COSTA RICA		344		530		96		90		218		(186	)		6			(122	)
DOMINICAN REPUBLIC		430		455		123		189		181		(25	)		(66	)		(58	)
ECUADOR		726		656		226		313		197		70			(87	)		29
EL SALVADOR		89		102		49		19		24		(13	)		30			25
GUATEMALA		279		422		41		167		136		(143	)		(126	)		(95	)
HONDURAS		96		109		41		38		47		(13	)		3			(6	)
JAMAICA		220		139		56		97		14		81			(41	)		42
MEXICO		3,608		3,519		1,050		1,146		1,247		89			(96	)		(197	)
NICARAGUA		52		48		17		35		6		4			(18	)		11
PANAMA		664		758		265		321		253		(94	)		(56	)		12
PARAGUAY		126		15		62		36		6		111			26			56
PERU		986		771		283		343		123		215			(60	)		160
SINGAPORE		50		604		7		43		123		(554	)		(36	)		(116	)
SWITZERLAND		401		6		0		201		6		395			(201	)		(6	)
TRINIDAD & TOBAGO		145		329		45		23		151		(184	)		22			(106	)
UNITED STATES		33		87		0		0		0		(54	)		0			0
URUGUAY		10		36		2		8		0		(26	)		(6	)		2
OTHER		26		42		8		12		8		(16	)		(4	)		0

TOTAL LOAN DISBURSED ⁽¹⁾	$	11,156	$	11,044	$	3,329	$	4,278	$	3,516	$	112		$	(949	)	$	(187	)

⁽¹⁾	Total loan disbursed does not include loan commitments and financial guarantee contracts, nor other interest-earning assets such as investment securities.
^(*)	Risk in countries outside the Region related to transactions carried out in the Region.