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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K/A

(Amendment No. 2)

REPORT OF FOREIGN PRIVATE ISSUER

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

SECURITIES EXCHANGE ACT OF 1934

For the month of July, 2016

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

EXPLANATORY NOTE

This Report of Foreign Private Issuer on Form 6-K/A (this “Amended Report”) is furnished to amend and restate in its entirety the Report of Foreign Private Issuer on Form 6-K furnished to the Securities and Exchange Commission by Banco Latinoamericano de Comercio Exterior, S.A. on May 6, 2016, as amended by the Issuer on Form 6-K/A on June 1, 2016 (the “Original Report”) solely to present the financial statements on a condensed basis, in compliance with IAS 34 -Interim financial statements. This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. This report is to be read in conjunction with the last annual audited report. The accounting policies are omitted as the accounting policies adopted are consistent with those of the previous financial year.

Banco Latinoamericano

de Comercio Exterior, S.A.

and Subsidiaries

Unaudited condensed consolidated interim statement of financial position as of March 31, 2016 and December 31, 2015, and related unaudited condensed consolidated interim statements of profit or loss, unaudited condensed consolidated interim statements of profit or loss and other comprehensive income, unaudited condensed consolidated interim statements of changes in equity and unaudited condensed consolidated interim statements of Cash Flows for the three Months Ended March 31, 2016 and 2015.

Banco Latinoamericano de Comercio Exterior, S.A.

and Subsidiaries

Unaudited condensed consolidated interim financial statements

Contents	Page

Unaudited condensed consolidated interim statements of financial position	5
Unaudited condensed consolidated interim statements of profit or loss	6
Unaudited condensed consolidated interim statements of profit or loss and other comprehensive income	7
Unaudited condensed consolidated interim statements of changes in equity	8
Unaudited condensed consolidated interim statements of cash flows	9
Notes to the unaudited condensed consolidated interim financial statements	10-69

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

Unaudited condensed consolidated statements of financial position

As of March 31, 2016 and December 31, 2015

(In US$ thousand)

		March 31			December 31
	Notes	2016			2015

Assets
Cash and cash equivalents	3,13		771,406			1,299,966
Financial Instruments:	4,13
At fair value through profit or loss	4.2, 13		49,327			53,411
At fair value through OCI	4.3, 13		174,084			141,803
Securities at amortized cost, net	4.4, 13		107,890			108,215
Loans at amortized cost	4.6		6,533,322			6,691,749
Allowance for expected credit losses	4.6		92,117			89,974
Unearned interest & deferred fees			8,579			9,304
Loans at amortized cost, net			6,432,626			6,592,471

At fair value - Derivative financial instruments used for hedging – receivable	4.8, 4.9, 13		21,521			7,400

Property and equipment, net			5,793			6,173
Intangibles, net			415			427

Other assets:
Customers' liabilities under acceptances	13		29,657			15,100
Accrued interest receivable	13		47,736			45,456
Other assets	5		29,112			15,794
Total of other assets			106,505			76,350

Total assets			7,669,567			8,286,216

Liabilities and stockholders' equity
Deposits:	6, 13
Noninterest-bearing - Demand			711			639
Interest-bearing - Demand			122,935			243,200
Time			2,949,733			2,551,630
Total deposits			3,073,379			2,795,469

At fair value – Derivative financial instruments used for hedging – payable	4.8, 4.9, 13		31,364			29,889

Financial liabilities at fair value through profit or loss	4.1,4.9,13		-			89
Securities sold under repurchase agreement	3,4.3,4.9,13		145,616			114,084
Short-term borrowings and debt	8.1,13		1,497,530			2,430,357
Long-term borrowings and debt, net	8.2,13		1,861,625			1,881,813

Other liabilities:
Acceptances outstanding	13		29,657			15,100
Accrued interest payable	13		21,534			17,716
Allowance for expected credit losses on off-balance sheet credit risk	4.7		4,512			5,424
Other liabilities	9		21,314			24,344
Total other liabilities			77,017			62,584
Total liabilities			6,686,531			7,314,285

Stockholders' equity:	10,11, 13,14
Common stock			279,980			279,980
Treasury stock			(71,964	)		(73,397	)
Additional paid-in capital in excess of assigned value of common stock			119,403			120,177
Capital reserves			95,210			95,210
Retained earnings			569,080			560,642
Accumulated other comprehensive loss	5.3,5.8,14		(8,673	)		(10,681	)
Total stockholders' equity			983,036			971,931
Total liabilities and stockholders' equity			7,669,567			8,286,216

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

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

Unaudited condensed consolidated statements of profit or loss

For the three months ended March 31, 2016 and 2015

(In US$ thousand, except per share amounts)

	Notes	2016			2015

Interest income from financial instruments	4
Deposits			1,171			431
At fair value through OCI			950			1,861
At amortized cost			59,037			51,362
Total interest income			61,158			53,654
Interest expense:	4
Deposits			4,552			2,453
Short-term borrowings and debt			4,855			6,643
Long-term borrowings and debt			12,233			8,733
Total interest expense			21,640			17,829

Net interest income			39,518			35,825

Other income
Fees and commissions, net			2,373			2,300
(Loss) gain on derivative financial instruments and foreign currency exchange	4.8		(839	)		844
(Loss) gain per financial instrument at fair value through profit or loss			(4,183	)		2,505
(Loss) gain per financial instrument at fair value through OCI			(285	)		296
Gain on sale of loans at amortized cost			100			207
Other income, net			351			248
Net other income			(2,483	)		6,400

Total income			37,035			42,225

Expenses
Impairment loss (gain) from expected credit losses on loans at amortized cost	4.6		2,143			(5,030	)
Impairment loss (gain) from expected credit losses on investment securities	4.3, 4.4		7			(830	)
Impairment (gain) loss from expected credit losses on off-balance sheet instruments	4.7		(913	)		5,105
Salaries and other employee expenses			7,880			8,355
Depreciation of equipment and leasehold improvements			329			380
Amortization of intangible assets			113			149
Professional services			477			753
Maintenance and repairs			433			395
Other expenses			3,128			3,080

Profit for the period			23,438			29,868
Earnings per share:

Basic	10		0.60			0.77
Diluted	10		0.60			0.77
Weighted average basic shares	10		38,997			38,805
Weighted average diluted shares	10		39,121			38,858

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

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

Unaudited condensed consolidated statements of profit or loss and other comprehensive income

For the three months ended March 31, 2016 and 2015

(In US$ thousand)

	Notes	2016			2015

Profit for the period			23,438			29,868
Other comprehensive income (loss):
Items that are or may be reclassified to profit or loss:
Net change in unrealized losses on financial instruments at fair value through OCI	14		3,428			49
Net change in unrealized losses on derivative financial instruments	14		(1,420	)		(1,257	)
Other comprehensive income (loss)	14		2,008			(1,208	)
Total comprehensive income for the period			25,446			28,660

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

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

Unaudited condensed consolidated statements of changes in equity

For the three months ended March 31, 2016 and 2015

(In US$ thousand, except per share amounts)

	Common stock		Treasury stock			Additional paid- in capital in excess of assigned value of common stock			Capital reserves		Retained earnings			Accumulated other comprenhensive income (loss)			Total
Balances at January 1, 2015		279,980		(77,627	)		119,644			95,210		501,669			(7,837	)		911,039
Profit for the period		-		-			-			-		29,868			-			29,868
Other comprehensive income		-		-			-			-		-			(1,208	)		(1,208	)
Compensation cost - stock options and stock units plans		-		-			581			-		-			-			581
Exercised options and stock units vested		-		2,932			(1,487	)		-		-			-			1,445
Balances at March 31, 2015		279,980		(74,695	)		118,738			95,210		531,537			(9,045	)		941,725

Balances at January 1, 2016		279,980		(73,397	)		120,177			95,210		560,642			(10,681	)		971,931
Profit for the period		-		-			-			-		23,438			-			23,438
Other comprehensive income		-		-			-			-		-			2,008			2,008
Compensation cost - stock options and stock units plans		-		-			659			-		-			-			659
Exercised options and stock units vested		-		1,433			(1,433	)		-		-			-			-
Dividends declared		-		-			-			-		(15,000	)		-			(15,000	)
Balances at March 31, 2016		279,980		(71,964	)		119,403			95,210		569,080			(8,673	)		983,036

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

Banco Latinoamericano de Comercio Exterior, S. A. y Subsidiarias

Unaudited condensed consolidated statements of cash flows

For the three months ended March 31, 2016 and 2015

(Expressed in thousands of US dollars)

	2016			2015
Cash flows from operating activities:
Profit for the period	$	23,438		$	29,868
Adjustments to reconcile profit for the period to net cash provided by
operating activities:
Activities of derivative financial instruments and hedging		(13,038	)		(14,901	)
Depreciation of equipment and leasehold improvements		328			529
Amortization of intangible assets		113			-
Impairment loss from expected credit losses		1,237			(755	)
Net gain on sale of financial assets at fair value through OCI		(285	)		(295	)
Compensation cost - share-based payment		659			581
Interest income		(61,159	)		(53,654	)
Interest expense		21,640			17,829
Net decrease (increase) in operating assets:
Net decrease (increase) in pledged deposits		4,125			13,009
Financial instruments at fair value through profit or loss		(4,084	)		(575	)
Net increase in loans at amortized cost		157,702			117,351
Other assets		(27,216	)		113,368
Net increase (decrease) in operating liabilities:
Net increase due to depositors		277,910			107,651
Financial liabilities at fair value through profit or loss		(89	)		(13	)
Other liabilities		11,322			(119,879	)
Cash provided by operating activities
Interest received		58,879			61,104
Interest paid		(17,823	)		(14,931	)
Net cash provided by operating activities		433,659			256,287

Cash flows from investing activities:
Acquisition of equipment and leasehold improvements		60			(157	)
Acquisition of intangible assets		(7	)		-
Proceeds from the redemption of of financial instruments at fair value through OCI		14,000			34,937
Proceeds from the sale of financial instruments at fair value through OCI		51,449			31,505
Proceeds from maturities of financial instruments at amortized cost		8,600			4,500
Purchases of financial instruments at fair value through OCI		(124,640	)		(58,123	)
Purchases of financial instruments at fair value at amortized cost		(8,226	)		(11,947	)
Net cash (used in) provided by investing activities		(58,764	)		715

Cash flows from financing activities:

Net (decrease) increase in short-term borrowings and debt and securities sold under repurchase agreements		(901,296	)		51,389
Proceeds from long-term borrowings and debt		268,206			59,076
Repayments of long-term borrowings and debt		(281,199	)		(176,291	)
Dividends paid		14,958			(14,980	)
Exercised stock options		-			1,445
Net cash used in financing activities		(899,331	)		(79,361	)

Net (decrease) increase in cash and cash equivalents		(524,436	)		177,641
Cash and cash equivalents at beginning of the year		1,267,302			741,305
Cash and cash equivalents at end of the period	$	742,866		$	918,946

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

Corporate information

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

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

In the Republic of Panama, banks are regulated by the SBP through Executive Decree No. 52 of April 30, 2008, which adopts the unique text of 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 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 of terrorism and related illicit activities, and procedures for banking intervention and liquidation, among others.

Bladex Head Office’s subsidiaries are the following:

Bladex Holdings Inc. a wholly owned subsidiary, incorporated under the laws of the State of Delaware, United States of America (USA), on May 30, 2000. Bladex Holdings Inc. has ownership in two subsidiaries: Bladex Representacao Ltda. and Bladex Investimentos Ltda.

Bladex Representaçao 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 Head Office and the remaining 0.001% owned by Bladex Holdings Inc.

Bladex Investimentos Ltda. was incorporated under the laws of Brazil on May 3, 2011. Bladex Head Office owns 99% of Bladex Investimentos Ltda., and Bladex Holdings Inc. owns the remaining 1%. This company has invested substantially all of its assets in an investment fund, Alpha 4x Latam Fundo de Investimento Multimercado, incorporated in Brazil (“the Brazilian Fund”), registered with the Brazilian Securities Commission (“CVM”, for its acronym in Portuguese). The Brazilian Fund is a non-consolidated variable interest entity.

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

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

Corporate information (continued)

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

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

These unaudited condensed consolidated interim financial statements were authorized for issue by the Board of Directors on April 12, 2016.

Basis of preparation of the consolidated financial statements

2.1

Statement of compliance

These unaudited consolidated interim financial statements of Banco Latinoamericano de Comercio Exterior, S. A. and its subsidiaries have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) issued by the International Accounting Standards Board ("IASB"). As all of the disclosures required by IFRS for annual period consolidated financial statements are not included herein, these unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2015, contained in the Bank’s annual audited consolidated financial statements. The unaudited condensed consolidated interim statements of profit or loss, profit or loss and other comprehensive income, changes in equity and cash flows for the periods presented are not necessarily indicative of results expected for any future period.

2.2.

Future changes in applicable accounting policies

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Bank financial statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become effective.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 January 2018, when the IASB finalizes their amendments to defer the effective date of IFRS 15 by one year. Early adoption is permitted. The Bank plans to adopt the new standard on the required effective date using the full retrospective method. During 2015, the Bank performed a preliminary assessment of IFRS 15, which is subject to changes arising from a more detailed ongoing analysis. Furthermore, the Bank is considering the clarifications issued by the IASB in an exposure draft in July 2015 and will monitor any further developments.

Basis of preparation of the consolidated financial statements (continued)

2.2.

Future changes in applicable accounting policies

IFRS 16 Leases

IFRS 16 was issued in January 2016 and sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16. IFRS 16 supersedes IAS 17 – Leases. The Bank is evaluating the potential impact of this new standard in its consolidated financial statements.

Cash and cash equivalents

	March 31, 2016		December 31, 2015

Cash and due from banks		6,504		2,601
Interest-bearing deposits in banks		764,902		1,297,365
Total		771,406		1,299,966

Less:
Pledged deposits		28,540		32,664
Total cash and cash equivalents		742,866		1,267,302

Interest-bearing deposits in banks

Demand deposits

As of March 31, 2016 and December 31, 2015, cash in banks balances correspond to bank deposits, bearing interest based on the daily rates determined by banks for between 0.01% and 0.30% and 0.01%, and 0.27%, respectively.

Time deposits

As of March 31, 2016 and December 31, 2015, cash equivalents balances correspond to demand deposits (overnight), bearing an average interest rate of 0.20% to 0.35% and 0.20% to 0.35%, respectively.

On March 31, 2016 and December 31, 2015 the New York Agency had a pledged deposit with a carrying value of $3.3 million and $3.3 million, respectively, with the New York State Banking Department, as required by law since March 1994. As of March 31, 2016 and December 31, 2015, the Bank had pledged deposits with a carrying value of $25.2 million and $29.3 million, respectively, to secure derivative financial instruments transactions and repurchase agreements.

Financial instruments

4.1

Financial liabilities at FVTPL

The fair value of financial liabilities at FVTPL is as follows:

	March 31, 2016		December 31, 2015
Interest rate swaps		-		15
Forward foreign exchange		-		74
Cross currency swaps		-		-
Total		-		89

As of March 31, 2016 and December 31, 2015, information on the nominal amounts of derivative financial instruments at FVTPL is as follows:

	March 31, 2016						December 31, 2015
	Nominal		Fair Value				Nominal		Fair Value
	Amount		Asset		Liability		Amount		Asset		Liability
Interest rate swaps		-		-		-		14,000		-		15
Forward foreign exchange		-		-		-		1,675		-		74
Cross currency swaps		-		-		-		-		-		-
Total		-		-		-		15,675		-		89

Financial instruments (continued)

4.2

Investment Funds at FVTPL

The Bank maintains an investment in the Alpha4X Feeder Fund (the “Feeder”) which is organized under a “Feeder-Master” structure. Under this structure, the Feeder invests all of its assets in the Master which in turn invests in various assets on behalf of its investor. The investment funds consist of the net asset value (NAV) of Bladex’s investment in the Feeder and in the Brazilian Fund.

The changes of the Bank´s investment in the Feeder is recorded in the consolidated statement of profit or loss of that fund in the “Gain (loss) per financial instruments at fair value through profit and loss” line item. The Feeder is not consolidated in the Bank’s financial statements as a result of the evaluation of control as per IFRS 10 “Consolidated Financial Statements” according to which the existing rights on the fund do not give the Bank the ability to direct the relevant activities of the fund nor the ability to use its power over the investee to affect its return. At March 31, 2016 and December 31, 2015 the Bank has a participation in that fund of 47.71%.

Bladex also reports the changes in the NAV of the Brazilian Fund in the “Gain (loss) per financial instruments at fair value through profit and loss" line item, which the Bank does not consolidate, because the existing rights on this fund do not give the Bank the ability to direct its relevant activities nor the ability to use its power over the investee to affect its return. This investment is adjusted to recognize the Bank's participation in the profits and losses of the fund in the line “gain (loss) per financial instruments at fair value through profit or loss” of the consolidated statement of profit or loss.

The following table summarizes the balances of investments in investment funds:

	March 31, 2016		December 31, 2015
Alpha4X Feeder Fund		44,804		49,585
Alpha4X Latam Fundo de Investimento Multimercado		4,523		3,826
		49,327		53,411

On February, May and November 2015, the Bank redeemed a total of $8.0 million of its investment in the Fund. The Bank has a commitment to remain as an investor in these funds, with possibility of contractual redemptions, until March 31, 2016. The Bank filed notices of redemption and the funds will be received in the respective accounts on April 2016.

Financial instruments (continued)

4.3

Securities at fair value through other comprehensive income

The amortized cost, related unrealized gross gain (loss) and fair value of securities at fair value through other comprehensive income by country risk and type of debt are as follows:

	March 31, 2016
			Unrealized
	Amortized Cost		Gain		Loss		Fair Value
Corporate debt:
Brazil		16,700		-		1,399		15,301
Colombia		16,753		-		6,058		10,695
Honduras		7,162		-		21		7,141
Panama		4,635		-		7		4,628
Peru		7,320		81		-		7,401
Venezuela		18,349		513		-		18,862
		70,919		594		7,485		64,028
Sovereign debt:
Brazil		11,562		-		600		10,962
Chile		10,515		35		17		10,533
Colombia		11,464		-		500		10,964
Mexico		69,723		-		473		69,250
Trinidad and Tobago		9,601		-		1,254		8,347
		112,865		35		2,844		110,056
		183,784		629		10,329		174,084

Financial instruments (continued)

4.3

Securities at fair value through other comprehensive income (continued)

	December 31, 2015
			Unrealized
	Amortized Cost		Gain		Loss		Fair Value
Corporate debt:
Brazil		31,831		-		3,000		28,831
Chile		8,205		-		209		7,996
Colombia		17,815		-		7,110		10,705
Honduras		7,195		-		61		7,134
Panama		4,648		-		73		4,575
Peru		7,339		-		64		7,275
Venezuela		18,392		-		93		18,299
		95,425		-		10,610		84,815

Sovereign debt:
Brazil		11,625		-		1,285		10,340
Chile		10,536		-		323		10,213
Colombia		12,046		-		670		11,376
Mexico		17,272		-		681		16,591
Trinidad and Tobago		9,705		-		1,237		8,468
		61,184		-		4,196		56,988
		156,609		-		14,806		141,803

As of March 31, 2016 and December 31, 2015 securities at fair value through OCI with a carrying value of $106.4 million and $87.6 million, respectively, were pledged to secure repurchase transactions accounted for as secured financings.

Financial instruments (continued)

4.3

Securities at fair value through other comprehensive income (continued)

The following table discloses those securities that have had unrealized losses for a period less than 12 months and for 12 months or longer:

	March 31, 2016
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Gross Losses		Fair Value		Unrealized Gross Losses		Fair Value		Unrealized Gross Losses

Corporate debt		22,572		120		15,193		7,365		37,765		7,485
Sovereign debt		70,754		272		34,004		2,572		104,758		2,844
Total		93,326		392		49,197		9,937		142,523		10,329

	December 31, 2015
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Gross Losses		Fair Value		Unrealized Gross Losses		Fair Value		Unrealized Gross Losses

Corporate debt		63,611		1,010		21,204		9,600		84,815		10,610
Sovereign debt		23,468		846		33,520		3,350		56,988		4,196
Total		87,079		1,856		54,724		12,950		141,803		14,806

The following table presents the realized gains and losses on sale of securities at fair value through other comprehensive income:

	March 31, 2016			March 31, 2015
Realized gain on sale of securities		39			296
Realized loss on sale of securities		(324	)		-
Net gain (loss) on sale of securities at fair value through other comprehensive income		(285	)		296

Financial instruments (continued)

4.3

Securities at fair value through other comprehensive income (continued)

Securities at fair value through other comprehensive income classified by issuer’s credit quality indicators are as follows

Rating(1)	March 31, 2016		December 31, 2015
1-4		166,070		133,989
5-6		6,850		6,224
7		1,164		1,590
8		-		-
9		-		-
10		-		-
Total		174,084		141,803

⁽¹⁾ Current ratings as of March 31, 2016 and December 31, 2015, respectively.

The amortized cost and fair value of securities at fair value through other comprehensive income by contractual maturity as of March 31, 2016 and December 31, 2015 are shown in the following tables:

	March 31, 2015
	Amortized Cost		Fair Value
Due within 1 year		73,583		73,378
After 1 year but within 5 years		68,092		58,646
After 5 years but within 10 years		42,109		42,060
		183,784		174,084

	December 31, 2015
	Amortized Cost		Fair Value
Due within 1 year		21,068		20,212
After 1 year but within 5 years		79,689		69,625
After 5 years but within 10 years		55,852		51,966
		156,609		141,803

Financial instruments (continued)

4.3

Securities at fair value through other comprehensive income (continued)

The allowance for expected credit losses relating to securities at fair value through other comprehensive income is as follow:

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)		Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾			Total
Allowance for expected credit losses as of December 31, 2015		234			178		-		6,737			7,149
Transfer to lifetime expected credit losses		-			-		-		-			-
Transfer to credit-impaired financial assets		-			-		-		-			-
Transfer to 12-month expected credit losses		-			-		-		-			-
Financial assets that have been derecognized during the period		(48	)		-		-		(962	)		(1,010	)
Changes due to financial instruments recognized as of December 31, 2015		(48	)		-		-		(962	)		(1,010	)
New financial assets originated or purchased		28			-		-		-			28
Write-offs		-			-		-		-			-
Changes in models/risk parameters		-			-		-		-			-
Foreign exchange and other movements		-			-		-		-			-
Allowance for expected credit losses as of March 31, 2016		214			178		-		5,775			6,167

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)			Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2014		701			1,408			-		-		2,109
Transfer to lifetime expected credit losses		(5,507	)		5,507			-		-		-
Transfer to credit-impaired financial assets		-			(6,737	)		-		6,737		-
Transfer to 12-month expected credit losses		-			-			-		-		-
Financial assets that have been derecognized during the period		(277	)		-			-		-		(277	)
Changes due to financial instruments recognized as of December 31, 2014		(5,784	)		(1,230	)		-		6,737		(277	)
New financial assets originated or purchased		5,317			-			-		-		5,317
Write-offs		-			-			-		-		-
Changes in models/risk parameters		-			-			-		-		-
Foreign exchange and other movements		-			-			-		-		-
Allowance for expected credit losses as of December 31, 2015		234			178			-		6,737		7,149

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit-impaired financial assets (lifetime expected credit losses)

Financial instruments (continued)

4.4

Securities at amortized cost

The amortized cost, related unrealized gross gain (loss) and fair value of these securities by country risk and type of debt are as follows:

	March 31, 2016
			Unrealized
	Amortized Cost⁽¹⁾		Gross Gain		Gross Loss		Fair Value
Corporate debt:
Brazil		1,483		-		261		1,222
Costa Rica		5,000		-		-		5,000
Panama		20,003		50		-		20,053
		26,486		50		261		26,275
Sovereign debt:
Brazil		21,888		4		2,195		19,697
Colombia		30,403		-		549		29,854
Mexico		20,789		-		968		19,821
Panama		8,824		-		108		8,716
		81,904		4		3,820		78,088
		108,390		54		4,081		104,363

	December 31, 2015
			Unrealized
	Amortized Cost⁽¹⁾		Gross Gain		Gross Loss		Fair Value
Corporate debt:
Brazil		1,484		-		383		1,101
Costa Rica		5,000		-		-		5,000
Panama		20,008		45		-		20,053
		26,492		45		383		26,154
Sovereign debt:
Brazil		21,903		-		3,260		18,643
Colombia		30,599		-		1,530		29,069
Mexico		20,871		-		1,684		19,187
Panama		8,876		4		-		8,880
		82,249		4		6,474		75,779
		108,741		49		6,857		101,933

⁽¹⁾

Amounts do not include allowance for expected credit losses of US$500.

⁽²⁾

Amounts do not include allowance for expected credit losses of US$526.

Financial instruments (continued)

4.4

Securities at amortized cost (continued)

The amortized cost and fair value of securities at amortized cost by contractual maturity as of March 31, 2016 and December 31, 2015 are shown in the following tables:

	March 31, 2016
	Amortized Cost		Fair Value

Due within 1 year		34,536		34,425
After 1 year but within 5 years		42,513		39,614
After 5 years but within 10 years		31,341		30,324
		108,390		104,363

	December 31, 2015
	Amortized Cost		Fair Value

Due within 1 year		28,454		28,474
After 1 year but within 5 years		43,236		39,206
After 5 years but within 10 years		37,051		34,253
		108,741		101,933

As of March 31, 2016 and December 31, 2015 securities at amortized cost with a carrying value of $69.8 million and $56.3 million, respectively, were pledged to secure repurchase transactions accounted for as secured financings.

Securities at amortized cost classified by issuer’s credit quality indicators are as follows:

Rating ⁽¹⁾	March 31, 2016		December 31, 2015
1-4		93,907		94,257
5-6		14,483		14,484
7		-		-
8		-		-
9		-		-
10		-		-
Total		108,390		108,741

⁽¹⁾

Current ratings as of March 31, 2016 and December 31, 2015, respectively.

Financial instruments (continued)

4.4

Securities at amortized cost (continued)

The allowance for expected credit losses relating to securities at amortized cost is as follow:

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)			Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2015		348			178			-		-		526
Transfer to lifetime expected credit losses		-			-			-		-		-
Transfer to credit-impaired financial assets		-			-			-		-		-
Transfer to 12-month expected credit losses		-			-			-		-		-
Financial assets that have been derecognized during the period		(80	)		(28	)		-		-		(108	)
Changes due to financial instruments recognized as of December 31, 2015		(80	)		(28	)		-		-		(108	)
New financial assets originated or purchased		82										82
Write-offs		-			-			-		-		-
Changes in models/risk parameters		-			-			-		-		-
Foreign exchange and other movements		-			-			-		-		-
Allowance for expected credit losses as of March 31, 2016		350			150			-		-		500

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)		Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2014		276			-		-		-		276
Transfer to lifetime expected credit losses		(178	)		178		-		-		-
Transfer to credit-impaired financial assets		-			-		-		-		-
Transfer to 12-month expected credit losses		-			-		-		-		-
Financial assets that have been derecognized during the period		(207	)		-		-		-		(207	)
Changes due to financial instruments recognized as of December 31, 2014		(385	)		178		-		-		(207	)
New financial assets originated or purchased		457			-		-		-		457
Write-offs		-			-		-		-		-
Changes in models/risk parameters		-			-		-		-		-
Foreign exchange and other movements		-			-		-		-		-
Allowance for expected credit losses as of December 31, 2015		348			178		-		-		526

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit-impaired financial assets (lifetime expected credit losses)

Financial instruments (continued)

4.5

Recognition and derecognition of financial assets

During the period ended March 31, 2016 and 2015, the Bank sold certain financial instruments measured at amortized cost. These sales were made on the basis of compliance with the Bank's strategy to optimize the loan portfolio.

The amounts and gains arising from the derecognition of these financial instruments are presented in the following table. These gains are presented within the line “gain on sale of loans” in the consolidated statement of profit or loss.

	Assignments and Participations		Gains

For the period ended March 31, 2016		13,800		56
For the period ended March 31, 2015		21,333		122

4.6

Loans – at amortized cost

The following table set forth details of the Bank’s gross loan portfolio:

	March 31, 2016		December 31, 2015
Corporations:
Private		3,229,070		3,254,792
State-owned		542,559		461,573
Banking and financial institutions:
Private		1,810,277		1,974,960
State-owned		572,805		612,677
Middle-market companies:
Private		378,611		387,747
Total		6,533,322		6,691,749

The composition of the gross loan portfolio by industry is as follows:

	March 31, 2016		December31, 2015
Banking and financial institutions		2,383,083		2,587,637
Industrial		1,120,935		1,142,385
Oil and petroleum derived products		934,143		828,355
Agricultural		1,172,641		1,140,124
Services		629,724		670,013
Mining		114,872		110,655
Others		177,924		212,580
Total		6,533,322		6,691,749

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

Loans are reported at their amortized cost considering the principal outstanding amounts net of unearned interest, deferred fees and allowance for expected credit losses.

The amortization of net unearned interest and deferred fees are recognized as an adjustment to the related loan yield using the effective interest rate method.

The unearned discount interest and deferred commission amounted to $8,579 and $9,304 at March 31, 2016 and December 31, 2015, respectively

Loans classified by borrower’s credit quality indicators are as follows:

March 31, 2016
	Corporations				Banking and financial institutions				Middle-market companies
Rating⁽¹⁾	Private		State-owned		Private		State-owned		Private		Total
1-4		2,535,200		402,323		1,527,283		275,843		215,191		4,955,840
5-6		656,708		140,236		282,994		296,962		127,513		1,504,413
7		32,456		-		-		-		35,000		67,456
8		-		-		-		-		-		-
9		-		-		-		-		-		-
10		4,706		-		-		-		907		5,613
Total		3,229,070		542,559		1,810,277		572,805		378,611		6,533,322

December 31, 2015
	Corporations				Banking and financial institutions				Middle-market companies
Rating⁽¹⁾	Private		State-owned		Private		State-owned		Private		Total
1-4		2,644,758		351,216		1,757,668		309,559		212,746		5,275,947
5-6		558,612		110,357		217,292		303,118		174,094		1,363,473
7		46,716		-		-		-		-		46,716
8		-		-		-		-		-		-
9		-		-		-		-		-		-
10		4,706		-		-		-		907		5,613
Total		3,254,792		461,573		1,974,960		612,677		387,747		6,691,749

⁽¹⁾

Current ratings as of March 31, 2016 and December 31, 2015, respectively.

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

The following table provides a breakdown of gross loans by country risk:

	March 31, 2016		December 31, 2015
Country:
Argentina		190,446		142,437
Belgium		0		12,629
Bermuda		19,200		19,600
Bolivia		24,910		19,911
Brazil		1,462,339		1,605,497
Chile		160,134		195,290
Colombia		602,255		620,547
Costa Rica		336,401		341,490
Dominican Republic		285,610		384,353
Ecuador		161,994		169,164
El Salvador		117,645		68,465
France		4,500		6,000
Germany		97,000		97,000
Guatemala		435,144		457,700
Honduras		110,717		118,109
Jamaica		19,790		16,520
Mexico		886,281		788,893
Nicaragua		22,000		16,820
Panama		401,555		455,405
Paraguay		108,946		116,348
Peru		606,607		511,250
Singapore		28,372		11,655
Switzerland		41,925		44,650
Trinidad and Tobago		139,340		200,000
United States of America		46,711		53,516
Uruguay		223,500		218,500
Total		6,533,322		6,691,749

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

The remaining loan maturities are summarized as follows:

	March 31, 2016		December 31, 2015
Current:
Up to 1 month		894,862		1,031,608
From 1 month to 3 months		1,118,617		1,336,901
From 3 months to 6 months		1,252,746		1,094,885
From 6 months to 1 year		1,275,952		1,170,114
From 1 year to 2 years		974,985		1,000,553
From 2 years to 5 years		921,906		967,416
More than 5 years		43,634		37,943
		6,482,702		6,639,420

Delinquent		22,607		-

Impaired		28,013		52,329
Total		6,533,322		6,691,749

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

	March 31, 2016		December 31, 2015

Fixed interest rates		2,985,713		3,177,147
Floating interest rates		3,547,609		3,514,602
Total		6,533,322		6,691,749

As of March 31, 2016 and December 31, 2015, 89 and 90%, respectively, of the loan portfolio at fixed interest rates has remaining maturities of less than 180 days.

An analysis of credit- impaired balances as of March 31, 2016 and December 31, 2015 is detailed as follows:

	March 31, 2016						2016
	Recorded investment		Unpaid principal balance		Related allowance Stage 3		Average principal loan balance		Interest income recognized
With an allowance recorded:
Private corporations		27,106		4,706		20,652		27,106		11
Middle-market companies		907		907		537		907		66
Total		28,013		5,613		21,189		28,013		77

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

	December 31, 2015						2015
	Recorded investment		Unpaid principal balance		Related allowance Stage 3		Average principal loan balance		Interest income recognized
With an allowance recorded:
Private corporations		51,422		4,706		20,703		9,946		230
Middle-market companies		907		907		448		7,472		49
Total		52,329		5,613		21,151		17,418		279

The following is a summary of information of interest amounts recognized on an effective interest basis on net carrying amount for those financial assets in Stage 3:

		March 31, 2016				March 31, 2015
Interest revenue calculated on the net carrying amount(net of credit allowance)			77				56

The following table presents an aging analysis of the loan portfolio:

March 31, 2016
	91-120 days		121- 150 days		151- 180 days		Greater than 180 days		Total Past due		Delinquent		Current		Total Loans
Corporations		-		-		-		4,706		4,706		7,607		3,759,316		3,771,629
Banking and financial institutions		-		-		-		-		-		-		2,383,082		2,383,082
Middle-market companies		-		-		-		907		907		15,000		362,704		378,611
Total		-		-		-		5,613		5,613		22,607		6,505,102		6,533,322

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

December 31, 2015
	91-120 days		121- 150 days		151- 180 days		Greater than 180 days		Total Past due		Delinquent		Current		Total Loans
Corporations		-		-		-		4,706		4,706		-		3,711,659		3,716,365
Banking and financial institutions		-		-		-		-		-		-		2,587,637		2,587,637
Middle-market companies		-		-		-		907		907		-		386,840		387,747
Total		-		-		-		5,613		5,613		-		6,686,136		6,691,749

As of March 31, 2016 and December 31, 2015 the Bank had credit transactions in the normal course of business with 16%, of its Class “A” and “B” stockholders. All transactions were made based on arm’s-length terms and subject to prevailing commercial criteria and market rates and were subject to all of the Bank’s Corporate Governance and control procedures. As of March 31, 2016 and December 31, 2015, approximately 8% and 9%, respectively, of the outstanding loan portfolio was placed with the Bank’s Class “A” and “B” stockholders and their related parties. As of March 31, 2016, the Bank was not directly or indirectly owned or controlled by another corporation or any foreign government, and no Class “A” or “B” shareholder was the registered owner of more than 3.5% of the total outstanding shares of the voting capital stock of the Bank.

The allowances for expected credit losses related to loans at amortized cost at March 31, 2016 and December 31, 2015 are as follows:

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)			Stage 2 ⁽²⁾ (individually assessed)			Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2015		59,214			9,609			-			21,151		89,974
Transfer to lifetime expected credit losses		(3,622	)		1,598			2,024			-		-
Transfer to credit-impaired financial assets		-			-			-			-		-
Transfer to 12-month expected credit losses		1,925			(1,963	)		-			38		-
Financial assets that have been derecognized during the period		(21,.001	)		(2,609	)		-			-		(23,610	)
Changes due to financial instruments recognized as of December 31, 2015		(22,698	)		(2,974	)		(2,024	)		38		(23,610	)
New financial assets originated or purchased		25,753			-			-			-		25,753
Write-offs		-			-			-			-		-
Changes in models/risk parameters		-			-			-			-		-
Foreign exchange and other movements		-			-			-			-		-
Allowance for expected credit losses as of March 31, 2016		62,269			6,635			2,024			21,189		92,117

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit Credit-impaired financial assets (lifetime expected credit losses)

Financial instruments (continued)

4.6

Loans – at amortized cost (continued)

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)			Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾			Total
Allowance for expected credit losses as of December 31, 2014		37,469			37,564			-		2,654			77,687
Transfer to lifetime expected credit losses		(9,147	)		9,147			-		-			-
Transfer to credit-impaired financial assets		-			(24,186	)		-		24,186			-
Transfer to 12-month expected credit losses		101			(101	)		-		-			-
Financial assets that have been derecognized during the period		(31,774	)		(12,815	)		-		-			(44,589	)
Changes due to financial instruments recognized as of December 31, 2014		(40,820	)		(27,955	)		-		24,186			(44,589	)
New financial assets originated or purchased		62,565			-			-		-			62,565
Write-offs		-			-			-		(5,689	)		(5,689	)
Changes in models/risk parameters		-			-			-		-			-
Foreign exchange and other movements		-			-			-		-			-
Allowance for expected credit losses as of December 31, 2015		59,214			9,609			-		21,151			89,974

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit-impaired financial assets (lifetime expected credit losses)

4.7

Instruments with off-balance sheet credit risk

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

The Bank’s outstanding instruments with off-balance sheet credit risk are as follows:

	March 31, 2016		December 31, 2015
Confirmed letters of credit		57,896		99,031
Stand-by letters of credit and guaranteed – Commercial risk		188,200		158,599
Credit commitments		104,769		189,820
Total		350,865		447,450

Financial instruments (continued)

4.7

Instruments with off-balance sheet credit risk (continued)

As of March 31, 2016 and December 31, 2015 the remaining maturity profile of the Bank’s outstanding instruments with off-balance sheet credit risk is as follows:

Maturities	March 31, 2016		December 31 2015
Up to 1 year		311,873		424,687
From 1 to 2 years		36,414		22,185
From 2 to 5 years		2,000		-
More than 5 years		578		578
		350,865		447,450

Instruments with off-balance sheet credit risk classified by issuer’s credit quality indicators are as follows:

Rating⁽¹⁾	March 31, 2016		December 31 2015
1-4		199,758		276,860
5-6		76,107		170,590
7		75,000		-
8		-		-
9		-		-
10		-		-
Total		350,865		447,450

⁽¹⁾

Current ratings as of March 31, 2016 and December 31, 2015, respectively.

Letters of credit and guarantees

The Bank, on behalf of its clients base, advises and confirms letters of credit to facilitate foreign trade transactions. When confirming letters of credit, the Bank adds its own unqualified assurance that the issuing bank will pay and that if the issuing bank does not honor drafts drawn on the letter of credit, the Bank will. The Bank provides stand-by letters of credit and guarantees, which are issued on behalf of institutional clients in connection with financing between its clients and third parties. The Bank applies the same credit policies used in its lending process, and once issued the commitment is irrevocable and remains valid until its expiration. Credit risk arises from the Bank's obligation to make payment in the event of a client’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 clients. Commitments generally 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.

Financial instruments (continued)

4.7

Instruments with off-balance sheet credit risk (continued)

As of March 31, 2016 and December 31, 2015 the breakdown of the Bank’s off-balance sheet exposure by country risk is as follows:

	March 31, 2016		December 31 2015
Country:
Argentina		-		10,145
Bolivia		2,042		1,261
Brazil		2,000		17,291
Colombia		104,515		96,085
Dominican Republic		26,334		4,527
Ecuador		53,162		88,585
El Salvador		25		145
Honduras		300		876
Mexico		14,387		46,994
Panama		112,468		136,022
Paraguay		-		43
Peru		9,562		19,018
Singapore		25,000		25,000
Switzerland		1,000		1,000
United Kingdom		70		70
Uruguay		-		388
Total		350,865		447,450

The allowances for credit losses related to instruments with off-balance sheet credit risk at March 31, 2016 and December 31, 2015 are as follows:

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)		Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2015		2,914			333		2,177		-		5,424
Transfer to lifetime expected credit losses		(610	)		126		484		-		-
Transfer to credit-impaired instruments		-			-		-		-		-
Transfer to 12-month expected credit losses		-			-		-		-		-
Instruments that have been derecognized during the period		(2,023	)		-		-		-		(2,023	)
Changes due to instruments recognized as of December 31, 2015		(2,633	)		126		484		-		(2,023	)
New instruments originated or purchased		1,111			-		-		-		1,111
Write-offs		-			-		-		-		-
Changes in models/risk parameters		-			-		-		-		-
Foreign exchange and other movements		-			-		-		-		-
Allowance for expected credit losses as of March 31, 2016		1,392			459		2,661		-		4,512

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit-impaired instruments (lifetime expected credit losses)

Financial instruments (continued)

4.7

Instruments with off-balance sheet credit risk (continued)

	Stage 1 ⁽¹⁾			Stage 2 ⁽²⁾ (collectively assessed)			Stage 2 ⁽²⁾ (individually assessed)		Stage 3 ⁽³⁾		Total
Allowance for expected credit losses as of December 31, 2014		7,079			2,794			-		-		9,873
Transfer to lifetime expected credit losses		-			(2,177	)		2,177		-		-
Transfer to credit-impaired instruments		-			-			-		-		-
Transfer to 12-month expected credit losses		-			-			-		-		-
Instruments that have been derecognized during the period		(6,908	)		(284	)		-		-		(7,192	)
Changes due to instruments recognized as of December 31, 2014		(6,908	)		(2,461	)		2,177		-		(7,192	)
New financial assets originated or purchased		2,743			-			-		-		2,743
Write-offs		-			-			-		-		-
Changes in models/risk parameters					-			-		-		-
Foreign exchange and other movements		-			-			-		-		-
Allowance for expected credit losses as of December 31, 2015		2,914			333			2,177		-		5,424

⁽¹⁾

12-month expected credit losses

⁽²⁾

Lifetime expected credit losses

⁽³⁾

Credit-impaired instruments (lifetime expected credit losses)

The reserve for expected credit losses on off-balance sheet credit risk reflects the Bank’s Management estimate of expected credit losses on off-balance sheet credit risk items such as: confirmed letters of credit, stand-by letters of credit, guarantees and credit commitments.

Financial instruments (continued)

4.7

Derivative financial instruments for hedging purposes

As of March 31, 2016 and December 31, 2015, quantitative information on derivative financial instruments held for hedging purposes is as follows:

	March 31, 2016
	Nominal		Carrying amount of the hedging instrument				Changes in fair value used for calculating hedge
	Amount		Asset		Liability		ineffectiveness
Fair value hedges:
Interest rate swaps		876,114		12,824		2,249		11,680
Cross-currency interest rate swaps		233,427		3,556		17,390		(37,222	)
Cash flow hedges:
Interest rate swaps		600,000		126		3,780		(5,678	)
Cross-currency interest rate swaps		59,498		2,484		-		2,463
Forward foreign exchange		284,993		2,531		7,407		(3,029	)
Net investment hedges:
Forward foreign exchange		3,898		-		539		(511	)
Total		2,057,930		21,520		31,365		(31,786	)

	December 31, 2015
	Nominal		Carrying amount of the hedging instrument				Changes in fair value used for calculating hedge
	Amount		Asset		Liability		ineffectiveness
Fair value hedges:
Interest rate swaps		886,631		2,549		1,444		647
Cross-currency interest rate swaps		214,067		322		23,710		14,731
Cash flow hedges:
Interest rate swaps		870,000		230		2,254		(258	)
Cross-currency interest rate swaps		75,889		374		395		215
Forward foreign exchange		247,869		3,925		2,058		1,867
Net investment hedges:
Forward foreign exchange		3,818		-		28		28
Total		2,298,274		7,400		29,889		17,230

The hedging instruments presented in the tables above are located in the line item in the statement of financial position at fair value - Derivative financial instruments used for hedging – receivable or at fair value – Derivative financial instruments used for hedging – payable.

Financial instruments (continued)

4.8

Derivative financial instruments for hedging purposes (continued)

The gains and losses resulting from activities of derivative financial instruments and hedging recognized in the consolidated statements of profit or loss are presented below:

	March 31, 2016
	Gain (loss) recognized in OCI (effective portion)			Classification of gain (loss)	Gain (loss) reclassified from accumulated OCI to the consolidated statement of profit or loss			Gain (loss) recognized on derivatives (ineffective portion)
Derivatives – cash flow hedge
Interest rate swaps		(1,618	)	Gain (loss) on interest rate swap		-			(578	)
Cross-currency interest rate swaps		2,787		Gain (loss) on foreign currency exchange		-			(64	)
				Interest income – loans		(752	)		-
Forward foreign exchange		(1,214	)	Interest income – securities at FVOCI		(220	)		-
				Interest income – loans		-			-
				Interest expense – borrowings and debt		-			-
				Interest expenses – deposits		177			-
				Gain (loss) on foreign currency exchange		3,940			-
Total		(45	)			2,503

Derivatives – net investment hedge
Forward foreign exchange		-				-			-
Total		-				-			-

Financial instruments (continued)

4.8

Derivative financial instruments for hedging purposes (continued)

	March 31, 2015
	Gain (loss) recognized in OCI (effective portion)			Classification of gain (loss)	Gain (loss) reclassified from accumulated OCI to the consolidated statement of profit or loss			Gain (loss) recognized on derivatives (ineffective portion)
Derivatives – cash flow hedge
Interest rate swaps		(1,139	)	Gain (loss) on interest rate swap		-			-
Cross-currency interest rate swaps		959		Gain (loss) on foreign currency exchange		-			-
				Interest income – loans		-			-
Forward foreign exchange		1,551		Interest income – securities at FVOCI		(197	)		-
				Interest income – loans		(246	)		-
				Interest expense – borrowings and debt		-			-
				Interest expenses – deposits		-			-
				Gain (loss) on foreign currency exchange		3,011			-
Total		1,371				2,586

Derivatives – net investment hedge
Forward foreign exchange		840				-			-
Total		840				-			-

Financial instruments (continued)

4.8

Derivative financial instruments for hedging purposes (continued)

The Bank recognized in the consolidated statement of profit or loss the gain (loss) on derivative financial instruments and the gain (loss) of the hedged asset or liability related to qualifying fair value hedges, as follows:

	March 31, 2016
	Classification in consolidated statement of profit or loss	Gain (loss) on derivatives			Gain (loss) on hedge item			Net gain (loss)
Derivatives – fair value hedge
Interest rate swaps	Interest income – securities at FVOCI		(198	)		426			228
	Interest income – loans		(36	)		831			795
	Interest expenses – borrowings and debt		1,679			(7,063	)		5,384
	Derivative financial instruments and hedging		(7,186	)		8,208			1,022
Cross-currency interest rate swaps	Interest income – loans		(42	)		119			77
	Interest expenses – borrowings and debt		(148	)		(1,837	)		(1,985	)
	Derivative financial instruments and hedging		7,131			(6,801	)		330
Total			1,200			(6,117	)		(4,917	)

	March 31, 2015
	Classification in consolidated statement of profit or loss	Gain (loss) on derivatives			Gain (loss) on hedge item			Net gain (loss)
Derivatives – fair value hedge
Interest rate swaps	Interest income – securities at FVOCI		(356	)		428			72
	Interest income – loans		(113	)		1,053			940
	Interest expenses – borrowings and debt		(1,788	)		(4,047	)		(3,061	)
	Derivative financial instruments and hedging		1,014			(1,129	)		(115	)
Cross-currency interest rate swaps	Interest income – loans		(67	)		590			523
	Interest expenses – borrowings and debt		676			(1,788	)		(1,112	)
	Derivative financial instruments and hedging		(12,286	)		13,314			1,028
Total			(10,146	)		8,421			(1,725	)

Financial instruments (continued)

4.8

Derivative financial instruments for hedging purposes (continued)

For control purposes, derivative instruments are recorded at their nominal amount (“notional amount”) in memorandum accounts. Interest rate swaps are made either in a single currency or cross currency for a prescribed period to exchange a series of interest rate flows, which involve fixed for floating interest payments, and vice versa. The Bank also engages in certain foreign exchange trades to serve customers’ transaction needs and to manage foreign currency risk. All such positions are hedged with an offsetting contract for the same currency.

The Bank manages and controls the risks on these foreign exchange trades by establishing counterparty credit limits by customer and by adopting policies that do not allow for open positions in the credit and investment portfolio. The Bank also uses foreign currency exchange contracts to hedge the foreign exchange risk associated with the Bank’s equity investment in a non-U.S. dollar functional currency foreign subsidiary. Derivative and foreign exchange instruments negotiated by the Bank are executed mainly over-the-counter (OTC). These contracts are executed between two counterparties that negotiate specific agreement terms, including notional amount, exercise price and maturity.

The maximum length of time over which the Bank has hedged its exposure to the variability in future cash flows on forecasted transactions is 7.94 years.

The Bank estimates that during remaining of 2016, approximately $499 reported as losses in OCI as of March 31, 2016 related to forward foreign exchange contracts, are expected to be reclassified into interest income as an adjustment to yield of hedged loans during the twelve-month period ending December 31, 2016.

The Bank estimates that during remaining of 2016, approximately $221 reported as losses in OCI as of March 31, 2016 related to forward foreign exchange contracts, are expected to be reclassified into interest income as an adjustment to yield of hedged securities during the twelve-month period ending December 31, 2016.

The Bank estimates that during remaining of 2016, approximately $344 reported as losses in OCI as of March 31, 2016 related to forward foreign exchange contracts, are expected to be reclassified into interest income as an adjustment to yield of hedged deposits during the twelve-month period ending December 31, 2016.

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 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 agreed-upon terms. The Bank has designated these derivative instruments as cash flow hedges and net investment hedges.

In addition to hedging derivative financial instruments, the Bank has derivative financial instruments at FVTPL as disclosed in Note 4.1.

Financial instruments (continued)

4.9

Offsetting of financial assets and liabilities

In the ordinary course of business, the Bank enters into derivative financial instrument transactions and securities sold under repurchase agreements under industry standards agreements. Depending on the collateral requirements stated in the contracts, the Bank and counterparties can receive or deliver collateral based on the fair value of the financial instruments transacted between parties. Collateral typically consists of cash deposits and securities. The master netting agreements include clauses that, in the event of default, provide for close-out netting, which allows all positions with the defaulting counterparty to be terminated and net settled with a single payment amount.

The International Swaps and Derivatives Association master agreement (“ISDA”) and similar master netting arrangements do not meet the criteria for offsetting in the consolidated statement of financial position. This is because they create for the parties to the agreement a right of set-off of recognized amounts that is enforceable only following an event of default, insolvency or bankruptcy of the Bank or the counterparties or following other predetermined events.

The following tables summarize financial assets and liabilities that have been offset in the consolidated statement of financial position or are subject to master netting agreements:

Derivative financial instruments – assets

March 31, 2016
			Gross amounts offset in the consolidated		Net amount of assets presented in the		Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts assets		statement of financial position		consolidated statement of financial position		Financial instruments		Cash collateral received			Net Amount
Derivative financial instruments		21,521		-		21,521		-		(690	)		20,831
Total		21,521		-		21,521		-		(690	)		20,831

December 31, 2015
			Gross amounts offset in the consolidated		Net amount of assets presented in the		Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts assets		statement of financial position		consolidated statement of financial position		Financial instruments		Cash collateral received			Net Amount
Derivative financial instruments		7,400		-		7,400		-		(690	)		6,710
Total		7,400		-		7,400		-		(690	)		6,710

Financial instruments (continued)

4.9

Offsetting of financial assets and liabilities (continued)

The following table presents the reconciliation of assets that have been offset or are subject to master netting agreements to individual line items in the consolidated statement of financial position as of March 31, 2016 and December 31, 2015:

	March 31, 2016
Description	Gross amounts of assets		Gross amounts offset in the consolidated statement of financial position		Net amount of assets presented in the consolidated statement of financial position
Derivative financial instruments:
Derivative financial instruments used for hedging – receivable		21,521		-		21,521
Total derivative financial instruments		21,521		-		21,521

	December 31, 2015
Description	Gross amounts of assets		Gross amounts offset in the consolidated statement of financial position		Net amount of assets presented in the consolidated statement of financial position
Derivative financial instruments:
Derivative financial instruments used for hedging – receivable		7,400		-		7,400
Total derivative financial instruments		7,400		-		7,400

Financial Instruments (continued)

4.9

Offsetting of financial assets and liabilities (continued)

Financial liabilities and derivative financial instruments – liabilities

March 31, 2016
			Gross amounts offset in the		Net amount of liabilities presented in the		Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of liabilities		consolidated statement of financial position		consolidated statement of financial position		Financial instruments		Cash collateral pledged			Net Amount
Securities sold under repurchase agreements		145,616		-		145,616		145,616		-			-

Financial liabilities at FVTPL		-		-		-		-		-			-

Derivative financial instruments - hedging		31,364		-		31,364		-		(25,238	)		6,126

Total		176,980		-		176,980		145,616		(25,238	)		6,126

December 31, 2015
			Gross amounts offset in the		Net amount of liabilities presented in the		Gross amounts not offset in the consolidated statement of financial position
Description	Gross amounts of liabilities		consolidated statement of financial position		consolidated statement of financial position		Financial instruments			Cash collateral pledged			Net Amount
Securities sold under repurchase agreements		114,084		-		114,084		(111,620	)		(2,463	)		1

Financial liabilities at FVTPL		89		-		89		-			-			89

Derivative financial instruments - hedging		29,889		-		29,889		-			(26,899	)		2,990

Total		144,062		-		144,062		(111,620	)		(29,362	)		3,080

Financial Instruments (continued)

4.9

Offsetting of financial assets and liabilities (continued)

The following table presents the reconciliation of liabilities that have been offset or are subject to master netting agreements to individual line items in the consolidated statement of financial position as of March 31, 2016 and December 31, 2015:

	March 31, 2016
Description	Gross amounts of liabilities		Gross amounts offset in the consolidated statement of financial position		Net amount of liabilities presented in the consolidated statement of financial position
Securities sold under repurchase agreements		145,616		-		145,616
Derivative financial instruments:
Financial liabilities at FVTPL
Derivative financial instruments used for hedging – payable		31,364		-		31,364
Total derivative financial instruments		31,364		-		31,364

	December 31, 2015
Description	Gross amounts of liabilities		Gross amounts offset in the consolidated statement of financial position		Net amount of liabilities presented in the consolidated statement of financial position
Securities sold under repurchase agreements		114,084		-		114,084
Derivative financial instruments:
Financial liabilities at FVTPL		89		-		89
Derivative financial instruments used for hedging – payable		29,889		-		29,889
Total derivative financial instruments		29,978		-		29,978

Other assets

Following is a summary of other assets as of March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31 2015

Accounts receivable		6,252		6,428
Equity investment in a private fund (at cost)		530		530
IT projects under development		5,978		4,952
Other		16,352		3,884
		29,112		15,794

Deposits

The remaining maturity profile of the Bank’s deposits is as follows:

	March 31, 2016		December 31 2015
Demand		123,646		243,839
Up to 1 month		158,700		1,492,175
From 1 month to 3 months		743,042		475,611
From 3 month to 6 months		293,667		319,995
From 6 month to 1 year		1,754,324		263,849
		3,073,379		2,795,469

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

	March 31, 2016		December 31 2015
Aggregate amounts of time deposits of $100,000 or more		3,072,859		2,794,912
Aggregate amounts of deposits in the New York Agency		226,917		235,203
Interest expense paid to deposits in the New York Agency		388		292

Securities sold under repurchase agreements

The Bank’s financing transactions under repurchase agreements amounted to $145.6 million and $114.4 million, as of March 31, 2016 and December 31, 2015, respectively.

During the periods ended March 31, 2016 and 2015, interest expense related to financing transactions under repurchase agreements totaled $270, and $662, respectively, corresponding to interest expense generated by the financing contracts under repurchase agreements. These expenses are included in the interest expense – short-term borrowings and debt line in the consolidated statements of profit or loss.

Borrowings and debt

8.1

Short-term borrowings and debt

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

	March 31, 2016			December 31 2015
Short-term Borrowings:
At fixed interest rates		425,997			983,245
At floating interest rates		590,000			871,522
Total borrowings		1,015,997			1,854,767

Short-term Debt:
At fixed interest rates		481,533			525,590
At floating interest rates		-			50,000
Total debt		481,533			575,590
Total short-term borrowings and debt		1,497,530			2,430,357

Average outstanding balance during the period		1,764,967			2,266,864
Maximum balance at any month-end		1,876,322			2,856,507
Range of fixed interest rates on borrowing and debt in U.S. dollars		0.83% to 1.24	%		0.53% to 1.21	%
Range of floating interest rates on borrowing and debt in U.S. dollars		0.88% to 1.27	%		0.67% to 1.24	%
Range of fixed interest rates on borrowing in Mexican pesos		4.66	%		3.76% to 3.98	%
Range of floating interest rate on borrowing in Mexican pesos		-			3.90% to 4.17	%
Range of fixed interest rate on debt in Japanese yens		0.31	%		0.31% to 0.33	%
Weighted average interest rate at end of the period		1.07	%		0.93	%
Weighted average interest rate during the period		1.00	%		0.85	%

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

	March 31, 2016		December 31 2015
Currency
US dollar		1,486,100		2,402,701
Mexican peso		6,097		14,366
Japanese yen		5,333		13,290
Total		1,497,530		2,430,357

Borrowings and debt (continued)

8.2

Long-term borrowings and debt

Borrowings consist of long-term and syndicated loans obtained from international banks. Debt instruments consist of public and private issuances under the Bank's Euro Medium Term Notes Program (“EMTN”) as well as public issuances in the Mexican market. The breakdown of borrowings and long-term debt (original maturity of more than one year), together with contractual interest rates gross of prepaid commission of $7,196 and $7,017 as of March 31, 2016 and December 31, 2015, respectively, is as follows:

	March 31, 2016			December 31 2015
Long-term Borrowings:
At fixed interest rates with due dates from September 2016 to October 2020		73,465			113,039
At floating interest rates with due dates from November 2016 to December 2020		708,091			695,837
Total borrowings		781,556			808,876

Long-term Debt:
At fixed interest rates with due dates from March 2016 to March 2024		936,992			929,998
At floating interest rates with due dates from July 2016 to January 2018		150,273			149,956
Total debt		1,087,265			1,079,954
Total long-term borrowings and debt outstanding		1,868,821			1,888,830

Average outstanding balance during the period		1,688,132			1,589,451
Maximum outstanding balance at any month – end		1,871,864			1,888,830
Range of fixed interest rates on borrowing and debt in U.S. dollars		1.01% a 3.75	%		1.01% to 3.75	%
Range of floating interest rates on borrowing and debt in U.S. dollars		0.92% a 2.18	%		0.84% to 1.95	%
Range of fixed interest rates on borrowing in Mexican pesos		4.30% a 5.95	%		4.30% to 5.95	%
Range of floating interest rates on debt in Mexican pesos		4.45% a 5.45	%		3.93% to 5.45	%
Range of fixed interest rate on debt in Japanese yens		0.50% a 0.81	%		0.50% to 0.81	%
Range of fixed interest rate on debt in Euros		0.40% a 3.75	%		0.40% to 3.75	%
Weighted average interest rate at the end of the period		2.71	%		2.62	%
Weighted average interest rate during the period		2.68	%		2.65	%

Borrowings and debt (continued)

8.2

Long-term borrowings and debt (continued)

The balances of long-term borrowings and debt by currency, is as follows:

	March 31, 2016		December 31 2015
Currency
US dollar		1,572,857		1,599,233
Mexican peso		150,694		153,332
Japanese yen		26,783		25,035
Euro		118,487		111,230
Total		1,868,821		1,888,830

The Bank's funding activities include: (i) 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 fixed or floating interest rates, or at discount, and in various currencies. The notes are generally issued in bearer or registered form through one or more authorized financial institutions; (ii) Short-and Long-Term Notes “Certificados Bursatiles” Program (the “Mexico Program”) in the Mexican local market, registered with the Mexican National Registry of Securities maintained by the National Banking and Securities Commission in Mexico (“CNBV”, for its acronym in Spanish), for an authorized aggregate principal amount of 10 billion Mexican pesos with maturities from one day to 30 years.

Some borrowing agreements include various events of default and covenants related to minimum capital adequacy ratios, incurrence of additional liens, and asset sales, as well as other customary covenants, representations and warranties. As of March 31, 2016, the Bank was in compliance with all covenants.

The future remaining maturities of long-term borrowings and debt outstanding as of March 31, 2016, are as follows:

	Outstanding
Due in
2016		159,616
2017		590,420
2018		505,801
2019		191,914
2020		359,518
2024		61,552
		1,868,821

Other liabilities

	March 31, 2016		December 31 2015
Accruals and other accumulated expenses		4,217		9,676
Dividends payable		146		146
Accounts payable		13,679		11,096
Others		3,272		3,426
		21,314		24,344

10.

Earnings per share

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

	March 31, 2016		March 31, 2015
Profit for the period for both basic and diluted EPS		23,438		28,868

Basic earnings per share		0.60		0.74
Diluted earnings per share		0.60		0.74

Weighted average common shares outstanding - applicable to basic		38,997		38,805

Effect of dilutive securities:
Stock options and restricted stock units plans		124		53

Adjusted weighted average common shares outstanding applicable to diluted EPS		39,121		38,858

11.

Capital and Reserves

Common stock

The Bank’s common stock is divided into four categories:

“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.

“Class B”; shares may only be issued to banks or financial institutions.

“Class E”; shares may be issued to any person whether a natural person or a legal entity.

“Class F”; may only be issued to state entities and agencies of non-Latin American countries, including, among others, central banks and majority state-owned banks in those countries, and multilateral financial institutions either international or regional institutions.

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.

11.

Capital and Reserves (continued)

Common stock (continued)

The following table provides detailed information on the Bank’s common stock activity per class for each of the periods in the three-month period ended March 31, 2016:

(Share units)	“Class A”		“Class B”		“Class E”			“Class F”		Total

Authorized		40,000,000		40,000,000		100,000,000			100,000,000		280,000,000
Outstanding at January 1, 2015		6,342,189		2,479,050		29,956,100			-		38,777,339
Exercised stock options - compensation plans		-		-		(68,959	)		-		(68,959	)
Restricted stock units – vested		-		-		(63,820	)				(63,820	)
Outstanding at March 31, 2015		6,342,189		2,479,050		29,823,321			-		38,644,560

Outstanding at January 31, 2016		6,342,189		2,474,469		30,152,247			-		38,968,905
Exercised stock options - compensation plans		-		-		-			-		-
Restricted stock units – vested		-		-		91,454			-		91,454
Outstanding at December 31, 2015		6,342,189		2,474,469		30,243,701			-		39,060,359

The following table presents information regarding shares repurchased but not retired by the Bank and accordingly classified as treasury stock:

	“Class A”				“Class B”				“Class E”						Total
	Shares		Amount		Shares		Amount		Shares			Amount			Shares			Amount
Outstanding at January 1, 2015		318,140		10,708		589,174		16,242		2,295,186			50,677			3,202,500			77,627
Exercised stock options - compensation plans		-		-		-		-		(68,959	)		(1,523	)		(68,959	)		(1,523	)
Restricted stock units – vested		-		-		-		-		(63,820	)		(1,409	)		(63,820	)		(1,409	)
Outstanding at March 31, 2015		318,140		10,708		589,174		16,242		2,162,407			47,745			3,069,721			74,695

Outstanding at January 1, 2016		318,140		10,708		589,174		16,242		2,103,620			46,447			3,010,934			73,397
Exercised stock options - compensation plans		-		-		-		-		-			-			-			-
Restricted stock units - vested		-		-		-		-		(64,870	)		(1,433	)		(64,870	)		(1,433	)
Outstanding at March 31, 2016		318,140		10,708		589,174		16,242		2,038,750			45,014			2,946,064			71,964

Reserves

The Banking Law in the Republic of Panama requires banks with general banking license to maintain a total capital adequacy index that shall not be lower than 8% of total assets and off-balance sheet irrevocable contingency transactions, weighted according to their risk; and primary capital equivalent that shall not be less than 4% of its assets and off-balance sheet irrevocable contingency transactions, weighted according to their risk. As of March 31, 2016, the Bank’s total capital adequacy ratio is 16.62% which is in compliance with the minimum capital adequacy ratios required by the Banking Law in the Republic of Panama.

11.

Capital and Reserves (continued)

Restriction on retained earnings

As of March 31, 2016 and December 31, 2015, $45.9 million and $38.7 million, respectively of retained earnings are restricted from dividend distribution for purposes of complying with local regulatory requirements.

Additional paid-in capital

As of March 31 2016 and December 31, 2015, the additional paid-in capital consists of additional cash contributions to the common capital paid by shareholders.

Dividends

As of March 31 2016 and 2015, the dividends provided for or paid were as follows:

	Period ended March 31
Dividends	2016		2015
Dividends provided for or paid during the first quarter		15,000		-
Dividend per share		0.385		-

12.

Business segment information

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.

The Bank’s net interest income represents the main driver of profits; therefore, the Bank presents its interest-earning assets by business segment, to give an indication of the size of business generating net interest income. Interest-earning assets also generate gains and losses on sales, such as for financial instruments at fair value through OCI and financial instruments at fair value through profit or loss, which are included in net other income, in the Treasury Segment. The Bank also discloses its other assets and contingencies by business segment, to give an indication of the size of business that generates net fees and commissions, also included in net other income, in the Commercial Business Segment.

The Commercial Business Segment incorporates all of the Bank’s financial intermediation and fees generated by the commercial portfolio. The commercial portfolio includes book value of loans, acceptances and contingencies. Profits from the Commercial Business Segment include net interest income from loans, fee income, impairment loss from expected credit losses on loans at amortized cost and off-balance sheet financial instruments, and allocated expenses.

The Treasury Business Segment incorporates deposits in banks and all of the Bank’s financial instruments at fair value through profit or loss, financial instruments at fair value through OCI and securities at amortized cost. Profits from the Treasury Business Segment include net interest income from deposits with banks, financial instruments at fair value through OCI and securities at amortized cost, derivative financial instruments foreign currency exchange, gain (loss) for financial instrument at fair value through profit or loss, gain (loss) for financial instrument at fair value through OCI, impairment loss for expected credit losses on investment securities, other income and allocated expenses.

12.

Business segment information (continued)

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

	2016⁽¹⁾		2015⁽¹⁾
Commercial
Interest income	58,253		50,957
Interest expense	(23,037	)	(19,907	)
Net interest income	35,216		31,050
Net other income ⁽²⁾	2,819		2,672
Impairment loss from expected credit losses on loans at amortized cost	(1,230	)	(75	)
Expenses	(9,578	)	(10,440	)
Profit for the period	27,227		23,207
Commercial assets and contingencies (end of period balances):
Interest-earning assets ^{(3 and 5)}	6,524,744		6,682,445
Other assets and contingencies ⁽⁴⁾	462,790		437,436
Total interest-earning assets, other assets and contingencies	6,987,534		7,119,881

Treasury
Interest income	2,905		2,697
Interest expense	1,397		2,078
Net interest income	4,302		4,775
Net other income ⁽²⁾	(5,302	)	3,728
Impairment loss for expected credit losses on investment securities	(7	)	830
Expenses	(2,782	)	(2,672	)

Profit for the period	(3,789	)	6,661

Treasury assets and contingencies (end of period balances):
Interest-earning assets ⁽⁵⁾	1,102,706		1,603,395
Total interest-earning assets, other assets and contingencies	1,102,706		1,603,395

Combined business segment total
Interest income	61,158		53,654
Interest expense	(21,640	)	(17,829	)
Net interest income	39,518		35,825
Net other income ⁽²⁾	(2,483	)	6,400
Impairment loss from expected credit losses on loans at amortized cost	(1,230	)	(75	)
Impairment loss from expected credit losses on investment securities	(7	)	830
Expenses	(12,360	)	(13,112	)
Profit for the period	23,438		29,868

⁽¹⁾

The numbers set out in these tables have been rounded and accordingly may not total exactly. The balances for 2015 correspond to December 31, 2015 figures.

⁽²⁾

Net other income consists of other income including gains (loss) per financial instrument at FVTPL and FVOCI, derivative instruments and foreign currency exchange.

⁽³⁾

Includes loans at amortized cost, net of unearned interest and deferred fees.

⁽⁴⁾

Includes customers’ liabilities under acceptances, letters of credit and guarantees covering commercial and country risk, and credit commitments.

⁽⁵⁾

Includes cash and due from banks, interest-bearing deposits with banks, financial instruments at fair value through OCI and financial instruments at amortized cost and financial instruments to fair value to profit or loss.

12.

Business segment information (continued)

	2016⁽¹⁾	2015⁽¹⁾
Total assets and contingencies (end of period balances):
Interest-earning assets ^{(3 and 5)}	7,627,450	8,285,840
Other assets and contingencies ⁽⁴⁾	462,790	437,436
Total interest-earning assets, other assets and contingencies	8,090,240	8,723,276

⁽¹⁾

The numbers set out in these tables have been rounded and accordingly may not total exactly. The balances for 2015 correspond to December 31, 2015 figures.

⁽²⁾

Net other income consist of other income including gains (loss) per financial instrument at FVTPL and FVOCI, derivative instruments and foreign currency exchange.

⁽³⁾

Includes loans at amortized cost, net of unearned interest and deferred fees.

⁽⁴⁾

Includes customers’ liabilities under acceptances, letters of credit and guarantees covering commercial and country risk, and credit commitments.

⁽⁵⁾

	March 31			December 31
	2016			2015
Reconciliation of total assets:
Interest-earning assets – business segment		7,627,450			8,285,840
Allowance for expected credit losses on loans at amortized cost		(92,117	)		(89,974	)
Customers’ liabilities under acceptances		29,657			15,100
Intangibles		415			427
Accrued interest receivable		47,736			45,456
Property and equipment, net		5,793			6,173
Derivative financial instruments used for hedging - receivable		21,521			7,400
Other assets		29,112			15,794
Total assets – consolidated financial statements		7,669,567			8,286,216

13.

Fair value of financial instruments

The Bank determines the fair value of its financial instruments using the fair value hierarchy established in IFRS 13 - Fair Value Measurements and Disclosure, which requires the Bank to maximize the use of observable inputs (those that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market information obtained from sources independent of the reporting entity) and to minimize the use of unobservable inputs (those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances) when measuring fair value. Fair value is used on a recurring basis to measure assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to 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 an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Bank uses some valuation techniques and assumptions when estimating fair value. The Bank applied the following fair value hierarchy:

13.

Fair value of financial instruments (continued)

Level 1 – Assets or liabilities for which an identical instrument is traded in an active market, such as publicly-traded instruments or futures contracts.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments, quoted prices in markets that are not active; or other observable inputs that can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments measured based on the best available information, which might include some internally-developed data, and considers risk premiums that a market participant would require.

When determining the fair value measurements for assets and liabilities that are required or permitted to be recorded at fair value, the Bank considers the principal or most advantageous market in which it would transact and considers the assumptions that market participants would use when pricing the asset or liability. When possible, the Bank uses active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Bank uses observable market information for similar assets and liabilities. However, certain assets and liabilities are not actively traded in observable markets and the Bank must use alternative valuation techniques to determine the fair value measurement. The frequency of transactions, the size of the bid-ask spread and the size of the investment are factors considered in determining the liquidity of markets and the relevance of observed prices in those markets.

When there has been a significant decrease in the volume or level of activity for a financial asset or liability, the Bank uses the present value technique which considers market information to determine a representative fair value in usual market conditions. A description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, including the general classification of such assets and liabilities under the fair value hierarchy is presented below:

Financial instruments at FVTPL and FVOCI

Financial instruments at FVTPL are carried at fair value, which is based upon quoted prices when available, or if quoted market prices are not available, on discounted expected cash flows using market rates commensurate with the credit quality and maturity of the security.

Financial instruments at FVOCI are carried at fair value, based on quoted market prices when available, or if quoted market prices are not available, based on discounted expected cash flows using market rates commensurate with the credit quality and maturity of the security.

When quoted prices are available in an active market, financial instruments at FVOCI and financial instruments at FVTPL 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 hierarchy

Derivative financial instruments

The valuation techniques and inputs depend on the type of derivative and the nature of the underlying instrument. Exchange-traded derivatives that are valued using quoted prices are classified within level 1 of the fair value hierarchy.

13.

Fair value of financial instruments (continued)

For those derivative contracts without quoted market prices, fair value is based on internal valuation techniques using inputs that are readily observable and that can be validated by information available in the market. The principal technique used to value these instruments is the discounted cash flows model and the key inputs considered in this technique include interest rate yield curves and foreign exchange rates. These derivatives are classified within level 2 of the fair value hierarchy.

The fair value adjustments applied by the Bank to its derivative carrying values include credit valuation adjustments (“CVA”), which are applied to OTC derivative instruments, in which the base valuation generally discounts expected cash flows using the Overnight Index Swap (“OIS”) interest rate curves. Because not all counterparties have the same credit risk as that implied by the relevant OIS curve, a CVA is necessary to incorporate the market view of both, counterparty credit risk and the Bank’s own credit risk, in the valuation.

Own-credit and counterparty CVA is determined using a fair value curve consistent with the Bank’s or counterparty credit rating. The CVA is designed to incorporate a market view of the credit risk inherent in the derivative portfolio. However, most of the Bank’s derivative instruments are negotiated bilateral contracts and are not commonly transferred to third parties. Derivative instruments are normally settled contractually, or if terminated early, are terminated at a value negotiated bilaterally between the counterparties. Therefore, the CVA (both counterparty and own-credit) may not be realized upon a settlement or termination in the normal course of business. In addition, all or a portion of the CVA may be reversed or otherwise adjusted in future periods in the event of changes in the credit risk of the Bank or its counterparties or due to the anticipated termination of the transactions.

Transfer of financial assets

Gains or losses on sale of loans depend in part on the carrying amount of the financial assets involved in the transfer, and 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 flows using information related to credit losses, prepayment speeds, forward yield curves, and discounted rates commensurate with the risk involved.

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

	March 31, 2016
	Level 1^(a)		Level 2^(b)		Level 3^(c)		Total
Assets
Securities at fair value through OCI:
Corporate debt		64,029		8,305		-		64,029
Sovereign debt		110,055		-		-		110,055
Total securities at fair value through OCI		165,779		8,305		-		174,084
Financial instruments at FVTPL
Investment funds		-		49,327		-		49,327
Total financial instruments at FVTPL		-		49,327		-		49,327
Derivative financial instruments used for hedging – receivable
Interest rate swaps		-		12,950		-		12,950
Cross-currency interest rate swaps		-		6,040		-		6,040
Forward foreign exchange		-		2,531		-		2,531
Total derivative financial instrument used for hedging – receivable		-		21,521		-		21,521
Total financial assets at fair value		165,779		79,153		-		244,932

13.

Fair value of financial instruments (continued)

	March 31, 2016
	Level 1^(a)		Level 2^(b)		Level 3^(c)		Total
Liabilities
Financial instruments at FVTPL:
Interest rate swaps		-		-		-		-
Cross-currency interest rate swaps		-		-		-		-
Forward foreign exchange		-		-		-		-
Total financial instruments at FVTPL		-		-		-		-
Derivative financial instruments used for hedging – payable
Interest rate swaps		-		6,029		-		6,029
Cross-currency interest rate swaps		-		17,390		-		17,390
Forward foreign exchange		-		7,945		-		7,945
Total derivative financial instruments used for hedging – payable		-		31,364		-		31,364
Total financial liabilities at fair value		-		31,364		-		31,364

	December 31, 2015
	Level 1^(a)		Level 2^(b)		Level 3^(c)		Total
Assets
Securities at fair value through OCI
Corporate debt		76,091		8,724		-		84,815
Sovereign debt		56,988		-		-		56,988
Total securities at fair value through OCI		133,079		8, 724		-		141,803
Financial instruments at FVTPL
Investment funds		-		53,411		-		53,411
Total financial instruments at FVTPL		-		53,411		-		53,411
Derivative financial instruments used for hedging – receivable
Interest rate swaps		-		2,779		-		2,779
Cross-currency interest rate swaps		-		696		-		696
Forward foreign exchange		-		3,925		-		3,925
Total derivative financial instrument used for hedging – receivable		-		7,400		-		7,400
Total financial assets at fair value		133,079		69,535		-		202,614

Liabilities
Financial instruments at FVTPL:
Interest rate swaps		-		15		-		15
Forward foreign exchange		-		74		-		74
Total financial instruments at FVTPL		-		89		-		89
Derivative financial instruments used for hedging – payable
Interest rate swaps		-		3,698		-		3,698
Cross-currency interest rate swaps		-		24,105		-		24,105
Forward foreign exchange		-		2,086		-		2,086
Total derivative financial instruments used for hedging – payable		-		29,889		-		29,889
Total financial liabilities at fair value		-		29,978		-		29,978

^(a⁾

Level 1: Quoted market prices in an active market.

^(b)

Level 2: Internally developed models with significant observable market or quoted market prices in an inactive market.

^(c)

Level 3: Internally developed models with significant unobservable market information.

13.

Fair value of financial instruments (continued)

The following information should not be interpreted as an estimate of the fair value of the Bank. Fair value 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, comparison of fair value information of the Bank and other companies may not be meaningful for comparative analysis.

The following methods and assumptions were used by the Bank’s management in estimating the fair values of financial instruments whose fair value is not measured on a recurring basis:

Financial instruments with carrying value that approximates fair value

The carrying value of certain financial assets, including cash and due from banks, interest-bearing deposits in banks, customers’ liabilities under acceptances, accrued interest receivable and certain financial liabilities 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, are considered to approximate fair value. These instruments are classified in Level 2.

Securities at amortized cost

The fair value has been based upon current market quotations, where available. If quoted market prices are not available, fair value has been estimated based upon quoted price of similar instruments, or where these are not available, on discounted expected cash flows using market rates commensurate with the credit quality and maturity of the security. These securities are classified in Levels 1 and 2.

Loans at amortized cost

The fair value of the loan portfolio, including impaired loans, is estimated by discounting future cash flows using the current rates at which loans would be made to borrowers with similar credit ratings and for the same remaining maturities, considering the contractual terms in effect as of December 31 of the relevant period. These assets are classified in Level 2.

Short and long-term borrowings and debt

The fair value of short and long-term borrowings and debt is estimated using discounted cash flow analysis based on the current incremental borrowing rates for similar types of borrowing arrangements, taking into account the changes in the Bank’s credit margin. These liabilities are classified in Level 2.

13.

Fair value of financial instruments (continued)

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:

	March 31, 2016
	Carrying value		Fair value		Level 1^(a)		Level 2^(b)		Level 3^(c)
Financial assets
Instruments with carrying value that approximates fair value		848,798		848,798		-		848,798		-
Securities at amortized cost		105,490		104,406		79,353		25,053		-
Loans at amortized cost ⁽¹⁾		6,432,626		6,544,046		-		6,544,046		-

Financial liabilities
Instruments with carrying value that approximates fair value		2,956,554		2,642,779		-		2,642,779		-
Short-term borrowings and debt		1,811,304		1,810,254		-		1,810,255		-
Long-term borrowings and debt		1,868,820		1,882,396		-		1,882,396		-

	December 31, 2015
	Carrying value		Fair value		Level 1^(a)		Level 2^(b)		Level 3^(c)
Financial assets
Instruments with carrying value that approximates fair value		1,360,522		1,360,522		-		1,360,522		-
Securities at amortized cost		108,215		101,726		76,673		25,053		-
Loans at amortized cost ⁽¹⁾		6,592,471		6,727,045		-		6,727,045		-

Financial liabilities
Instruments with carrying value that approximates fair value		2,678,806		2,678,806		-		2,678,806		-
Short-term borrowings and debt		2,430,357		2,428,513		-		2,428,513		-
Long-term borrowings and debt		1,881,813		1,904,231		-		1,904,231		-

^(a)

Level 1: Quoted market prices in an active market.

^(b)

Level 2: Internally developed models with significant observable market or quoted market prices in an inactive market.

^(c)

Level 3: Internally developed models with significant unobservable market information.

⁽¹⁾

The carrying value of loans is net of the allowance for expected credit losses of $92.1 million and unearned interest and deferred fees of $8.6 million for March 31, 2016; allowance for expected credit losses of $89.9 million and unearned interest and deferred fees of $89.3 million for December 31, 2015.

14.

Accumulated other comprehensive income (loss)

As of March 31, 2016 and 2015, the breakdown of accumulated other comprehensive income (loss) related to financial instruments at FVOCI, derivative financial instruments, and foreign currency translation is as follows:

	Financial instruments at FVOCI			Derivative financial instruments			Foreign currency translation adjustments, net of hedges		Total
Balance as of January 1, 2016		(8,931	)		(1,750	)		-		(10,681	)

Net unrealized gain (loss) arising from the period		2,900			(1,099	)		-		1,801
Reclassification adjustment for (gains) loss included in the profit of the period ⁽¹⁾		528			(321	)		-		207
Foreign currency translation adjustment, net		-			-			-		-
Other comprehensive income (loss) from the period		3,428			(1,420	)		-		2,008
Balance as of March 31, 2016		(5,503	)		(3,170	)		-		(8,673	)

Balance as of January 1, 2015		(6,817	)		(1,020	)		-		(7,837	)
Net unrealized gain (loss) arising from the period		971			(2,735	)				(1,764	)
Reclassification adjustment for (gains) loss included in the profit of the period ⁽¹⁾		(922	)		1,478					556
Foreign currency translation adjustment, net		-			-			-		-
Other comprehensive income (loss) from the period		49			(1,257	)		-		(1,208	)
Balance as of March 31, 2015		(6,768	)		(2,277	)		-		9,045

⁽¹⁾ Reclassification adjustments include amounts recognized in profit of the period that had been part of other comprehensive income (loss) in this and previous periods.

14.

Accumulated other comprehensive income (loss) (continued)

The following table presents amounts reclassified from other comprehensive income to the profit of the period:

March 31, 2016
Details about accumulated other comprehensive income components	Amount reclassified from accumulated other comprehensive income			Affected line item in the consolidated statement of profit or loss where net income is presented
Realized gains (losses) on financial instruments at FVOCI:		(221	)	Interest income – financial instruments at FVOCI
		50		Net gain on sale of financial instruments at FVOCI
		(357	)	Derivative financial instruments and hedging
		(528	)

Gains (losses) on derivative financial instruments:
Forward foreign exchange		(751	)	Interest income - loans
		177		Interest expense – borrowings and deposits
		264		Net gain (loss) on foreign currency exchange
Interest rate swaps		578		Net gain (loss) on interest rate swaps
Cross-currency interest rate swap		54		Net gain (loss) on cross-currency interest rate swap