Bladex-2010-english

A KEY PLAYER IN THE ECONOMIC GROWTH OF LATIN AMERICA

2010 ANNUAL REPORT

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Note: Corporate GoverNaNCe (For purposes of section 303 a, of the NYSe Listed Company Manual / Corporate Governance rules).

Bladex Choose to include the information and documentation pertaining to compliance with section 303a of the NYSe Listed Company Manual / Corporate Governance rules on its website (www.bladex.com) Bladex will continuously update this information.

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Message to Shareholders

22

Consolidated Financial Data

24

Mission and vision

26

Macroeconomic environment

32

Commercial Division

38

treasury and Capital Markets

40

operating results

48

our Commitment to Social Development

54

Human Capital and talent

56

Board of Directors

58

Shareholders

60

executive team

62

executive Staff

66

representative offices

76

Financial Statments

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MeSSaGe to tHe SHareHoLDerS Performance reflects solid market fundamentals and the Bank’s strong position. Bladex is executing on an ambitious, steady course.

For Bladex, 2010 was defined by a strong economic recovery in Latin america, with increased trade flows adding significant scale and diversification to the Bank’s business. Bladex also invested in the capabilities and size of its commercial and risk management teams, strengthening the Bank's origination capacity with additional banking professionals across an expanding network of representative offices. throughout the year, Bladex maintained solid financial fundamentals. Indicators relating to the Bank's capitalization, liquidity, and credit quality remained strong, reflecting the sound, conservative management of the Bank’s operations, even as business expanded at a rapid pace.

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Sometime during the second quarter of 2010, the global economy found itself in an unprecedented situation, with emerging markets recovering strongly from the 2009 recession, while developed economies, particularly those of the european Union, were forced to confront a serious sovereign debt problem on the heels of the 2008 financial crisis. as a result, the 2010 average economic growth rate in emerging markets, at 7.1%, significantly exceeded the 3.0% indicator in developed economies. In Latin america in particular, the combination of improving commodity prices and strong consumer demand, accompanied by generally well-managed fiscal and monetary policy, resulted in average economic growth of 5.9%, a noticeable improvement from the 1.8% economic contraction in 2009.

Jaime Rivera

Gonzalo MenĂŠndez Duque

presidente ejecutivo

presidente de la Junta Directiva

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La

6

tin

Am e

ri c

a

Significantly for Bladex, the recovering economic activity in Latin america brought about a 26% increase in the region's trade flows. the work that the Bank had carried out during the previous two years in terms of expanding its infrastructure and

delivery platform paid off handsomely, allowing Bladex to increase disbursements in 2010 by 79% to $7.4 billion, and grow year-end credit balances by 35%, to $4.9 billion.

Trade Flows - Latin America

2,000

1,706

1,600

Bladex - Credit Disbursements

10.0 7.4

1,351

1,200

4.1

800 400 0 2009

2010

US$ Billion

US$ Billion

0

Bladex - Credit Portfolio End of Period Balances

4.9

5.0

2009

2010

Bladex - Non-Accruing Loans to Total Loans, net

2.0

1.8%

3.6 0.7%

0 US$ Billion

0 2009

2010

2009

2010

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During 2010, while much of the financial industry was still recovering from the financial crisis, Bladex expanded its geographic footprint, establishing representative offices in Monterrey, Mexico, and porto alegre, Brazil. With the benefit of a reinforced commercial team, the Bank was able to capture additional business throughout the region across a variety of industries, increasing the diversification of the Bank’s portfolio and the quality of revenues.

Corporate Portfolio Composition by Industry December 31, 2010 airlines

4%

Minerals

5%

oil & Gas

26%

Coffee

8% Metals (manufacturing)

7%

Chemicals

6%

Food

15% Commodities

11%

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others (Construction, Sugar, etc.)

18%

Despite increased competition, Bladex was successful in managing its mix of clients and services, keeping its overall intermediation margins reasonably stable and at levels well above those prior to the financial crisis.

Bladex - Financial Margins 1.78%

1.73%

1.55%

1.62%

1.70% 1.43%

0.69%

0.78%

2006

2007

Net Interest Margin (NIM)

0.98%

2008

1.12%

2009

2010

Net Interest Spread (NIS)

In order to support the Bank's rapid growth with both new and existing clients while maintaining its trademark strong liquidity levels, Bladex’s required a larger and more diversified funding base. With this in mind, the Bank continued to expand its sources of funding in asia, and further strengthened its commercial ties with the Latin american Central Banks. as a result, deposits reached record levels, demonstrating the close relationships and the trust between the Bank and Latin american governments.

Bladex - Total Deposits 1,821

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 US$ Million

1,256

2009

2010

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there was only one line of business that did not meet expectations in 2010: the asset Management Unit which, after three successful years, posted its first annual loss. In order to reduce the volatility in its financial results, as well as to provide funding for other fee generating opportunities, the Bank has announced its intention to gradually withdraw its accumulated profits in the Unit.

While net income from the Bank’s commercial activities in 2010 improved by 27%, driven by disbursements that grew by 79%, portfolio balances that expanded by 35%, and credit quality that improved even beyond the excellent indicators of 2009, the negative results in the asset Management Unit impacted the Bank’s consolidated figures, taking some of the shine from what was otherwise a solid performance.

Bladex - Net Income / Asset Management Unit 20

18.5

15

14.1

12.3

10 5

-9.7

0

US$ Million

-5 -10 -15

2007

2008

2009

2010

Bladex - Net Income

Bladex - Net Income / Commercial and Treasury Divisions 60

60

51.9

50

50

10

40.9

30

30

20

20

10 0

2009

42.2

40

US$ Million

US$ Million

40

54.9

2010

10 0

2009

2010

Global Changes Are Shaping Our Strategy Bladex’s future endeavors are being shaped by what the Bank believes are powerful, global economic and demographic shifts. the emergence of China, Brazil, and India are only part of a process that Bladex believes will result in increasing demand for food, energy, metals, transportation, housing, entertainment, health care services, etc., on behalf of huge population pools that, until recently, were on the fringes of the global economy. In addition, the Bank believes that manufacturing facilities will continue to migrate toward emerging markets, as developed economies concentrate resources on the high technology and service sectors.

In Bladex's view, this scenario presents a historic opportunity for Latin america, a region that enjoys significant comparative advantages in the production of commodities in general, and where a number of countries represent a natural alternative for US and eU manufacturers seeking higher efficiencies to compete with asian facilities.

Importantly, the use of world-class technologies in agriculture, oil exploration, and mining is allowing the region to reap significant new value-added benefits from these industries.

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By definition, as increasing amounts of surplus food, energy, minerals, etc., move from Latin america to the rest of the world, the region's trade flows will expand, and with them, Bladex's business opportunities. the combination of rising commodity prices and growing investment flows into the region will benefit Bladex’s business, but could also bring inflationary pressures to bear on the region's economies. these flows could also fuel additional local currency appreciation, which monetary authorities in the region will need to continue managing with care. taken as a whole, however, all indications point to the second decade of the 21st century as Latin america’s, and Bladex's, time to shine.

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Aiming for Increased Value the ongoing global changes in trade flow dynamics play to Bladex's strengths, and are taking place quickly. this is why Bladex, too, is evolving rapidly, welcoming change as an opportunity to assert its unique market position.

Beginning in 2009, the Bank started to invest in the expansion of its team and its geographic coverage. In addition to the new offices in Monterrey and porto alegre, the Bank has secured peruvian regulatory approval to establish an office in Lima, and is about to begin the process to do likewise in Bogota, Colombia, with the possibility of yet further expansion in the near future. on the commercial front, the Bank has refined its client segmentation, focusing on customizing services to

the special and changing needs of banks, large corporations, middle market companies, and the rapidly growing number of regional organizations.

More fundamentally, Bladex has strengthened core competencies by refining its knowledge of the region, expanding the scope of its relationships with its 23 government shareholders, and by perfecting its standards of corporate governance. In addition, Bladex is also investing in product and service innovation as a means of developing new revenue sources, and to better serve clients. the major thrust in this regard has been the research and development of a regional factoring network, a project that has been maturing over the last two years.

Finally, Bladex is reviewing and automating its policies and procedures to support improved agility and customer service that new market realities demand, as well as to provide even more effective controls.

Current global trends, along with Bladex's improved positioning, will allow the Bank to continue to leverage its balance sheet in a steady, prudent manner as Bladex expands its franchise and generates additional revenue. the goal is for the Bank’s business to grow at a pace significantly faster than the region’s underlying economic growth rate, bringing about a growing, sustainable level of roe and added economic value.

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Sharing Success with Shareholders as the Bank executed its strategy in 2010, we were glad to see that shareholders realized a 33% appreciation on the value of their holdings. We suggest, however, that the Bank’s solid financial condition, the favorable and well established trends in its business, and the excellent prospects in its markets, justify a richer valuation. In addition to the increased share price, during the year our shareholders received the added benefit of a 4% dividend yield. on January 19, 2011, based on fourth quarter 2010 results, the Board of Directors voted for the second dividend increase in the past year, continuing Bladex's tradition of sharing its success with its shareholders, a practice that the Bank intends to maintain as its business continues to grow in a sustainable manner.

From Latin america´s perspective, the $7.4 billion in financing that Bladex disbursed during the year across 18 countries and 18 industries, to companies large and small, represented a tangible contribution to the well-being of thousands of workers throughout Latin america, while providing support for the fiscal and current accounts of most countries in the region.

Our Values and Sense of Social Solidarity Bladex has explicitly defined five values that are at the core of what the Bank does and what it believes. these core values are excellence, integrity, respect, humility and commitment. over the years, these are the values that have come to define our organization, anchoring it through the ebbs and flows in the market, and guiding it through radical changes in the industry.

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Consistent with these values, the Bank has recognized education, particularly the education of underprivileged children in violence-prone areas, as a key factor to the success of the region's efforts to achieve excellence. In 2010, Bladex supported wellrecognized children's education programs in Honduras, Nicaragua, and panama, to complement its support of similar programs in ecuador, Brazil, and trinidad and tobago.

Positioned for the Future as 2010 drew to a close, Bladex found itself in a privileged position to benefit from a rapidly growing market that it knows well, where it enjoys significant competitive advantages, and where its brand and reputation are second to none. Bladex firmly believes that the coming years will see the Bank realize the full returns from the solid groundwork that it has laid.

In closing, we wish to thank our clients, depositors, multilateral agencies, correspondents, rating agencies, directors, and associates for their help in allowing us to convert the passion that we feel for our business and for Latin america into solid value for you, our shareholders, whose confidence and support we gratefully acknowledge. on behalf of the Bladex team,

Gonzalo MenĂŠndez Duque

Jaime Rivera

president of the Board

Chief executive officer

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BoarD o

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F DIreCtorS CLaSS “a” DIreCtorS Guillermo Güémez García* BaNCo De MeXICo, Mexico

esteban alejandro acerbo* BaNCo De La NaCIÓN arGeNtINa, argentina

João Carlos de Nobrega pecego *** BaNCo Do BraSIL, Brazil

* expires in 2011 ** expires in 2012 *** expires in 2013

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18

CLaSS “e” DIreCtorS Mario Covo*

Maria da Graça França***

United States of america

Brazil

Will C. Wood**

William D. Hayes***

United States of america

United States of america

Herminio Blanco*** Mexico

* expires in 2011 ** expires in 2012 *** expires in 2013 19

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DIreCtorS ALL CLASSES

Gonzalo Menéndez Duque** Chile

Jaime rivera** panama

DIGNItarIeS Gonzalo Menéndez Duque Charmain of the Board

ricardo Manuel arango Secretary

Maria da Graça França treasurer * expires in 2011 ** expires in 2012 *** expires in 2013

Jaime rivera Chief executive officer

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CoNSoLIDateD FINaNCIaL Data - SUMMarY YEAR ENDED DECEMBER 31 (In US$ millIion, except per share amounts) Income Statement Data Net interest income reversal (provision) for credit losses (1) Fees and commissions, net operating expenses Net income attributable to Bladex Selected Balance Sheet Data Investment securities Investment fund Loan portfolio (2) Credit portfolio, net of unearned income (3) total assets total liabilities Stockholders' equity

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2009

2010

65 (15) 7 (38) 55

75 5 10 (42) 42

507 198 2,775 3,617 3,879 3,168 676

437 167 4,060 4,880 5,100 4,384 697

Per Common Share Data Net income per share (US$) Book value per common share -period end- (US$) Common Shares outstanding: (in thousands) period average period end

1.50 18.49

1.15 18.99

36,493 36,546

36,647 36,711

Selected Financial Ratios (In %) return on average assets return on average stockholders' equity Net interest margin operating expenses to total average assets Non-accruing loans to total loans, net of discounts (2) Charge-offs to total loan portfolio (2) allowance for loan losses to total loan portfolio (2) allowance for losses on off-balance sheet credit risk to total contingencies Stockholders' equity to total assets tier 1 capital to risk-weighted assets total capital to risk-weighted assets

1.4% 8.6% 1.62% 0.96% 1.8% 0.0% 2.7% 8.3% 17.4% 25.8% 27.0%

1.0% 6.2% 1.70% 0.97% 0.7% 0.1% 1.9% 3.5% 13.7% 20.5% 21.8%

Notes (1) Includes reversal (provision) for loan losses and off-balance sheet credit risk.

(2) Loan portfolio is presented net of unearned income and deferred loans fees.

(3) Includes book value of loans, fair value of investment securities, acceptances, and contingencies, (including confirmed letters of credit, stand-by letters of credit, and guarantees covering commercial and country risks, credit default swaps and credit commitments).

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oUr MISSIoN to provide seamless support to Latin america’s foreign trade, while creating values for our shareholders.

oUr vISIoN to be the premier provider of integrated finacial solutions across Latin america’s foreign trade value chain.

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MaCroeCoNoMIC eNvIroMeNt

We expect that the macroeconomic environment in Latin america and the Caribbean will continue to show a long-term positive trend. the region’s GDp is expected to post 6% growth in 2010, following a decrease of 1.8% in 2009. the region was one of the least affected by the international crisis that started in 2008, and showed a great ability to recover, enacting counter-cyclical measures that were made possible by the fiscal discipline of previous years. the region also took advantage of the sustained demand for raw materials from China and other emerging countries.

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In fact, in spite of the reduction in interest rates, inflation remained close to the targets set by the central banks. another key aspect of the region’s continued economic stability has been the financial sector's solvency, which has allowed for counter-cyclical monetary initiatives to be implemented and ensured the provision of banking credit to the private sector. Capital markets have played an important role expanding funding in the region, in addition to banking credit. Based on these factors, the favorable trend in the risk profile has been reflected in the region`s economic stability, and on upgrades to the international risk rating of Latin american countries, in clear contrast to the evolution recorded by developed economies.

In this scenario, Bladex enhanced its ability to support both international and interregional trade, resulting in one of its highest levels of geographic diversification in credits granted, and in a downward trend for the systemic risk related to such placements throughout the period. the macroeconomic environment is expected to remain favorable in 2011, with GDp growth near 4%. this expectation is based on a positive perspective in terms of both trade and the partial withdrawal of the stimulus implemented through fiscal measures.

the region is expected to continue on the course of fiscal consolidation, with lower deficits than the one recorded in 2010, of 2.3% (2.9% in 2009). We remain cautious about macroeconomic risks, such as the uncertainty regarding the economic recovery of developed countries, potential new interruptions in the credit markets due to concerns about european sovereign risks, and the continued appreciation of Latin american currencies.

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170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0

152

158

162

169

144

114 89

97

120

124

129

135

105

79 67 56

46

2

3

4

5

6 7

14 17 9 11

22

29

37

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

In US$ Billion

Total Accumulated Credits

Risk Management Bladex's risk Management is based on an enterprise risk management model, in line with the best international risk management practices, reflecting the organization's degree of complexity. this division is independent from the other areas of the Bank, and the Senior vice president for risk Management has veto power granted by the Board of Directors.

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this unit is organized by type of risk and line of business (Institutional, Corporate, and Middle Market Companies) with personnel dedicated exclusively to analyzing and monitoring Country risk, Credit risk, Market risk, and operational risk. In 2010 this structure was strengthened even further with the addition of an executive in charge of the middle market companies segment, and

Bladex’s Credit Ratings ratING aGeNCIeS terM

Short term Long term perspective

another executive for portfolio Management and Monitoring. the portfolio Management and Monitoring executive provides us with a portfoliolevel vision that supplements the scheduled and ad hoc monitoring already performed by the area, including regular visits to all countries and customers, contact with local authorities, financial institutions’ top executives and employees, as well

MooDY'S DeC ‘10

S&p MaY ‘10

Fitch aUG ‘10

p-2 Baa2 Stable

a-2 BBB Stable

F-2 BBB Stable

as representatives of international risk rating agencies operating in the country. as part of its Corporate Governance model, Bladex counts on different analysis and approval levels for its activities. In the case of the risk Division, these include:

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The Risk Policy & Evaluation Committee (RPEC) formed by members of the Board of Directors. this Committee approves the internal risk ratings, amounts, maturities, and other conditions for each country where we have operations. It also reviews and ratifies risk policies after they are approved by management. this Committee meets at least five times per year.

The Country Risk Committee proposes the countries’ internal ratings to the rpeC and substantiates Management’s opinion with regard to general and specific reserves. this committee meets on a quarterly basis, or at the discretion of its members upon the occurrence of events requiring their attention.

The Credit Committee has different approval levels, depending on the nature of the client (e.g., 30

if it is a new client, or if it is based in a deteriorated country), and the amount requested. Bladex does not approve credit facilities upon a single signature: it always requires the confirmation of a business officer, and two signatures authorized at the Bank’s headquarters (the risk Division’s confirmation is mandatory and has veto power). this conservative approach to risk management has ensured that the Bank maintains its assets' high quality in spite of adverse macroeconomic conditions. Since its founding, Bladex's total writeoffs account for only 0.2% of the overall accumulated credit granted. During 2010, write offs charged against specific reserves totaled $5.3 million. By the end of 2010, Bladex reported total general reserves of $80.5 million, while at the end of 2009 these reserves were $86.7 million.

Credit Quality Indicators (In US$ thousands, except percentages)

2009

2010

Balance at beginning of the year

54,648

73,789

provision (reversal of provision) for loan losses

18,293

9,091

Loan recoveries

866

996

Loans written-off against the allowance for loan losses

(18)

(5,261)

73,789

78,615

Balance at beginning of the year

30,724

27,261

provision (reversal of provision) for losses on off-balance sheet credit risk

(3,463)

(13,926)

Balance at end of the year

27,261

13,335

Balance at beginning of the year

85,372

101,050

provision (reversal of provision) for credit losses

14,830

(4,835)

Credit losses recoveries

866

996

Loans written-off against the allowance for credit losses

(18)

(5,261)

101,050

91,950

allowance for loan losses to total loan portfolio(1)

2.7%

1.9%

allowance for losses on off-balance sheet credit risk to total contingencies

8.3%

3.5%

allowance for credit losses to total commercial portfolio

3.2%

2.1%

At December 31 Components of the allowance for credit losses Allowance for loan losses:

Balance at end of the year Allowance for losses on off-balance sheet credit risk:

Allowance for credit losses:

Balance at end of the year

(1) Loan portfolio is presented net of unearned income and deferred loans fees.

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CoMMerCIaL DIvISIoN

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according to the World trade organization, global trade made an important return to growth in 2010. their latest report showed growth in trade volumes of 13.5% in 2010, comprised of 11.5% growth in developed countries, and 16.5% in developing economies.

2010, growth of 43% year to year. total disbursements for the year reached $7.4 billion, up from $4.1 billion in 2009, an impressive growth of 79% year to year. as a result, Net Income generated by the Division reached $ 56.8 million, showing an increase of 63% when compared to 2009 figures.

We at Bladex were able to identify opportunities and capture this growth in Latin america in our core trade finance business. We increased our portfolio from $3.1 billion, in 2009, to $4.4 billion in

We also restructured the Commercial Division into three main departments: one for our traditional business with financial institutions, another to focus on corporations, and a third to develop

business with middle market companies. In order to approach this third segment, it was necessary to reorganize the sales force, and to expand our physical presence in two important markets, Brazil and Mexico, by opening representative offices in porto alegre, and Monterrey. our business with Corporations focused mainly on those groups involved in intra-regional trade, providing them with medium-term financing to support their expansion into new markets, mainly

within Latin america. Credit balances with corporate clients grew from $1.5 billion to $2.3 billion during the year. our portfolio of credits in favor of Financial Institutions was managed opportunistically, identifying accumulations of demand in different markets, and responding quickly to our clients’ needs. as a result, our Financial Institutions portfolio grew from $1.4 billion to $1.9 billion over the course of 2010. We also launched our marketing initiative to middle market companies in 2010. We expect that this

Commercial Portfolio Profile

By Line of Business 31 Dec 2010

By Remaining Term 31 Dec 2010 Short term

Corporations

trade

72%

51%

By Trade Indicator 31 Dec 2010

59%

Banks

44% Medium term

Middle-market companies

Non-trade

28%

5%

By Line of Business 31 Dec 2009

41%

By Remaining Term 31 Dec 2009

Corporations

trade

Short term

49%

By Trade Indicator 31 Dec 2009

62%

69% Banks

46%

Middle-market companies

5%

Medium term

31%

Non-trade

38%

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new market will allow the Bank to increase its client base significantly over the coming years, leveraging off our very successful experience with Corporations, and our excellent long-standing relationships with the local banks in the region.

We finished the year with a portfolio of $226 million in the middle market companies segment.

We also established a special area to design and offer new products to companies that export to Latin america from the United States. In this context, we disbursed a total of $338 million, capturing new types of transactions, and establishing a recurrent business with several important new exporters.

In the course of 2010, we were able to add almost 100 new clients to the Bank, including 47 new middle market companies clients, 40 Corporations, and 10 Financial Institutions.

We will continue to expand our footprint in 2011, opening new offices in peru (already authorized by the local authorities) and in Colombia, which is in its application phase with the local regulators.

Commercial Portfolio by Type of Institution (1)

private Corporations State-owned Corporations

42%

8% private Companies

Central Banks and Governments

5%

5%

State-owned Banks

8% private Banks

32% (1) Includes book value of loans, acceptances, and contingencies (including confirmed letters of credit, stand-by letters of credit, guarantees covering commercial and country risks, and credit commitments).

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Commercial Portfolio Distribution by Country (In US$ Millions) at the end of December 31 COUNTRY

2009

2010

arGeNtINa BraZIL CHILe CoLoMBIa CoSta rICa DoMINICaN repUBLIC eCUaDor eL SaLvaDor GUateMaLa HoNDUraS JaMaICa MeXICo paNaMa perU trINIDaD & toBaGo UrUGUaY veNeZUeLa otHerS

$73 1,358 258 200 107 33 135 42 75 23 31 362 41 161 72 46 92 1

$237 1,649 328 585 120 135 165 39 93 38 65 456 49 343 63 0 80 1

$3,110

$4,446

totaL CoMMerCIaL portFoLIo (1)

(1) Includes book value of loans, acceptances, and contingencies (including confirmed letters of credit, stand-by letters of credit, and guarantees covering commercial and country risks and credit commitments).

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Average Commercial Portfolio acceptances and Contingencies Loans, net of discount and deferred commission

5,000 4,314

4,500 3,793

4,000 3,500

2,988 2,692

2,721

149

219

3,000

355

2,500

2,633

2,543

2,502

1-Qtr-09

2-Qtr-09

3-Qtr-09

2,923

3,076

255

308

2,667

2,768

4-Qtr-09

1-Qtr-10

3,258 298

327

388 3,926

3,466

2,960

2,000

US$ Million

1,500 1,000 500 0

these two new offices will be important for our growth with middle market companies in the region. the offices in porto alegre and Monterrey are already fully operational and originating transactions with middle market companies.

2-Qtr-10

3-Qtr-10

4-Qtr-10

our outlook for 2011 in the business environment, mainly in trade finance, is positive, and we are positioned to take full advantage of the region’s excellent growth prospects for 2011. We are prepared to convert that economic growth into value for our shareholders, complying with Bladexʹs mission to promote Latin america’s foreign trade.

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treaSUrY aND CapItaL MarKetS

With funding costs trending downward, and with high liquidity balances, the Bank used mediumterm funds obtained in 2009, as well as the traditional funding sources from international and Latin american banks, to support the strong growth of its commercial portfolio in 2010.

In order to diversity its funding sources and to cover its future medium-term requirements, the Bank’s euro Medium-term Notes (eMtN) program was reactivated. this program allows Bladex to issue debt in the capital markets in several currencies, maturities and markets. the Bank made presentations to investors in several international and Latin american markets, and executed a plan to expand its network of

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correspondent agents in the asian capital markets. at the end of the year, we announced the structuring of a new syndicated loan in asia. the investment portfolio managed by our treasury Division maintained its sound structure in 2010. this portfolio consists of Latin american securities, of which 83% were issued by sovereign or stateowned entities. the asset Distribution team had a particularly successful year, acting as an intermediary in the international markets on behalf of Bladex, through the purchase and sale of Latin american credits both in the primary and secondary markets.

Asset Management Unit For the first time since its inception in 2006, the asset Management Unit showed a net loss for the year. the Bladex Capital Growth Fund (BCGF), managed by the Bank’s New York-based subsidiary, Bladex asset Management, posted a loss of 5.19%, after fees. Including the 2010 performance, the Fund has accumulated an annualized return of 8.4% since inception.

and places a strong emphasis on risk management and capital preservation. the Fund can take long or short positions in order to maximize yield under a broad range of market conditions.

Funding Sources Medium and Longterm Borrowings and Debt

Deposits

25% BCGF adopts a macro-style strategy and invests in a broad range of financial instruments: fixed income bonds, local interest rate instruments, currencies, and stock exchange indices in Latin america. BCGF maintains a highly liquid portfolio, employs limited leverage and moderate volatility,

43%

Short-term Borrowings and Debt (1)

32%

(1)

Includes short-term borrowings, trading liabiilities and securities sold under repurshase agreements.

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operatING reSULtS

For the year 2010 Bladex posted net income of $42.2 million, or $1.15 per share, representing a variance of -$12.6 million and -$0.35, respectively, when compared to the net income of $54.9 million, or $1.50 per share, in 2009. the 2010 results were mainly driven by the Commercial Division’s net income of $56.8 million, partially offset by net losses of $9.7 million from the asset Management Unit and net losses of $4.9 million from the treasury Division, compared to $34.8 million, $14.1 million and $6.1 million, for the year 2009 respectively. this variation in results for 2010 versus 2009 reflects the Bank's capacity to leverage the trade flows that have been recovering in the region, to expand its operations and grow its core business through higher average credit volumes and higher fee income, consolidating even further its critical role in the financial relations between Latin america and the international markets.

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RESULTS BY BUSINESS SEGMENT Commercial Division the Commercial Division incorporates the Bank’s core business of financial intermediation and fee generation activities, and its portfolio includes loans, letters of credit, guarantees, and loan commitments. Net income includes net interest income from loans, fee income, net allocated operating expenses, the reversal (provisions) for credit losses, and any impairment on assets.

Net income for 2010 amounted to $56.8 million, compared to $34.8 million in 2009. the $22.0 million, or 63%, increase during the year was a result of: i) a net reversal in its provisions for credit losses, due to improved risk profile and credit quality of the portfolio, ii) an increase in net interest income and other fee income mostly attributable to higher commercial portfolio's balances, and iii) an increase in operating expenses as the Division expanded its sale force and local presence in various markets.

the commercial portfolio’s balance as of December 31, 2010 was $4.4 billion, versus $3.1 billion in the previous year, the annual increase was largely attributable to increased demand from the Bank’s established client base of large corporations and financial institutions, while the business expansion into the middle market segment continued. as of December 31, 2010, the commercial portfolio was mostly short-term and trade-related in nature, with 72%, or $3.2 billion, maturing on or before December 31, 2011. trade financing operations accounted for 59% of the commercial portfolio.

Net Operating Revenues Distribution 2010

Non-interest operating income

3%

Net Interest Income

as of December 31, 2010, the Bank had $29.0 million of loans in non-accruing status, representing 0.7% of the total loan portfolio.

97% 2009

Non-interest operating income

41%

Net Interest Income

59% 41

Treasury Division the treasury Division incorporates the Bank’s liquidity management and investment securities activities. Net income is presented net of allocated operating expenses, and includes net interest income on treasury assets (interest-bearing deposits with banks, investment securities, and trading assets), and net other income (loss), such as net gain (loss) from trading, the sale of securities available for sale, foreign currency exchange, and hedging activities of derivative instruments. the treasury Division's net loss for the year 2010 was $4.9 million, compared to a net income of $6.1 million in 2009. the 2010 results were mainly driven by a $3.6 million trading loss, compared to a $13.1 million gain during 2009, as increases in securities valuations were more than offset by the diminished valuations of associated trading derivates. the 2010 year-end investment securities portfolio totaled $437 million, posting a 14% decrease from December 31, 2009. at December 31, 2010, the securities portfolio accounted for 9% of the Bank’s total credit portfolio, and consisted mostly of Latin american securities, 83% of which were issued by sovereign or state-owned entities. on that same date, 81% of the portfolio consisted of securities available for sale, 12% were trading securities, and the remaining 8% were securities held to maturity.

42

In the available-for-sale portfolio, and in order to hedge the instruments’ interest rate risk, the Bank enters into interest rate swap agreements to convert bonds from fixed to floating rate instruments. the available-for-sale portfolio is marked to market, with the impact recorded in the stockholders’ equity through the accumulated other Comprehensive Loss account which stood at $6 million at year-end 2010, nearly the same level as a year ago. as of December 31, 2010, liquid assets totaled $421 million, representing 8.2% of total assets and 23.1% of liability deposits. Liability deposit balances totaled $1.8 billion, representing an increase of $565 million, or 45%, versus year-end 2009.

Bladex Asset Management Unit the asset Management Unit oversees the Bank’s asset management activities, through its subsidiary, Bladex asset Management, Inc. (“BaM”). the Unit manages the Bladex Capital, Growth Fund (“the Fund”), which follows a Latin america macro strategy, by using a combination of products (foreign exchange, equity indexes, interest rate swaps, and credit derivative products) to establish long and short positions in the Latin american markets. at December 31, 2010, Bladex owned 88.67% of Bladex offshore Feeder Fund, with the remaining balance owned by third parties.

Net Income Distribution by Business Segment

asset Management Unit Commercial Division treasury Division

70 60

54.9

50

14.1

42.2

40

US$ Million

30 20

34.8

56.8

10 0 -10 -20

6.1 2009

-4.9 -9.7 2010

43

Capital preservation is one of the Fund’s main objectives, coupled with a trading strategy focused on high liquidity, moderate volatility, and lower leverage.

44

at December 31, 2010, the Fund's net asset value totaled $167 million, compared to $198 million as of December 31, 2009, of which redeemable noncontrolling interest amounted to $19 million and $35 million, respectively.

the Unit's net income is presented net of operating expenses, and includes the Fund’s net interest income, as well as its net gains (losses) from trading, and other related income (loss).

Net Interest Income

the net loss for 2010 amounted to $9.7 million, compared to a net gain of $14.1 million in 2009. the decrease was mainly due to net losses from the Fund’s securities trading.

For the year 2010, net interest income amounted to $74.5 million, an increase of $9.7 million, or 15%, from 2009, reflecting a $697 million, or 27%, increase in the average balance of the Commercial

CONSOLIDATED RESULTS OF OPERATIONS

Division’s loan portfolio and the decrease by 112 bps in the average yield paid on interest-bearing liabilities, partially offset by a 81 bps decrease in the average yield on interest-earning assets.

decrease in generic reserves, resulting from lower reserve requirements related to the improved risk profile and credit quality of the portfolio.

During 2010, the Bank’s net commission income amounted to $10.3 million, compared to $6.7 million in 2009. the $3.6 million, or 53%, increase mainly results from the higher volumes of letters of credit.

at December 31, 2010, the Bank’s allowance for credit losses amounted to $92.0 million, compared to $101.0 million at December 31, 2009, of which $80.5 million and $86.7 million, respectively, were related to generic credit provisions. the ratio of the allowance for credit losses to the commercial portfolio was 2.1% as of December 31, 2010, compared to 3.2% as of December 31, 2009.

Reversal (Provision) for Credit Losses

Derivative Financial Instruments and Hedging

For the year 2010, the Bank recorded a net reversal in the amount of $4.8 million in its provisions for credit losses (including both a $9.1 million provision for loan losses and a $13.9 million reversal for losses on off-balance sheet credit risk), compared to a net provision of $14.8 million in 2009. the year 2010’s net reversal results mainly due to the

the Bank recorded a $1.4 million loss in derivative financial instruments and hedging in 2010, compared to a $2.5 million loss in 2009. these results reflect the effect of recording the effectiveness on hedging relationships and the discount of the Bank's own credit risk when calculating the fair value of its cross-currency swap

Fees and Commissions, Net

45

Efficiency Ratio

US$ Million

operating revenues operating expenses efficiency ratio

120

55%

100 80

50% 109.0

60 40

35%

76.9

20%

-

(40) (60)

46

40% 30%

20

(20)

60%

2009 (38.2)

2010 (42.1)

10% 0%

portfolio that it contracts for hedging purposes. the fair value of these cross-currency swaps improved in 2010 and, consequently, the credit risk discount decreased with the valuation of such derivatives.

Net Gain (Loss) from Investment Fund Trading the Bank recorded a net loss of $8.0 million from investment fund trading in 2010, compared to a net gain of $25 million in 2009. this net loss reflects the trading results of the Fund managed

by BaM. Net Gain (Loss) from Trading Securities the Bank recorded a $3.6 million net loss from trading securities in 2010, compared to a net gain of $13.1 million in 2009, as increases in securities valuations were more than offset by the diminished valuations of associated trading derivaties.

Net Gain on Sale of Securities Available for Sale

them prior to maturity. these debt instruments are classified as securities available for sale and are included as part of the Bank’s credit portfolio. the Bank’s net gain from the sale of securities available for sale in 2010 was $2.3 million, compared to $0.5 million in 2009.

Operating Expenses In 2010, total operating expenses amounted to $42.1 million, compared to $38.2 million in 2009. the $3.9 million, or 10%, increase was attributable to the net effect of salary and other employee expenses associated with higher average headcount and professional fees in support of the Commercial Division and the risk Management’s expansion, as well as capital market issuance programs, and lower performance-related expenses from the Investment Fund. the efficiency level (operating expenses as a percentage of net revenues) was 55% in 2010, up from 35% in 2009.

the Bank purchases debt instruments as part of its treasury operations, with the possibility of selling

47

oUr CoMMItMeNt to SoCIaL DeveLopMeNt

48

Bladex understands that the Bank plays an important economic role as an agent for the development of the communities in which it operates. the work carried out during 2010 reiterates the Bank’s commitment to sustainable development, as well as the improvement of the quality of life for the people of Latin america. With this goal in mind, Bladex, as a socially responsible institution, has continued its contribution to programs and projects that support education, children, culture, and the environment.

as part of Bladex’s strategy to expand its social contribution to the region, last year the Bank extended its presence to Nicaragua, Honduras, and Haiti through partnerships with recognized associations whose programs focus primarily on youth education and welfare of children and youth.

In Nicaragua, through the Zamora terĂĄn Foundation, Bladex provided a multigrade elementary school with one laptop for each student and teacher, opening a window of opportunity and knowledge for those who otherwise would have no access to a computer and the Internet.

49

In Honduras, Bladex built, together with the Ficohsa Foundation, a preschool center in one of the most marginal areas of San pedro Sula to offer the facilities required for the community’s children, ages three to five. particularly in Haiti, both the Bank, as an institution, and its employees, helped the Haitian people following the tragic earthquake of January 2010. Bladex allocated institutional funds, through the Banque de la republique, to the reconstruction of a school in the capital city so that it could be reopened in 2011.

In panama, where the Bank’s headquarters are located, Bladex continued to support fifteen organizations operating throughout the country. the Bank's main project in the country is the Marie poussepin educational Center, where Bladex started building the first stage of a complex that will offer seventh through twelfth grade classes,

50

Nicaragua

Brazil

Honduras

51

Colombia

52

Panama

increasing the number of students at this school to 850. providing a solid education has contributed to reducing youth violence, gang activities, and dropout rates. additionally, in 2010 Bladex hired a fulltime counselor at the school, and expanded the capacity of the school's computer lab. as Bladex have done since its foundation, the Bank’s employees maintained their support for this school's scholarship program in 2010, benefiting 120 students during the year. Bladex’s employees also organized recreational and cultural activities for the students.

the Bank’s social commitment also involves the recognition of efforts made by Latin american companies to promote the foreign trade in the region. Bladex’s 2010 exporter award was announced during the 22nd annual National Colombian exporter Conference. the winner was agua Bendita, recognized as the most outstanding Small Business in the consumer goods industry.

53

54

SoUND GroWtH aND DeveLopMeNt IN HUMaN CapItaL aND taLeNt In spite of the turbulence that persists in the financial markets worldwide, Latin america showed significant signs of recovery in 2010, as was evidenced by the positive evolution in foreign trade figures.

Bladex actively contributed to that recovery, playing an important role in funding the region’s international trade flows. this has allowed the Bank to accomplish its mission of promoting the economic development of Latin american countries. the organizational strategy of fostering the region's development, led us to open new representative offices in porto alegre (Brazil), Monterrey (Mexico), and Lima (peru), accompanied by a significant increase of our commercial team. During 2010, we focused particularly on recruiting a considerable number of professionals who have contributed to strengthening Bladex’s human capital and talent, and on realigning the Bank's processes and structures, in order to achieve higher levels of agility and effectiveness. all these factors, coupled with our constant efforts to strengthen the organizational culture based on the Bank's values, have enabled Bladex to offer its customers and the region an organization that is committed to Latin america's sustained growth.

55

BoarD oF DIreCtorS Class “A”

All Classes

Guillermo Güémez García*

Gonzalo Menéndez Duque**

BaNCo De MÉXICo, Mexico

Chile

esteban alejandro acerbo*

Jaime rivera**

BaNCo De La NaCIÓN arGeNtINa, argentina

João Carlos de Nobrega pecego *** BaNCo Do BraSIL, Brazil

Class “E” Mario Covo*

United States of america

Will C. Wood**

United States of america

Herminio Blanco*** Mexico

Maria da Graça França*** Brazil

William D. Hayes*** United States of america

Honorary Chairman Nicolás ardito Barletta Honorary Chairman

* expires in 2011 ** expires in 2012 *** expires in 2013

56

panama

Dignitaries

Advisory Council roberto Feletti

Secretary of economic policy Ministry of economy and public Finances, argentina

roberto texeira da Costa Board Member Sul américa S.a., Brazil

Carlos Martabit

Gonzalo Menéndez Duque Charmain of the Board

General Manager, Finance Division Banco del estado de Chile, Chile

ricardo Manuel arango

Santiago perdomo

Secretary

Maria da Graça França treasurer

Jaime rivera

Chief executive officer

president Banco Colpatria – red Multibanca Colpatria, Colombia

alberto C. Motta Jr.

president Inversiones Bahía, panamá

enrique Cornejo ramírez Minister Ministry of transportation and Communications, peru

57

SHareHoLDerS Class “A” (17.28%) Banco de la Nación argentina Central Bank of Barbados Ministerio de economía y Finanzas públicas (Bolivia) Banco do Brasil Banco del estado de Chile Banco de Comercio exterior de Colombia, S.a.

Banco Central de Costa rica Banco Central del ecuador Banco Central de reserva de el Salvador Banco de Guatemala Banque de la republique D’Haiti Banco Central de Honduras National export-Import Bank of Jamaica Banco de México Banco Central de Nicaragua Banco Nacional de panamá Banco Central del paraguay Banco de la Nación (perú) Banco de reservas de la república Dominicana Centrale Bank van Suriname Central Bank of trinidad and tobago Banco de la república oriental del Uruguay Banco de Comercio exterior (Bolivarian republic of venezuela) Class “B” (6.92%) Argentina aBN aMro Bank N.v.

Banco avellaneda S.a.

(In Liquidation - resolution No. 515 of November 1, 1991, Source: Central Bank of argentina) Banco B.I. Creditanstalt S.a.

Banco de Corrientes S.a.

Banco de Formosa S.a.

Banco de Galicia y Buenos aires S.a.

Banco de Italia y río de la plata S.a. (In Liquidation – resolution No. 841 of December 11, 1987, Source: Central Bank of argentina) Banco de la Ciudad de Buenos aires Banco de la Nación argentina Banco de La pampa Banco de la provincia de Buenos aires Banco de la provincia de Córdoba

58

Banco de San Juan S.a.

Banco de Santa Cruz Banco de valores S.a.

Banco Feigin S.a.

(Bankruptcy request – File No. 518690/36) Banco Finansur S.a.

Banco General de Negocios Banco Macro Bansud S.a.

Banco patagonia Sudameris S.a.

Banco provincia del Neuquén Banco río de la plata S.a.

BBva Banco Francés S.a.

HSBC Bank argentina, S.a.

Nuevo Banco de Santa Fe, S.a.

Scotiabank Quilmes S.a.

(Suspension of operations – National Court of Commercial First Instance No.14, Secretariat No. 27, Source: Central Bank of argentina) Belgium KBC Bank N.v. Brussels Belize atlantic Bank Limited Brazil auxiliar S.a.

Banco aBC Brasil S.a.

Banco Banorte S.a. (extraordinary Liquidation, Source: Central Bank of Brazil) Banco Bradesco, S.a.

Banco do estado de Sao paulo (Banespa) Banco do estado do espirito Santo S.a.

Banco do estado do para S.a.

Banco do Nordeste do Brasil S.a.

Banco Industrial e Comercial S.a.

Banco Itaú Banco Santander Brasil S.a.

Banestado, S.a. participacoes, adm. y Serv.

Chile Banco de Chile Banco de Crédito e Inversiones Banco Santiago BBv Banco BHIF

Colombia Bancolombia Costa Rica Banco BaC San José, S.a.

Banco BCt, S.a.

Banco HSBC Costa rica, S.a.

Dominican Republic Banco Intercontinental, S.a.

Banco popular Dominicano Ecuador Banco del pacífico Banco pichincha C.a.

El Salvador Banco de Fomento agropecuario Guatemala Banco agromercantil de Guatemala, S.a.

Banco de Guatemala Banco G&t Continental, S.a.

Banco Industrial, S.a.

Banco Inmobiliario Banco Internacional, S.a.

Banco promotor, S.a.

Banco reformador, S.a.

Corporación Financiera Nacional-Corfina Crédito Hipotecario Nacional de Guatemala Fideicomiso de administración y realización de activos para el pago de Bonos Hipotecarios Bancafé I – el Crédito Hipotecario Nacional (Fiduciario) Haiti Banque Nationale de Credit Honduras Banco atlántida, S.a.

Banco Continental, S.a.

Banco de los trabajadores Banco de occidente, S.a.

Banco Hondureño del Café, S.a.

Banco Nacional de Desarrollo agrícola Financiera Centroamericana, S.a.

Jamaica National Commercial Bank Jamaica, Ltd. National export-Import Bank of Jamaica rBtt Bank Jamaica Limited Korea the Korea exchange Bank Mexico Banco Nacional de Comercio exterior, S.N.C. Banco Nacional de México, S.a.

Banco Santander, S.a.

BBva Bancomer, S.a.

HSBC México, S.a.

Nacional Financiera, S.a.

Panama Banco de Bogotá Bancolombia (panamá), S.a.

Corporación Financiera Nacional (Cofina) Metrobank Multibank popular Bank Ltd., Inc. towerbank International Inc. Peru Banco Internacional del perú Corporación Financiera de Desarrollo, S.a.

Puerto Rico Bancaracas International Banking Corp.

Bolivarian Republic of Venezuela Banco de Maracaibo Banco Latino, C.a.S.a.C.a.

Banco Metropolitano, C.a.

Class “E” (75.80%) Individual and Institutional Investors (Shares Listed on the New York Stock exchange)

59

eXeCUtIve teaM

60

Jaime rivera Chief executive officer

rubens v. amaral Jr. executive vice president Chief Commercial officer

Miguel Moreno executive vice president Chief operating officer

Gregory D. testerman executive vice president Senior Managing Director, treasury and Capital Markets

Miguel a. Kerbes predari Senior vice president Chief risk officer

Christopher Schech Senior vice president Chief Financial officer

Gustavo DĂ­az Senior vice president Controller

61

eXeCUtIve StaFF Executive Office Jaime Rivera Chief executive officer

62

Craig Escalante vice president Patricio Mainardi vice president

Commercial Banking

Marcia Müller vice president

Rubens V. Amaral Jr. Chief Commercial officer

Federico Pérez-Sartori vice president

Middle Market

Eliseo Sánchez-Lucca vice president

Luiz Yamasaki Director

Marcos dos Santos vice president

Alejandro Barrientos Deputy Director

Verónica Alarcón Manager

Miguel Calvillo vice president

Catalina Antúnez Manager

Murilo D'Avila vice president

María Paz Balbuena Manager

Martinho Oliveira Fernandes vice president

Adriana Lima Santechole Manager

Claudia Flores vice president

Mónica Suárez Manager

Francisco Lozano vice president

Financial Institutions and Solutions

Anselmo Sandri vice president

Pierre Dulin Director

Corporate Banking

Claudia Ades Hibner vice president

Ulysses Marciano Director

Christian Novy vice president

Magaly Calderón de la Barca vice president

Fernando Pompeu vice president

Fernando Riojas vice president

Annette Van Hoorde de Solís assistant vice president

Lourdes Huang assistant vice president

Marianela Broce Manager

Nitza Maiolini assistant vice president

Adriana Espinosa de Arias Manager

Eucadis de Molina assistant vice president María Olivera Manager Leasing Edmur Ribeiro Director Gabriel Vázquez Celis assistant vice president

Risk Management Miguel A. Kerbes Predari Chief risk officer Yoel Alveo vice president José Eladio Rodríguez vice president Alejandro Tizzoni vice president

Treasury & Capital Markets

Leonel van Grieken vice president

Gregory D. Testerman Senior Managing Director

Leandro Ordoñez assistant vice president

Milciades Denis Director

Ana María Bonilla attorney

Raúl Plata vice president

Felipe Jaramillo attorney

Stella Chen assistant vice president

Elia Rivera attorney

Ann Vanessa Dinsmore assistant vice president

Carlos Moreno economist

Ana Teresa de Méndez assistant vice president

63

eXeCUtIve StaFF Finance

Human Resources

Christopher Schech Chief Financial officer

María Teresa Jaramillo assistant vice president

Financial Planning and Analysis

Larissa Córdoba Manager

Ana Graciela de Méndez vice president

Administration

Mónica Cosulich Manager

Oscar Díaz assistant vice president

Marixenia Polo Manager

Carlos López Manager

Accounting

Operations

Eduardo Sánchez vice president

Carmen Murillo vice president

Jaime Espinosa Manager

María de Cano Manager

Ana Cristina Modes Manager

Rosa Sheppard Manager

Regulatory Reporting

Itzel Valdés Manager

Ana María Chiquilani de Sosa Manager

Technology and Processes Roger Iván Córdoba vice president

Support Services Miguel Moreno Chief operating officer Organizational Performance and Development Ana María M. de Arias Senior vice president

64

Milagros Cedeño assistant vice president Iván Vergara assistant vice president Roberto Bárcenas Manager

Luis Carlos Bustamante Manager Ovidio Gutiérrez Manager Ismael Rodríguez Manager

Internal Audit María Alejandra De León Manager Leonildo Gordón Manager Lourdes de Colona Manager

New York Agency Pedro Toll General Manager

Institutional Relations and Marketing

B. Netram Rambudhan vice president – Deputy General Manager

Nikolina de Alvarado Manager

Henry Rodríguez Manager Legal Department

Shareholder Relations Luisa de Polo Manager

Tatiana Calzada vice president - Chief Legal Counsel

Bladex Asset Management (BAM) Controller Gustavo Díaz Controller Compliance

Manuel E. Mejía-Aoun General Manager John Cadley Head of risk Management and Compliance Urvish Bidkar Director

Julio Aguirre assistant vice president Head Compliance officer

Tulio Vera Director

Luis Cifuentes Compliance officer – NY & BaM

Linette Figueroa de Vega Manager

65

NeW YorK aGeNCY

pedro toll General Manager

B. Netram rambudhan Deputy General Manager

Luis Cifuentes vice president – Compliance officer NY & BaM

Henry rodrĂ­guez Manager

66

BLaDeX aSSet MaNaGeMeNt (BaM) Manuel e. MejĂ­a-aoun General Manager

tulio vera Director

Urvish Bidkar Director

John Cadley Head of risk Management and Compliance

67

repreSeNtatIve oFFICe BraZIL

68

Ulysses Marciano

Claudia ades Hibner

Marcos dos Santos

Director - Corporate Banking

vice president

vice president

Luiz Yamasaki

Martinho oliveira Fernandes

Murilo D’avila

Director - Middle Market

vice president

vice president

anselmo Sandri

Marcia MĂźller

adriana Lima Santechole

vice president

vice president

Manager

Jose eladio rodrĂ­guez vice president

69

repreSeNtatIve oFFICe arGeNtINa

70

Federico pĂŠrez-Sartori vice president

MarĂ­a paz Balbuena Manager

71

repreSeNtatIve oFFICe MeXICo

72

alejandro Barrientos Deputy Director - Middle Market

Miguel Calvillo

Magaly Calderón

Catalina antúnez

vice president

vice president

Manager

Craig escalante

Mónica Suárez

vice president

Manager

Claudia Flores

verónica alarcón

vice president

Manager

Francisco Lozano vice president

73

repreSeNtatIve oFFICe MIaMI

74

rubens v. amaral Jr. Chief Commercial officer

pierre Dulin Director - Financial Institutions and Solutions

edmur ribeiro Director - Leasing

Fernando riojas vice president

Christian Novy vice president

MarĂ­a olivera Manager

75

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Notes to consolidated financial statements

99

Following is a summary as of December 31, 2010 of loan balances and reserves for loan: (In thousands of US$) Corporations Allowance for loan losses Specific allowance Generic allowance Total of allowance for loan losses Loans Loans with specific allowance Loans with generic allowance Total loans

Banking and financial institutions

Middle-market companies

Sovereign

Total

11,200 42,960 54,160

18,790 18,790

300 4,965 5,265

400 400

11,500 67,115 78,615

28,000 2,056,386 2,084,386

1,701,062 1,701,062

1,002 223,756 224,758

54,126 54,126

29,002 4,035,330 4,064,332

b) Reserve for losses on off-balance sheet credit risk: December 31,

(In thousands of US$)

Balance at beginning of the year Provision (reversal of provision) for losses on off-balance sheet credit risk Balance at end of the year

2010

2009

2008

27,261

30,724

13,727

(13,926)

(3,463)

16,997

13,335

27,261

30,724

The reserve for losses on off-balance sheet credit risk reflects the Bankâ&#x20AC;&#x2122;s management estimate of probable losses on offbalance sheet credit risk items such as: confirmed letters of credit, stand-by letters of credit, guarantees and credit commitments (see Note 18). The 2010â&#x20AC;&#x2122;s decrease in the reserve for losses on off-balance sheet credit risk was primarily due to changes in volume, composition, and improvement of the risk profile of the portfolio, together with the purchase of international insurance to mitigate exposures on the off-balance sheet credit risk portfolio.

9.

Premises and equipment A breakdown of cost and accumulated depreciation and amortization for premises and equipment as of December 31, 2010 and 2009 is as follows: December 31,

(In thousands of US$) Land Building and improvements Furniture and equipment Less: accumulated depreciation and amortization

2010

2009

462 5,365 17,345 23,172 16,640 6,532

462 5,254 16,323 22,039 14,290 7,749

In 2008, the Bank recorded impairment on a portion of a financial information system for $968 thousand that was included in the depreciation, amortization and impairment of premises and equipment expense line.

10.

Other assets As of December 31, 2010 and 2009, other assets include an equity investment in a private investment fund with a carrying value of $1.7 million and 1.9 million, respectively. During 2010, the Bank did not increase its participation in this fund.

100

Notes to consolidated financial statements

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106

Notes to consolidated financial statements

Stock purchase options: The fair value of stock purchase options granted to certain Executives during 2010, 2009 and 2008 was estimated using the “Black-Scholes” option-pricing model, based on the following factors: 2010 $2.91 4.75 37% 2.32% 5.00%

Weighted average fair value per option Weighted average expected term, in years Expected volatility Risk-free rate Expected dividend

2009 $1.90 4.75 37% 1.79% 6.00%

2008 $3.52 5.50 37% 2.72% 4.84%

These options expire seven years after the grant date and are exercisable at a rate of 25% each year on the grant date’s anniversary.

Related cost charged against income during 2010, 2009 and 2008 as a result of the amortization of these plans amounted to $742 thousand, $436 thousand and $178 thousand, respectively. The remaining compensation cost pending amortization of $1,752 thousand in 2010 will be amortized over a period of 2.53 years. A summary of stock options granted is presented below:

Outstanding at January 1, 2008 Granted Forfeited Outstanding at December 31, 2008 Granted Forfeited Outstanding at December 31, 2009 Granted Forfeited Exercised Outstanding at December 31, 2010 Exercisable Expected to vest

Options

232,403 (3,318) 229,085 601,985 (27,076) 803,994 420,777 (646) (82,106) 1,142,019 172,898 969,121

Weighted average exercise price $15.43 15.43 15.43 10.15 12.43 $11.58 13.52 15.43 10.15 $12.39 $13.46 $12.20

Weighted average remaining contractual term

5.29 years 4.12 years 5.44 years

Aggregate intrinsic value (thousands)

$6,928 $ 865 $6,063

The intrinsic value of exercised options during the year ended December 31, 2010 was $383 thousand. During the year ended December 31, 2010 the Bank received $834 thousand from exercised options.

B. Restricted Stock – Directors (Discontinued) During 2003, the Board of Directors approved a restricted stock award plan for Directors of the Bank that was amended in 2007 and subsequently terminated in 2008. No grants were made after the 2007’s grant. The restricted stock vests at a rate of 20% each year on the grant date’s anniversary.

Related costs to outstanding restricted stock were charged against income totaled $108 thousand, $123 thousand and $217 thousand in 2010, 2009 and 2008, respectively. As of December 31, 2010, the Bank had unrecognized compensation costs of $139 thousand related to this plan that will be amortized over 1.49 years.

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