---

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549

---

FORM 20-F

---

oREGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

---

Commission File Number 1-11414

BANCO LATINOAMERICANO DE EXPORTACIONES, S.A.
(Exact name of Registrant as specified in its charter)

|LATIN AMERICAN EXPORT BANK                        |  | REPUBLIC OF PANAMA                               
|------------------------------------------------- |  | -------------------------------------------------
|(Translation of Registrants   name into English) |  | (Jurisdiction of incorporation   or organization)
|                                                  |  |                                                  
|                                                 

Calle 50 y Aquilino de la Guardia P.O. Box 0819-08730 Panama City, Republic of Panama (507) 210-8500
(Address and telephone number of Registrants principal executive offices)

---

Securities registered or to be registered pursuant to Section 12(b) of the Act.

|Title of each class  |  | Name of each exchange on which   registered
|-------------------- |  | -------------------------------------------
|Class E Common Stock |  | New York Stock Exchange                    

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

---

Indicate the number of outstanding shares
of each of the issuers classes of capital or common stock as of the close
of the period covered by the annual report.

| | 6,342,189  |  | Shares of Class A Common Stock
| | ---------- |  | ------------------------------
| | 3,214,344  |  | Shares of Class B Common Stock
| | 28,540,242 |  | Shares of Class E Common Stock
| | 38,096,775 |  | Total Shares of Common Stock  

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

|xYes | oNo
|---- | ---

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

|oYes | xNo
|---- | ---

Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

|xYes |  | oNo
|---- |  | ---

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated file in Rule 12b-2 of the Exchange Act.  (Check one):

| | oLarge Accelerated Filer | xAccelerated Filer | oNon-accelerated Filer | 
| | ------------------------ | ------------------ | ---------------------- | 

Indicate by check mark which financial statement item the Registrant has elected to follow.

|oItem 17 |  | xItem 18
|-------- |  | --------

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|oYes |  | xNo
|---- |  | ---

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S.A.

**TABLE OF CONTENTS**

|        |                                                           |  | Page
|------- | --------------------------------------------------------- |  | ----
|PART I  |                                                           |  |     
|        |                                                           |  |     
|Item 1. | Identity of Directors, Senior   Management and Advisers   |  | 5   
|        |                                                           |  |     
|Item 2. | Offer Statistics and Expected   Timetable                 |  | 5   
|        |                                                           |  |     
|Item 3. | Key Information                                           |  | 5   
|A.      | Selected   Financial Data                                 |  | 5   
|B.      | Capitalization   and Indebtedness                         |  | 6   
|C.      | Reasons   for the Offer and Use of Proceeds               |  | 6   
|D.      | Risk   Factors                                            |  | 6   
|        |                                                           |  |     
|Item 4. | Information on the Company                                |  | 9   
|A.      | History   and Development of the Company                  |  | 9   
|B.      | Business   Overview                                       |  | 10  
|C.      | Organizational   Structure                                |  | 24  
|D.      | Property,   Plants and Equipment                          |  | 25  
|        |                                                           |  |     
|Item 5. | Operating and Financial Review   and Prospects            |  | 26  
|A.      | Operating   Results                                       |  | 26  
|B.      | Liquidity   and Capital Resources                         |  | 32  
|C.      | Research   and Development, Patents and Licenses, etc.    |  | 38  
|D.      | Trend   Information                                       |  | 38  
|E.      | Off-Balance   Sheet Arrangements                          |  | 38  
|F.      | Contractual   Obligations and Commercial Commitments      |  | 39  
|        |                                                           |  |     
|Item 6. | Directors, Senior Management and   Employees              |  | 39  
|A.      | Directors   and Senior Management                         |  | 39  
|B.      | Compensation                                              |  | 43  
|C.      | Board   Practices                                         |  | 46  
|D.      | Employees                                                 |  | 49  
|E.      | Share   Ownership                                         |  | 49  
|        |                                                           |  |     
|Item 7. | Major Shareholders and Related   Party Transactions       |  | 49  
|A.      | Major   Shareholders                                      |  | 49  
|B.      | Related   Party Transactions                              |  | 50  
|C.      | Interests   of Experts and Counsel                        |  | 51  
|        |                                                           |  |     
|Item 8. | Financial Information                                     |  | 51  
|A.      | Consolidated   Statements and Other Financial Information |  | 51  
|B.      | Significant   Changes                                     |  | 51  
|        |                                                           |  |     
|Item 9. | The Offer and Listing                                     |  | 51  
|A.      | Offer   and Listing Details                               |  | 51  
|B.      | Plan of   Distribution                                    |  | 52  
|C.      | Markets                                                   |  | 52  
|D.      | Selling   Shareholders                                    |  | 52  

2

---



|E.       | Dilution                                                                       |  | 52
|-------- | ------------------------------------------------------------------------------ |  | --
|F.       | Expenses   of the Issue                                                        |  | 52
|         |                                                                                |  |   
|Item 10. | Additional Information                                                         |  | 52
|A.       | Share   Capital                                                                |  | 52
|B.       | Memorandum   and Articles of Association                                       |  | 52
|C.       | Material   Contracts                                                           |  | 52
|D.       | Exchange   Controls                                                            |  | 53
|E.       | Taxation                                                                       |  | 53
|F.       | Dividends   and Paying Agents                                                  |  | 57
|G.       | Statement   by Experts                                                         |  | 57
|H.       | Documents   on Display                                                         |  | 57
|I.       | Subsidiary   Information                                                       |  | 57
|         |                                                                                |  |   
|Item 11. | Quantitative and Qualitative   Disclosure About Market Risk                    |  | 57
|         |                                                                                |  |   
|Item 12. | Description of Securities Other   than Equity Securities                       |  | 58
|         |                                                                                |  |   
|PART II  |                                                                                | 
|         |                                                                                |  |   
|Item 13. | Defaults, Dividend Arrearages   and Delinquencies                              |  | 58
|         |                                                                                |  |   
|Item 14. | Material Modifications to the   Rights of Security Holders and Use of Proceeds |  | 59
|         |                                                                                |  |   
|Item 15. | Controls and Procedures                                                        |  | 59
|         |                                                                                |  |   
|Item 16. | Reserved                                                                       |  | 59
|A.       | Audit   and Compliance Committee Financial Expert                              |  | 59
|B.       | Code of   Ethics                                                               |  | 59
|C.       | Principal   Accountant Fees and Services                                       |  | 59
|D.       | Exemptions   from the Listing Standards for Audit Committees                   |  | 60
|E.       | Purchases   of Equity Securities by the Issuer and Affiliated Purchasers       |  | 60
|         |                                                                                |  |   
|PART III |                                                                                | 
|         |                                                                                |  |   
|Item 17. | Financial Statements                                                           |  | 61
|         |                                                                                |  |   
|Item 18. | Financial Statements                                                           |  | 61
|         |                                                                                |  |   
|Item 19. | Exhibits                                                                       |  | 61

In this Annual
Report on Form 20-F (this Annual Report), references to the
Bank or Bladex are to Banco Latinoamericano de
Exportaciones, S.A., a specialized supranational bank incorporated under the
laws of the Republic of Panama (Panama) and its subsidiaries. 
References to dollars or $ are to United States
dollars.  The Bank accepts deposits and raises funds principally in United
States dollars, grants loans mostly in United States dollars and publishes its
consolidated financial statements in United States dollars.  The numbers
and percentages set out in this Annual Report have been rounded and,
accordingly, may not total exactly.

Upon written or oral
request, the Bank will provide without charge to each person to whom this Annual
Report is delivered, a copy of any or all of the documents listed as exhibits to
this Annual Report (other than exhibits to those documents, unless the exhibits
are specifically incorporated by reference in the documents).  Written
requests for copies should be directed to the attention of Carlos Yap, Chief
Financial Officer, Bladex, as follows: (1) if by regular mail, to P.O. Box
0819-08730, Panama City, Republic of Panama, and (2) if by courier, to Calle 50
y Aquilino de la Guardia, Panama City, Republic of Panama.

3

---



Telephone requests may be directed to Mr. Yap at 011-507-210-8653.  Written
requests also may be faxed to Mr. Yap at 011-507-269-6333 or sent via e-mail to
cyap@blx.com.  Information is also available on the Banks website at:
www.blx.com.

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).  Forward-looking statements include statements regarding:

| |  | the anticipated growth of the Banks credit   portfolio, including its trade finance portfolio;               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | the Banks ability to increase the number of   corporate clients;                                             
| |  | the continuation of the Banks preferred creditor   status;                                                   
| |  | the effects of increased interest rates on the   Banks financial condition;                                  
| |  | the implementation of the Banks strategies and   initiatives, including its revenue diversification strategy;
| |  | anticipated operating income in future periods;                                                               
| |  | the adequacy of the Banks allowance for credit   losses;                                                     
| |  | the necessity of making additional provisions for   credit losses;                                            
| |  | the Banks ability to maintain its investment-grade   credit ratings;                                         
| |  | the availability and cost of future funding sources   for the Banks lending operations; and                  
| |  | the adequacy of the Banks sources of liquidity to   cover large deposit withdrawals.                         

In addition, the statements included under the headings Strategy and Trends are forward-looking statements. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ materially from these forward-looking statements include the risks described in the section titled Risk Factors.  All forward-looking statements in this Annual Report are made as of the date hereof, based on information available to the Bank as of the date hereof, and the Bank assumes no obligation to update any forward-looking statement.

Terms Relating to the Banks Credit Portfolio

As used in this
Annual Report, the following terms relating to the Banks credit portfolio
have the meanings set forth below, unless otherwise indicated:

Credit
portfolio consists of loans, securities purchased under agreements to
resell, selected securities held to maturity and available for sale (presented
at their estimated fair value) and contingencies. Certain investment securities
(selected investment securities) are considered part of the
Banks credit portfolio when the acquisition these such securities is
subject to the same lending policies, including credit approval criteria, as the
rest of the credit portfolio.

Contingencies
consist of financial instruments with off-balance sheet credit risk, including
letters of credit, reimbursement undertakings, guarantees, credit commitments,
and customers liabilities under acceptances.

References to
provision for credit losses are to additions to the allowance for
credit losses in a particular period that are charged to income. References to
allowance for credit losses are to the aggregate allowance for
credit losses shown as of a particular date as a balance sheet item.

Total loans includes total performing loans and total impaired loans. Total impaired loans includes only principal. For a description of the Banks policies regarding the classification of loans as impaired, see Information on the CompanyAsset Quality.

Total loans, net refers to total loans less allowance for loan losses and unearned income.

4

---



PART I

|Item 1. | Identity of Directors, Senior   Management and Advisers
|------- | -------------------------------------------------------
|        |                                                        
|        | Not required in this Annual Report.                    
|        |                                                        
|Item 2. | Offer Statistics and Expected   Timetable              
|        |                                                        
|        | Not required in this Annual Report.                    
|        |                                                        
|Item 3. | Key Information                                        

A.      Selected Financial Data

The following table
presents consolidated selected financial data for the Bank.  The financial
data presented below are at and for the years ended December 31, 2001, 2002,
2003, 2004 and 2005 and are derived from the Banks consolidated financial
statements for the years indicated, which were prepared in accordance with U.S.
generally accepted accounting principles (U.S. GAAP) and audited by
KPMG.  The consolidated financial statements of the Bank at December 31,
2004 and 2005 and for each of the years in the three-year period ended December
31, 2005 (the Consolidated Financial Statements) are included in
this Annual Report, together with the report of KPMG.  The information
below is qualified in its entirety by the detailed information included
elsewhere herein and should be read in conjunction with Information on the
Company, Operating and Financial Review and Prospects and the
Consolidated Financial Statements and notes thereto included in this Annual
Report.

Consolidated Selected Financial Information

|                                                 |  | At and for   the Year Ended December 31,               
|------------------------------------------------ |  | -------------------------------------------------------
|                                                 |  |                                                        
|                                                 |  | 2001                                                   
|                                                 |  |                                                        
|                                                 |  | (in $ thousands, except per share amounts and   ratios)
|Income Statement Data:                           |  |                                                        
|Net   interest income 1                          |  |                                                        
|Commission   income, net 1                       |  |                                                        
|Reversal   (Provision) for credit losses 2       |  |                                                        
|Total   operating expenses                       |  |                                                        
|Income   (loss) from continuing operations       |  |                                                        
|Cumulative   effect of accounting changes        |  |                                                        
|Net   income (loss)                              |  |                                                        
|Balance Sheet Data:                              |  |                                                        
|Investment   securities                          |  |                                                        
|Loans                                            |  |                                                        
|Allowance   for loan losses                      |  |                                                        
|Total   assets                                   |  |                                                        
|Total   deposits                                 |  |                                                        
|Short-term   borrowings and placements           |  |                                                        
|Medium   and long-term borrowings and placements |  |                                                        
|Total   liabilities                              |  |                                                        
|Total   stockholders equity                     |  |                                                        
|Average number of shares outstanding             |  |                                                        
|Per Common Share Data:                           |  |                                                        
|Net   income (loss) per share                    |  |                                                        
|Diluted   earnings per share                     |  |                                                        
|Book   value (period end)                        |  |                                                        
|Cash   dividends per share                       |  |                                                        
|Selected Financial Ratios:                       |  |                                                        
|Performance Ratios:                              |  |                                                        
|Return   on average assets                       |  |                                                        
|Return   on average stockholders equity         |  |                                                        

5

---



|                                                                            |  | At and for   the Year Ended December 31,               
|--------------------------------------------------------------------------- |  | -------------------------------------------------------
|                                                                            |  |                                                        
|                                                                            |  | 2001                                                   
|                                                                            |  |                                                        
|                                                                            |  | (in $ thousands, except per share amounts and   ratios)
|Net   interest margin 3                                                     |  |                                                        
|Net   interest spread 3                                                     |  |                                                        
|Total   operating expenses to total average assets                          |  |                                                        
|Cash   dividend payout ratio                                                |  |                                                        
|Asset Quality Ratios:                                                       |  |                                                        
|Impaired   loans to loans 4                                                 |  |                                                        
|Charge-offs   to loans                                                      |  |                                                        
|Allowance   for loan losses to loans                                        |  |                                                        
|Allowance   for loan losses to non-accruing loans                           |  |                                                        
|Reserve for losses on offbalance sheet credit risks to total
contingencies |  |                                                        
|Capital Ratios:                                                             |  |                                                        
|Stockholders   equity to total assets                                      |  |                                                        
|Tier   1 capital to risk-weighted assets 5                                  |  |                                                        
|Total   capital to risk-weighted assets 5                                   |  |                                                        

| 
|-
|1
|2
|3
|4
|5

B.      Capitalization and Indebtedness

Not required in this Annual Report.

C.      Reasons for the Offer and Use of Proceeds

Not required in this Annual Report.

D.      Risk Factors

Risks Relating to the Region

The Banks credit portfolio is concentrated in Latin America and the Caribbean and adverse economic changes in those countries, could affect adversely the Banks growth, asset quality, prospects, profitability and financial condition.

The Banks
lending activities and, as a result, the credit portfolio is concentrated in
Central and South America and the Caribbean (the Region). 
Historically, economies of countries in the Region have sometimes experienced
significant volatility characterized, in some cases, by political uncertainty,
slow growth or recession, declining investments, government and private sector
debt default and restructurings, significant inflation and/or devaluation. 
Global economic changes, including oil prices, the U.S. dollar interest rates
and exchange rate, and slower economic growth in developed countries, could have
a significant adverse effect on the economic condition of countries in the
Region.  In turn, adverse changes affecting the economies of countries in
the Region could have a significant adverse impact on the Banks credit
portfolio, including increased loan loss provisions, debt restructurings, and
loan losses and, as a result, on the Banks growth, asset quality,
prospects, profitability and financial condition.

6

---



Bladexs lending activities are concentrated in a relatively
small number of countries and clients, exacerbating the possible effect that
adverse economic changes in such countries could have on the
Bank.

The Banks
lending activities are concentrated in a relatively small number of countries,
which could have an adverse impact on the Banks credit portfolio and, as a
result, its financial condition, growth, prospects, cash flows and results of
operations if one or more of those countries encounter economic
difficulties.  At December 31, 2005, approximately 62% of the Banks
credit portfolio was outstanding to borrowers in the following four countries:
Brazil ($1,453 million, or 40%); Chile ($315 million, or 9%); Colombia ($261
million, or 7%); and Peru ($230 million, or 6%).

In addition, at
December 31, 2005, 20% of the Banks total credits were to five borrowers
in Brazil and 7% of total credits were to two borrowers in Chile.  A
significant deterioration of the financial condition of any of these borrowers
could require the Bank to create additional allowances for credit losses, or
suffer further credit losses with the effect being accentuated because of this
concentration.

Local country foreign exchange controls or currency devaluation may harm the
Banks borrowers ability to pay U.S. dollar-denominated
obligations.

The Bank makes
mostly U.S. dollar-denominated loans.  As a result, the Bank faces the risk
that local country foreign exchange controls will restrict the ability of the
Banks borrowers, even if they are exporters, to acquire dollars to repay
loans on a timely basis, and/or that significant currency devaluation will
occur, which could increase the cost, in local currency terms, to the
Banks borrowers of acquiring dollars to repay loans.

The performance of
financial markets, including fluctuations in interest rates, may cause changes
in the value of the Banks investment securities portfolio and in the
amount of revenues generated from these assets.

Increased risk perception in countries in the Region where the Bank has large
credit exposure could affect adversely the Banks credit ratings, funding
activities and funding costs.

As a result of the
Argentine crisis in 2002 the major credit rating agencies downgraded the
Banks credit ratings due to its large Argentine credit exposure and the
increasing risk of default among Argentine borrowers.  The downgrades also
reflected the Banks large exposure in Brazil, where political and economic
uncertainty created concerns at that time.  One of the Banks funding
sources for short-term loans is interbank deposits received principally from
central banks in the Region.  During 2002, these central banks withdrew a
substantial portion of their deposits from the Bank, in large part because of
the deterioration in the Banks financial condition and the credit ratings
downgrades.  In addition, the dramatic increase in the risk perception of
Latin America resulted in a significant decline in the availability of credit
lines to the Region.  The Bank maintained an adequate liquidity position
throughout this period.

The occurrence of
similar events in any countries in the Region where the Bank has large exposures
could trigger downgrades to the Banks credit ratings.  A credit
rating downgrade would likely increase the Banks funding costs, and reduce
its deposit base and access to the debt capital markets.  In that case, the
Banks ability to obtain the necessary funding to carry on trade finance
activities in Latin America at meaningful levels could be severely
hampered.

Risks Relating to the Banks Business

The Banks allowances for credit losses could prove inadequate to cover credit losses related to its loans and contingencies.

Determining the
appropriate level of allowances for credit losses necessarily requires the
Banks Boards and managements judgment, including assumptions
and estimates made in the context of changing political and economic conditions
in the Region.  Consequently, the Banks allowances could be
inadequate to cover losses in its credit portfolio, which in turn, could have a
material adverse effect on the Banks financial condition, results of
operations, and business.

7

---



The Banks businesses are subject to market risk.

Market risk
generally represents the risk that values of assets and liabilities or revenues
will be adversely affected by changes in market conditions.  Market risk is
inherent in the financial instruments associated with many of the Banks
operations and activities, including loans, deposits, investment securities,
short-term borrowings, long-term debt and derivatives.  As many other
market conditions that may shift from time to time, thereby exposing the Bank to
market risk, are fluctuations in interest and currency exchange rates, changes
in the implied volatility of interest rates, changes in foreign exchange rates
and changes in securities prices, due to changes in either market perception or
actual credit quality of either the issuer or its country of origin. 
Accordingly, depending on the instruments or activities impacted, market risks
can have wide ranging, complex adverse affects on the Banks financial
condition, results of operations, and business.

Bladex faces liquidity risk, and its failure to adequately manage this risk
could produce a liquidity shortage, which could affect adversely its financial
condition and results of operations.

Bladex faces
liquidity risk, or the risk of not being able to maintain adequate cash flow to
repay its deposits and borrowings required to fund its credit portfolio on a
timely basis.  Failure to adequately manage its liquidity risk could
produce a liquidity shortage in which the Bank would not be able to repay these
obligations as they become due.

As a U.S. dollar
based economy, Panama does not have a central bank in the traditional sense, and
there is no lender of last resort to the banking system in Panama.  In
addition, the central banks of other Latin American countries would not be
obligated to act as lenders of last resort if Bladex were to face a liquidity
shortage.  Accordingly, if the Bank faced a liquidity shortage, it would
have to rely on commercial liquidity sources.

Operational problems or errors can have a material adverse impact on the
Banks business, financial condition and results of
operations.

Bladex, like all
financial institutions, is exposed to operational risks, including the risk of
fraud by employees and outsiders, failure to obtain proper internal
authorizations, failure to properly document transactions, equipment failures,
and errors by employees.  Although the Bank maintains a system of internal
controls, there can be no assurance that operational problems or errors will not
occur, and that their occurrence will not have a material adverse impact on the
Banks business, financial condition and results of operations.

The Banks credit portfolio may not continue to grow at the same or similar
rate.

No assurance can be
given that, in the future, the Banks credit portfolio, including the
Banks foreign trade portfolio, will continue to grow at historical
rates.  A reversal in the rate of growth of the Regions economy and
trade volumes could adversely affect the rate of growth of the Banks
credit portfolio.

Increased competition and industry consolidation in some Latin American
countries could increase competition and limit the Banks ability to grow
in those markets and reduce its profitability, which may adversely affect
results of operations.

Most of the
competition the Bank faces in the trade finance area comes from international
banks, mostly European and North American, which provide similar financing
services to those the Bank provides within the markets the Bank serves. 
These international banks have substantially greater resources and access to
less expensive funding than the Bank does, which puts the Bank at a competitive
disadvantage.  There can be no assurance that increased competition will
not affect adversely the Banks growth prospects and results of
operations.

8

---



Although some of
these international banks compete directly with the Bank, in many cases they
also provide funding for the Bank and represent a source of business.  If
these international banks ceased providing funding to the Bank, the Bank would
be required to seek funding from other sources, which may not be available, or
if available, may only be at higher interest costs.

Changes in the
business and in the markets of the Region could potentially place the Bank at a
competitive disadvantage with respect to scale, resources, and its ability to
develop and diversify its income sources.

A substantial
consolidation of the banking business in Latin America has occurred and is
continuing.  This has reduced the number of local banks in the Region,
which historically have been the Banks primary customers for trade finance
loans.

The Bank may pursue a capital management strategy that differs from that
expected by some of its stockholders or others in the
market.

The Boards
opinion regarding the Banks capital adequacy and needs might differ from
that of some of its stockholders or other market participants.  If so, the
Banks capital management actions and the timing of such actions might not
correspond with the expectations of the Banks stockholders or other market
participants.  The Banks Board of Directors (the Board)
may choose to pursue any of several capital management options, or a combination
of strategies, including growth, investments, declaring dividends to
stockholders, or repurchasing shares under a stock repurchase program.  The
Board is not required to declare dividends (or increase dividends) or effect
stock repurchases pursuant to its stock repurchase program, and could use the
capital for other purposes, which may not coincide with the preferences of some
of the Banks stockholders.  To the extent that the capital management
strategy elected by the Banks Board differs from expectations of investors
or other market participants, it could result in negative market perceptions of
the Bank.  Dissatisfaction of some of the Banks stockholders or a
negative market perception of the Bank with regard to the use of capital could
adversely affect the Banks stock price.

Any delays or failure to implement business initiatives that the Bank may
undertake could prevent the Bank from realizing the anticipated revenues and
benefits of the initiatives, divert the attention of its management, cause
additional expenses, or cause other negative repercussions for the
Bank.

Part of the
Banks strategy is to diversify income sources through business initiatives
that, in some cases, involve partnerships or strategic alliances with
specialists, expanding into new markets, targeting new clients and developing
new products and services.  These initiatives may not be fully implemented
within the time frame the Bank expects, or at all.  In addition, even if
such initiatives are fully implemented, they may not generate revenues as
expected.  Any delays in securing necessary regulatory approvals, in
reaching agreement with strategic partners, or otherwise implementing the
Banks strategic initiatives, could divert the attention of the Banks
management, result in additional expense, prevent the Bank from pursuing other
initiatives or ultimately, prevent the Bank from realizing the anticipated
benefits of the initiatives, which could adversely affect the Banks
business, results of operations and financial condition.

Item 4.
      Information on the Company


A.      History and Development of the Company

The Bank,
headquartered in Panama City, Panama, is a specialized supranational bank
originally established by central banks of Latin American and Caribbean
countries to promote trade finance in the Region.  The Bank was established
pursuant to a May 1975 proposal of the XX Assembly of Governors of central banks
in the Region, which recommended the creation of a multinational organization to
increase the Regions foreign trade financing capacity.  The Bank was
constituted in 1978 as a corporation pursuant to the laws of the Republic of
Panama as Banco Latinoamericano de Exportaciones, S.A. and commenced
operations in January 1979.  The Bank operates under the commercial name of
Bladex. Panama was selected as the location of the Banks
headquarters because of the countrys importance as a banking center, the
benefits of a fully U.S. dollar-based economy, the absence of foreign exchange
controls, its geographic location and the quality of its communications
facilities.  Under special legislation enacted in 1978, the Bank was
granted certain privileges by the government of Panama, including an exemption
from payment of income taxes in Panama.

9

---



The Banks
mission is to provide seamless support to Latin Americas foreign trade,
while creating value for its stockholders.  The Bank is principally engaged
in providing short-term trade financing to selected commercial banks in the
Region, which, in turn, lend to businesses primarily active in foreign trade and
to state and private corporations.  The majority of the Banks loans
are extended in connection with specific foreign trade transactions that have
been identified.

The Banks
lending activities are funded by interbank deposits, primarily from central
banks and financial institutions in the Region, by borrowings from international
commercial banks and, to a lesser extent, by sales of debt securities
(placements) made with financial institutions and investors in
Japan, Europe and North America.  The Bank does not provide retail-banking
services to the general public, such as retail savings accounts or checking
accounts, and does not take retail deposits.

Bladex offers its
services through the Banks head office in Panama City, its agency in New
York City (the New York Agency), its subsidiary in Brazil, its
representative offices in Mexico City and Buenos Aires and a worldwide network
of correspondent banks.  In addition, the Bank has obtained regulatory
approval to open a representative office in Miami, Florida.  See
Organizational Structure and Note 1 to the Consolidated Financial
Statements.

B.      Business Overview

Overview

Bladex is a
supranational bank originally established by the central banks of Latin American
and Caribbean countries to promote trade finance in the Region.  The
Banks mission is to provide seamless support to Latin Americas
foreign trade, while creating value for its stockholders.  The Bank offers
trade finance services, primarily providing short-term financing.  More
recently, through its revenue diversification strategy, the Bank has introduced
a broader range of products, services and solutions associated with foreign
trade, including co-financing arrangements, syndicated loans, bilateral credits
and vendor financing.

Historically, trade
finance generally has not been negatively affected by Latin American debt
restructurings.  This has been due, in part, to the perceived importance
that governments and borrowers in the Region attach to maintaining their access
to trade finance.  In the case of Bladex, the Bank generally has enjoyed
preferred creditor status in several countries in the Region, which
has strengthened its position in respect of debt restructurings.  The Bank
believes that its preferred creditor status is partially
attributable to its relationship with its Class A stockholders consisting of
central banks or governmental financial institutions from 23 countries in the
Region.  The Bank, due in part to its preferred creditor status, generally
has been allowed to negotiate directly with the governments of these countries
concerning its loans, as opposed to negotiating indirectly as a member of a
group of creditors in debt restructuring proceedings.  In addition, the
Banks preferred creditor status has generally exempted it from
convertibility and transfer limitations of U.S. dollars for payment of external
obligations.

Developments During 2004

The Banks net income for 2004 was a record $142 million, representing an increase of 27% as compared to 2003.  These results reflected increased reversal of provisions for possible credit losses and recoveries on impairment losses mostly related to the reduction in the Banks exposure in Argentina.  The 2004 net income figure produced a return on equity of 22.8%.  Other indicators of note included a 25% growth in the Banks trade finance portfolio, and a 23% increase in its deposit base.

10

---



The Banks
business activity during 2004 reflected prevailing financial market
conditions.  For 2004, Gross Domestic Product growth in the Region is
estimated to have reached 5.5%, a significant increase over 2003.  This
trend was driven by improved terms of exchange, low inflation, and increasingly
effective fiscal policies.  As a result, risk levels generally improved
during the year, with major rating agencies upgrading eight countries in the
Region.  Along with high levels of liquidity, reduced risk levels drove
loan margins to historically low levels.  The trade finance business in the
Region resumed growth, spurred by several factors, among others, the Free Trade
Agreements signed with the United States, an increase in intra-regional trade,
and the worldwide surge in commodity prices which was in large part stimulated
by the demands of the Chinese economy.

During 2004, the
Banks efforts were focused on strengthening its role as a leading
supranational bank supporting trade in Latin America by:


      maximizing the value of the Banks Argentine   portfolio;
      increasing the Banks trade finance balances and   diversifying its credit portfolio;
      taking proactive capital management actions;
      diversifying revenue; and
      further strengthening the Bladex brand.


Developments During 2005

During 2005, the
Bank substantially improved the composition and magnitude of its operating
income.  The Bank also resolved its impaired Argentine portfolio, which has
been collected nearly in full.  Lastly, the Bank made significant progress
on the execution of a business model that seeks to expand the Banks client
base and broaden its financial service offering.

For 2005, the Bank
reported net income of $80 million, implying a return on equity of 12.9%. 
These results reflected a $61 million year-over-year reduction in the amount of
reversals of provisions for possible credit losses and impairment losses on
securities, which largely explain the lower net income in 2005 when compared to
the $142 million reported in 2004.  Excluding the impact of provision
reversals and net revenues from the non-accrual portfolio, the Banks net
income increased 42% during the year.

Throughout 2005, the
Bank continued to be a key institution in supporting the trade finance business
in Latin America, despite a highly competitive environment with new players, an
abundance of funding, and historically low margins.

The Bank continued
to analyze the Banks capital management, seeking a proper balance between
its capitalization ratio, growth potential, investment opportunities, and the
return to its stockholders.  During the year, the Bank paid a common
dividend equivalent to $0.60 per share, along with an extraordinary dividend of
$2.00 per share. Furthermore, after the close of 2005, the Bank declared an
additional extraordinary dividend of $1.00 per share, as well as a 25% increase
in the common quarterly dividend.

During 2005, the
Bank initiated a project aimed at transforming and modernizing its technology
platform, an undertaking that is expected to be completed during the second half
of 2006.  The Banks management believes that the new technological
capabilities will provide the Bank with greater flexibility, agility,
effectiveness and efficiency in providing quality client service, and in the
deployment of new products.

Strategy for 2006

Since its inception,
one of the Banks key objectives has been to contribute to the development
and prosperity of Latin America.  Another target of equal importance has
been the creation of value for and the rewarding of its stockholders.  The
combination of these two goals reflects the commercial strategy deployed by the
Bank throughout its history.  In 2006, the Bank looks forward to building
on the momentum gained in 2005 through the implementation of its long-term
strategy that seeks to expand the Banks client base, particularly the
corporate portion, and broaden its financial services offering.  The Bank
will continue to leverage its brand and reputation in the Region with a
commitment to providing high quality, value-added services and solutions to the
Banks expanded target customer base, and will continue developing the
Banks Treasury Area as a source of revenue, including a new asset
distribution desk and a fixed income desk. The asset distribution desk is
designed to intermediate Latin American loan instruments with regional and
international investors, and the fixed income desk is expected to bring to the
Bank professional proprietary portfolio management capabilities in the Latin
American debt capital markets.

11

---



Lending Policies

Imports and exports
financed by the Bank are destined for buyers/sellers in countries both inside
and outside the Region.  Historically, it has been Bank operating policy to
extend credit directly mostly to banks and state-owned export organizations
within the Region, as well as to non-bank private entities.  At December
31, 2005, excluding the non-accruing portfolio, total loans and contingencies
outstanding to non-bank private entities constituted 16% of the Banks
total loans and contingencies.  The Bank analyzes credit requests from
eligible borrowers in the light of credit risk criteria, including economic and
market conditions.  The Bank maintains a consistent lending policy and
applies the same credit criteria to all types of potential borrowers in
evaluating creditworthiness.

At December 31,
2005, the Bank had 39 officers across its offices responsible for marketing the
Banks financial products and services to existing and potential
customers.

The Bank finances
import and export transactions for all goods and products, with the exception of
articles such as weapons, ammunition, military equipment, hallucinogenic drugs
or narcotics not utilized for medical purposes.

The Banks
loans generally are unsecured.  However, in certain instances, based upon
its credit review of the borrower and the economic and political situation and
trends in the borrowers home country, the Bank has determined that the
level of risk involved requires that a loan be secured by pledged
deposits.

Country Credit Limits

The Credit Policy
and Risk Assessment Committee of the Board (the Board Credit
Committee) establishes country limits annually and more often if required.
The Board Credit Committee also reviews country usage in both nominal terms and
in terms of capital requirements quarterly.  All transactions must comply
fully with Board approved country limits and other conditions.  The Board
approves all country credit limits based on management recommendations, along
with targeted customer and risk profiles as regarding the tenor and type of risk
to be undertaken in a particular country.

Borrower Lending Limits

Generally the Bank
establishes lines of credit for each borrower in line with its risk analysis and
business prospects; however, the Bank is not required to lend under these lines
of credit.  The Bank does not, as a general rule, publish or communicate
its lending limits for countries in which it lends or its borrowers but uses
these limits internally as a credit risk management tool.  Once a line of
credit has been established, credit generally is extended after receipt of a
request from the borrower for financing usually related to foreign trade. 
Loan pricing is determined in accordance with prevailing market conditions and
the borrowers creditworthiness.

For existing
borrowers, the Banks management has authority to approve credit lines up
to the legal lending limit prescribed by Panamanian law (see
RegulationPanamanian Law), provided that the credit
lines comply fully with the country credit limits and conditions for the
borrowers country of domicile set by the Board.  Approved borrower
lending limits are reported to the Board Credit Committee quarterly.  As of
December 31, 2005, the legal lending limit prescribed by Panamanian law for any
one borrower amounted to approximately $185 million.  The head of the
Commercial Area or Treasury Area, or their designees, depending on the facility
type, recommend proposed credit lines.  Approval from the head of Risk
Management Area is required for all credit approvals, and approval from the
Chief Executive Officer also is required for all new clients and for exposures
exceeding $30 million. Certain credit lines require approval by the Board Credit
Committee.  The Board Credit Committee also reviews the entire impaired
portfolio, along with certain non-impaired credits quarterly.

12

---



Panamanian Banking
Law prescribes certain concentration limits, which are strictly adhered to by
the Bank, including a 30% limit, applicable to the Bank, as a percentage of
capital and reserves for any one borrower and borrower group.  At December
31, 2005, the Bank was in full compliance with all regulatory limits. See
RegulationPanamanian Law.

Credit Portfolio

The Banks
credit portfolio, which consists of loans, selected investment securities held
to maturity and available for sale, securities purchased under agreements to
resell, letters of credit, customers liabilities under acceptances,
reimbursement undertakings, guarantees covering commercial and country risks and
credit commitments, increased from $2,847 million at December 31, 2003, to
$2,944 million at December 31, 2004 and to $3,616 million at December 31,
2005.

At December 31,
2005, $757 million or 21% of the Banks total credit portfolio (excluding
the non-accruing portfolio and investment securities) represented non-trade
related credits.  At December 31, 2005 there were no past due loans of
these non-trade credits.  At December 31, 2005, the geographic composition
of the Banks credit portfolio by client type and transaction type was as
follows:

|                         |  | Brazil |      | Chile |  | Colombia |      | Peru |  | Rest of   countries |      | Total
|------------------------ |  | ------ | ---- | ----- |  | -------- | ---- | ---- |  | ------------------- | ---- | -----
|                         |  |        |      |       |  |          |      |      |  |                     |      |      
|Transaction type         |  |        |      |       |  |          |      |      |  |                     |      |      
|Trade                    |  |        | 76%  |       |  |          | 60%  |      |  |                     | 25%  |      
|Non-trade                |  |        | 16%  |       |  |          | 30%  |      |  |                     | 71%  |      
|Investment   Securities  |  |        | 7%   |       |  |          | 10%  |      |  |                     | 4%   |      
|Non-accrual              |  |        | 0%   |       |  |          | 0%   |      |  |                     | 0%   |      
|                         |  |        |      |       |  |          |      |      |  |                     |      |      
|Total                    |  |        | 100% |       |  |          | 100% |      |  |                     | 100% |      
|                         |  |        |      |       |  |          |      |      |  |                     |      |      
|Client type              |  |        |      |       |  |          |      |      |  |                     |      |      
|Financial   entities     |  |        | 69%  |       |  |          | 90%  |      |  |                     | 94%  |      
|Non-financial   entities |  |        | 31%  |       |  |          | 10%  |      |  |                     | 6%   |      
|                         |  |        |      |       |  |          |      |      |  |                     |      |      
|Total                    |  |        | 100% |       |  |          | 100% |      |  |                     | 100% |      
|                         |  |        |      |       |  |          |      |      |  |                     |      |      

The following table sets forth the distribution of the Banks credit portfolio, by product category at December 31 of each year.

|                                                  |  | At   December 31,                    
|------------------------------------------------- |  | -------------------------------------
|                                                  |  |                                      
|                                                  |  | 2001                                 
|                                                  |  |                                      
|                                                  |  | (in   $ millions, except percentages)
|Loans                                             |  | $4,734                               
|Investment   securities 1                         |  | 357                                  
|Securities   purchased under agreements to resell |  | 292                                  
|Contingencies                                     |  | 1,044                                
|                                                  |  |                                      
|Total                                             |  | $6,426                               
|                                                  |  |                                      

| 
|-
|1

13

---



A per country
distribution of the remaining maturity profile of the Banks credit
portfolio maturing beyond one year is presented below:

|           |  |                       |  | Credits Maturing   in Year Ended
|---------- |  | --------------------- |  | --------------------------------
|           |  |                       |  |                                 
|           |  | As of   Dec. 31, 2005 |  | 2007                            
|           |  |                       |  |                                 
|           |  |                       |  |                                 
|Argentina  |  | $30                   |  |                                 
|Brazil     |  | 651                   |  |                                 
|Colombia   |  | 18                    |  |                                 
|Chile      |  | 32                    |  |                                 
|Costa Rica |  | 7                     |  |                                 
|Guatemala  |  | 5                     |  |                                 
|Mexico     |  | 67                    |  |                                 
|Panama     |  | 69                    |  |                                 
|Peru       |  | 30                    |  |                                 
|Venezuela  |  | 29                    |  |                                 
|           |  |                       |  |                                 
|Total      |  | $939                  |  |                                 
|           |  |                       |  |                                 

Loan Portfolio

At December 31,
2005, the Banks total loans amounted to $2,610 million, compared to $2,442
million at December 31, 2004.  At December 31, 2005, 82% of the
Banks loans were scheduled to mature within one year.  The Bank
services all loans in its loan portfolio except syndicated loans, which are
serviced through agent banks generally appointed by the arrangers of the
syndication.  See Operating and Financial Review and
ProspectsChanges in Financial ConditionLoans and Note 5 to
Consolidated Financial Statements.

Loans by Country

The following table
sets forth the distribution of the Banks loans by country at December 31
of each year:

|                   |  | At   December 31,                  
|------------------ |  | -----------------------------------
|                   |  |                                    
|                   |  | 2001                               
|                   |  |                                    
|                   |  | (in $ millions, except percentages)
|Argentina          |  | $804                               
|Bolivia            |  | 26                                 
|Brazil             |  | 2,013                              
|Chile              |  | 112                                
|Colombia           |  | 138                                
|Costa Rica         |  | 67                                 
|Dominican Republic |  | 175                                
|Ecuador            |  | 14                                 
|El Salvador        |  | 19                                 
|Guatemala          |  | 23                                 
|Honduras           |  | 0                                  
|Jamaica            |  | 7                                  
|Mexico             |  | 833                                
|Nicaragua          |  | 38                                 
|Panama             |  | 43                                 
|Paraguay           |  | 1                                  
|Peru               |  | 120                                
|Trinidad & Tobago  |  | 59                                 
|Uruguay            |  | 0                                  
|Venezuela          |  | 242                                
|                   |  |                                    
|Total              |  | $4,734                             
|                   |  |                                    

Loans by Type of Borrower

The following table
sets forth the amounts of the Banks loans by type of borrower at
December 31 each year:

|                                      |  | At   December 31,
|------------------------------------- |  | -----------------
|                                      |  |                  
|                                      |  | 2001             
|                                      |  |                  
|                                      |  |                  
|Private   sector commercial banks     |  | $2,337           
|State-owned   commercial banks        |  | 693              
|Central   banks                       |  | 59               
|Sovereign   debt                      |  | 157              
|State-owned   exporting organizations |  | 424              
|Private   corporations                |  | 1,064            
|                                      |  |                  
|Total                                 |  | $4,734           
|                                      |  |                  

14

---



Investment Securities

Investment
securities are considered part of the Banks credit portfolio when the
acquisition of such securities is subject to the same lending policies,
including credit approval criteria, as the rest of the credit portfolio. 
At December 31, 2005, all of the Banks investment securities were
considered part of its credit portfolio.

The Banks
investment securities consist mostly of debt securities held to maturity and
securities available for sale.  The following table sets forth information
regarding the carrying value of the Banks investment securities portfolio
at December 31 each year.  See Note 4 to the Consolidated Financial
Statements.

|                                      |  | At December 31,
|------------------------------------- |  | ---------------
|                                      |  |                
|                                      |  | 2003           
|                                      |  |                
|                                      |  |                
|Securities held to maturity           |  |                
|Bonds                                 |  | $29            
|                                      |  |                
|Total   securities held to maturity   |  | $29            
|                                      |  |                
|Securities Available for   Sale       |  |                
|Bonds                                 |  | $43            
|Impaired   bonds                      |  | 5              
|                                      |  |                
|Total   securities available for sale |  | $48            
|                                      |  |                
|Total investment securities           |  | $78            
|                                      |  |                

In the normal course
of business, the Bank utilizes interest rate swaps for hedging purposes in its
assets and liabilities management activities, including investment securities.

At December 31,
2005, the Banks investment securities portfolio totaled $209 million, of
which 77% consisted of investments with banks and sovereign borrowers, and the
Banks total portfolio had a weighted average interest rate of 5.63% per
annum.

Total Outstandings by Country

The following table
sets forth the aggregate amount of the Banks cross-border outstandings,
consisting of cash and due from banks, interest-earning deposits in other banks,
selected investment securities net of impairment loss on securities, estimated
unrealized gain (loss) on impaired securities, premiums and discounts (which
were purchased as part of its credit portfolio activity), securities purchased
under agreements to resell and loans, but not including contingencies
(collectively cross-border outstandings) at December 31 of each
year:

|                   |  | 2003                                  |  | 2004                      |       | 2005  
|------------------ |  | ------------------------------------- |  | ------------------------- | ----- | ------
|                   |  |                                       |  |                           |       |       
|                   |  | Amount                                |  | % of Total   Outstandings |       | Amount
|                   |  |                                       |  |                           |       |       
|                   |  | (in   $ millions, except percentages)
|Argentina          |  | $403                                  |  |                           | 14.7% |       
|Austria            |  | 0                                     |  |                           | 0.0   |       
|Belgium            |  | 0                                     |  |                           | 0.0   |       
|Brazil             |  | 1,027                                 |  |                           | 37.5  |       
|Canada             |  | 20                                    |  |                           | 0.7   |       
|Chile              |  | 131                                   |  |                           | 4.8   |       
|Colombia           |  | 123                                   |  |                           | 4.5   |       
|Costa Rica         |  | 59                                    |  |                           | 2.2   |       
|Dominican Republic |  | 24                                    |  |                           | 0.9   |       

15

---



|                    |  | 2003                                  |  | 2004                      |        | 2005  
|------------------- |  | ------------------------------------- |  | ------------------------- | ------ | ------
|                    |  |                                       |  |                           |        |       
|                    |  | Amount                                |  | % of Total   Outstandings |        | Amount
|                    |  |                                       |  |                           |        |       
|                    |  | (in   $ millions, except percentages)
|Ecuador             |  | 22                                    |  |                           | 0.8    |       
|El Salvador         |  | 26                                    |  |                           | 0.9    |       
|Finland             |  | 16                                    |  |                           | 0.6    |       
|France              |  | 7                                     |  |                           | 0.3    |       
|Germany             |  | 86                                    |  |                           | 3.1    |       
|Guatemala           |  | 34                                    |  |                           | 1.2    |       
|Honduras            |  | 0                                     |  |                           | 0.0    |       
|Ireland             |  | 10                                    |  |                           | 0.4    |       
|Italy               |  | 20                                    |  |                           | 0.7    |       
|Jamaica             |  | 14                                    |  |                           | 0.5    |       
|Japan               |  | 10                                    |  |                           | 0.4    |       
|Mexico              |  | 213                                   |  |                           | 7.8    |       
|Panama              |  | 44                                    |  |                           | 1.6    |       
|Peru                |  | 65                                    |  |                           | 2.4    |       
|Portugal            |  | 23                                    |  |                           | 0.8    |       
|Spain               |  | 0                                     |  |                           | 0.0    |       
|Sweden              |  | 20                                    |  |                           | 0.7    |       
|The   Netherlands   |  | 14                                    |  |                           | 0.5    |       
|Trinidad   & Tobago |  | 100                                   |  |                           | 3.6    |       
|United   Kingdom    |  | 10                                    |  |                           | 0.4    |       
|United   States     |  | 150                                   |  |                           | 5.5    |       
|Venezuela           |  | 61                                    |  |                           | 2.2    |       
|Other1              |  | 9                                     |  |                           | 0.3    |       
|                    |  |                                       |  |                           |        |       
|Total               |  | $2,740                                |  |                           | 100.0% |       
|                    |  |                                       |  |                           |        |       

| 
|-
|1

In allocating
country risk limits, the Bank takes into consideration several factors,
including the Banks perception of country risk levels, business
opportunities, and economic and political analysis, applying a portfolio
management approach.

Cross-border
outstandings in countries outside the Region correspond mostly to cash and due
from banks and interest bearing deposits with banks.

The following table
sets forth the amount of the Banks cross-border outstandings by type of
institution at December 31 of each year:

|                                      |  | 2003              |  | 2004 |        | 2005
|------------------------------------- |  | ----------------- |  | ---- | ------ | ----
|                                      |  |                   |  |      |        |     
|                                      |  | (in   $ millions)
|Private   sector commercial banks     |  | $1,189            |  |      | $1,415 |     
|State-owned   commercial banks        |  | 475               |  |      | 577    |     
|Central   banks                       |  | 0                 |  |      | 138    |     
|Sovereign   debt                      |  | 239               |  |      | 0      |     
|State-owned   exporting organizations |  | 439               |  |      | 488    |     
|Private   corporations                |  | 398               |  |      | 171    |     
|                                      |  |                   |  |      |        |     
|Total                                 |  | $2,740            |  |      | $2,789 |     
|                                      |  |                   |  |      |        |     

Contingencies

The Bank considers contingencies part of the credit portfolio because it applies the same credit policies used in its lending process to its evaluation of these instruments.  At December 31, 2005, total contingencies amounted to $794 million, representing 22% of the Banks total credit portfolio.

The Bank, on behalf of its institutional client base, advises and confirms letters of credit to facilitate foreign trade transactions.  The Bank also issues stand-by letters of credit and guarantees to provide coverage for country risk arising from the risk of convertibility and transferability of local currency of countries in the Region into hard currency and to provide coverage for country risk arising from political risks, such as expropriation, nationalization, war and/or civil disturbances.  At December 31, 2005, total stand-by letters of credit and guarantees representing country risk coverage amounted to $150 million.  The Bank also enters into credit commitments (defined as a combination of either non-binding or legal agreements to lend to a customer) in order to meet the financial needs of customers.  See Note 16 to the Consolidated Financial Statements.

16

---



Asset Quality

The Bank believes
that its asset quality is linked to the composition of its client base, the
importance that governments and borrowers in the Region attach to maintaining
continued access to trade financing, its preferred creditor status, and the
Banks strict adherence to commercial criteria in its credit
activities.  The Bank has developed knowledge of, and relationship with,
its client base throughout its 27 years of operations in the Region, which
allows it to continue to further enhance its risk management process.

The Banks
management and the Board Credit Committee periodically review a report of all
loan delinquencies.  The Banks collection policies include rapid
internal notification of any delinquency and prompt initiation of collection
efforts, usually involving senior management.

Impaired Assets and Contingencies

The Banks
impaired assets consist of impaired loans and impaired securities.  Loans
are identified as impaired and placed on non-accrual status when any principal
or interest payment is over 90 days past due or if the Banks management
determines that the ultimate collection of principal or interest is
doubtful.  In all cases, if a borrower has more than one outstanding loan
under its line of credit with the Bank and any of its individual loans is placed
on non-accrual status, the Bank places all outstanding loans to that borrower on
non-accrual status.  Similarly, if a single note of a loan is placed on
non-accrual status, the remaining notes under that loan are placed on
non-accrual status as well.  Securities that experience a decline in value,
which is deemed other than temporary, are classified as impaired. 
Contingencies are identified as impaired and placed on non-accrual status when
any payment of fees or commissions relating thereto is over 90 days past due or
if the Banks management determines that the item may become payable by the
Bank and ultimate collection of principal or interest is doubtful.

Loans are charged
off when they are deemed uncollectible, after considering factors such as the
customers financial condition and underlying collateral and guarantees, as
well as general and industry economic conditions.

The following table
sets forth information regarding the Banks impaired assets and
contingencies at December 31 of each year:

|                                                                                          |  | 2001                                  |  | 2002 |       | 2003 |  | 2004  |  | 2005
|----------------------------------------------------------------------------------------- |  | ------------------------------------- |  | ---- | ----- | ---- |  | ----- |  | ----
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     
|                                                                                          |  | (in   $ millions, except percentages) | 
|Impaired   loans                                                                          |  | $77                                   |  |      | $691  |      |  | $445  |  |     
|Allocation   from the allowance for loan losses                                           |  | 18                                    |  |      | 365   |      |  | 191   |  |     
|Impaired   loans as a percentage of total loans                                           |  | 1.6%                                  |  |      | 27.5% |      |  | 19.6% |  |     
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     
|Impaired   contingencies                                                                  |  | $20                                   |  |      | $45   |      |  | $32   |  |     
|Allocation   from the reserve for losses on off balance-sheet credit risks                |  | 5                                     |  |      | 14    |      |  | 20    |  |     
|Impaired   contingencies as a percentage of total contingencies                           |  | 1.9%                                  |  |      | 9%    |      |  | 8.8%  |  |     
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     
|Impaired   securities (par value)                                                         |  | $50                                   |  |      | $107  |      |  | $10   |  |     
|Estimated   fair value adjustments on options and impaired securities1                    |  | 40                                    |  |      | 73    |      |  | 5     |  |     
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     
|Estimated   fair value of impaired securities                                             |  | $10                                   |  |      | $35   |      |  | $5    |  |     
|Impaired   securities as a percentage of total securities2                                |  | 2.8%                                  |  |      | 21.6% |      |  | 6.8%  |  |     
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     
|Impaired   loans and securities as a percentage of total assets                           |  | 1.5%                                  |  |      | 24.8% |      |  | 17.6% |  |     
|Impaired   loans, securities and contingencies as a percentage of total credit portfolio3 |  | 1.7%                                  |  |      | 23.4% |      |  | 17.0% |  |     
|                                                                                          |  |                                       |  |      |       |      |  |       |  |     

| 
|-
|1
|2
|3

17

---



At December 31,
2005, impaired loans and contingencies consisted of $37 million to borrowers in
Argentina and $6 million to a corporation in Brazil.  Other than these,
management does not believe that there is a material amount of loans and
contingencies with respect to which it has serious doubts as to the ability of
the obligors to comply with the present terms there under.

During 2005, the
Bank charged-off an Argentine investment security with par value of $5 million
(fair value of $1 million), bringing the outstanding balance of impaired
securities to $0.

Allowance for Credit Losses

The allowance for
credit losses (which includes the allowance for loan losses and the reserve for
losses on off-balance sheet credit risk) covers the credit risk on loans and
contingencies.  For additional information regarding allowance for credit
losses, see Note 6 to the Consolidated Financial Statements.

The following table sets forth information regarding the Banks allowance for credit losses with respect to total credits outstanding at December 31 of each year:

|                                                                                         |  | 2001                                  |  | 2002 |       | 2003 |  | 2004  |  | 2005
|---------------------------------------------------------------------------------------- |  | ------------------------------------- |  | ---- | ----- | ---- |  | ----- |  | ----
|                                                                                         |  |                                       |  |      |       |      |  |       |  |     
|                                                                                         |  | (in   $ millions, except percentages)
|Components of the allowance for credit losses                                            |  |                                       |  |      |       |      |  |       |  |     
|Allowance for loan losses                                                                |  |                                       |  |      |       |      |  |       |  |     
|Balance   at beginning of the year                                                       |  | $110                                  |  |      | $177  |      |  | $430  |  |     
|Provision   (reversal)                                                                   |  | 77                                    |  |      | 273   |      |  | (70)  |  |     
|Effect   of change in methodology                                                        |  | 0                                     |  |      | 0     |      |  | 0     |  |     
|Cumulative effect on prior years (2004) of a change in credit loss reserve
methodology   |  | 0                                     |  |      | 0     |      |  | 0     |  |     
|Recoveries                                                                               |  | 0                                     |  |      | 0     |      |  | 2     |  |     
|Loans   charged-off                                                                      |  | (10)                                  |  |      | (21)  |      |  | (138) |  |     
|Balance   at the end of the year                                                         |  | $177                                  |  |      | $430  |      |  | $224  |  |     
|Reserve for losses on   off-balance sheet credit risk:                                   |  |                                       |  |      |       |      |  |       |  |     
|Balance   at beginning of the year                                                       |  | $17                                   |  |      | $17   |      |  | $23   |  |     
|Provision   (reversal)                                                                   |  | 0                                     |  |      | 6     |      |  | 11    |  |     
|Effect   of change in methodology                                                        |  | 0                                     |  |      | 0     |      |  | 0     |  |     
|Cumulative   effect on prior years (2004) of a change in credit loss reserve methodology |  | 0                                     |  |      | 0     |      |  | 0     |  |     
|                                                                                         |  |                                       |  |      |       |      |  |       |  |     
|Balance   at end of the year                                                             |  | $17                                   |  |      | $23   |      |  | $34   |  |     
|Allowance for losses on   guarantees (potential credit and market losses on options)     |  |                                       |  |      |       |      |  |       |  |     
|Balance   at beginning of the year                                                       |  | $5                                    |  |      | $0    |      |  | $0    |  |     
|Reclassification   due to SFAS 133 adoption                                              |  | (5)                                   |  |      | 0     |      |  | 0     |  |     
|Balance   at the end of the year                                                         |  | $0                                    |  |      | $0    |      |  | $0    |  |     
|                                                                                         |  |                                       |  |      |       |      |  |       |  |     
|Total   allowance for credit losses                                                      |  | $195                                  |  |      | $453  |      |  | $258  |  |     
|                                                                                         |  |                                       |  |      |       |      |  |       |  |     
|Allowance for credit losses   to total credit portfolio                                  |  | 3.0%                                  |  |      | 13.7% |      |  | 9.1%  |  |     

The following table
sets forth the distribution of the Banks loans charged-off against the
allowance for loan losses, by country at December 31 of each year:

|          |  | 2001                                  |  | % |       | 2002 |  | %   |  | 2003 |       | % |  | 2004 |  | % |       | 2005 |  | %  
|--------- |  | ------------------------------------- |  | - | ----- | ---- |  | --- |  | ---- | ----- | - |  | ---- |  | - | ----- | ---- |  | ---
|          |  |                                       |  |   |       |      |  |     |  |      |       |   |  |      |  |   |       |      |  |    
|          |  | (in   $ millions, except percentages)
|Argentina |  | $10                                   |  |   | 100.0 |      |  | $20 |  |      | 95.3  |   |  | $137 |  |   | 99.4  |      |  | $13
|Brazil    |  | 0                                     |  |   | 0.0   |      |  | 0   |  |      | 0.0   |   |  | 0    |  |   | 0.0   |      |  | 0  
|Mexico    |  | 0                                     |  |   | 0.0   |      |  | 1   |  |      | 4.7   |   |  | 0    |  |   | 0.0   |      |  | 0  
|Paraguay  |  | 0                                     |  |   | 0.0   |      |  | 0   |  |      | 0.0   |   |  | 1    |  |   | 0.6   |      |  | 0  
|          |  |                                       |  |   |       |      |  |     |  |      |       |   |  |      |  |   |       |      |  |    
|Total     |  | $10                                   |  |   | 100.0 |      |  | $21 |  |      | 100.0 |   |  | $138 |  |   | 100.0 |      |  | $13
|          |  |                                       |  |   |       |      |  |     |  |      |       |   |  |      |  |   |       |      |  |    

18

---



The following table sets forth information regarding the Banks allowance
for credit losses allocated by country of exposure at December 31 of each
year:

|                                  |  | 2003                                  |  | 2004 |        | 2005 
|--------------------------------- |  | ------------------------------------- |  | ---- | ------ | -----
|                                  |  |                                       |  |      |        |      
|                                  |  | Total                                 |  | %    |        | Total
|                                  |  |                                       |  |      |        |      
|                                  |  | (in   $ millions, except percentages)
|Argentina                         |  | $195.4                                |  |      | 75.7   |      
|Brazil                            |  | 35.1                                  |  |      | 13.6   |      
|Colombia                          |  | 0.8                                   |  |      | 0.3    |      
|Dominican Republic                |  | 0.8                                   |  |      | 0.3    |      
|Ecuador                           |  | 11.4                                  |  |      | 4.4    |      
|Mexico                            |  | 0.6                                   |  |      | 0.2    |      
|Nicaragua                         |  | 2.1                                   |  |      | 0.8    |      
|Peru                              |  | 2.0                                   |  |      | 0.8    |      
|Venezuela                         |  | 7.4                                   |  |      | 2.9    |      
|Other1                            |  | 2.7                                   |  |      | 1.1    |      
|                                  |  |                                       |  |      |        |      
|Total Allowance for Credit Losses |  | $258.3                                |  |      | 100.0% |      
|                                  |  |                                       |  |      |        |      

| 
|-
|1

The following table
sets forth information regarding the Banks allowance for credit losses by
type of borrower at December 31 of each year:

|                                   |  | 2003            |  | 2004 |        | 2005
|---------------------------------- |  | --------------- |  | ---- | ------ | ----
|                                   |  |                 |  |      |        |     
|                                   |  | (in $ millions)
|Private sector commercial banks    |  | $33.4           |  |      | $30.1  |     
|State-owned commercial banks       |  | 129.2           |  |      | 60.0   |     
|Central banks                      |  | 8.0             |  |      | 10.0   |     
|Sovereign debt                     |  | 2.1             |  |      | 0.0    |     
|State-owned exporting organization |  | 10.2            |  |      | 6.6    |     
|Private corporations               |  | 75.2            |  |      | 32.6   |     
|                                   |  |                 |  |      |        |     
|Total                              |  | $258.3          |  |      | $139.5 |     
|                                   |  |                 |  |      |        |     

Revenues Per Country

The following table
sets forth information regarding the Banks approximate net revenues per
country at the dates indicated, with net revenues calculated as the sum of net
interest income, net commission income, gain on sale of securities available for
sale, gain on early extinguishment of debt, gain (loss) on foreign currency
exchange and other income.

|                   |  | For the   year ended December 31,
|------------------ |  | ---------------------------------
|                   |  |                                  
|                   |  | 2003                             
|                   |  |                                  
|                   |  | (in   $ millions)                
|Argentina          |  | $38.5                            
|Brazil             |  | 25.2                             
|Chile              |  | 1.1                              
|Colombia           |  | 1.4                              
|Dominican Republic |  | 3.8                              
|Ecuador            |  | 2.5                              
|El Salvador        |  | 0.2                              
|Jamaica            |  | 0.6                              
|Mexico             |  | 2.2                              
|Panama             |  | 0.4                              
|Peru               |  | 1.5                              
|Venezuela          |  | 2.7                              
|Other1             |  | 4.2                              
|                   |  |                                  
|Total              |  | $84.1                            
|                   |  |                                  

| 
|-
|1
|2

19

---



The $33 million
decline in net revenues for 2004 compared to 2003, was primarily due
to:

| |  | lower gains on the sale of Argentine impaired   securities;                                              
| | - | ---------------------------------------------------------------------------------------------------------
| |  | a decline in the accruing loan portfolio average   lending spread from 1.90 in 2003 to 0.99% in 2004; and
| |  | the collection of part of the richly priced   restructured Argentine credit portfolio.                   

The $3 million increase in net revenues for 2005 compared to 2004, was primarily due to:

| |  | the positive effect of higher interest rates on the   Banks interest-earning assets;                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the positive effect of an increase in the average   credit portfolio from $2,705 million in 2004 to 3,081 million in 2005; and                                                                                                             
| |  | revenues from gains on hedging activities.                                                                                                                                                                                                 
| |  | These factors were offset by the impact of lower interest collections on the
Banks decreasing and richly priced non-accruing portfolio, as well as
lower net lending margins and lower gains on the sale of Argentine impaired
securities.

Competition

The Bank operates in
a highly competitive environment in most of its markets.  Management
recognizes that the Bank needs to continue to invest and adapt to remain
competitive.  The Bank faces strong competition principally from regional
and international banks in making loans, attracting deposits, and providing
fee-generating services.  Financial disintermediation by the local and
international securities markets and the growth of specialized finance companies
is another factor that results in increased competition.  Whenever economic
conditions and risk perception improve in the largest countries of the Region,
competition from commercial banks, the securities markets and other new
participants tend to increase.  Competition may have the effect of reducing
the spreads of the Banks lending rates over its funding costs and
constraining the Banks profitability.  The Bank competes in its
lending and deposit taking activities with other banks and international
financial institutions, many of which have greater financial resources and offer
sophisticated banking services.

The Bank believes
that most of the competition it faces in the trade financing area and within the
markets served by the Bank is from international banks, mostly European and
North American, which provide similar services.  Although international
banks compete with the Bank, they also provide funding for the Bank and
represent a source of business for the Bank.

The Bank believes
that competition also comes from investment banks and the local and
international securities markets, which provide liquidity to the financial
systems in certain countries in the Region, as well as non-bank specialized
financial institutions.  The Bank competes primarily on the basis of
pricing in financing trade-related transactions, providing a stable supply of
credit to its clients and the quality of its service.  The Bank believes
that it possesses a competitive advantage in that it enables its customer banks
to meet their clients financing needs, but does not compete directly with
these banks for the business of their clients.  Moreover, the Bank has
developed customer loyalty because it has been a consistent source of
trade-related financing.  The Bank also believes that its operating
efficiencies, commitment to the Region, preferred creditor status, market
knowledge, and business focus constitute important competitive advantages in
certain markets.

The trade finance
business also is subject to change.  Increased open account exports and new
financing requirements from multinational corporations are putting more pressure
on the way banks traditionally intermediate foreign trade financing.  The
Bank cannot predict with certainty the changes that may occur and how these may
affect the competitiveness of its businesses.  Although the Bank has
undertaken several initiatives to adapt to, and benefit from, these changes, it
is possible that competition with the Banks products will, in the future,
reduce demand for the Banks services.  If this were to occur, the
Bank may be required to take additional steps in order to adapt to the changing
competitive environment.

Consolidation in the
banking systems within the markets in which the Bank operates could potentially
affect the competitive environment.  Consolidation process in most
countries of the Region has reduced the number of client banks that the Bank can
work with.  The acquisition of local banks by large international banks in
the local markets of the Region also has changed the competitive
environment.  The Bank cannot predict with certainty the extent to which
these changes in the banking industry may occur or the success that they may
achieve.  These changes in the business and in the markets of this Region
could potentially place the Bank at a competitive disadvantage with respect to
scale, resources and its ability to develop and diversify its sources of
income.

20

---



Regulation

General

The Superintendency
of Banks in Panama (the Superintendency of Banks) regulates,
supervises and examines Bladex.  In addition, the New York Agency is
regulated, supervised and examined by the New York Banking Department and the
Federal Reserve Board.  The regulation of the Bank by relevant Panamanian
authorities differs from the regulation generally imposed on banks, including
foreign banks, in the United States by U.S. federal and state regulatory
authorities.

As of October 5,
2004, the Superintendency of Banks entered into an arrangement for the sharing
of supervisory information with various U.S. regulators, including the Federal
Reserve Board, the Office of the Comptroller of Currency and the Federal Deposit
Insurance Corporation (the Statement of Cooperation).  The
Statement of Cooperation promotes cooperation between U.S. and Panamanian
banking regulators and demonstrates the commitment of the U.S. regulators and
the Superintendency of Banks to the principles of comprehensive consolidated
supervision.

Panamanian Law

On February 26,
1998, Panama adopted Decree-Law No. 9 (the Banking Law), which is a
comprehensive revision and restatement of the banking legislation in
Panama.  The Banking Law took effect on June 12, 1998.

The Bank operates in
Panama under a General Banking License issued by the National Banking
Commission, predecessor of the Superintendency of Banks, and is subject to
supervision and examination by the Superintendency of Banks.  Banks
operating under a General Banking License (General License Banks)
may engage in all aspects of the banking business in Panama, including accepting
local and offshore deposits, as well as entering into banking transactions in
Panama that may have an economic impact outside of Panama.

General License
Banks must have a paid-in capital of not less than $10 million. 
Additionally, General License Banks must maintain minimum capital of 8% of their
total risk-weighted assets.  The capital adequacy standards used by the
Superintendency of Banks are based on the Basel Capital Accord.  The
Superintendency of Banks is authorized to increase the minimum capital
requirement percentage in Panama in the event that generally accepted
international capitalization standards as set forth in the Basel Capital Accord
become more stringent.

General License
Banks are required to maintain 30% of their global deposits in liquid assets
(which include short-term loans to other banks and other liquid assets) of the
type prescribed by the Superintendency of Banks.  Under the Banking Law,
deposits from central banks and other similar depositories of the international
reserves of sovereign states are immune from attachment or seizure
proceedings.

Pursuant to the
Banking Law, the Bank cannot make loans or issue guarantees or any other
obligation to any one person or a group of related persons in excess of thirty
percent (30%) of its capital.

Under the Banking Law, a bank may not grant loans or issue guarantees or any
other obligation to related parties that exceed (1) 5% of its total
capital, in the case of unsecured transactions, (2) 10% of its total capital, in
the case of collateralized transactions (other than loans secured by deposits in
the bank), and (3) 25% of its total capital, in the case of total loans and
credit facilities granted to Related Parties and indebtedness title investments
issued by Related Parties. For these purposes a related party is (a)
any one or more of the banks directors, (b) any stockholder of the bank
who directly or indirectly owns 5% or more of the outstanding and issued capital
stock of the bank, (c) any company of which one or more of the banks
directors is a director or officer or where one or more of the banks
directors is a guarantor of the loan or credit facility, (d) any company or entity in which the bank or any one of its directors or
officers can exercise a controlling influence, (e) any company or entity in
which the bank or any one of its directors or officers owns 20% or more of the
outstanding and issued capital stock of such company or entity and (f) managers,
officers and employees of the bank, or their respective spouses (other than home
mortgage loans or guaranteed personal loans under general programs approved by
the bank for employees).  The Superintendency of Banks may authorize the total or partial exclusion of loans or credits from the computation of these limitations in cases of unsecured loans and other credits granted by mixed-capital banks with headquarters in Panama whose principal business is the granting of loans to other banks, which is the case of  the Bank.  This authorization is contingent on the following conditions:  (i) the ownership of shares in the debtor bank directly or indirectly by the shared director or shared officer, may not exceed five-percent (5%) of the said banks capital, or may not amount to any sum that would ensure his or her majority control over the decisions of this bank; (ii) the ownership of shares in the creditor bank directly or indirectly by the debtor bank represented in any manner by the shared director or shared officer, may not exceed five-percent (5%) of the shares outstanding of the creditor bank, or may not amount to an









y sum that would ensure his or her majority control over the decisions of this bank; (iii) the shared director or shared officer must abstain from participating in the deliberations and in the voting sessions held by the creditor bank regarding the loan or credit request under this article, and (iv) the loan or credit must strictly comply with customary standards of discretion set by the grantor banks credit policy.  The Superintendency of Banks shall determine the amount of the exclusion in the case of each loan or credit submitted for its consideration.

21

---



The Banking Law
contains additional limitations and restrictions with respect to loans and
credit facilities to parties related to the lending banks.  For instance,
under the Banking Law, all loans made to managers, officers, employees or
stockholders who are owners of 5% or more of the lending Banks outstanding
and issued capital stock shall be made on terms and conditions similar to those
given by the bank to its clients in arms-length transactions and which
reflect market conditions.  In addition, shares of a bank cannot be pledged
or offered as security for loans or credit facilities issued by such
bank.

In addition to the
foregoing requirements, there are certain other restrictions applicable to
General License Banks, including (1) a requirement that a bank must notify the
Superintendency of Banks before opening or closing a branch or office in Panama
and obtain approval from the Superintendency of Banks before opening or closing
a branch or subsidiary outside Panama and (2) a requirement that a bank obtain
approval from the Superintendency of Banks before it liquidates its operations,
merges or consolidates with another bank or sells all or substantially all of
its assets.  The subsidiaries of Panamanian banks established in foreign
jurisdictions must observe the legal and regulatory provisions applicable in
Panama regarding the sufficiency of capital, as prescribed under the Banking
Law.

The Banking Law
provides that banks in Panama are subject to inspection by the Superintendency
of Banks, which must take place at least once every two years.  These
supervisory powers of the Superintendency of Banks also extend to a banks
subsidiaries and branches.  The Superintendency of Banks last inspected the
Bank during April and May of 2006.  Even though the results of this
inspection have not been received, the Banks management believes that the
results will be fully satisfactory.  Prior to this inspection, the
Superintendency of Banks inspected the Bank in 2004, and the results of this
inspection were fully satisfactory.

The Superintendency
of Banks is empowered to request from any bank or any company that belongs to
the economic group of which a bank in Panama is a member, the documents and
reports pertaining to its operations and activities.  Banks are required to
file with the Superintendency of Banks monthly, quarterly and annually
information, including financial statements, analysis of their credit facilities
and any other information, requested by the Superintendency of Banks.  In
addition, banks are required to make available for inspection any reports or
documents that are necessary for the Superintendency of Banks to ensure
compliance with Panamanian banking laws and regulations.  Banks subject to
supervision may be fined by the Superintendency of Banks for violations of
Panamanian banking laws and regulations.

22

---



Panamanian Anti
Money Laundering laws and regulations.  In Panama, all banks and all
trust corporations must take measures necessary to prevent their operations
and/or transactions from being used to commit the felony of money laundering,
terrorism financing and any other illicit activity contemplated in the laws and
regulations addressing this matter.

Money laundering is
a criminal offense pursuant to Chapter VI, entitled Capital Laundering of title
XII, Book II of the Panamanian Penal Code, articles 389, 390, 391, 392 and
393.  In addition, there are specific laws and regulations for Anti Money
Laundering: Decree -Law No. 42-2000 (October 2, 2000), and the Agreement No.
12-2005 (December 2005).  The breach or contempt of the instructions given
by the Superintendency of Banks regarding the anti money laundering may be
sanctioned with a fine to the bank or the trust corporation of up to Ten
thousand United States Dollars (USD10,000) per day according to the gravity of
the offense or the degree of recidivism.  Acts or omissions of an employee,
director, officer, administrator or legal representative of a bank or trust
corporation can be attributed to such entities.

United States Law

Bladex operates a
New York state-licensed agency in New York, New York and maintains a
wholly-owned non-banking subsidiary in Delaware that is not engaged in
activities other than holding 0.001% interest in an affiliated company.  On
January 12, 2005, Bladex, after receiving approval from the Superintendency of
Banks, applied to the Federal Reserve Board and the Florida Department of
Financial Services to establish a representative office in Miami, Florida,
United States. The Bank has received approval from the Florida Office of
Financial Regulation and the Federal Reserve Board to establish an office in
Miami.

New York State
Law.  The New York Agency, established in 1989, is licensed by the
Superintendent of Banks of the State of New York (the
Superintendent) under the New York Banking Law.  The New York
Agency maintains an international banking facility that also is regulated by the
Superintendent and the Federal Reserve Board.  The New York Agency is
examined by the New York State Banking Department and is subject to banking laws
and regulations applicable to a foreign bank that operates a New York
agency.  New York agencies of foreign banks are regulated substantially the
same as, and have similar powers to, New York state-chartered banks, except with
respect to capital requirements and deposit-taking activities.

The Superintendent
is empowered by law to require any branch or agency of a foreign bank to
maintain in New York specified assets equal to a percentage of the branch or
agencys liabilities, as the Superintendent may designate.  Under the
current requirement, the New York Agency is required to maintain a pledge of 1%
of its total third-party liabilities, subject to a minimum of $2 million. 
At December 31, 2005, the New York Agency maintained a pledge of $5 million,
representing the minimum required amount.

In addition, the
Superintendent retains the authority to impose specific asset maintenance
requirements upon individual agencies of foreign banks on a case-by-case
basis.  No special requirement has been prescribed for the New York Agency.

The Superintendent
is authorized to take possession of the business and property of a New York
agency of a foreign bank whenever an event occurs that would permit the
Superintendent to take possession of the business and property of a
state-chartered bank.  These events include the violation of any law,
unsafe business practices, an impairment of capital, and the suspension of
payments of obligations.  In liquidating or dealing with an agencys
business after taking possession of the agency, the New York Banking Law
provides that the claims of creditors which arose out of transactions with the
agency may be granted a priority with respect to the agencys assets over
other creditors of the foreign bank.

Federal
Law.  In addition to being subject to New York State laws and
regulations, the New York Agency is subject to federal regulations, primarily
under the International Banking Act of 1978 (the IBA) and is subject
to examination and supervision by the Federal Reserve.  The IBA generally
extends federal banking supervision and regulation to the United States offices
of foreign banks and to the foreign bank itself.  Under the IBA, the United
States branches and agencies of foreign banks, including the New York Agency,
are subject to reserve requirements on certain deposits.  At present, the
New York Agency has no deposits subject to such requirements.  The New York
Agency also is subject to reporting and examination requirements imposed by the
Federal Reserve Board similar to those imposed on domestic banks that are
members of the Federal Reserve System. The Foreign Bank Supervision Enhancement Act of 1991 (the FBSEA) has amended the IBA to enhance the authority of the Federal Reserve Board to supervise the operations of foreign banks in the United States.  In particular, the FBSEA has expanded the Boards authority to regulate the entry of foreign banks into the United States, supervise their ongoing operations, conduct and coordinate examinations of their U.S. offices with state banking authorities, and terminate their activities in the United States for violations of law or for unsafe or unsound banking practices.

23

---



In addition, under
the FBSEA, state-licensed branches and agencies of foreign banks may not engage
in any activity that is not permissible for a federal branch (i.e.,
a branch of a foreign bank licensed by the federal government through the Office
of the Comptroller of the Currency of the Treasury Department (OCC),
rather than by a state), unless the Federal Reserve Board has determined that
such activity is consistent with sound banking practices.

The New York Agency
does not engage in retail deposit-taking in the United States, and deposits with
the New York Agency are not insured by the Federal Deposit Insurance Corporation
(FDIC).  Under the FBSEA, the New York Agency may not obtain
FDIC insurance and generally may not accept deposits of less than
$100,000.

The IBA also
restricts the ability of a foreign bank with a branch or agency in the United
States to engage in nonbanking activities in the United States, to the same
extent as a United States bank holding company.  Bladex is subject to
certain provisions of the Federal Bank Holding Company Act of 1956 (the
BHCA) because it maintains an agency in the United States. 
Generally, any nonbanking activity engaged in by Bladex directly or through a
subsidiary in the United States is subject to certain limitations under the
BHCA.  Under the Gramm-Leach-Bliley Financial Modernization Act of 1999
(the GLB Act), a foreign bank with a branch or agency in the United
States may engage in a broader range of non-banking financial activities,
provided it is qualified and has filed a declaration with the Federal Reserve
Board to be a financial holding company (FHC).  As
of the date hereof, Bladex has not filed such declaration with the Federal
Reserve Board.  At present, Bladex has one subsidiary in the United States,
Bladex Holdings Inc. (Bladex Holdings), that is incorporated under
Delaware law.  That subsidiary is not engaged in any activity, other than
owning 0.001% of a Brazilian limited liability company that serves as
Bladexs Brazilian representative office.

The USA PATRIOT Act
of 2001 (the PATRIOT Act) substantially broadened the scope of U.S.
anti-money laundering laws and regulations by imposing significantly new
compliance and due diligence obligations, creating new crimes and penalties and
expanding the extraterritorial jurisdiction of the United States.  Failure
of a financial institution to comply with the PATRIOT Acts requirements
could have serious legal and reputational consequences for an institution. 
The New York Agency is a financial institution within the meaning of the PATRIOT
Act.

C.      Organizational Structure

Banco
Latinoamericano de Exportaciones, S.A. (in its individual capacity, Bladex
Panama) has the following subsidiaries:


      Bladex Representaçao Ltda., which was incorporated under the laws of Brazil
on January 7, 2000 and continues to exist thereunder, and was established to
operate our representative office in Brazil.
      Bladex Holdings Inc., a wholly owned subsidiary, which was incorporated
under the laws of the State of Delaware on May 30, 2000 and continues to
exist thereunder.
      Bladex Offshore Feeder Fund, which is a wholly owned   subsidiary of the Bank, and was incorporated under the laws of the Cayman   Islands on February 21, 2006, and in turn is the sole owner of Bladex Capital   Growth Fund, which was also incorporated under the laws of the Cayman Islands   on February 21, 2006.  Both are   investment funds that were established to operate a proprietary fixed income   desk for the Bank.


24

---



| |  | Bladex Asset Management,   Inc. a wholly owned subsidiary of Bladex Holdings Inc., which in turn is a   wholly owned subsidiary of the Bank, was incorporated under the laws of the   State of Delaware on May 24, 2006. The company will serve as investment   manager for Bladex Offshore Feeder Fund and Bladex Capital Growth Fund.                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Clavex, S.A., which is a wholly owned subsidiary,   was incorporated under the laws of Panama on May 18, 2006 to offer from   Panama financial and technology advisory services and solutions to facilitate   trade and electronic   banking in Latin America.                                                                                                      
| |  | Bladex Leasing Latinoamericana, S.A.,
which is a wholly owned subsidiary, was incorporated under the laws of Panama on
May 24, 2006 to engage in the domestic and international leasing
business.                                                                                                                                                                   
| |  | Clavex, LLC, a wholly owned subsidiary of Bladex Holdings Inc., which
in turn is a wholly owned subsidiary of the Bank, was incorporated under
the laws of the State of Delaware on June 15, 2006. The new subsidiary
will offer from the United States solutions for the use of digital
identification to facilitate trade and electronic banking in Latin America.

Banco
Latinoamericano de Exportaciones, Limited, was a wholly owned subsidiary
incorporated under the laws of the Cayman Islands (B.W.I.) on September 8,
1987.  This subsidiary ceased all banking business and surrendered its
banking license in December 2004 and was dissolved effective December 29,
2005.

The Bank established
an agency in the State of New York, which began operations on March 27,
1989.  The New York Agency is principally engaged in providing foreign
trade financing.  Since March 13, 2006, the Banks operations in New
York City have been located at 600 Lexington Avenue, 12th Floor, New
York, New York 10022.  The Bank also has representative offices in Buenos
Aires, Argentina, and in Mexico City, Mexico.

At the end of 2004,
the Bank received approval from the Superintendency of Banks to open a
representative office in Miami, Florida, U.S.A..  The Bank has received
approval from the Florida Office of Financial Regulation and, thereafter
received approval from the Federal Reserve Board, to establish an office in
Miami.  The Bank plans to open this representative office during the third
quarter of 2006.

The Bank commenced
operations with stockholders equity of $25 million paid by 186
stockholders and, at December 31, 2005, had stockholders equity of $617
million. The Bank has three classes of common shares as follows:

| |  | Class A shares: Central banks or governmental financial institutions from 23
countries in the Region, own all of the Banks Class A shares, which at
December 31, 2005 comprised 17% of the Banks common stock.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Class B shares: 125 commercial banks, mostly from the Region, own the
Banks Class B shares, which at December 31, 2005 comprised 8% of the
Banks common stock.                                                
| |  | Class E shares: the Banks Class E shares are listed on the New York Stock
Exchange and at December 31, 2005 comprised 75% of its common
stock.                                                                 

As of December 31,
2005, the Board was comprised of three directors representing holders of the
Class A common shares, five directors representing holders of the Class E common
shares, and two directors representing all classes of common shares.  On
January 2, 2004, the Banks Class B stockholders forfeited to the Class E
stockholders their right to elect two directors, due to the percentage of Class
B share ownership as of that date.  For additional information regarding
stockholders voting rights see Articles of
Incorporation.

D.      Property, Plants and Equipment

The Bank owns its principal offices located at Calle 50 y Aquilino de La Guardia
in Panama City, which was completed in 1983.  The building, with office
space of 3,457 square meters, is used solely by the Bank and is located on a
2,672 square meter site.  As of the date hereof, the Bank also leases 136
square meters of office space in a nearby building.  In addition, the Bank
leases the following office space:  (1) 150 square meters for its Buenos
Aires Representative Office at Ave. Corrientes 617, 9 Piso, Buenos Aires,
Argentina, (2) 149 square meters for Bladex Representação
Ltda. at Rua Leopoldo Couto de Magalhäes Junior 110, 9o Andar,
Sao Paulo, SP, Brazil, (3) 130 square meters for its Mexico City Representative
Office at Ruben Dario 281, Oficina No 1203, Colonia Bosque de Chapultepec,
Mexico City, Mexico; and (4) 750 square meters of office space at 600
Lexington Avenue, 12th Floor, New York, NY 10022 for its New York Agency. 
See also Note 7 to Consolidated Financial Statements.

25

---



|Item 5. | Operating and Financial Review and   Prospects
|------- | ----------------------------------------------

The following
discussion should be read in conjunction with the Banks Consolidated
Financial Statements and the Notes thereto included elsewhere in this Annual
Report.

Nature of Earnings

The Bank derives
income principally from net interest income and, to a lesser extent, from fee
income.  Net interest income, or the difference between the interest income
the Bank receives on its interest-earning assets and the interest it pays on
interest-bearing liabilities, is generated principally by the Banks
lending activities.  The Bank generates fee income mainly through the
issuance, confirmation and negotiation of letters of credit and guarantees
covering commercial and country risk, loan origination and sales.

A.      Operating Results

The following table
summarizes changes in components of the Banks net income and performance
at and for the periods indicated.

|                                                                                                                                                           |  | At and For   the Year Ended December 31,                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------
|                                                                                                                                                           |  |                                                             
|                                                                                                                                                           |  | 2003                                                        
|                                                                                                                                                           |  |                                                             
|                                                                                                                                                           |  | (in   $ thousands, except per share amounts and percentages)
|Total interest income                                                                                                                                      |  | $98,395                                                     
|Total interest expense                                                                                                                                     |  | (44,408)                                                    
|Net interest income                                                                                                                                        |  | 53,987                                                      
|Reversal of Provision for   loan losses                                                                                                                    |  | (69,508)                                                    
|Net interest income after   reversal of provision for loan losses                                                                                          |  | 123,495                                                     
|Other   income (expense):                                                                                                                                  |  |                                                             
|Reversal   (Provision) for losses on off-balance sheet credit risk                                                                                         |  | (10,603)                                                    
|Commission   income, net                                                                                                                                   |  | 7,446                                                       
|Derivatives   and hedging activities                                                                                                                       |  | (7,988)                                                     
|Recoveries   (impairment) on securities                                                                                                                    |  | (953)                                                       
|Net   gain on sale of securities available for sale                                                                                                        |  | 22,211                                                      
|Gain   on early extinguishment of debt                                                                                                                     |  | 789                                                         
|Gain   (loss) on foreign currency exchange                                                                                                                 |  | (382)                                                       
|Other   income, net                                                                                                                                        |  | 42                                                          
|Net other income                                                                                                                                           |  | 10,562                                                      
|Total operating expenses                                                                                                                                   |  | (22,561)                                                    
|Income before cumulative   effect of changes in accounting principles                                                                                      |  | $111,496                                                    
|Cumulative effect on prior   years (to December 31, 2004) of a changein the credit loss reserve   methodology                                              |  | 0                                                           
|Cumulative effect on prior years (to December 31, 2004) of anearly adoption of
the fair-value-based method of accounting stock-based employee
compensation |  | 0                                                           
|                                                                                                                                                           |  |                                                             
|Net income                                                                                                                                                 |  | $111,496                                                    
|                                                                                                                                                           |  |                                                             
|Net income available for   common stockholders                                                                                                             |  | $111,130                                                    
|Net income per share                                                                                                                                       |  | $3.88                                                       
|Diluted earnings per share                                                                                                                                 |  | $3.88                                                       
|Return on average assets                                                                                                                                   |  | 4.24%                                                       
|Return on average   stockholders equity                                                                                                                   |  | 23.91%                                                      

26

---



Net Income

The Banks net income for the last three years reflected the effect of sales, payments and prepayments of the Banks Argentine restructured portfolio.  The $62 million net income reduction during 2005 was driven by lower net reversals of both, credit provisions and impairment losses, which amounted to $51 million, as compared to $112 million in 2004, resulting from the $247 million reduction in the non-accruing credit portfolio in Argentina and Brazil.  Excluding the impact of the reversals of credit provisions and impairment losses, and net revenues from the non-accruing portfolio, net income for 2005 grew by 42%.

The $30 million net income increase during 2004 was mainly driven by higher net reversals of credit provisions, which amounted to $112 million, as compared to $59 million in 2003, resulting from the collection of $168 million in payments, and prepayments of principal on its Argentine portfolio.  These higher reversals of credit provisions were partially offset by lower gains on sale of securities available for sale related to the Argentine portfolio.

Net Interest Income and Margins

The following table sets forth information regarding net interest income, the Banks net interest margin (the net interest income divided by the average balance of interest-earning assets), and the net interest spread (the average yield earned on interest-earning assets, less the average yield paid on interest-bearing liabilities) for the periods indicated.

|                        |  | For the   Year Ended December 31,    
|----------------------- |  | -------------------------------------
|                        |  |                                      
|                        |  | 2003                                 
|                        |  |                                      
|                        |  | (in $ millions, except   percentages)
|Interest   Income       |  |                                      
|Accruing assets         |  | $73                                  
|Non-accruing assets     |  | 26                                   
|                        |  |                                      
|Total   interest income |  | 98                                   
|Interest   expense      |  | (44)                                 
|                        |  |                                      
|Net interest income     |  | $54                                  
|                        |  |                                      
|Net   interest margin   |  | 1.87%                                
|Net   interest spread   |  | 1.23%                                

The $3 million increase in net interest income and the increase in net interest margin in 2005, as compared to 2004, were mainly due to the positive effect of higher market interest rates on the Banks interest earning assets.  This factor offset the impact of lower interest collections on the Banks decreasing non-accruing portfolio, which resulted in the decline in net interest spread.

Net interest income for 2004 declined $12 million compared to 2003 primarily due to lower operating net interest income, mostly related to:

| |  | lower net lending spreads on the Banks accruing   loan portfolio, resulting from the generally improved risk perception in the   Banks markets and generally improved U.S. dollar liquidity; and                                                    
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | lower interest collections on the non-accruing   credit portfolio, resulting from principal reduction in the Banks Argentine   portfolio, as well as the reduction in the stock of non-trade credit   portfolio, both of which yield a higher spread.

Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and Differentials

The following table
presents the distribution of consolidated average assets, liabilities and
stockholders equity, as well as the total dollar amounts of interest
income from average interest-earning assets and the resulting yields, and the
dollar amounts of interest expense and average interest-bearing liabilities, and
corresponding information regarding rates.  All impaired loans are on
non-accruing status, and interest on these loans is accounted for on a cash
basis.  Average balances have been computed on the basis of consolidated
daily average balance sheets.

27

---



|                                                                       |  | Year ended   December 31,             | 
|---------------------------------------------------------------------- |  | ------------------------------------- | 
|                                                                       |  |                                       | 
|                                                                       |  | 2003                                  | 
|                                                                       |  |                                       | 
|Description                                                            |  | Average   balance                     | 
|                                                                       |  |                                       | 
|                                                                       |  | (in   $ millions, except percentages)
|Interest-Earning   Assets                                              |  |                                       | 
|Interest-bearing deposits   with banks                                 |  | $401                                  | 
|Securities purchased under   agreements to resell                      |  | 132                                   | 
|Loans, net                                                             |  | 1,650                                 | 
|Impaired loans                                                         |  | 573                                   | 
|Investment securities                                                  |  | 125                                   | 
|                                                                       |  |                                       | 
|Total   interest-earning assets                                        |  | $2,881                                | 
|                                                                       |  |                                       | 
|Non-interest-earning assets                                            |  | $57                                   | 
|Allowance for loan losses                                              |  | (325)                                 | 
|Other assets                                                           |  | 14                                    | 
|                                                                       |  |                                       | 
|Total Assets                                                           |  | $2,627                                | 
|                                                                       |  |                                       | 
|Interest-Bearing   Liabilities                                         |  |                                       | 
|Deposits                                                               |  | $573                                  | 
|Short-term borrowings and   placements                                 |  | 604                                   | 
|Medium- and long-term   borrowings and placements                      |  | 873                                   | 
|                                                                       |  |                                       | 
|Total   interest-bearing liabilities                                   |  | $2,050                                | 
|                                                                       |  |                                       | 
|Non-interest bearing   liabilities and other liabilities               |  | $106                                  | 
|                                                                       |  |                                       | 
|Total   Liabilities                                                    |  | $2,156                                | 
|                                                                       |  |                                       | 
|Redeemable preferred stock1                                            |  | 6                                     | 
|Stockholders equity                                                   |  | 465                                   | 
|                                                                       |  |                                       | 
|Total Liabilities, Redeemable Preferred Stock and Stockholders
Equity |  | $2,627                                | 
|                                                                       |  |                                       | 
|Net Interest Spread                                                    |  |                                       | 
|Net Interest Income and Net   Interest Margin                          |  |                                       | 
|                                                                       |  |                                       | 

| 
|-
|1

Changes in Net Interest Income  Volume and Rate Analysis

Net interest income is affected by changes in volume and changes in interest rates.  Volume changes are caused by differences in the level of interest-earning assets and interest-bearing liabilities.  Rate changes result from differences in yields earned on interest-earning assets and rates paid on interest-bearing liabilities.  The following table sets forth a summary of the Banks changes in net interest income of the Bank resulting from changes in average interest-earning asset and interest-bearing liability balances (volume) and changes in average interest rates for 2003 compared to 2004 and 2004 compared to 2005.  Volume and rate variances have been calculated based on movements in average balances over the period and changes in interest rates on average interest-earning assets and average interest-bearing liabilities.  Variances caused by changes in both volume and
rates have been allocated equally to volume and rate.

|                                                  |  | 2004 vs.   2003    |  | 2005 vs.   2004
|------------------------------------------------- |  | ------------------ |  | ---------------
|                                                  |  |                    |  |                
|                                                  |  | Volume             |  | Rate           
|                                                  |  |                    |  |                
|                                                  |  | (in   $ thousands)
|Increase   (Decrease) in Interest Income          |  |                    |  |                
|Interest-bearing deposits   with banks            |  | $(2,293)           |  |                
|Securities purchased under   agreements to resell |  | (853)              |  |                
|Loans, net                                        |  | 4,414              |  |                
|Impaired loans                                    |  | (10,233)           |  |                
|Investment securities                             |  | (2,078)            |  |                
|Total   Increase (Decrease)                       |  | $(11,043)          |  |                
|Increase   (Decrease) in Interest Expense         |  |                    |  |                
|Deposits                                          |  | 2,810              |  |                
|Short-term borrowings and   placements            |  | (1,333)            |  |                
|Medium- and long-term   borrowings and placements |  | (14,278)           |  |                
|                                                  |  |                    |  |                
|Total   Increase (Decrease)                       |  | $(12,800)          |  |                
|                                                  |  |                    |  |                
|Increase   (Decrease) in Net Interest Income      |  | $1,758             |  |                
|                                                  |  |                    |  |                

28

---



Reversal of Provision for Loan Losses

The Banks $54 million reversal of provision for loan losses during 2005 was mainly due to the net effect of:


      a $61 million reversal related to the decrease in   restructured loans, reflecting payments and prepayments during the year;
      a $3 million reversal due to recoveries from loans   charged-off in previous years;
      $16 million in generic provision charges, due to   increased loan exposure; and
      a $6 million reversal due to the change in the   credit loss reserve methodology during 2005.


The $111 million provision reversal during 2004 was mainly due to provision reversals related to Argentina, including:


      $92 million in payments and prepayments on restructured   loans,
      $6 million in loan recoveries, and
      $6 million in sales of loans.


In addition, during 2004, the Bank decreased $8 million in generic reserves assigned to certain countries mainly due to improved risk levels, and reversed $2 million in specific reserves related to a non-accruing loan in Brazil due to payments received.  These reversals were partially offset by a $4 million increase in specific reserves assigned to a loan in Brazil placed on non-accrual status during the fourth quarter of 2004.

Of the reversal amount for 2003, $63 million resulted from the sale of impaired loans of six Argentine borrowers during the year. The $7 million balance related to a $15 million reduction in allowances for loan losses mostly related to Brazil, as a result of that countrys improved economic situation, and an $8 million net increase in specific allowances for loan losses allocated to Argentine borrowers.

Commission Income

We generate commission income primarily from originating letters of credit confirmation, guarantees, country risk coverage, and loans.  The following table shows the components of the Banks commission income for the periods indicated.

|                                 |  | For the   Year Ended December 31,
|-------------------------------- |  | ---------------------------------
|                                 |  |                                  
|                                 |  | 2003                             
|                                 |  |                                  
|                                 |  |                                  
|Letters of credit                |  | $4,242                           
|Guarantees:                      |  |                                  
|Other   guarantees               |  | 936                              
|Country   risk coverage business |  | 1,251                            
|Loans and other                  |  | 1,460                            
|                                 |  |                                  
|Total   Commission Income        |  | $7,889                           
|                                 |  |                                  

The decline of $165
thousand in commission income for 2005, compared to 2004, resulted mainly from
lower pricing in the letter of credit business.

The decline of $2
million in commission income for 2004, compared to 2003, resulted mainly from a
decline in loans and other commission income related to the Banks decision
to reduce loan commitments not related to foreign trade transactions; and a
decrease in the average volume of letters of credit and guarantees.

Reversal (provision) for Losses on Off-Balance Sheet Credit Risk

The $16 million
provision for losses on off-balance sheet credit risk in 2005 was mainly related
to the effect of a change in the credit loss reserve methodology during
2005.  The $1 million reversal during 2004 was mainly due to exposure
reductions in certain countries.

29

---



Derivatives and Hedging Activities

During 2005, the Bank recorded income of $2 million mostly related to the unwinding of interest rate swaps associated with the sale of securities available for sale.  During 2004, the Bank did not enter into new foreign exchange forward contracts or interest rate swaps transactions.  The $8 million loss during 2003 was mostly related to the Banks decision to unwind interest rate swaps associated with certain high yield fixed-rate securities.

Impairment Loss on Securities

During 2005, the Bank collected Argentine impaired securities for $11 million which had been written-off and charged to earnings in prior years.  Also, during the year, an impaired security with a net carrying value of $469 thousand was written-off and charged to earnings.  During 2004, the Bank did not identify any impairment loss on securities.  During 2003, impairment losses on securities amounted to $1 million.

Gain on the Sale of Securities Available for Sale

From time to time, the Bank purchases debt instruments as part of its Treasury activity with the intention of selling 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.  During 2005, 2004 and 2003, the Bank had gains on the sale of securities available for sale for $206 thousand, $3 million and $22 million, respectively, mostly related to the sale of impaired Argentine securities.

Operating Expenses

The following table shows a breakdown of the components of total operating expenses for the periods indicated.

|                                       |  | For the   Year Ended December 31,
|-------------------------------------- |  | ---------------------------------
|                                       |  |                                  
|                                       |  | 2003                             
|                                       |  |                                  
|                                       |  | (in $ thousands)                 
|Salaries   and other employee expenses |  |                                  
|Depreciation                           |  |                                  
|Professional   services                |  |                                  
|Maintenance   and repairs              |  |                                  
|Other   operating expenses             |  |                                  
|                                       |  |                                  
|Total Operating Expenses               |  |                                  
|                                       |  |                                  

The $3 million, or 16%, increase in operating expenses for 2005 compared to 2004, was mostly due to increased expenses associated with the strengthening of the Banks sales team, the adoption of FAS 123R related stock-based compensation expense, and legal and consulting fees related to new product development and business initiatives.

The $1 million, or 5%, decline in operating expenses for 2004 compared to 2003, was mostly due to lower salaries and other employee expenses related to lower severance costs, restructuring reserves and performance bonuses, which were partially offset by higher insurance premiums, expenses related to new product development and branding, and increased business promotion efforts.

30

---



Changes in Financial Condition

The following table summarizes components on the Banks balance sheet at December 31 of each year:

|                                                    |  | 2003             |            | 2004 |  | 2005
|--------------------------------------------------- |  | ---------------- | ---------- | ---- |  | ----
|                                                    |  |                  |            |      |  |     
|                                                    |  | (in $ thousands)
|Assets                                              |  |                  |            |      |  |     
|Cash and due from banks                             |  |                  | $868       |      |  |     
|Interest-bearing deposits with banks                |  |                  | 253,946    |      |  |     
|Securities purchased under agreements to resell     |  |                  | 132,022    |      |  |     
|Investment securities                               |  |                  | 77,793     |      |  |     
|Loans                                               |  |                  | 2,275,031  |      |  |     
|Less:                                               |  |                  |            |      |  |     
|Allowance for loan losses                           |  |                  | (224,347)  |      |  |     
|Unearned income and deferred loan fees              |  |                  | (7,226)    |      |  |     
|                                                    |  |                  |            |      |  |     
|Loans, net                                          |  |                  | 2,043,458  |      |  |     
|Customers liabilities under acceptances            |  |                  | 29,006     |      |  |     
|Premises and equipment, net                         |  |                  | 4,119      |      |  |     
|Accrued interest receivable                         |  |                  | 10,931     |      |  |     
|Derivative financial instruments-assets             |  |                  | 2,256      |      |  |     
|Other assets                                        |  |                  | 6,214      |      |  |     
|                                                    |  |                  |            |      |  |     
|Total Assets                                        |  |                  | $2,560,612 |      |  |     
|                                                    |  |                  |            |      |  |     
|Liabilities and Stockholders Equity                |  |                  |            |      |  |     
|Deposits                                            |  |                  | 702,955    |      |  |     
|Short-term borrowings                               |  |                  | 687,214    |      |  |     
|Medium and long-term borrowings and placements      |  |                  | 485,516    |      |  |     
|Acceptances outstanding                             |  |                  | 29,006     |      |  |     
|Accrued interest payable                            |  |                  | 5,432      |      |  |     
|Derivative financial instruments-liabilities        |  |                  | 13,021     |      |  |     
|Reserve for losses on off-balance sheet credit risk |  |                  | 33,973     |      |  |     
|Redeemable preferred stock1                         |  |                  | 10,946     |      |  |     
|Other liabilities                                   |  |                  | 8,220      |      |  |     
|                                                    |  |                  |            |      |  |     
|Total Liabilities                                   |  |                  | $1,976,283 |      |  |     
|                                                    |  |                  |            |      |  |     
|Stockholders Equity                                |  |                  |            |      |  |     
|Common stock, no par value                          |  |                  | 279,978    |      |  |     
|Capital surplus                                     |  |                  | 133,786    |      |  |     
|Capital reserves                                    |  |                  | 95,210     |      |  |     
|Retained earnings                                   |  |                  | 150,789    |      |  |     
|Treasury stock                                      |  |                  | (85,310)   |      |  |     
|Accumulated other comprehensive income (loss)       |  |                  | 9,876      |      |  |     
|                                                    |  |                  |            |      |  |     
|Total Stockholders Equity                          |  |                  | $584,329   |      |  |     
|                                                    |  |                  |            |      |  |     
|Total Liabilities and Stockholders Equity          |  |                  | $2,560,612 |      |  |     
|                                                    |  |                  |            |      |  |     

| 
|-
|1

Loans

The $168 million increase in loans during 2005 was mainly attributable to the increase in the Banks non-trade lending, which offset the reduction in the Banks non-accruing portfolio.

The $167 million increase in loans during 2004 was mainly attributable to growth of the Banks trade finance loan portfolio, which offset the decline in the Banks non-accruing loans and the stock of non-trade medium-term loan portfolio.

Allowance for Loan Losses

During 2005, the allowance for loan losses decreased by $67 million to $39 million, primarily as a result of $48 million reversals of provision for loan losses mostly related to payments and pre-payments of non-accrual loans, the $12 million effect of a change in the credit loss reserve methodology, a $3 million recovery mostly related to a previously charged-off loan to a Mexican corporation, and $9 million in charge-offs related to the sale of an Argentine non-accruing loan and a loan to a Brazilian bank that ceased operations.

During 2004, the allowance for loan losses decreased by $118 million to $106 million, primarily as a result of reversal of provisions related to scheduled payments and pre-payments of Argentine restructured loans, as well as Argentine loan sales and recoveries.  In addition, the Bank decreased generic reserves assigned to certain countries due to improved risk perception as reflected in country credit ratings (primarily Brazil) and due to the reduction of credit exposure in some countries in the Region, such as the Dominican Republic, Venezuela and Nicaragua.

31

---



Critical Accounting Policies

General

The Bank prepares its Consolidated Financial Statements in conformity with U.S. GAAP.  As such, the Bank is required to use methods, make estimates, judgments and assumptions in applying its accounting policies that have a significant impact on the results it reports in its Consolidated Financial Statements.  Some of the Banks accounting policies require management to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  The Banks management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from the estimates.

The Banks most critical accounting estimates include the assessment of allowance for credit losses, impairments on the value of securities that are other than temporary, and the fair value of financial instruments.  For information regarding the Banks most critical accounting policies see Note 2, Note 6 and Note 19 to the Consolidated Financial Statements.

B.     Liquidity and Capital Resources

Liquidity

Liquidity refers to the Banks ability to maintain adequate cash flows to fund operations and meet obligations and other commitments on a timely basis.  The Bank maintains its liquid assets in demand deposits, overnight funds and time deposits with well-known international banks.  These liquid assets are adequate to cover 24-hour deposits from customers, which theoretically could be withdrawn on the same day.  At December 31, 2005, the Banks 24-hour deposits from customers (overnight deposits, demand deposit accounts and call deposits) amounted to $28 million, representing 2.7% of the Banks total deposits.  In addition, the Bank had approximately $40 million to $45 million of time deposits maturing daily.  The liquidity requirement resulting from these maturities is met by the Banks liquid assets, which at December 31, 2005, were $225 million
(representing 21% of total deposits), and by daily maturities of approximately $134 million to $186 million in the Banks loan portfolio.

The
Banks overall objective is to have a minimum of 50% of its liquidity
position represented by demand, call accounts and time deposits with maturities
of less than one week, invested in overnight deposits, with the balance invested
in short-term time deposits with maturities of up to six months in the
inter-bank market.  Inter-bank deposits are placed with reputable
international banks that have A1, P1, or F1 ratings by two of the major rating
agencies, and are located outside of the Region.  These banks must have a
correspondent relationship with the Bank and be approved by the Board on an
annual basis.  In addition, the Banks liquidity policy allows for
investing in negotiable money market instruments, such as Euro certificates of
deposit, commercial paper, bankers acceptances and other liquid
instruments with maturities of up to 180 days.  These instruments
must be of investment grade quality (carrying two of the following ratings: A-1,
P-1 or F-1 from Standard & Poors, Moodys or Fitch, respectively)
and must have a liquid secondary market.

The primary objectives for the investment of the Banks liquidity funds are security and convertibility and the secondary objective is yield.  The Bank reviews and monitors its liquidity position on a daily basis.

32

---



The following table shows the Banks liquid assets, which consist of short-term funds deposited with other banks broken down by principal geographic area:

|                 |  | At   December 31,
|---------------- |  | -----------------
|                 |  |                  
|                 |  | 2003             
|                 |  |                  
|                 |  | (in $ millions)  
|Europe           |  |                  
|United   States  |  |                  
|Other   O.E.C.D. |  |                  
|                 |  |                  
|Total            |  |                  
|                 |  |                  

While the Banks liabilities generally mature over shorter periods than its assets, requiring the Bank to renew or create new liabilities at current interest rates, the associated risk is diminished by the short-term nature of the loan portfolio.  At December 31, 2005, the average original term to maturity of the Banks short-term loan portfolio was approximately 95 days.

At December 31, 2005, the Banks cumulative maturity gap for the subsequent twelve-month period was positive.  This means that the Bank has sufficient asset maturities in the next twelve months to cover the maturity of its liabilities.

Funding Sources

The Banks principal sources of funds are deposits, borrowed funds and floating and fixed rate placements.  While these sources are expected to continue to provide the majority of the funds needed by the Bank in the future, their mix, as well as the possible use of other sources of funds, will depend upon future economic and market conditions.  The following table shows the Banks funding distribution:



|                                                   |  | At   December 31,
|-------------------------------------------------- |  | -----------------
|                                                   |  |                  
|                                                   |  | 2003             
|                                                   |  |                  
|                                                   |  | (in percentages) 
|Inter-bank   deposits                              |  |                  
|Short-   and medium-term borrowings and placements |  |                  
|Other   liabilities.                               |  |                  
|                                                   |  |                  
|Total liabilities                                  |  |                  
|                                                   |  |                  

Short- and medium-term borrowings and placements are important funding sources for the Banks loan portfolio because they permit the Bank to diversify its funding sources outside the Region, and because the Bank uses these borrowings and placements, which generally have longer maturities than deposits, to manage its asset and liability positions.  See Asset/Liability Management.

Deposits

The Bank obtains deposits principally from central and commercial banks in the Region.  At December 31, 2005, approximately 46% of the deposits held by the Bank were deposits made by central banks of countries in the Region.  Many of these banks deposit a portion of their dollar reserves with the Bank.  The average term remaining to maturity of deposits from central banks of countries in the Region at December 31, 2005 and 2004 was 39 days.  The bulk of the Banks remaining deposits is obtained primarily from commercial banks located in the Region.  At December 31, 2005, 100% of the Banks deposits are scheduled to mature within 12 months.  At December 31, 2005, deposits from the Banks five largest depositors, of which two were central banks in the Region, represented 59% of the Banks total deposits.

33

---



The principal components of the Banks customer deposits are demand and time deposits.  The following table analyzes the Banks deposits by country at December 31 of each year:

|                      |  | 2003            |      | 2004 |  | 2005
|--------------------- |  | --------------- | ---- | ---- |  | ----
|                      |  |                 |      |      |  |     
|                      |  | (in $ millions)
|Argentina             |  |                 | $111 |      |  |     
|Barbados              |  |                 | 5    |      |  |     
|Brazil                |  |                 | 328  |      |  |     
|Chile                 |  |                 | 3    |      |  |     
|Colombia              |  |                 | 23   |      |  |     
|Costa Rica            |  |                 | 49   |      |  |     
|Dominican Republic    |  |                 | 22   |      |  |     
|Ecuador               |  |                 | 1    |      |  |     
|El Salvador           |  |                 | 22   |      |  |     
|France                |  |                 | 9    |      |  |     
|Germany               |  |                 | 0    |      |  |     
|Haiti                 |  |                 | 2    |      |  |     
|Honduras              |  |                 | 0    |      |  |     
|Hungary               |  |                 | 0    |      |  |     
|Italy                 |  |                 | 5    |      |  |     
|Jamaica               |  |                 | 2    |      |  |     
|Mexico                |  |                 | 55   |      |  |     
|The   Netherlands     |  |                 | 0    |      |  |     
|Nicaragua             |  |                 | 0    |      |  |     
|Panama                |  |                 | 11   |      |  |     
|Paraguay              |  |                 | 0    |      |  |     
|Peru                  |  |                 | 1    |      |  |     
|Spain                 |  |                 | 20   |      |  |     
|Trinidad   and Tobago |  |                 | 10   |      |  |     
|Venezuela             |  |                 | 23   |      |  |     
|                      |  |                 |      |      |  |     
|Total                 |  |                 | $703 |      |  |     
|                      |  |                 |      |      |  |     

Management believes that the 21% and 23% increase in deposits during 2005 and 2004, respectively, reflects the markets positive perception of Bladex and its investment grade credit risk ratings.

Short-Term Borrowings and Placements

The Banks short-term borrowings consist of borrowings from banks and have maturities of up to 365 days.  These borrowings are made available to the Bank on an uncommitted basis for the financing of trade-related loans.  Approximately 55 European and North American banks provide these short-term borrowings from banks.

The average term remaining to maturity of short-term borrowings at December 31, 2005 was approximately 206 days. See Note 9 to the Consolidated Financial Statements.

The following table presents information regarding the amounts outstanding under, and interest rates on, the Banks short-term borrowings at the dates and during the periods indicated.

|                                                                   |  | At and for   the Year Ended December 31,
|------------------------------------------------------------------ |  | ----------------------------------------
|                                                                   |  |                                         
|                                                                   |  | 2003                                    
|                                                                   |  |                                         
|                                                                   |  | (in $ millions, except percentages)     
|Maximum   amount outstanding at any month-end                      |  |                                         
|Amount   outstanding at year-end                                   |  |                                         
|Average   amount outstanding                                       |  |                                         
|Weighted   average interest rate on average amount outstanding     |  |                                         
|Weighted   average interest rate on amount outstanding at year end |  |                                         

Medium- and Long-Term Borrowings and Placements

Medium and long-term, borrowings and placements increased by $130 million during 2005 mostly due to a three-year revolving syndicated loan facility for $235 million which was oversubscribed, and several bilateral borrowings from international banks, with maturities of two and three years, and borrowings in the capital markets of up to five years.  Medium and long-term obligations declined $82 million in 2004 mostly due to the reduction on the medium-term loan portfolio and low demand in debt markets for Latin American paper. The interest rates on most medium and long-term borrowings are adjusted semi-annually using six-month LIBOR plus a credit spread (which is based on several factors, including credit ratings, risk perception, and the maturity period).  The Bank uses these funds to finance its medium-term loan portfolio.  The average term remaining to maturity of the Banks medium
and long-term debt is 2.1 years.

34

---



The Banks Euro Medium Term Note Program, or, EMTN Program, has a maximum limit of $2.3 billion.  Notes issued under the EMTN Program are placed in Asia, Europe and North America, in either the Euro or Regulation S or 144A markets, and are general obligations of the Bank.  The EMTN Program may be used to issue notes with maturities ranging from 90 days up to a maximum of 30 years, at fixed or floating interest rates and in various currencies.  The sale of notes issued under the EMTN Program is generally made through one or more authorized financial institutions.  The Bank has not actively used the EMTN Program in the past three years, since demand from our clients for medium term funding did not reach the expected levels.   As of December 31, 2005, the total amount outstanding under this program with medium-term maturities was $44 million.  The interest rate on


all currently outstanding floating rate notes issued under the EMTN Program is adjusted quarterly or semi-annually using the applicable LIBOR rate.   As part of its interest rate and currency risk management, the Bank has from time to time, entered into foreign exchange forward and cross currency contracts and interest rate swaps to hedge the risk associated with a portion of the notes issued under its EMTN Program.  See Note 10 to the Consolidated Financial Statements and Quantitative and Qualitative Disclosure About Market Risk.

Dividends

In 2004, the Banks Board re-instituted a policy of quarterly cash dividends on the Banks common stock, and, from time to time has declared special dividends to its stockholders. During 2005, the Bank paid $23 million in quarterly dividends and $78 million in special dividend.  Dividends are declared at the Bank Boards discretion.  For additional information, please see Financial Information  Dividends.

Cost and Maturity Profile of Borrowed Funds and Floating and Fixed Rate Placements

The following table sets forth certain information regarding the weighted average cost and the remaining maturities of the Banks borrowed funds and floating and fixed rate placements at December 31, 2005:

|                                                            |  | Amount          |          | Weighted   Average Cost
|----------------------------------------------------------- |  | --------------- | -------- | -----------------------
|                                                            |  |                 |          |                        
|                                                            |  | (in $ millions) |          |                        
|Short-term   borrowings at fixed interest rate              |  |                 |          |                        
|Due   in 0 to 30 days                                       |  |                 | $129     |                        
|Due   in 31 to 90 days                                      |  |                 | 8        |                        
|Due   in 91 to 180 days                                     |  |                 | 120      |                        
|Due   in 181 to 365 days                                    |  |                 | 434      |                        
|                                                            |  |                 |          |                        
|Total                                                       |  |                 | **$761** |                        
|Medium   and long-term borrowings at fixed interest rate    |  |                 |          |                        
|Due   in 1 through 4 years                                  |  |                 | 40       |                        
|                                                            |  |                 |          |                        
|Total                                                       |  |                 | $40      |                        
|Medium   and long-term borrowings at floating interest rate |  |                 |          |                        
|Due   in 91 to 180 days                                     |  |                 | $30      |                        
|Due   in 181 to 365 days                                    |  |                 | 34       |                        
|Due   in 1 through 4 years                                  |  |                 | 385      |                        
|                                                            |  |                 |          |                        
|Total                                                       |  |                 | $450     |                        
|Medium   & long-term floating rate placements               |  |                 |          |                        
|Due   in 0 to 30 days                                       |  |                 | $9       |                        
|Due   in 91 to 180 days                                     |  |                 | 10       |                        
|Due   in 1 through 5 years                                  |  |                 | 25       |                        
|                                                            |  |                 |          |                        
|Total                                                       |  |                 | $44      |                        

Asset/Liability Management

The Bank seeks to manage its assets and liabilities to reduce the potential adverse impact on net interest income that could result from interest rate changes.  The Bank controls interest rate risk through systematic monitoring of maturity mismatches.  The Banks investment decision-making takes into account not only the rates of return and the respective underlying degree of risk, but also liquidity requirements, including minimum cash reserves, withdrawal and maturity of deposits and additional demand for funds.

35

---



For any given period, a matched pricing structure exists when an equal amount of assets and liabilities are repriced.  An excess of assets or liabilities over these matched items results in a gap or mismatch, as shown in the table under Interest Rate Sensitivity below.  A negative gap denotes liability sensitivity and normally means that a decline in interest rates would have a positive effect on net interest income, while an increase in interest rates would have a negative effect on net interest income.  Substantially all of the Banks assets and liabilities are denominated in dollars and, therefore, the Bank has no material foreign exchange risk.

Interest Rate Sensitivity

The following table presents the projected maturities and interest rate adjustment periods of the Banks assets, liabilities and stockholders equity based upon the contractual maturities and adjustment dates at December 31, 2005.  The Banks interest-earning assets and interest-bearing liabilities and the related interest rate sensitivity gap shown in the following table may not reflect of positions in subsequent periods.

|                                                      |  | Total                                 |          | 0-30 Days |  | 31-90 Days |        | 91-180 Days |  | 181-365    Days |          | More than   365 Days |  | Non-Interest    Sensitive
|----------------------------------------------------- |  | ------------------------------------- | -------- | --------- |  | ---------- | ------ | ----------- |  | --------------- | -------- | -------------------- |  | -------------------------
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|                                                      |  | (in $ millions, except   percentages)
|Interest-earning assets                               |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Cash and due from banks                               |  |                                       | $0.7     |           |  |            | $0.0   |             |  |                 | $0.0     |                      |  |                          
|Interest-bearing deposits with banks                  |  |                                       | 229.2    |           |  |            | 224.2  |             |  |                 | 5.0      |                      |  |                          
|Investment securities                                 |  |                                       | 208.6    |           |  |            | 18.6   |             |  |                 | 37.6     |                      |  |                          
|Loans, net                                            |  |                                       | 2,565.0  |           |  |            | 658.6  |             |  |                 | 981.5    |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Total interest-earning assets                         |  |                                       | 3,003.5  |           |  |            | 901.4  |             |  |                 | 1,024.1  |                      |  |                          
|Non-interest earning assets                           |  |                                       | 144.5    |           |  |            | 0.0    |             |  |                 | 0.0      |                      |  |                          
|Other assets                                          |  |                                       | 11.3     |           |  |            | 0.0    |             |  |                 | 0.0      |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Total assets                                          |  |                                       | $3,159.2 |           |  |            | $901.4 |             |  |                 | $1,024.1 |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Interest-bearing liabilities                          |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Deposits                                              |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Demand                                                |  |                                       | $28.4    |           |  |            | $28.4  |             |  |                 | $0.0     |                      |  |                          
|Time                                                  |  |                                       | 1,018.2  |           |  |            | 575.4  |             |  |                 | 361.1    |                      |  |                          
|Short-term borrowings and placements                  |  |                                       | 760.7    |           |  |            | 128.6  |             |  |                 | 77.5     |                      |  |                          
|Medium- and long-term borrowings and placements       |  |                                       | 533.9    |           |  |            | 36.0   |             |  |                 | 258.0    |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Total interest-bearing liabilities                    |  |                                       | 2,341.2  |           |  |            | 768.3  |             |  |                 | 696.6    |                      |  |                          
|Non-interest-bearing liabilities                      |  |                                       | 201.3    |           |  |            | 0.0    |             |  |                 | 0.0      |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Total liabilities                                     |  |                                       | 2,542.4  |           |  |            | 768.3  |             |  |                 | 696.6    |                      |  |                          
|Stockholders equity                                  |  |                                       | 616.8    |           |  |            | 0.0    |             |  |                 | 0.0      |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Total liabilities and stockholders   equity          |  |                                       | $3,159.2 |           |  |            | $768.3 |             |  |                 | $696.6   |                      |  |                          
|                                                      |  |                                       |          |           |  |            |        |             |  |                 |          |                      |  |                          
|Interest rate sensitivity gap                         |  |                                       |          |           |  |            | 133.0  |             |  |                 | 327.5    |                      |  |                          
|Cumulative interest rate sensitivity gap              |  |                                       |          |           |  |            | 133.0  |             |  |                 | 460.5    |                      |  |                          
|Cumulative gap as a% of total interest-earning assets |  |                                       |          |           |  |            | 4.4%   |             |  |                 | 15.3%    |                      |  |                          

The Banks
interest rate risk arises from the Banks liability sensitive short-term
position, which means that the Banks interest-bearing liabilities reprice
more quickly than the Banks interest-earning assets.  As a result,
there is a potential adverse impact on the Banks net interest income that
might result from interest rate increases.

The Banks
interest rate risk is managed by attempting to match the term and repricing
characteristics of the Banks interest rate sensitive assets and
liabilities.  The Banks policy with respect to interest rate gaps
also provides that the Bank is to match fund interest-earning assets over 365
days, depending on its interest rate basis.  If it is floating rate, it is
to be match funded at a 50% minimum, and if it is fixed rate, it is to be match
funded at an 85% minimum.  The Banks policy with respect to interest
rate gaps also provides that the Bank match fund interest-earning assets over
365 days.  The Bank also has used interest rate swaps on a limited basis as
part of its interest rate risk management.  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 rate
interest payments or vice versa.  At December 31, 2005, the Bank had
interest rate swaps for a notional amount of $115 million.

36

---



Stockholders Equity

The following table presents information concerning the Banks capital position at the dates indicated.

|                             |  | At   December 31,
|---------------------------- |  | -----------------
|                             |  |                  
|                             |  | 2003             
|                             |  |                  
|                             |  | (in $ thousands) 
|Common   stock               |  |                  
|Capital   surplus            |  |                  
|Capital   reserves           |  |                  
|Retained   earnings          |  |                  
|Treasury   stock             |  |                  
|Other   comprehensive income |  |                  
|                             |  |                  
|Total stockholders equity   |  |                  
|                             |  |                  

In view of
the impact of the Argentine crisis on the Bank, Bladex developed a
recapitalization plan, which was implemented during 2003.  On June 27,
2003, the Bank completed the recapitalization process, raising $147 million at
$6.68 per share, solely through a rights offering to existing common
stockholders for the purchase of common stock.  Following the
recapitalization, the Banks shareholding composition was 16% Class A
shares, 10% Class B shares, and 74% Class E shares representing a total of 39
million shares.

The net increase in stockholders equity during 2004 was mainly due to the following factors:

| |  | Dividends paid to common stockholders for $59   million in 2004;                                              
| | - | --------------------------------------------------------------------------------------------------------------
| |  | The repurchase of $8 million Class E shares during   2004 pursuant to the Banks stock repurchase program; and
| |  | Net income of $142 million.                                                                                   

The net decrease in stockholders equity during 2005 was mainly due to the following factors:

| |  | Dividends paid to common stockholders for $101   million in 2005;                                              
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | The repurchase of $14 million Class E shares during   2005 pursuant to the Banks stock repurchase program; and
| |  | Net income for $80 million.                                                                                    

At December 31, 2005, the Bank had repurchased $21 million in Class E shares pursuant to the Banks $50 million stock repurchase program, which was commenced in August 2004.  See Dividends and Purchases of Equity Securities by the Issuer and Affiliated Purchasers for additional information.

Capital reserves are established by the Bank from retained earnings and are a form of retained earnings according to Panamanian banking regulations.  Capital reserves are intended to strengthen the Banks capital position.  Reductions of these reserves, for example to pay dividends, require approval of the Board of the Bank and Panamanian banking authorities.  Panamanian banking regulations do not require the Bank to maintain any particular level of capital reserves.

At December
31, 2005, the capital ratio of total stockholders equity to total assets
was 19.5%.  Although the Bank is not subject to the capital adequacy
requirements of the United States Board of Governors of the Federal Reserve
System (the Federal Reserve Board), if the Federal Reserve
Boards fully phased-in risk-based capital guidelines applied to the Bank,
the Banks ratios would have exceeded all applicable capital adequacy
requirements.  At December 31, 2005, the Banks Tier 1 and total
capital ratios calculated according to these guidelines were 33.7% and 35.0%,
respectively.  The Banking Law (as defined under Information on the
CompanyBusiness OverviewRegulation) in Panama, which became
effective on June 12, 1998, requires the Bank to maintain a minimum total
capital to risk-weighted asset ratio of 8% (each, as defined in
the Banking Law).  At December 31, 2005, the Banks total capital to
risk-weighted asset ratio, calculated according to the guidelines of the Banking
Law, was 21.0%.  See Information on the CompanyBusiness
OverviewRegulationPanamanian Law.

37

---



C.      Research and Development, Patents and Licenses, etc.

Not applicable.

D.      Trend Information

The following are the most important trends, uncertainties and events that are reasonably likely to materially affect the Bank or that would cause the financial information disclosed herein not to be indicative of the Banks future operating results or financial condition:

| |  | The effect that changes in global economic   conditions including oil and other commodities prices, the U.S. dollar   exchange rate, interest rates, and slower economic growth in developed   countries and trading partners, and the effect that these changes may have on   the economic condition of countries in the Region.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The effect that an economic slowdown or political   events in large Latin American countries may have on the Banks asset   quality, results of operations and growth prospects.                                                                                                                                                 
| |  | Continued improvement in risk perception in the   Banks markets, increased competition and U.S. dollar liquidity could further   pressure spreads over LIBOR on the Banks accruing portfolio, which in turn,   could reduce the Banks net interest spreads.                                                                   
| |  | A downturn in the capital markets or a downturn in   investor confidence.                                                                                                                                                                                                                                                        

In addition, see Key Information - Risk Factors for a discussion of the risks the Bank faces, which could affect the business, results of operations or financial condition.

E.      Off-Balance Sheet Arrangements

In the ordinary course of business, to meet the financing needs of its customers, the Bank enters into arrangements that are not recognized on its balance sheet.  At December 31, 2005, the Banks off-balance sheet arrangements included stand-by letters of credit, guarantees (commercial risk and country risk) reimbursement undertakings and credit commitments (including other commitments and unused commitments).  See Note 16 to the Consolidated Financial Statements.  These arrangements are kept off-balance sheet as long as the Bank does not incur an obligation from them or itself become entitled to an asset. A reserve for losses on off-balance sheet credit risk is recognized on the balance sheet, with the resulting loss recorded in the income statement. The amount recognized on the balance sheet does not represent the full potential loss inherent in such arrangements.

For 2005, commission income from off-balance sheet arrangements amounted to $6 million. For additional information see Results of Operations  Commission Income.  The Banks credit policy establishes the recognition of a reserve for estimated losses on off-balance sheet credit risk with the resulting charge to the income statement.  During 2005 and 2004, the amounts provisioned in this reserve were $16 million and $(1) million, respectively.

During November 2003, the Bank made a commitment to invest $5 million in an equity investment fund, whose main objective is to invest in the Mexican export industry and its supply chain.  At December 31, 2005 and 2004, the total investment was $3 million and $1 million, respectively.

No obligations have arisen from variable interest entities as defined in FIN 46.

The Bank has entered into agreements that contain indemnification provisions, such as indemnification agreements with its executive officers and directors, and provides indemnity insurance pursuant to which directors and officers are indemnified or insured against liability or loss under certain circumstances including liabilities or related losses arising under the Securities Act and the Exchange Act.

38

---



F.     Contractual Obligations and Commercial Commitments

The following tables set forth information regarding the Banks contractual obligations and commercial commitments as of December 31, 2005.

|                                         |  | Payments   Due by Period                   
|---------------------------------------- |  | -------------------------------------------
|                                         |  |                                            
|Contractual Obligations                  |  | Total                                      
|                                         |  |                                            
|                                         |  | (in $ millions)                            
|Medium and long-term debt   obligations1 |  |                                            
|Short-term debt obligations              |  |                                            
|Service agreements                       |  |                                            
|Leasehold obligations                    |  |                                            
|                                         |  |                                            
|Total contractual obligations            |  |                                            
|                                         |  |                                            
|                                         |  |                                            
|                                         |  | Amount of   Commitment Expiration by Period
|                                         |  |                                            
|Other Commercial Commitments             |  | Total                                      
|                                         |  |                                            
|                                         |  | (in $ millions)                            
|Letters of credit                        |  |                                            
|Stand-by letters of credit               |  |                                            
|Guarantees                               |  |                                            
|Reimbursements undertaking               |  |                                            
|Other commercial   commitments           |  |                                            
|                                         |  |                                            
|Total Commercial Commitments             |  |                                            
|                                         |  |                                            

| 
|-
|1
|2

Purchase Agreements

The Bank has signed service agreements with certain vendors that provide services that are necessary for the ongoing operations of its business and mainly related to the implementation during 2005 and 2006, of a new technology platform and telecommunications services.   The terms of these agreements are up to 8 years and some of these agreements can be re-negotiated for annual or semi-annual price adjustments, after the fifth year.  These agreements also include maintenance and license payments, starting from 2007.  During 2005 amounts paid under these agreements are $2 million.  See Note 16 to the Consolidated Financial Statements.

|Item 6. | Directors, Senior Management and   Employees
|------- | --------------------------------------------

A.      Directors and Senior Management

Directors

The following table sets forth certain information concerning the Directors of the Bank as of the date of this Annual Report.

|Name                                                                                      |  | Country of      Citizenship |  | Position   Held   with The Bank      |  | YearTerm Expires |  | Age | 
|----------------------------------------------------------------------------------------- |  | --------------------------- |  | ------------------------------------ |  | ---------------- |  | --- | 
|                                                                                          |  |                             |  |                                      |  |                  |  |     | 
|CLASS A                                                                                   |  |                             |  |                                      |  |                  |  |     | 
|Guillermo   Güémez García   Deputy Governor   Banco de Mexico, Mexico                     |  | Mexico                      |  | Director                             |  | 2008             |  | 65  | 
|Santiago   Perdomo Maldonado   President   Red Multibanca Colpatria, Colombia             |  | Colombia                    |  | Director                             |  | 2008             |  | 48  | 
|Maria   da Graça França   Director  Internal Control   Banco do Brasil, Brazil           |  | Brazil                      |  | Director                             |  | 2007             |  | 57  | 
|CLASS E                                                                                   |  |                             |  |                                      |  |                  |  |     | 
|Mario   CovoChief Executive OfficerFinaccess International, Inc., U.S.A.                  |  | U.S.A                       |  | Director                             |  | 2008             |  | 48  | 
|Herminio   Blanco   Chief Executive Officer   Soluciones Estratégicas Consultoría, Mexico |  | Mexico                      |  | Director                             |  | 2007             |  | 55  | 
|William Hayes   President   Wellstone Global Finance, LLC, U.S.A.                         |  | U.S.A.                      |  | Director                             |  | 2007             |  | 62  | 
|Alexandre Lodygensky Jr   Director   Comexport, Brazil                                    |  | Brazil                      |  | Director                             |  | 2007             |  | 50  | 
|Will C. Wood   Principal   Kentwood Associates, U.S.A.                                    |  | U.S.A.                      |  | Director                             |  | 2009             |  | 66  | 
|ALL CLASSES OF COMMON STOCK                                                               |  |                             |  |                                      |  |                  |  |     | 
|Gonzalo   Menéndez Duque   Director   Banco de Chile, Chile                               |  | Chile                       |  | Chairman   of the Board of Directors |  | 2009             |  | 57  | 
|Jaime Rivera   Chief Executive OfficerBladex, Panama                                      |  | Guatemala                   |  | Director                             |  | 2009             |  | 53  | 

39

---



Guillermo
Güémez García has served as a director of the Bank since
1997.  Mr. Güémez has served as Deputy Governor of Banco de
Mexico since 1995 and served as Vice Chairman and President of the Executive
Committee in Grupo Azucarero Mexico of Grupo de Embotelladoras Unidas, S. A. de
C. V. from 1993 to 1994.  He served on the Mexican Business Coordinating
Council for the North American Free Trade Agreement, or NAFTA, in the capacity
of Executive Director from 1991 to 1993.  He was employed by Banco Nacional
de Mexico in various capacities from 1974 to 1990, including holding the
position of Executive Vice President for International Products from 1986 to
1990.  Mr. Güémez was the founder and served as President of
Euromex Casa de Cambio and Euroamerican Capital Corporation from 1986 to
1990.  He has held the positions of Executive Vice
President of International Treasury and Foreign Exchange, Exchange Controls and Ficorca from 1982 to 1986, as well as International Operations from 1984 for Banco Nacional de Mexico.  He was a representative in London and set up the Banco Nacional de Mexicos branch in London from 1979 to 1981 and was the Manager for Foreign Currency Funding and International Credits from 1974 to 1978.  Mr. Güémez was employed by the Bank of America in Mexico, as an Assistant Representative in 1973, and from 1964 to 1972 he worked in the construction and cement industry.

Santiago Perdomo Maldonadohas served as a director of the Bank since 2003.  Mr. Perdomo has served as President of Banco Colpatria  Red Multibanca Colpatria, in Colombia, since May 1999.  Mr. Perdomo has been employed by Banco Colpatria in various capacities since 1994, including: as Executive Vice President from November 1998 to April 1999, as President from September 1994 to October 1998, and as Executive Vice President of Corporación Colpatria from February 1994 to August 1994.  Previously, he was Manager of Corredora Bursatil from March 1993 to January 1994.  Mr. Perdomo has also served as Manager of Colpatria Sociedad Administradora from September 1991 to February 1993, and as Manager of Corporate Banking from July 1981 to August 1991.

Maria da
Graça França has served as a director of the Bank since
2004.  Ms. França has served as Director of Internal Control of Banco
do Brasil, in Brasilia, Brazil since 2006.  Ms. França has been
employed by Banco do Brasil in various capacities since 1971, holding the
positions of Head of North America and General Manager of Banco do Brasil, New
York Branch from 2004 to 2005, Executive General Manager of the International
Division in Brasilia, Brazil from 2002 to 2003, Regional Manager for the
operations of the Bank in South America, based in Argentina in 2002, General
Manager of Banco do Brasil Paris Branch from 1999 to 2002, Deputy General
Manager of Banco do Brasil Miami Branch from 1993 to 1999, General Manager of
the Department responsible for Banco do Brasil foreign network from 1992 to
1993, Deputy General Manager in charge of the foreign exchange from
1989 to 1992, Assistant Manager within the Risk Management Area from 1988 to 1989, Assistant Manager at the foreign exchange internal controls from 1984 to 1987 and Foreign Exchange Department from 1971 to 1984.

40

---



Mario Covo has served as a director of the Bank since 1999.  Mr. Covo is a founding partner of Finaccess International Inc., New York, and has served as the Chairman and Chief Executive Officer of the company since 1999.  Mr. Covo is also one of the founders of Columbus Advisors and the Columbus Group where he worked from 1995 to 1999.  Mr. Covo was employed by Merrill Lynch, as Head of Emerging Markets-Capital Markets, from 1989 to 1995.  Previously, he was employed by Bankers Trust Company as Vice President in the Latin American Merchant Banking Group from 1985 to 1989, focusing on corporate finance and debt-for-equity swaps.  Prior to that Mr. Covo was employed as an International Economist for Chase Econometrics from 1984 to 1985, focusing primarily on Venezuela and Colombia.

Herminio A. Blancohas served as a director of the Bank since 2004.  Mr. Blanco has served as Chief Executive Officer of Soluciones Estratégicas Consultoría, Mexico City, since 2002, as a business consultant to some of the leading corporations in the world, as an advisor to the Inter-American Development Bank, advisor to national governments on trade negotiations, and as a member of the International Advisory Committee of Mitsubishi Corporation and member of the Trilateral Commission since 2000.  Mr. Blanco was Secretary of Trade and Industry, Chairman of the National Council for Deregulation, Chairman of the Advisory Council for Trade Negotiations, Chairman of the Board of Exportadora de Sal, S.A., Chairman of the Board of Fideicomiso de Fomento Minero and Vice Chairman of the Board of Banco Nacional de Comercio Exterior, in Mexico from 1994 to 2000.  He was Undersecretary


for International Trade and Negotiations of the Ministry of Trade and Industry of Mexico from 1993 to 1994 and from 1988 to 1990.  From 1990 to 1993, Mr. Blanco was Mexicos Chief Negotiator of the NAFTA.  He was one of the three members of Council of Economic Advisors to the President of Mexico from 1985 to 1988.  Mr. Blanco was Assistant Professor of Economics at Rice University, Houston, Texas from 1980 to 1985.  He was senior advisor to the Finance Minister of Mexico from 1978 to 1980.

William Dick Hayeshas served as a director of the Bank since 2004.  Mr. Hayes has served as President of Whaleco, Inc., New York, President of Wellstone Global Finance, LLC, San Francisco, California and Connecticut, and as a Charter Member of the Board of Directors and Investment Committee of WestLB-Tricom Forfaiting Fund Limited, Bermudas since 1999.  He worked for West Merchant Bank Limited, London (formerly Standard Chartered Merchant Bank and Chartered WestLB), in various capacities from 1987 to 1999.  Mr. Hayes worked for Libra Bank Limited, New York Agency as Senior Vice President-Trading from 1986 to 1987.  He was Principal of W.D. Hayes and Associated, California from 1984 to 1986.  He worked for Wells Fargo Bank, N.A., San Francisco, California, from 1969 to 1984 in various capacities.

Alexandre Lodygensky Jr. has served as a director of the Bank since 2004.  Mr. Lodygensky has served as Director of Comexport, in Sao Paulo, Brazil, since 2004.  Mr. Lodygensky held the position of Chief Executive Officer of Rutherford Trading Co. from 2002 to 2004. From 1998 to 2002, he worked as a Regional Commercial Director for HSBC in Brazil, leading the commercial area for two of the largest regional operations: Central region, based in the city of Belo Horizonte, and later the Southeast region, based in the city of São Paulo. Before joining HSBC, Mr. Lodygensky worked as a Commercial Director for Banco Excel-Econômico starting in 1993. From 1986 to 1993, he worked as a General Manager and later as head of International Trade Finance for Banco Francês e Brasileiro S.A, a subsidiary of Crédit Lyonnais. From 1984 to 1986, he worked for Banorte in the position of
General Finance Manager, responsible for the Treasury and the Financial Planning and Control Department. Before joining Banorte, from 1981 to 1984, Mr. Lodygensky worked as a Trainee and then as a Finance Manager for Banco ValBrás and one of its successors, Digibanco Comercial S.A, a joint venture of CCF-Crédit Commercial de France and Sharp Brasil.

Will C. Woodhas served as a director of the Bank since 1999.  Mr. Wood also has served as the founding principal of Kentwood Associates of Menlo Park, California since 1993.  Mr. Wood was employed by Wells Fargo in the International Banking Group and served as an Executive Vice President from 1986 to 1989.  While at Wells Fargo, he was a Director of the Bankers Association for Foreign Trade and PEFCO, a privately owned export finance company.

41

---



Mr. Wood was employed by Crocker Bank and served as Executive Vice President in charge of the International Division and Manager of the Latin America Area from 1975 to 1986.  He worked for Citibank in La Paz, Bolivia, Lima, Peru, Rio de Janeiro and Sao Paulo, Brazil, and began his career with Citibanks Overseas Division in 1964 in New York.

Gonzalo Menéndez Duquehas served as a director of the Bank since 1990.  Mr. Menéndez Duque is a senior director of the Luksic companies in Chile, and serves as a director of the following Luksic group holding companies:  Banco de Chile since 2001, Holdings Quiñenco since 1996, and Antofagasta PLC since 1985.  In addition, he serves as President of the following Luksic group companies:  Banchile Administradora General de Fondos since 2002, and Inversiones Vita since 2000.  Previously, Mr. Menéndez Duque served as a director and President of several companies related to Grupo Lucksic since 1985, including:  Banco de A. Edwards and related companies, Banco Santiago, Empresas Lucchetti, S.A., Banco OHiggins, and Antofagasta Group.

Senior Management

The following table and information sets forth the names of the executive officers of the Bank and their respective positions as of the date hereof and positions held by them with the Bank and other entities in prior years:

|Name                 |  | Position   Held withThe Bank                                                 |  | Country of Citizenship |  | Age | 
|-------------------- |  | ---------------------------------------------------------------------------- |  | ---------------------- |  | --- | 
|                     |  |                                                                              |  |                        |  |     | 
|Jaime Rivera         |  | Chief Executive Officer                                                      |  | Guatemala              |  | 53  | 
|Rubens V. Amaral Jr. |  | Chief Commercial Officer and General Manager of the   Banks New York Agency |  | Brazil                 |  | 47  | 
|Ernesto A. Bruggia   |  | Chief Operations Officer                                                     |  | Argentina              |  | 50  | 
|Miguel Moreno        |  | Senior Vice President, Controller                                            |  | Colombia               |  | 53  | 
|Gregory Testerman    |  | Senior Vice President, Treasurer                                             |  | U.S.A.                 |  | 43  | 
|Carlos Yap S.        |  | Senior Vice President, Chief Financial Officer                               |  | Panama                 |  | 50  | 
|Ana Maria de Arias   |  | Senior Vice President, Human Resources and Corporate   Operations            |  | Panama                 |  | 42  | 
|Miguel A. Kerbes     |  | Senior Vice President, Chief Risk Officer                                    |  | Uruguay                |  | 46  | 

Jaime Riverahas served as a director of the Bank since 2004, when he was appointed Chief Executive Officer of the institution.  Mr. Rivera joined the Bank in 2002 as Chief Operating Officer.  Previously, Mr. Rivera was employed by Bank of America Corporation in various capacities since 1978, including:  Managing Director of the Latin America Financial Institutions Group in Miami and at the Latin America Corporate Finance team in New York, as General Manager in Brazil, Argentina, Uruguay and Guatemala, as Marketing Manager in Chile, and as Manager of Latin America Information Systems in Venezuela. Mr. Rivera has held Board positions with the Council of the Americas, the Florida International Bankers Association, and the Latin American Agribusiness Development Corporation.  Mr. Rivera is a member of the International Advisory Committee (IAC) to the New York Stock Exchange
Board of Directors.

Rubens V. Amaral Jr.became Chief Commercial Officer of the Bank in March 2004.  He worked for Banco do Brasil, New York Branch as General Manager and Managing Director for North America since 2000.  Mr. Amaral was employed by Banco do Brasil in various capacities since 1975, holding the positions of Managing Director, International Division and alternate member of the board of directors in 1998, Executive General Manager of the International Division in Sao Paulo from 1994 to 1998, Deputy General Manager in the New York branch in charge of the Trade Finance & Correspondent Banking Department, Head of Staff of the International Division from 1993 to 1994 and Advisor, Head of Department and General Manager in the Trade Finance Area at the International Division - Head Office, from 1989 to 1993.  Mr. Amaral also served as a representative for the Central Bank of


Brazil from 1982 to 1988 in banking supervision.

42

---



Ernesto A. Bruggiabecame Chief Operations Officer of the Bank in July 2004.  Mr. Bruggia served as Chief Executive Officer of Banco de la Provincia de Buenos Aires (BPBA) from 1999 to 2004, and as Chief Executive Officer of Grupo BAPRO (holding company of BPBA) from 1998 to 2004.  Mr. Bruggia was employed by BPBA in various capacities since 1976, including: as Assistant General Manager from 1993 to 1999, as Finance and International Relations Manager from 1992 to 1993, as International Operations Manager from 1990 to 1992, as Deputy Manager in charge of International Operations from 1989 to 1990, as Deputy Manager in charge of the International Division in 1985 and as Chief of International Audit in 1983.  Mr. Bruggia began his career with BPBA in 1976 in its Stock Exchange Department.

Miguel Morenohas served as Senior Vice President and Controller of the Bank since September 2001.  He was a Partner and Information Technology Consulting Manager for Price Waterhouse, Bogotá, Colombia from 1988 to 2001, and served as Vice President of Information Technology and Operations for Banco de Crédito, Bogotá, Colombia from 1987 to 1988.  Mr. Moreno served as Chief Executive Officer, TM Ingeniería, Bogotá, Colombia, from 1983 to 1987 and as Chief Executive Officer, ICDS Ltd., Bogotá, Colombia, from 1982 to 1987.  He was Head of the Industrial Engineering Department, Los Andes University, Colombia, from 1982 to 1984.  Mr. Moreno was employed by SENA, as Chief of the Organization and Systems Office, Colombia from 1977 to 1981, and worked for the Finance and Public Credit Ministry of Colombia as Advisor to the Minister from 1976 to
1977.

Gregory Testermanhas served as Senior Vice President and Treasurer of the Bank since January 2005.  Mr. Testerman worked for Banco Santander Central Hispano, S.A. from 1986 to 2003 in various capacities, including: as General Manager, Miami Agency, from 1999 to 2003, as General Manager, Tokyo Branch, as Country Manager in Japan from 1995 to 1999, as Vice President, Head of Financial Control, Benelux & Asia Pacific, from 1991 to 1995, as Second Vice President, Special Credit Valuation Assignment, London Branch, in 1991, as Second Vice President, Treasury Operations Manager, Belgium, from 1989 to 1991, and as Second Vice President, Management Reporting, Belgium, from 1986 to 1989.  Mr. Testerman began his career with The Chase Manhattan Bank, N.A. as Assistant Treasurer in Belgium in 1986, and as part of the Corporate Controllers Development Program in New York from 1984 to
1986.

Carlos Yap S.has served as Senior Vice President and Chief Financial Officer, of the Bank since July 2002.  Mr. Yap previously served as Vice President, Finance, of the Bank from 1993 to 2002.  Prior to this position, Mr. Yap worked for the Bank in the departments of Institutional Planning, Treasury, Correspondent International Banking and Capital Markets from 1980 to 1993.  Prior to his employment by the Bank, Mr. Yap worked for Banco Nacional de Panama in its Credit Department from 1979 to 1980, Azucarera Nacional, S.A. and the Panama Canal Company from 1977 to 1979.

Ana Maria de Arias has served as Senior Vice President of Human Resources and Corporate Operations of the Bank since June 2004.  Prior to her employment by the Bank, she served as Vice President of Human Resources of Banco General, S.A., Panama, from 2000 to 2004, and as Assistant Vice President of Human Resources, from 1999 to 2000.  She was employed by the Panama Canal Commission, Panama, in various capacities from 1990 to 1999.

Miguel A. Kerbeshas served as Senior Vice President and Chief Risk Officer, of the Bank since July 2002.  Mr. Kerbes previously served as Vice President, Risk Management, of the Bank from 2000 to 2002.  He was the Assistant Credit Director for the Southern Cone Area of Banco Santander-Chile from 1995 to 2000.  Mr. Kerbes also served as the Head of Credit Division at Banco Boston, Chile, from 1992 to 1995, and was employed by ING Bank in various capacities from 1982 to 1992.

B.      Compensation

Cash Compensation

Executive Officers

The aggregate amount of cash compensation paid by the Bank during the year ended December 31, 2005 to the executive officers of the Bank as a group for services in all capacities was $2,633,036.  During the fiscal year ended December 31, 2005, the Bank accrued, and in February 2006, paid performance-based bonuses to the Banks executive officers in the aggregate amount of $847,000.  At December 31, 2005, the total amount set aside or accrued by the Bank to provide pension, retirement or similar benefits for executive officers was approximately $554,276.

43

---



The Bank sponsors a defined contribution plan for its expatriate officers. The Banks contributions are determined as a percentage of the eligible officers annual salary, with each officer contributing an additional amount withheld from his salary and deposited in a savings account with the Bank, earning interest at market rates. During the years 2005, 2004, and 2003, the Bank charged to salaries expense $165,188, $178,626, $139,934, respectively, with respect to this plan.  As of December 31, 2005 and 2004, the accumulated liability payable under this contribution plan amounted to $483,839 and $356,369, respectively.

2005 CEO Compensation

The 2005 compensation of the Banks chief executive officer included a base salary of $300,000, a performance-based cash bonus of $235,000, a performance-based indexed stock option grant with a value of $231,000, a retirement plan that included a contribution from the Bank of $35,292 during 2005, and executive perquisites for $11,660.  In addition, the CEO has a contractual severance payment in case of termination without cause of $300,000.

Board of Directors Compensation

The Board revised the compensation of the directors on July 19, 2003. As part of the revised compensation plan each non-employee director of the Bank is eligible to receive an annual amount of up to $30,000 for services as a director and an additional amount of $1,500 for each meeting of the Board and each meeting of stockholders attended, and $1,000 for each Board Committee meeting attended.  The Chairman of the Board is eligible to receive an additional 50% of the compensation that other directors are eligible to receive.  The Chairman of each Committee of the Board is eligible to receive an additional amount of $500 for each Board Committee meeting attended. The aggregate amount of cash compensation paid by the Bank during the year ended December 31, 2005 to the directors of the Bank as a group for their services as directors was $679,250.

Share Compensation and Ownership

Share Compensation

During 1995 and 1999, the Board approved two stock option plans for employees (the 1995 and 1999 Stock Option Plans).  On July 19, 2003, the Board decided to discontinue these plans and consequently, no additional options were granted.  As of December 31, 2005, 62,766 Class E shares had been purchased through the exercise of stock options granted under the 1995 and 1999 Stock Option Plans.

For additional information regarding the 1995 and 1999 Stock Option Plans, see Note 14 to the Consolidated Financial Statements.

In 1999, the Board approved the adoption of two employee stock programs, the Deferred Equity Unit Plan (the DEU Plan) and the Deferred Compensation Plan (the DC Plan).  Each of these plans were implemented in the year 2001 and subsequently terminated in July 2003.  While awards are no longer being granted under these plans, as of December 31, 2005, an aggregate number of 122 and 27,953 deferred equity units, representing the right to acquire the same number of Class E shares or the economic equivalent thereof, had been granted to eligible employees of the Bank and were outstanding under the DEU Plan and the DC Plan, respectively.  For additional information regarding Deferred Equity and Deferred Compensation Plans, see Note 14 to the Consolidated Financial Statements.

In 2000, the Board adopted a stock option plan (the Board Plan) for the non-employee directors of the Bank, which, was subsequently terminated in 2003.  As of December 31, 2005, stock options with respect to 2,584 Class E shares had been granted by the Board under the Board Plan at an exercise price of $32.88 per Class E share.  On February 2006, all of the stock options granted by the Board under the Board Plan expired, and none of the stock options granted were exercised.  For additional information regarding the Board Plan, see Note 14 to the Consolidated Financial Statements.

44

---



On April 13, 2004, the Board approved an indexed stock option plan (the Indexed Stock Option Plan) for officers and directors, which, was subsequently terminated in April 2006.As of December 31, 2005, indexed options with respect to 32,480 and 304,440 Class E shares had been granted to directors and officers, respectively, by the Board under the Indexed Stock Option Plan.  For additional information regarding the Indexed Stock Option Plan, see Note 14 to the Consolidated Financial Statements.

In 2003, the Board adopted the Board Restricted Stock Plan for the non-employee directors of the Bank.    During 2005, 2004 and 2003 the Bank issued under this plan, 5,320, 6,242 and 9,547, Class E shares, respectively, and compensation expense charged against income was $95 thousand each year.  For additional information regarding the Board Restricted Stock Plan, see Note 14 to the Consolidated Financial Statements.

Beneficial Ownership

As of December 31, 2005, the Banks executive officers and directors, as a group, owned an aggregate of 26,595 Class E shares, which was approximately 0.1% of all issued and outstanding Class E shares.

The following tables set forth information regarding the number of shares owned by the Banks executive officers and options and rights held as of December 31, 2005.

|Name and   Position of    Executive Officer                                       |  | Number of   Shares    Beneficially Owned   as of Dec. 31, 2005 |  | Number of   Shares   that may be    Acquired   within 60 days of   Dec. 31, 2005 |  | Stock   Options |  | Rights   under    Deferred    Compensation   Plan |  | Indexed   Stock    Options 1 | 
|--------------------------------------------------------------------------------- |  | -------------------------------------------------------------- |  | -------------------------------------------------------------------------------- |  | --------------- |  | ------------------------------------------------- |  | ---------------------------- | 
|                                                                                  |  |                                                                |  |                                                                                  |  |                 |  |                                                   |  |                              | 
|Jaime RiveraChief Executive Officer                                               |  | 1,400                                                          |  | 0                                                                                |  | 0               |  | 770                                               |  | 155,709                      | 
|Rubens V. Amaral Jr.Chief Commercial Officer                                      |  | 1,000                                                          |  | 0                                                                                |  | 0               |  | 0                                                 |  | 102,638                      | 
|Ernesto A. BruggiaChief Operations Officer                                        |  | 2,155                                                          |  | 0                                                                                |  | 0               |  | 0                                                 |  | 37,992                       | 
|Miguel MorenoSenior Vice President
Controller                                     |  | 2,000                                                          |  | 0                                                                                |  | 0               |  | 597                                               |  | 35,757                       | 
|Gregory TestermanSenior Vice PresidentTreasurer                                   |  | 1,300                                                          |  | 0                                                                                |  | 0               |  | 0                                                 |  | 20,998                       | 
|Carlos   Yap SSenior Vice PresidentChief Financial Officer                        |  | 0                                                              |  | 27,163                                                                           |  | 27,163          |  | 545                                               |  | 26,574                       | 
|Ana   Maria de AriasSenior Vice PresidentHuman Resources and Corporate Operations |  | 590                                                            |  | 0                                                                                |  | 0               |  | 0                                                 |  | 21,176                       | 
|Miguel   A. KerbesSenior Vice PresidentChief Risk Officer                         |  | 0                                                              |  | 3,750                                                                            |  | 3,750           |  | 621                                               |  | 29,830                       | 
|                                                                                  |  |                                                                |  |                                                                                  |  |                 |  |                                                   |  |                              | 
|Total                                                                             |  | 8,445                                                          |  | 30,913                                                                           |  | 30,913          |  | 2,533                                             |  | 430,674                      | 
|                                                                                  |  |                                                                |  |                                                                                  |  |                 |  |                                                   |  |                              | 

| 
|-
|1

In addition, as of the date hereof, there are 3,582 rights outstanding under the DC Plan that were granted to former executive officers of the Bank.

The following table sets forth information regarding ownership of the Banks shares by members of its Board, restricted shares held under the Board Restricted Stock Plan and options received under the Indexed Stock Option Plan, as of December 31, 2005.

45

---



|Name of   Director           |  | Number of Shares    Beneficially Owned as    of Dec. 31, 20051 |  | Number of Shares that    may be Acquired    within 60 days of   Dec. 31, 2005 |  | Indexed Stock   Options2 |  | Restricted Shares | 
|---------------------------- |  | -------------------------------------------------------------- |  | ----------------------------------------------------------------------------- |  | ------------------------ |  | ----------------- | 
|                             |  |                                                                |  |                                                                               |  |                          |  |                   | 
|Maria   da Graça França 3    |  | 0                                                              |  | 0                                                                             |  | 0                        |  | 0                 | 
|Guillermo   Güémez García 4  |  | 0                                                              |  | 0                                                                             |  | 0                        |  | 0                 | 
|Santiago   Perdomo Maldonado |  | 2,222                                                          |  | 0                                                                             |  | 5,960                    |  | 2,222             | 
|Will C. Wood                 |  | 4,222                                                          |  | 0                                                                             |  | 5,960                    |  | 2,222             | 
|Mario   Covo                 |  | 2,222                                                          |  | 0                                                                             |  | 5,960                    |  | 2,222             | 
|Herminio   Blanco            |  | 1,217                                                          |  | 0                                                                             |  | 5,960                    |  | 1,217             | 
|William Hayes                |  | 3,717                                                          |  | 0                                                                             |  | 5,960                    |  | 1,217             | 
|Alexandre Lodygensky Jr.     |  | 1,217                                                          |  | 0                                                                             |  | 5,960                    |  | 1,217             | 
|Gonzalo   Menéndez Duque     |  | 3,333                                                          |  | 0                                                                             |  | 8,942                    |  | 3,333             | 
|                             |  |                                                                |  |                                                                               |  |                          |  |                   | 
|Total                        |  | 18,150                                                         |  | 0                                                                             |  | 44,702                   |  | 13,650            | 
|                             |  |                                                                |  |                                                                               |  |                          |  |                   | 

| 
|-
|1
|2
|3
|4

For additional information regarding stock options granted to executive officers and directors, see Note 14 to the Consolidated Financial Statements.

C.      Board Practices

Corporate Governance

The Board has decided not to constitute a corporate governance committee. Given the importance that corporate governance has for the Bank, the Board decided to address all matters related to corporate governance in plenary meetings of the Board.  The Audit and Compliance Committee is responsible for promoting continued improvement in the Banks corporate governance and to verify compliance with all applicable policies.

The Bank has included the information regarding its corporate governance practices necessary to comply with Section 303A of the New York Stock Exchanges Listed Company Manual/Corporate Governance Rules on its website (www.blx.com).  Additionally, the Banks website (under Corporate Governance) provides a summary of the significant differences between corporate governance practices commonly used by the Bank and other public companies in Panama and the NYSE Standards for U.S. domestic companies.

Stockholders, employees of the Bank, and other interested parties may communicate directly with the Board by corresponding to the address below.  Correspondence will be discussed at the next scheduled meeting of the Board, or as indicated by the urgency of the matter.

Attn: Board of Directors of Banco Latinoamericano de Exportaciones, S. A.
c/o Mr. Gonzalo Menéndez Duque, Director & Chairman of the Board of
Directors Privileged & Confidential P.O. Box 0819-08730Panama, Republic of Panama

In addition, Bladex has selected EthicsPoint to provide stockholders, employees of the Bank, and other interested parties with an alternative channel to report anonymously actual or possible violations of the Banks Code of Ethics, as well as other work-related situations or irregular or suspicious transactions, accounting matters, internal audit or accounting controls. In order to file a report, a link is provided in the Banks website (www.blx.com), under Corporate Governance  Private Filing of Reports.

Information as to Dignatarios

The following table sets forth the names, countries of citizenship, and ages of the Banks dignatarios, their current office or position with other institutions and their current office or position with the Bank.  Dignatarios are elected annually by the members of the Board.  Dignatarios attend meetings of the Board, participate in discussions and offer advice and counsel to the Board, but do not have the power to vote (unless they also are directors of the Bank).

46

---



|Name                                                                      |  | Country of Citizenship |  | Position held by Dignatariowith the Bank |  | Age | 
|------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------------------------- |  | --- | 
|                                                                          |  |                        |  |                                          |  |     | 
|Gonzalo   Menéndez Duque 1   Director  Banco de Chile                    |  | Chile                  |  | Chairman   of the Board                  |  | 57  | 
|Jaime Rivera   Bladex                                                     |  | Guatemala              |  | Chief   Executive Officer                |  | 53  | 
|Maria   da Graça França   Director  Internal Control  Banco do   Brasil |  | Brazil                 |  | Treasurer                                |  | 57  | 
|Ricardo   Manuel Arango
Partner  Arias, Fábrega & Fábrega                |  | Panama                 |  | Secretary                                |  | 45  | 

| 
|-
|1

Committees of the Board of Directors

The Board conducts its business through meetings of the Board and through its Committees.  During the fiscal year ended December 31, 2005, the Board held twelve meetings.  Each director attended approximately 89% of the total number of Board meetings held during the fiscal year ended December 31, 2005.

The following table sets forth the four Committees established by the Board, the current number of members of each Committee and the total number of meetings held by each Committee during the fiscal year ended December 31, 2005:

|Committee                                   |  | Number of   members |  | Total   number of meetings held | 
|------------------------------------------- |  | ------------------- |  | ------------------------------- | 
|                                            |  |                     |  |                                 | 
|Audit and Compliance Committee              |  | 4                   |  | 11                              | 
|Credit Policy and Risk Assessment Committee |  | 5                   |  | 6                               | 
|Assets and Liabilities Committee            |  | 5                   |  | 6                               | 
|Nomination and Compensation Committee       |  | 4                   |  | 5                               | 

The Bank has included the charters of its four Committees established by the Board on its website www.blx.com.

Audit and Compliance Committee

The Audit and Compliance Committee is a standing Committee of the Board.  According to its Charter, the Audit and Compliance Committee must be comprised of at least three directors.  The current members of the Audit and Compliance Committee are Will C. Wood (Chairman of the Audit and Compliance Committee), Gonzalo Menéndez Duque, Santiago Perdomo and Maria da Graça França.

All members of the Audit and Compliance Committee are independent directors, as determined by the Board, and at least one director is a financial expert. No member of the Audit and Compliance Committee is an employee of the Bank.

The Audit and Compliance Committee meets at least six times a year, as required by the Superintendency of Banks of Panama, or more often if the circumstances so require.

The Audit and Compliance Committee reviewed and recommended to the Board that the audited consolidated financial statements of the Bank for the year ended December 31, 2005 be included in the Banks Annual Report.  The Audit and Compliance Committee also recommended to the Board that it retain KPMG as its external independent auditors for the fiscal year ending December 31, 2006.  The Audit and Compliance Committee pre-approves all audit and non-audit services.

47

---



According to its Charter, the Audit and Compliance Committees main oversight responsibilities include the following:

| |  | Review the quality   of the accounting policies used in the preparation of the Banks interim   consolidated financial statements, the annual consolidated financial   statements and the annual report on Form 20-F. Consider whether they are   complete and consistent with the information known to Committee members, and   appropriately reflect accounting principles.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Review the effect and impact of regulatory and   professional pronouncements, as well as unusual or complex transactions and   off balance sheet structures, on the Financial Statements.                                                                                                                                                                                    
| |  | Consider and review the effectiveness of the Banks   internal controls over interim and annual financial information, including   data and information technology security and control.                                                                                                                                                                                     
| |  | Review and evaluate the performance of the External   Auditors, determine their fees and give final approval for a recommendation   to the stockholders on their renewal or replacement at the annual   Stockholders Meeting.  Monitor the   independence of the external auditors.                                                                                         
| |  | Review the effectiveness of the system established   for monitoring compliance with laws and regulations (including policies and   procedures against money laundering and terrorism finance), and the results   of the investigations and follow-up (including disciplinary actions) made by   Management in any instances of non-compliance.                               
| |  | Establish and maintain procedures for: (i) receipt,   filing and handling of complaints received by the Bank regarding accounting,   accounting internal controls or audit issues; and (ii) confidential and   anonymous submission of concerns regarding questionable accounting or audit   issues.                                                                         
| |  | Review the Banks compliance with its Code of   Ethics.                                                                                                                                                                                                                                                                                                                      
| |  | Review and evaluate the adequacy of the work performed by the Banks   Controller, Chief Auditor, and Compliance Officer.                                                                                                                                                                                                                                                    

The Charter of the Audit and Compliance Committee requires an annual self-evaluation of the Committees performance.

Nomination and Compensation Committee

The Nomination and Compensation Committee is a standing Committee of the Board.  No member of the Nomination and Compensation Committee can be an employee of the Bank.  The Board has determined that all members of the Nomination and Compensation Committee are independent. The current members of the Nomination and Compensation Committee are Santiago Perdomo (Chairman of the Committee), Mario Covo, Maria da Graça França, and William Hayes.

The Committee meets at least four times per year.

The Nomination and Compensation Committees primary responsibilities are to assist the Board by identifying candidates to become Board members, and recommending nominees for the annual meetings of stockholders; by making recommendations to the Board concerning candidates for Chief Executive Officer and other senior management, and counseling on succession planning for senior management; by recommending compensation for Board members and Committee members, including cash and equity compensation; by recommending compensation for senior management and employees of the Bank, including cash and equity compensation, and policies for senior management and employee benefit programs and plans; and by reviewing and recommending changes to the Banks Code of Ethics; and by advising senior management on issues related to the Banks personnel.

The Charter of the Nomination and Compensation Committee requires an annual self-evaluation of the Committees performance.

48

---



Advisory Council

The Advisory Council was created by the Board in April 2000 pursuant to the powers granted to the Board under the Banks Articles of Incorporation.  The duties of Advisory Council members consist primarily of providing advice to the Board with respect to the business of the Bank in their areas of expertise.  Each member of the Advisory Council receives $5,000 for each Advisory Council meeting attended.  The aggregate amount of fees paid by the Bank during the fiscal year ended December 31, 2005 for services rendered by the Advisory Council during 2005 was $20,000.  During the fiscal year ended December 31, 2005, the Advisory Council met once.  The Advisory Council meets when convened by the Board.

The following table sets forth the names, positions, countries of citizenship and ages of the members of the Advisory Council of the Bank.

|                            |  |                                                                   |  |                        |  |     | 
|--------------------------- |  | ----------------------------------------------------------------- |  | ---------------------- |  | --- | 
|Name                        |  | Position                                                          |  | Country of Citizenship |  | Age | 
|                            |  |                                                                   |  |                        |  |     | 
|Luis   Pagani               |  | President
    Arcor S.A.I.C.                                      |  | Argentina              |  | 48  | 
|Roberto   Teixeira da Costa |  | Board Member
    Sul America, S.A.                                |  | Brazil                 |  | 71  | 
|Carlos   Martabit           |  | General   Manager, Finance Division
    Banco del Estado de Chile |  | Chile                  |  | 52  | 
|Eugenio   Clariond          |  | Chief Executive Officer
    Grupo Imsa, S.A. de C.V.              |  | Mexico                 |  | 62  | 
|Alberto   Motta, Jr         |  | Vice President
    Inversiones Bahia Ltd.                         |  | Panama                 |  | 59  | 
|Alfredo   Riviere           |  | President
    Sural, C.A.                                         |  | Venezuela              |  | 66  | 

D.      Employees

As of December 31, 2005, the total number of permanent employees was 169, which were geographically distributed as follows: Head Office in Panama: 142; New York Agency: 8; Representative Office in Argentina: 3; Representative Office in Brazil: 7; and Representative Office in Mexico: 3.

E.      Share Ownership

As of December 31, 2005, the Banks executive officers and directors, as a group, owned an aggregate of 26,595 Class E shares, which was approximately 0.1% of all issued and outstanding Class E shares.

For additional information regarding the Banks equity compensation for directors and Senior Management, see Compensation.

|Item 7. | Major Shareholders and Related Party   Transactions
|------- | ---------------------------------------------------

A.      Major Shareholders

As of December 31, 2005, the Bank was not directly or indirectly owned or controlled by another corporation or any foreign government, and no person was the registered owner of more than 13% of the total outstanding shares of voting capital stock of the Bank.

49

---



The following table sets forth information regarding the Banks stockholders that are the beneficial owners of 5% or more of any one class of the total outstanding shares of voting capital stock of the Bank, at December 31, 2005:

|                                          |  | At   December 31, | 
|----------------------------------------- |  | ----------------- | 
|                                          |  |                   | 
|                                          |  | Number of Shares  | 
|                                          |  |                   | 
|Class A                                   |  |                   | 
|Banco   de la Nación Argentina            |  | 1,045,348         | 
|Banco   do Brasil1                        |  | 974,551           | 
|Banco   de Comercio Exterior de Colombia  |  | 488,547           | 
|Banco   de la Nación Perú                 |  | 446,556           | 
|Banco   Central del Paraguay              |  | 434,658           | 
|Banco   Central del Ecuador               |  | 431,217           | 
|Banco   del Estado de Chile               |  | 323,413           | 
|                                          |  |                   | 
|Total   Shares of Class A Common Stock    |  | 6,342,189         | 
|                                          |  |                   | 
|Class B                                   |  | Number of Shares  | 
|                                          |  |                   | 
|Banco   de la Provincia de Buenos Aires   |  | 884,461           | 
|Banco   de la Nación Argentina            |  | 295,945           | 
|Mizuho Corporate Bank Ltd                 |  | 294,345           | 
|                                          |  |                   | 
|Total   Shares of Class B Common Stock    |  | 3,214,344         | 
|                                          |  |                   | 
|Class E2                                  |  | Number of Shares  | 
|                                          |  |                   | 
|Oppenheimer Funds Inc                     |  | 4,889,605         | 
|Mondrian Investment Partners   Ltd        |  | 3,461,500         | 
|Arnhold & S.   Bleichroeder Advisers, LLC |  | 2,787,720         | 
|Franklin Resources Inc                    |  | 2,165,700         | 
|Brandes Investment Partners,   LP         |  | 1,853,492         | 
|Artisan Partners LP                       |  | 1,597,214         | 
|Capital Research and   Management Co      |  | 1,475,000         | 
|                                          |  |                   | 
|Total   Shares of Class E Common Stock    |  | 28,540,242        | 
|                                          |  |                   | 
|Total   Shares of Common Stock            |  | 38,096,775        | 
|                                          |  |                   | 

| 
|-
|1
|2

All common shares have the same rights and privileges regardless of their class, except that:

| |  | The affirmative vote of three-quarters (3/4) of the   issued and outstanding Class A shares is required (A) to dissolve and   liquidate the Bank, (B) to amend certain material provisions of the Amended   and Restated Articles of Incorporation, (C) to merge or consolidate the Bank   with another entity and (D) to authorize the Bank to engage in activities   other than those described as the purposes of the Bank in its Amended and   Restated Articles of Incorporation;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Class E shares and the preferred shares are   freely transferable, while the Class A shares and Class B shares can only be   transferred to qualified holders;                                                                                                                                                                                                                                                                                                                    
| |  | The Class B shares may be converted into Class E   shares;                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | The holders of Class A shares and Class B shares   benefit from pre-emptive rights, but the holders of Class E common shares do   not; and (v) the classes vote separately for their respective Directors.                                                                                                                                                                                                                                                                            
| |  | The classes vote separately for their respective   Directors.                                                                                                                                                                                                                                                                                                                                                                                                                         

B.      Related Party Transactions

Certain directors of the Bank are executive officers and/or directors of banks and/or other financial institutions located in Latin America, the Caribbean and elsewhere.  Some of these banks and/or other financial institutions own shares of the Banks common stock and have entered into loan transactions with the Bank in the ordinary course of business. The terms and conditions of such loan transactions, including interest rates and collateral requirements, are substantially the same as the terms and conditions of comparable loan transactions entered into with other persons under similar market conditions.  As a matter of policy, directors of the Bank do not participate in the approval process for credit facilities extended to institutions of which they are executive officers or directors nor do they participate with respect to decisions regarding country exposure limits in countries in
which such institutions are domiciled.

At December 31, 2005, the Bank did not have any outstanding credit exposure with related parties as defined by the Panamanian Superintendency of Banks.

50

---



C.      Interests of Experts and Counsel

Not required in this Annual Report.

|Item 8. | Financial Information
|------- | ---------------------

A.      Consolidated Statements and Other Financial Information

The information included in Item 18 of this Annual Report is referred to and incorporated by reference into this Item 8.A.

Dividends

The following table shows information about common dividends paid on the dates indicated.

|Payment   date   |  | Record date          |  | Dividend per share | 
|---------------- |  | -------------------- |  | ------------------ | 
|                 |  |                      |  |                    | 
|April 5, 2004    |  | March   26, 2004     |  | $0.10              | 
|July 7, 2004     |  | June   28, 2004      |  | $0.10              | 
|October 7, 2004  |  | September   27, 2004 |  | $1.15              | 
|January 17, 2005 |  | January   6, 2005    |  | $0.15              | 
|April 11, 2005   |  | March   28, 2005     |  | $2.15 1            | 
|July 15, 2005    |  | July   5, 2005       |  | $0.15              | 
|October 14, 2005 |  | October   4, 2005    |  | $0.15              | 
|January 17, 2006 |  | January   6, 2006    |  | $0.15              | 
|April 6, 2006    |  | March   24, 2006     |  | $1.19 2            | 

| 
|-
|1
|2

In February 2006, the Banks Board declared a 25% increase in the quarterly dividend, from $0.15 per share to $0.1875 per share.  In addition, the Board declared a special cash dividend of $1.00 per common share.  Both the increased quarterly dividend and special dividend were paid on April 6, 2006 to stockholders of record as of March 24, 2006.

The following table shows information about preferred dividends paid on the dates indicated.

|Payment   date    |  | Record date        |  | Dividend per share | 
|----------------- |  | ------------------ |  | ------------------ | 
|                  |  |                    |  |                    | 
|May 17, 2004      |  | April   30, 2004   |  | $0.40              | 
|November 15, 2004 |  | November   8, 2004 |  | $1.90              | 
|May 16, 2005      |  | April   29, 2005   |  | $2.15              | 
|November 15, 2005 |  | October   31, 2005 |  | $2.18              | 

B.      Significant Changes

Not applicable

|Item 9. | The Offer and Listing
|------- | ---------------------

A.      Offer and Listing Details

The Banks Class E shares are listed on the New York Stock Exchange under the symbol BLX.  The following table shows the high and low sales prices of the Class E shares on the New York Stock Exchange for the periods indicated.

51

---



|                 |  | Price per   Class E Share (in $) | 
|---------------- |  | -------------------------------- | 
|                 |  |                                  | 
|                 |  | High                             | 
|                 |  |                                  | 
|2001             |  | 37.70                            | 
|2002             |  | 29.70                            | 
|2003             |  | 19.95                            | 
|2004             |  | 20.00                            | 
|2005             |  | 25.50                            | 
|2004:            |  |                                  | 
|First   Quarter  |  | 19.23                            | 
|Second   Quarter |  | 18.98                            | 
|Third   Quarter  |  | 17.00                            | 
|Fourth   Quarter |  | 20.00                            | 
|2005:            |  |                                  | 
|First   Quarter  |  | 25.50                            | 
|Second   Quarter |  | 20.95                            | 
|Third   Quarter  |  | 18.52                            | 
|Fourth   Quarter |  | 18.95                            | 
|2006:            |  |                                  | 
|First   Quarter  |  | 18.70                            | 
|2005:            |  |                                  | 
|December         |  | 18.95                            | 
|2006:            |  |                                  | 
|January          |  | 18.70                            | 
|February         |  | 18.61                            | 
|March            |  | 18.28                            | 
|April            |  | 17.44                            | 
|May              |  | 17.04                            | 

B.      Plan of Distribution

Not required in this Annual Report.

C.      Markets

The Banks Class A shares and Class B shares were sold in private placements or sold in connection with the Banks 2003 rights offering, are not listed on any exchange and are not publicly traded.  The Banks Class E shares, which constitute the only class of shares publicly traded (on the New York Stock Exchange), represent approximately 75% of the total shares of the Banks common stock issued and outstanding at December 31, 2005.  The Banks Class B shares are convertible into Class E shares on a one to one basis.

D.      Selling Shareholders

Not required in this Annual Report.

E.      Dilution

Not required in this Annual Report.

F.      Expenses of the Issue

Not required in this Annual Report.

|Item 10. | Additional Information
|-------- | ----------------------

A.      Share Capital

Not required in this Annual Report.

B.      Memorandum and Articles of Association

The Amended and Restated Articles of Incorporation, filed as an exhibit to the Form 20-F for the fiscal year ended December 31, 2002 filed with the Commission on February 24, 2003, is referred to and incorporated by reference into this Item 10.B.

C.      Material Contracts

The Bank has signed service agreements with certain vendors that provide services that are necessary for the ongoing operations of its business and mainly related to the implementation during 2005 and 2006, of a new technology platform and telecommunications services. The terms of these agreements are up to 8 years and some of these agreements can be re-negotiated for annual or semi-annual price adjustments, after the fifth year.  These agreements also include maintenance and license payments, starting from 2007.  During 2005 amounts paid under these agreements are $2 million.  See Note 16 to the Consolidated Financial Statements.

52

---



D.      Exchange Controls

Currently, there are no Panamanian restrictions on the export or import of capital, including foreign exchange controls, and no restrictions on the payment of dividends or interest, nor are there limitations on the rights of foreign stockholders to hold or vote stock.

E.      Taxation

The following is a summary of certain U.S. federal and Panamanian tax matters that may be relevant with respect to the acquisition, ownership and disposition of Class E shares.  Prospective purchasers of Class E shares should consult their own tax advisors as to the United States, Panamanian or other tax consequences of the acquisition, ownership and disposition of Class E shares.

This summary does not address the consequences of the acquisition, ownership or disposition of the Banks Class A shares or Class B shares.

United States Taxes

This summary describes the principal U.S. federal income tax consequences of the ownership and disposition of the Class E shares, but does not purport to be a comprehensive description of all of the tax considerations that may be relevant to holders of Class E shares.  This summary applies only to current holders that hold Class E shares as capital assets and does not address classes of holders that are subject to special treatment under the United States Internal Revenue Code of 1986, as amended (the Code), such as dealers in securities or currencies, financial institutions, tax-exempt entities, regulated investment companies, insurance companies, securities traders that elect mark-to-market tax accounting, persons subject to the alternative minimum tax, certain U.S. expatriates, persons holding Class E shares as part of a hedging, constructive ownership or conversion transaction or a
straddle, holders whose functional currency is not the U.S. dollar, or a holder that owns 10% or more (directly, indirectly or constructively) of the voting shares of the Bank.

This summary is based upon the Code, existing, temporary and proposed regulations promulgated there under, judicial decisions and administrative pronouncements, as all in effect on the date of this Annual Report and which are subject to change (possibly on a retroactive basis) and to differing interpretations.  Purchasers or holders of Class E shares should consult their own tax advisors as to the U.S. federal, state and local, and foreign tax consequences of the ownership and disposition of Class E shares in their particular circumstances.

As used
herein, a U.S. Holder refers to a beneficial holder of Class E
shares that is, for U.S. federal income tax purposes, (1) an individual citizen
or resident of the United States, (2) a corporation, or an entity treated as a
corporation, organized or created in or under the laws of the U.S. or any
political subdivision thereof, (3) an estate the income of which is subject to
U.S. federal income taxation without regard to the source of its income, (4) a
trust, if both (A) a court within the United States is able to exercise primary
supervision over the administration of the trust and (B) one or more U.S.
persons (as defined in the Code) have the authority to control all substantial
decisions of the trust, or a trust that has made a valid election under U.S.
Treasury Regulations to be treated as a domestic trust, and (5) any holder
otherwise subject to U.S. federal income taxation on a
net income basis with respect to Class E shares (including a non-resident alien
individual or foreign corporation that holds, or is deemed to hold, any Class E
share in connection with the conduct of a U.S. trade or business).  In the
case of a holder of Class E shares that is a partnership for U.S. federal income
tax purposes, each partner will take into account its allocable share of income,
gain or loss from the Class E shares, and will take such income, gain or loss
into account under the rules of taxation applicable to such partner, taking into
account the activities of the partnership and the partner.

53

---



Taxation of Distributions

Subject to the Passive Foreign Investment Company Status discussion below, to the extent paid out of current or accumulated earnings and profits of the Bank as determined under U.S. federal income tax principles (earnings and profits), distributions made with respect to Class E shares (other than certain pro rata distributions of capital stock of the Bank or rights to subscribe for shares of capital stock of the Bank) will be includable in income of a U.S. Holder as ordinary dividend income in accordance with the U.S. Holders regular method of accounting for U.S. federal income tax purposes whether paid in cash or Class E shares.  To the extent that a distribution exceeds the Banks earnings and profits, such distribution will be treated, first, as a nontaxable return of capital to the extent of the U.S. Holders tax basis in the Class E shares and will reduce
the U.S. Holders tax basis in such shares, and thereafter as a capital gain from the sale or disposition of Class E shares.  See TaxationUnited States TaxesTaxation of Capital Gains.  The amount of the distribution will equal the gross amount of the distribution received by the U.S. Holder, including any Panamanian taxes withheld from such distribution.

Distributions
made with respect to Class E shares out of earnings and profits generally will
be treated as dividend income from sources outside the United States.  U.S.
Holders that are corporations will not be entitled to the dividends
received deduction under Section 243 of the Code with respect to such
dividends.  Dividends may be eligible for the special 15% rate applicable
to qualified dividend income received by an individual, provided,
that (1) the Bank is not a passive foreign investment company in the
year in which the dividend is paid and the immediately preceding year, (2) the
class of stock with respect to which the dividend is paid is readily tradable on
an established securities market in the U.S., and (3) the U.S. Holder held his
shares for more than 60 days during the 121-day period beginning 60 days prior
to the ex-dividend date and meets other holding period requirements. 
Subject to certain conditions and limitations, Panamanian tax withheld from
dividends will be treated as a foreign income tax eligible for deduction from
taxable income or as a credit against a U.S. Holders U.S. federal income
tax liability.  Distributions of dividend income made with respect to Class
E shares generally will be treated as passive income or, in the case
of certain U.S. Holders, financial services income, for purposes of
computing a U.S. Holders U.S. foreign tax credit.

Less than 25
percent of the Banks gross income is effectively connected with the
conduct of a trade or business in the United States, and the Bank expects this
to remain true.  If this remains the case, a holder of Class E shares that
is not a U.S. Holder (a non-U.S. Holder) generally will not be
subject to U.S. federal income tax or withholding tax on distributions received
on Class E shares that are treated as dividend income for U.S. federal income
tax purposes.  Special rules may apply in the case of non-U.S. Holders (1)
that are engaged in a U.S. trade or business, (2) that are former citizens or
long-term residents of the United States, controlled foreign
corporations, corporations that accumulate earnings to avoid U.S. federal
income tax, and certain foreign charitable organizations, each within the
meaning of the Code, or (3) certain non-resident alien individuals who are
present in the United States for 183 days or more during a taxable year. 
Such persons should consult their own tax advisors as to the U.S. federal income
or other tax consequences of the ownership and disposition of Class E
shares.

Taxation of Capital Gains

Gain or loss
realized by a U.S. Holder on the sale or other disposition of Class E shares
will be subject to U.S. federal income tax as capital gain or loss in an amount
equal to the difference between the U.S. Holders tax basis in the Class E
shares and the amount realized on the disposition.  Such gain will be
treated as long-term capital gain if the Class E shares are held by the U.S.
Holder for more than one year at the time of the sale or other
disposition.  Otherwise, the gain will be treated as a short-term capital
gain.  Gain realized by a U.S. Holder on the sale or other disposition of
Class E shares generally will be treated as U.S. source income for U.S. foreign
tax credit purposes, unless the gain is attributable to an office or fixed place
of business maintained by the U.S. Holder outside the United States or is
recognized by an individual whose tax home is outside the United States, and
certain other conditions are met.  For U.S. federal income tax purposes,
capital losses are subject to limitations on deductibility.  As a general
rule, U.S. Holders that are corporations can use capital losses for a taxable
year only to offset capital gains in that year.  A corporation may be entitled to carry back unused capital losses to the three preceding tax years and to carry over losses to the five following tax years.  In the case of non-corporate U.S. Holders, capital losses in a taxable year are deductible to the extent of any capital gains plus ordinary income of up to $3,000.  Unused capital losses of non-corporate U.S. Holders may be carried over indefinitely.

54

---



A non-U.S. Holder of Class E shares will generally not be subject to U.S. federal income tax or withholding tax on gain realized on the sale or other disposition of Class E shares.  Special rules may apply in the case of non-U.S. Holders (1) that are engaged in a U.S. trade or business, (2) that are former citizens or long-term residents of the United States, controlled foreign corporations, corporations which accumulate earnings to avoid U.S. federal income tax, and certain foreign charitable organizations, each within the meaning of the Code, or (3) certain non-resident alien individuals who are present in the United States for 183 days or more during a taxable year.  Such persons should consult their own tax advisors as to the United States or other tax consequences of the purchase, ownership and disposition of the Class E shares.

Passive Foreign Investment Company Status

Under the Code, certain rules apply to an entity classified as a passive foreign investment company (PFIC).  A PFIC is defined as any foreign (i.e., non-U.S.) corporation if either (1) 75% or more of its gross income for the taxable year is passive income (generally including, among other types of income, dividends, interest and gains from the sale of stock and securities) or (2) 50% or more of its assets (by value) produce, or are held for the production of, passive income.  The Code provides an exception for foreign institutions in the active conduct of a banking business, provided the institution is licensed to do business in the United States.  Under proposed regulations, the exception is for active banks licensed by federal or state regulatory authorities to do business as a bank in the United States, provided the foreign bank is not prohibited from taking
deposits or making loans.  Based on its current and intended method of operations as described herein, the Bank believes that it is not a PFIC under current U.S. federal income tax law because it is eligible for the exception available to U.S. licensed banks in the Code and the proposed regulations.  The Bank intends to continue to operate in a manner that will entitle the Bank to rely upon that exception to avoid classification as a PFIC.

If the Bank were to become a PFIC for purposes of the Code, unless a U.S. Holder makes the election described below, a U.S. Holder generally will be subject to a special tax charge with respect to (a) any gain realized on the sale or other disposition of Class E shares and (b) any excess distribution by the Bank to the U.S. Holder (generally, any distributions including return of capital distributions, received by the U.S. Holder on the Class E shares in a taxable year that are greater than 125 percent of the average annual distributions received by the U.S. Holder in the three preceding taxable years, or, if shorter, the U.S. Holders holding period).  Under these rules (1) the gain or excess distribution would be allocated ratably over the U.S. Holders holding period for the Class E shares, (2) the amount allocated to the current taxable year would be treated as ordinary
income, (3) the amount allocated to each prior year would be subject to tax at the highest rate in effect for that year; and (4) on interest charge at the rate generally applicable to underpayments of tax would be imposed with respect to the resulting tax attributable to each such prior year.  For purposes of the foregoing rules, a U.S. Holder of Class E shares that uses such stock as security for a loan will be treated as having disposed of such stock.

If the Bank were a PFIC, U.S. Holders of interests in a holder of Class E shares may be treated as indirect holders of their proportionate share of the Class E shares and may be taxed on their proportionate share of any excess distributions or gain attributable to the Class E shares.  An indirect holder also must treat an appropriate portion of its gain on the sale or disposition of its interest in the actual holder as gain on the sale of Class E shares.

If the Bank were to become a PFIC, a U.S. Holder could make an election, provided the Bank complies with certain reporting requirements, to have the Bank treated, with respect to such U.S. Holder, as a qualified electing fund (hereinafter referred to as a QEF election), in which case, the electing U.S. Holder would be required to include annually in gross income the U.S. Holders proportionate share of the Banks ordinary earnings and net capital gains, whether or not such amounts are actually distributed.  If the Bank were to become a PFIC, the Bank intends to so notify each U.S. Holder and to comply with all reporting requirements necessary for a U.S. Holder to make a QEF election and will provide to record U.S. Holders of Class E shares such information as may be required to make such QEF election.

55

---



If the Bank is a PFIC in any year, a U.S. Holder that beneficially owns Class E shares during such year must make an annual return on Internal Revenue Service Form 8621, which describes the income received (or deemed to be received if a QEF election is in effect) from the Bank.  The Bank will, if applicable, provide all information necessary for a U.S. Holder of record to make an annual return on Form 8621.

A U.S. Holder that owns certain marketable stock in a PFIC may elect to mark-to-market such stock and, subject to certain exceptions, include in income any gain (increases in market value) or loss (decreases in market value to the extent of prior gains recognized) realized as ordinary income or loss to avoid the adverse consequences described above.  U.S. Holders of Class E shares are urged to consult their own tax advisors as to the consequences of owning stock in a PFIC and whether such U.S. Holder would be eligible to make either of the aforementioned elections to mitigate the adverse effects of such consequences.

Information Reporting and Backup Withholding

Each U.S. payor making payments in respect of Class E shares will generally be required to provide the Internal Revenue Service (the IRS) with certain information, including the name, address and taxpayer identification number of the beneficial owner of Class E shares, and the aggregate amount of dividends paid to such beneficial owner during the calendar year.  Under the backup withholding rules, a holder may be subject to backup withholding at a current rate of 28% with respect to proceeds received on the sale or exchange of Class E shares within the United States by non-corporate U.S. Holders and to dividends paid, unless such holder (1) is a corporation or comes within certain other exempt categories (including securities broker-dealers, other financial institutions, tax-exempt organizations, qualified pension and profit sharing trusts and individual retirement accounts), and, when
required, demonstrates this fact or (2) provides a taxpayer identification number, certifies as to no loss of exemption and otherwise complies with the applicable requirements of the backup withholding rules.  Non-U.S. Holders are generally exempt from information reporting and backup withholding, but may be required to provide a properly completed Form W-8BEN (or other similar form) or otherwise comply with applicable certification and identification procedures in order to prove their exemption.  This backup withholding tax is not an additional tax and any amounts withheld from a payment to a holder of Class E shares will be refunded (or credited against such holders U.S. federal income tax liability, if any) provided that the required information is furnished to the IRS.

There is no income tax treaty between Panama and the United States.

Panamanian Taxes

The following is a summary of the principal Panamanian tax consequences arising in connection with the ownership and disposition of the Banks Class E shares.  This summary is based upon the laws and regulations of Panama, as well as court precedents and interpretative rulings, in effect as of the date of this Annual Report, all of which are subject to prospective and retroactive change.

General Principle

The Bank is exempt from income tax in Panama under a special exemption granted to the Bank pursuant to Law 38 of July 25, 1978.  In addition, under general rules of income tax in Panama, only income that is deemed to be Panama source income is subject to taxation in Panama. Accordingly, since the Banks income is derived primarily from sources outside of Panama and is not deemed to be Panama source income, even in the absence of such a special exemption, the Bank would have limited income tax liability in Panama.

Taxation of Distributions

Dividends whether cash or in kind, paid by the Bank in respect of its shares are also exempt from dividend tax or other withholding under the aforementioned special legislation. If such special legislation did not exist, Panama would impose a 10% withholding tax on dividends or distributions paid in respect of the Banks registered shares (20% in respect of the Banks bearer shares), to the extent such dividends are paid from income derived by the Bank from Panamanian sources.

56

---



Taxation of Capital Gains

Inasmuch as almost all of the Banks income derives from non-Panamanian sources, capital gains realized by an individual or a corporation, regardless of its nationality or residency, on the sale or other disposition outside of Panama of Class E shares should not be subject to taxation in Panama. However, there are no rules of income allocation currently in effect in Panama with respect to capital gains and it cannot be determined with certainty when the tax authorities would consider that a significant amount of the Banks income derives from Panamanian sources, thus resulting in the taxation of capital gains realized on the sale or disposition of the Banks Class E shares.

F.      Dividends and Paying Agents

Not required in this Annual Report.

G.      Statement by Experts

Not required in this Annual Report.

H.      Documents on Display

Upon written or oral request, the Bank will provide without charge to each person to whom this Annual Report is delivered, a copy of any or all of the documents listed as exhibits to this Annual Report (other than exhibits to those documents, unless the exhibits are specifically incorporated by reference in the documents).  Written requests for copies should be directed to the attention of Carlos Yap, Chief Financial Officer, Bladex, as follows: (i) if by regular mail, to P.O. Box 0819-08730, Panama City, Republic of Panama, and (ii) if by courier, to Calle 50 y Aquilino de la Guardia, Panama City, Republic of Panama.  Telephone requests may be directed to Mr. Yap at 011-507-210-8653.  Written requests may also be faxed to Mr. Yap at 011-507-269-6333 or sent via e-mail to cyap@blx.com.  Information is also available on the Banks website at: www.blx.com.

I.      Subsidiary Information

Not applicable

|Item 11. | Quantitative and Qualitative   Disclosure About Market Risk
|-------- | -----------------------------------------------------------

The Banks risk management policies, as approved by the Board from time to time, are designed to identify and control the Banks credit and market risks by establishing and monitoring appropriate limits on the Banks credit and market exposures.  Certain members of the Board constitute the Assets and Liabilities Committee, which meet on a regular basis and monitor and control the risks in each specific area.  At the management level, the Bank has a Risk Management Department that measures and controls the credit and market exposure of the Bank.

The Banks businesses are subject to market risk.  The components of market risk are interest rate risk inherent in the Banks balance sheet, price risk in the Banks principal investing portfolio and market value risk in the Banks trading portfolios.  For quantitative information relating to the Banks interest rate risk and information relating to the Banks management of interest rate risk, see Liquidity and Capital Resources, and Note 17 and Note 2(q) to the Consolidated Financial Statements.

For information regarding derivative financial instruments see Note 17 and Note 2 (q) to the Consolidated Financial Statements.  For information regarding investment securities see Information on the CompanyBusiness OverviewInvestment Securities and Note 4 to the Consolidated Financial Statements.

57

---



Information about Derivative Financial Instruments

The table below lists for each of the years 2005 to 2010 the notional amounts and weighted interest rates, as of December 31, 2005, for the Banks investments, borrowings and placements and interest rate swaps.  There were no cross currency swaps outstanding on this date.

|                                  |  | Maturities     | 
|--------------------------------- |  | -------------- | 
|                                  |  |                | 
|                                  |  | 2006           | 
|                                  |  |                | 
|                                  |  | (in thousands)
|Investments                       |  |                | 
|Fixed   rate                      |  |                | 
|US   Dollars                      |  | 20,000         | 
|Fixed   rate                      |  | 4.77%          | 
|Borrowings and Placements         |  |                | 
|Fixed   rate                      |  |                | 
|US   Dollars                      |  | 760,699        | 
|Fixed   rate                      |  | 4.73%          | 
|Variable   rate                   |  |                | 
|US   Dollars                      |  | 83,500         | 
|Variable   rate                   |  | 5.09%          | 
|Interest Rate Swaps - Assets      |  |                | 
|US   Dollars Fixed to Variable    |  |                | 
|Average   pay rate                |  |                | 
|Average   receive rate            |  |                | 
|Interest Rate Swaps - Liabilities |  |                | 
|US   Dollars Fixed to Variable    |  |                | 
|Average   pay rate                |  |                | 
|Average   receive rate            |  |                | 

| 
|-
|1

For information regarding fair value disclosure of financial instruments, see Note 19 to the Consolidated Financial Statements.

Foreign Exchange Risk Management and Sensitivity

The Bank accepts deposits and raises funds principally in United States dollars, and makes loans mostly in United States dollars.  At December 31, 2005, the Bank did not have non-dollar financial liabilities.  Currency exchange risk arises when the Bank accepts deposits or raises funds in one currency and lends or invests the proceeds in another.  Failure to adequately manage this risk could adversely affect the Banks results of operations if the value of the currency in which the Bank borrows declines compared to the value of the currency in which it lends or invests.  During 2005, the Bank managed this risk by not holding significant open foreign exchange positions.  The Bank uses foreign exchange forward contracts as part of its management of currency risks.  Foreign currency-denominated loans are funded with liability instruments denominated in the same
currency.  In the cases where these loans were funded in different currencies, forward foreign currency exchange or cross-currency swap contracts were used to fully hedge the risk resulting from this cross-currency funding.

|Item 12. | Description of Securities Other   than Equity Securities
|-------- | --------------------------------------------------------

Not required in this Annual Report.

PART II

|Item 13. | Defaults, Dividend Arrearages and   Delinquencies
|-------- | -------------------------------------------------

None.

58

---



|Item 14. | Material Modifications to the   Rights of Security Holders and Use of Proceeds
|-------- | ------------------------------------------------------------------------------

None.

|Item 15. | Controls and Procedures
|-------- | -----------------------

Evaluation of Disclosure Controls and Procedures

The Bank maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports it files under the Securities and Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms. Such controls include those designed to ensure that information for disclosure is communicated to the members of the Board and management, including the Chief Executive Officer (the CEO), as appropriate to allow timely decisions regarding required disclosure.

The CEO and Chief Financial Officer (the CFO), with the participation of management, evaluated the effectiveness of the Banks disclosure controls and procedures as of December 31, 2005. Based on such evaluation, the CEO and the CFO have concluded that, as of the end of such period, the Banks disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Bank in the reports that it files or submits under the Exchange Act.

Changes in Internal Controls

There have not been any changes in the Banks internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Banks fiscal year ended December 31, 2005, that have materially affected, or are reasonably likely to materially affect, the Banks internal control over financial reporting.

|Item 16. | Reserved
|-------- | --------

A.      Audit and Compliance Committee Financial Expert

The Banks Board has determined that the Bank has at least one audit and compliance committee financial expert serving on its Audit and Compliance Committee.  The Audit and Compliance Committee financial expert is Mr. Gonzalo Menéndez Duque.

B.      Code of Ethics

The Bank adopted a code of ethics that applies to the Banks principal executive officer and principal financial and accounting officers.  The Bank includes the information regarding its corporate governance practices necessary to comply with Section 303A of the New York Stock Exchanges Listed Company Manual/Corporate Governance Rules, including its code of ethics on its website (www.blx.com).

C.      Principal Accountant Fees and Services

The following table sets forth the aggregate fees billed for each of the fiscal years ended December 31, 2004 and 2005 for professional services rendered by the Banks independent auditors, KPMG:

|               |  | 2004     |  | 2005     | 
|-------------- |  | -------- |  | -------- | 
|               |  |          |  |          | 
|Audit Fees     |  | $356,225 |  | $336,674 | 
|Tax Fees       |  | 37,583   |  | 20,500   | 
|All Other Fees |  | 79,741   |  | 797      | 
|               |  |          |  |          | 
|Total          |  | $473,549 |  | $357,971 | 
|               |  |          |  |          | 

59

---



The following is a description of the type of services included within the categories listed above:

| |  | Audit Fees include aggregate fees billed for   professional services rendered by KPMG for the audit of the Banks annual   financial statements or services that are normally provided by KPMG in   connection with statutory and regulatory filings.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Tax Fees include aggregate fees billed for   professional services rendered by KPMG to the Bank for tax compliance, tax   advice and tax planning.                                                                                                   
| |  | All Other Fees include aggregate fees billed for   products and services provided by KPMG to the Bank, other than the services   reported in the two preceding paragraphs.                                                                           

Audit and Compliance Committee Pre-Approval Policies

The Audit and Compliance Committee pre-approves all audit and non-audit services to be provided to the Bank by the Banks independent auditors.

D.      Exemptions from the Listing Standards for Audit Committees

Not applicable.

E.      Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On August 5, 2004, the Bank announced a $50 million three-year open market stock repurchase program under which Bladex, may from time to time, repurchase its Class E shares of common stock, on the open market at the then prevailing market price.  Repurchases under the program are made in accordance with applicable law, and subject to all required regulatory approvals.  The repurchases are made using Bladexs cash resources, and the program may be suspended or discounted at any time without prior notice.

At December 31, 2005 the Bank has paid $21 million for 1,267,800 shares repurchased.  The following table shows information about shares repurchased by the Bank in the open market:

|Period1                               |  | Total Number of   Shares Purchased |  | Average Price   Paid per Share |  | Total Number of   Shares Purchased as    Part of Publicly    Announced Plans or    Programs |  | Maximum   Number of Shares   That May Yet Be    Purchased Under the    Plans or Programs | 
|------------------------------------- |  | ---------------------------------- |  | ------------------------------ |  | ------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- | 
|                                      |  |                                    |  |                                |  |                                                                                             |  |                                                                                          | 
|September 2004 (9.10.04    9.22.04)  |  | 231,200                            |  | $16.41                         |  | 231,200                                                                                     |  | 2,814,811                                                                                | 
|October 2004 (10.5.04    10.20.04)   |  | 230,700                            |  | $16.18                         |  | 230,700                                                                                     |  | 2,625,136                                                                                | 
|March 2005 (03.17.05)                 |  | 10,000                             |  | $21.93                         |  | 10,000                                                                                      |  | 1,926,724                                                                                | 
|May 2005 (05.13.05    05.26.05)      |  | 297,500                            |  | $17.08                         |  | 297,500                                                                                     |  | 2,175,838                                                                                | 
|August 2005 (08.11.05    08.31.05)   |  | 121,500                            |  | $17.06                         |  | 121,500                                                                                     |  | 2,057,247                                                                                | 
|September 2005 (09.1.05    09.30.05) |  | 376,000                            |  | $17.09                         |  | 376,000                                                                                     |  | 1,677,895                                                                                | 
|November 2005 (11.18.05    11.18.05) |  | 900                                |  | $17.07                         |  | 900                                                                                         |  | 1,678,808                                                                                | 
|February 2006 (02.23.06    02.23.06) |  | 3,200                              |  | $17.80                         |  | 3,200                                                                                       |  | 1,606,478                                                                                | 
|March 2006 (03.7.06    03.31.06)     |  | 278,700                            |  | $17.10                         |  | 278,700                                                                                     |  | 1,393,462                                                                                | 
|April 2006 (04.3.06    03.13.06)     |  | 102,700                            |  | $17.28                         |  | 102,700                                                                                     |  | 1,276,706                                                                                | 
|May 2006 (05.11.06    05.31.06)      |  | 188,500                            |  | $16.63                         |  | 188,500                                                                                     |  | 1,137,953                                                                                | 
|June 2006 (06.1.06    06.12.06)      |  | 100,500                            |  | $16.59                         |  | 100,500                                                                                     |  | 1,040,118                                                                                | 
|                                      |  |                                    |  |                                |  |                                                                                             |  |                                                                                          | 
|Total                                 |  | 1,941,400                          |  |                                |  | 1,941,400                                                                                   |  |                                                                                          | 
|                                      |  |                                    |  |                                |  |                                                                                             |  |                                                                                          | 

| 
|-
|1

60

---



PART III

|Item 17. | Financial Statements
|-------- | --------------------

The Bank is providing the financial statements and related information specified in Item 18.

|Item 18. | Financial Statements
|-------- | --------------------

|List of Consolidated Financial Statements |                                                                                                                                       
|----------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|                                          |                                                                                                                                       
|                                          | Independent Auditors Report                                                                                                          
|                                          |                                                                                                                                       
|                                          | Consolidated Balance Sheets at December 31, 2005 and   2004                                                                           
|                                          |                                                                                                                                       
|                                          | Consolidated Statements of Operations for each of   the Years in the  Three-Year Period   Ended December 31, 2005                     
|                                          |                                                                                                                                       
|                                          | Consolidated Statements of Changes in Stockholders   Equity for each  of the Years in the   Three-Year Period Ended December 31, 2005
|                                          |                                                                                                                                       
|                                          | Consolidated Statements of Comprehensive Income for   each of the Years in the Three-Year Period Ended December 31, 2005              
|                                          |                                                                                                                                       
|                                          | Consolidated Statements of Cash Flows for each of   the Years in the  Three-Year Period   Ended December 31, 2005                     
|                                          |                                                                                                                                       
|                                          | Notes to Consolidated Financial Statements                                                                                            

|Item 19. | Exhibits
|-------- | --------

| | List of Exhibits |                                                              
| | ---------------- | -------------------------------------------------------------
| |                  |                                                              
| | Exhibit 1.1.     | Amended and Restated   Articles of Incorporation*            
| | Exhibit 1.2.     | By-Laws*                                                     
| | Exhibit 4.1.     | Mandate Letter*                                              
| | Exhibit 12.1.    | Rule 13a-14(a)   Certification of Principal Executive Officer
| | Exhibit 12.2.    | Rule 13a-14(a)   Certification of Principal Financial Officer
| | Exhibit 13.1.    | Rule 13a-14(b)   Certification of Principal Executive Officer
| | Exhibit 13.2.    | Rule 13a-14(b)   Certification of Principal Financial Officer

| 
|-
|*

61

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Financial Statements

December 31, 2005 and 2004

(With Independent Auditors Report Thereon)

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Table of Contents

|Independent Auditors Report                                                                                                           | 
|-------------------------------------------------------------------------------------------------------------------------------------- | 
|                                                                                                                                       | 
|Consolidated Balance Sheets at December 31, 2005 and   2004.                                                                           | 
|Consolidated Statements of Operations for Each of   the Years in the Three-Year Period Ended December 31, 2005.                        | 
|Consolidated Statements of Changes in Stockholders   Equity for Each of the Years in the Three-Year Period Ended December 31,   2005. | 
|Consolidated Statements of Comprehensive Income for   Each of the Years in the Three-Year Period Ended December 31, 2005.              | 
|Consolidated Statements of Cash Flows for Each of   the Years in the Three-Year Period Ended December 31, 2005.                        | 
|Notes to Consolidated Financial Statements.                                                                                            | 

---



|Message |                                                                 |                                                                            
|------- | --------------------------------------------------------------- | ---------------------------------------------------------------------------
|        | KPMG   Apartado Postal 816-1089   Panamá 5, Republica de Panamá | Teléfono: (507) 208-0700
   Fax: (507) 263-9852   Internet: www.kpmg.com.pa

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and StockholdersBanco Latinoamericano de Exportaciones, S. A.

We have audited the accompanying consolidated balance sheets of Banco Latinoamericano de Exportaciones, S. A. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of operations, changes in stockholders equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2005.  These consolidated financial statements are the responsibility of the Banks management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).   Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Banco Latinoamericano de Exportaciones, S. A. and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

As further disclosed in Note 2(o) and 6 to the consolidated financial statements, the Bank changed its method of accounting for share-based compensation plan and its methodology for estimating generic allowances for credit losses in 2005.

Message

January 31, 2006 Panama, Republic of Panama

| |                                                   
| | --------------------------------------------------
| | KPMG, una sociedad civil   panamena, es miembro de
| | KPMG International, una   cooperativa suiza.      

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Balance Sheets

|December 31, 2005 and 2004
(in US$ thousands, except per share amounts)
|-----------------------------------------------------------------------
|                                                                       

|Assets                                                                                                                                                          |  |  | Note     |  |     | 2005      |   |  | 2004      |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -------- |  | --- | --------- | - |  | --------- | -
|Cash and due from banks                                                                                                                                         |  |  | 3,19     |  | US$ | 687       |   |  | 687       |  
|Interest-bearing deposits   with banks (including pledged certificate of deposit of US$5,000 and  US$4,200 for 2005 and 2004, respectively)                     |  |  | 3,19     |  |     | 229,200   |   |  | 154,099   |  
|Securities available for   sale                                                                                                                                 |  |  | 4,19     |  |     | 182,050   |   |  | 164,871   |  
|Securities held to   maturity (market value of US$26,325 in 2005 and  US$28,117 in 2004)                                                                        |  |  | 4,19     |  |     | 26,520    |   |  | 27,984    |  
|Loans                                                                                                                                                           |  |  | 5,19     |  |     | 2,610,019 |   |  | 2,441,686 |  
|Less:                                                                                                                                                           |  |  |          |  |     |           |   |  |           |  
|Allowance   for loan losses                                                                                                                                     |  |  | 6,19     |  |     | 39,448    |   |  | 106,352   |  
|Unearned   income and deferred loan fees                                                                                                                        |  |  |          |  |     | 5,577     |   |  | 7,013     |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Loans,   net                                                                                                                                                    |  |  |          |  |     | 2,564,994 |   |  | 2,328,321 |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Customers liabilities   under acceptances                                                                                                                      |  |  | 19       |  |     | 110,621   |   |  | 32,530    |  
|Premises and equipment,   net                                                                                                                                   |  |  | 7        |  |     | 3,253     |   |  | 3,508     |  
|Accrued interest   receivable                                                                                                                                   |  |  | 19       |  |     | 30,254    |   |  | 15,448    |  
|Derivative financial   instruments-assets                                                                                                                       |  |  | 17,19    |  |     | 357       |   |  | 0         |  
|Other assets                                                                                                                                                    |  |  | 16       |  |     | 11,295    |   |  | 5,491     |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Total   assets                                                                                                                                                  |  |  |          |  | US$ | 3,159,231 |   |  | 2,732,939 |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Liabilities and Stockholders Equity                                                                                                                            |  |  |          |  |     |           |   |  |           |  
|Deposits:                                                                                                                                                       |  |  | 8,19     |  |     |           |   |  |           |  
|Noninterest-bearing   - Demand                                                                                                                                  |  |  |          |  | US$ | 28,385    |   |  | 22,619    |  
|Interest-bearing   - Time                                                                                                                                       |  |  |          |  |     | 1,018,233 |   |  | 841,541   |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Total   deposits                                                                                                                                                |  |  |          |  |     | 1,046,618 |   |  | 864,160   |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Short-term borrowings                                                                                                                                           |  |  | 9,19     |  |     | 760,699   |   |  | 704,718   |  
|Medium and long-term   borrowings and placements                                                                                                                |  |  | 10,19    |  |     | 533,860   |   |  | 403,621   |  
|Acceptances outstanding                                                                                                                                         |  |  | 19       |  |     | 110,621   |   |  | 32,530    |  
|Accrued interest payable                                                                                                                                        |  |  | 19       |  |     | 14,736    |   |  | 6,477     |  
|Derivative financial   instruments - liabilities                                                                                                                |  |  | 17,19    |  |     | 297       |   |  | 0         |  
|Reserve for losses on   off-balance sheet  credit risk                                                                                                          |  |  | 6        |  |     | 52,086    |   |  | 33,101    |  
|Redeemable preferred stock   (US$10 par value)                                                                                                                  |  |  | 11,19    |  |     | 5,149     |   |  | 7,860     |  
|Other liabilities                                                                                                                                               |  |  |          |  |     | 18,383    |   |  | 24,342    |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Total   liabilities                                                                                                                                             |  |  |          |  |     | 2,542,449 |   |  | 2,076,809 |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Stockholders equity:                                                                                                                                           |  |  | 12,13,14 |  |     |           |   |  |           |  
|Class   A common stock, no par value, assigned value of US$6.67 (Authorized   40,000,000; issued and outstanding 6,342,189)                                   |  |  |          |  |     | 44,407    |   |  | 44,407    |  
|Class   B common stock, no par value, assigned value of US$6.67 (Authorized   40,000,000; issued and outstanding 3,214,344 in 2005 and 3,271,269 in 2004)     |  |  |          |  |     | 25,219    |   |  | 25,598    |  
|Class   E common stock, no par value, assigned value of US$6.67 (Authorized   100,000,000; issued and outstanding 28,540,242 in 2005  and 29,283,621 in 2004) |  |  |          |  |     | 210,353   |   |  | 209,973   |  
|Additional   paid-in capital in excess of assigned value                                                                                                        |  |  |          |  |     | 134,340   |   |  | 133,786   |  
|Capital   reserves                                                                                                                                              |  |  |          |  |     | 95,210    |   |  | 95,210    |  
|Retained   earnings                                                                                                                                             |  |  |          |  |     | 212,916   |   |  | 233,701   |  
|Treasury   stock                                                                                                                                                |  |  | 12       |  |     | (106,282  | ) |  | (92,627   | )
|Accumulated   other comprehensive income                                                                                                                        |  |  | 4,18     |  |     | 619       |   |  | 6,082     |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Total   stockholders equity                                                                                                                                    |  |  |          |  |     | 616,782   |   |  | 656,130   |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  
|Commitments and contingent   liabilities                                                                                                                        |  |  | 16,19    |  |     |           |   |  |           |  
|Total   liabilities and stockholders equity                                                                                                                    |  |  |          |  | US$ | 3,159,231 |   |  | 2,732,939 |  
|                                                                                                                                                                |  |  |          |  |     |           |   |  |           |  

See accompanying notes to consolidated financial statements.

F-2

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Statements of Operations

|For  Each of the Years in the Three - Year Period Ended December 31, 2005
(in US$ thousands, except per share amounts)
|----------------------------------------------------------------------------------------------------------------------
|                                                                                                                      

|                                                                                                                                                                    |  | Note |         |  | 2005 |         | 2004 |  | 2003     |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | ------- | ---- |  | -------- | -
|Interest income:                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Deposits   with banks                                                                                                                                               |  |      |         |  | US$  | 5,121   |      |  | 2,765    |  
|Investment   securities:                                                                                                                                            |  |      |         |  |      |         |      |  |          |  
|Investment   available for sale                                                                                                                                     |  |      |         |  |      | 7,755   |      |  | 3,688    |  
|Investment   held to maturity                                                                                                                                       |  |      |         |  |      | 2,219   |      |  | 2,218    |  
|Loans                                                                                                                                                               |  |      |         |  |      | 101,728 |      |  | 67,481   |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Total   interest income                                                                                                                                             |  |      |         |  |      | 116,823 |      |  | 76,152   |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Interest expense:                                                                                                                                                   |  |      |         |  |      |         |      |  |          |  
|Deposits                                                                                                                                                            |  |      |         |  |      | 29,559  |      |  | 11,939   |  
|Short-term   borrowings                                                                                                                                             |  |      |         |  |      | 20,408  |      |  | 9,388    |  
|Medium   and long-term borrowings and placements                                                                                                                    |  |      |         |  |      | 21,603  |      |  | 12,800   |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Total   interest expense                                                                                                                                            |  |      |         |  |      | 71,570  |      |  | 34,127   |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   interest income                                                                                                                                               |  |      |         |  |      | 45,253  |      |  | 42,025   |  
|Reversal of provision  for loan losses                                                                                                                              |  |      | 6       |  |      | (54,155 | )    |  | (111,400 | )
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   interest income after reversal of provision for loan losses                                                                                                   |  |      |         |  |      | 99,408  |      |  | 153,425  |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Other income (expense):                                                                                                                                             |  |      |         |  |      |         |      |  |          |  
|Reversal   (provision) for losses on off-balance sheet credit risk                                                                                                  |  |      | 6       |  |      | (15,781 | )    |  | 871      |  
|Commission   income, net                                                                                                                                            |  |      |         |  |      | 5,824   |      |  | 5,928    |  
|Derivatives   and hedging activities                                                                                                                                |  |      |         |  |      | 2,338   |      |  | 47       |  
|Recoveries   (impairment) on securities                                                                                                                             |  |      | 4       |  |      | 10,206  |      |  | 0        |  
|Net   gain on sale of securities available for sale                                                                                                                 |  |      | 4       |  |      | 206     |      |  | 2,922    |  
|Gain   on early extinguishment of debt                                                                                                                              |  |      | 10      |  |      | 0       |      |  | 6        |  
|Gain   (loss) on foreign currency exchange                                                                                                                          |  |      |         |  |      | 3       |      |  | (194     | )
|Other   income, net                                                                                                                                                 |  |      |         |  |      | 5       |      |  | 77       |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net other   income                                                                                                                                                  |  |      |         |  |      | 2,801   |      |  | 9,657    |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Operating expenses:                                                                                                                                                 |  |      |         |  |      |         |      |  |          |  
|Salaries   and other employee expenses                                                                                                                              |  |      |         |  |      | 13,073  |      |  | 10,335   |  
|Depreciation   of premises and equipment                                                                                                                            |  |      |         |  |      | 869     |      |  | 1,298    |  
|Professional   services                                                                                                                                             |  |      |         |  |      | 3,281   |      |  | 2,571    |  
|Maintenance   and repairs                                                                                                                                           |  |      |         |  |      | 1,172   |      |  | 1,207    |  
|Other   operating expenses                                                                                                                                          |  |      |         |  |      | 6,296   |      |  | 5,941    |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Total   operating expenses                                                                                                                                          |  |      |         |  |      | 24,691  |      |  | 21,352   |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Income   before cumulative effect of changes in accounting principles                                                                                               |  |      |         |  |      | 77,518  |      |  | 141,730  |  
|Cumulative effect on prior   years (to December 31, 2004) of a change in the credit loss reserve   methodology                                                      |  |      | 6,15    |  |      | 2,733   |      |  | 0        |  
|Cumulative effect on prior   year (to December 31, 2004) of an early adoption of the fair-value-based   method of accounting stock-based employee compensation plan |  |      | 14,15   |  |      | (150    | )    |  | 0        |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   income                                                                                                                                                        |  |      |         |  | US$  | 80,101  |      |  | 141,730  |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Basic   earnings per share:                                                                                                                                         |  |      | 6,14,15 |  |      |         |      |  |          |  
|Income   before cumulative effect of changes in accounting principles                                                                                               |  |      |         |  | US$  | 2.01    |      |  | 3.61     |  
|Cumulative   effect of changes in accounting principles                                                                                                             |  |      |         |  |      | 0.07    |      |  | 0.00     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   income per share                                                                                                                                              |  |      |         |  | US$  | 2.08    |      |  | 3.61     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Diluted   earnings per share:                                                                                                                                       |  |      | 6,14,15 |  |      |         |      |  |          |  
|Income   before cumulative effect of changes in accounting principles                                                                                               |  |      |         |  | US$  | 1.99    |      |  | 3.60     |  
|Cumulative   effect of changes in accounting principles                                                                                                             |  |      |         |  |      | 0.07    |      |  | 0.00     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   income per share                                                                                                                                              |  |      |         |  | US$  | 2.06    |      |  | 3.60     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Pro forma   amounts, assuming the changes in accounting principles are applied   retroactively:                                                                     |  |      | 6,14,15 |  |      |         |      |  |          |  
|Income before effect of   changes in accounting principles                                                                                                          |  |      |         |  | US$  | 77,518  |      |  | 141,730  |  
|Less - Preferred stock   dividends                                                                                                                                  |  |      |         |  |      | 0       |      |  | 0        |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net income, as reported                                                                                                                                             |  |      |         |  |      | 77,518  |      |  | 141,730  |  
|Effect on prior years of a   change in the credit loss reserve methodology                                                                                          |  |      |         |  |      | 0       |      |  | (8,244   | )
|Effect on prior year of an   early adoption of the fair-value based method of accounting stock-based   employee compensation plan                                   |  |      |         |  |      | 0       |      |  | (150     | )
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Net   income available to common stockholders for both basic and diluted earning   per share                                                                        |  |      |         |  | US$  | 77,518  |      |  | 133,336  |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Basic   earning per share                                                                                                                                           |  |      |         |  | US$  | 2.01    |      |  | 3.40     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  
|Diluted   earnings per share                                                                                                                                        |  |      |         |  | US$  | 1.99    |      |  | 3.39     |  
|                                                                                                                                                                    |  |      |         |  |      |         |      |  |          |  

See accompanying notes to consolidated financial statements.

F-3

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders Equity

|For  Each of the Years in the Three - Year Period Ended December 31, 2005
(in US$ thousands)
|--------------------------------------------------------------------------------------------
|                                                                                            

|                                                                           |  |  | Note  |  |     | 2005     |   |  | 2004    |   |  | 2003    |  
|-------------------------------------------------------------------------- |  |  | ----- |  | --- | -------- | - |  | ------- | - |  | ------- | -
|Common stock:                                                              |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | 279,978  |   |  | 279,978 |   |  | 133,235 |  
|Issuance   of common stock                                                 |  |  | 12,13 |  |     | 0        |   |  | 0       |   |  | 146,740 |  
|Difference   in fractional shares in conversion  of   common stock         |  |  |       |  |     | 1        |   |  | 0       |   |  | 3       |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | 279,979  |   |  | 279,978 |   |  | 279,978 |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Additional paid-in capital   in excess of assigned value:                  |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | 133,786  |   |  | 133,786 |   |  | 145,490 |  
|Issuance   of common stock                                                 |  |  | 12,13 |  |     | 0        |   |  | 0       |   |  | 220     |  
|Compensation   cost - indexed stock options plan                           |  |  | 14    |  |     | 555      |   |  | 0       |   |  | 0       |  
|Difference   in fractional shares in conversion  of   common stock         |  |  |       |  |     | (1       | ) |  | 0       |   |  | (3      | )
|Stock   offering costs                                                     |  |  |       |  |     | 0        |   |  | 0       |   |  | (11,921 | )
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | 134,340  |   |  | 133,786 |   |  | 133,786 |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Capital reserves:                                                          |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at the beginning and end of the year                             |  |  |       |  | US$ | 95,210   |   |  | 95,210  |   |  | 95,210  |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Retained earnings:                                                         |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | 233,701  |   |  | 150,789 |   |  | 40,740  |  
|Net   income                                                               |  |  |       |  |     | 80,101   |   |  | 141,730 |   |  | 111,496 |  
|Dividends   - common stock                                                 |  |  |       |  |     | (100,825 | ) |  | (58,702 | ) |  | 0       |  
|Dividends   - redeemable preferred stock                                   |  |  |       |  |     | 0        |   |  | 0       |   |  | (1,219  | )
|Issuance   of restricted stock                                             |  |  |       |  |     | (57      | ) |  | (116    | ) |  | (228    | )
|Stock   awards granted                                                     |  |  |       |  |     | (4       | ) |  | 0       |   |  | 0       |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | 212,916  |   |  | 233,701 |   |  | 150,789 |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Treasury stock:                                                            |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | (92,627  | ) |  | (85,310 | ) |  | (85,633 | )
|Issuance   of restricted stock                                             |  |  |       |  |     | 152      |   |  | 211     |   |  | 323     |  
|Stock   awards granted                                                     |  |  | 14    |  |     | 8        |   |  | 0       |   |  | 0       |  
|Repurchase   of Class E common stock                                     |  |  | 12    |  |     | (13,815  | ) |  | (7,528  | ) |  | 0       |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | (106,282 | ) |  | (92,627 | ) |  | (85,310 | )
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Accumulated other   comprehensive income (loss):                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | 6,082    |   |  | 9,876   |   |  | (118    | )
|Net   change in unrealized gains (losses) on securities available for sale |  |  | 18    |  |     | (5,463   | ) |  | (4,178  | ) |  | 7,259   |  
|Net   change in unrealized gains on derivatives                            |  |  |       |  |     | 0        |   |  | 384     |   |  | 2,735   |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | 619      |   |  | 6,082   |   |  | 9,876   |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at beginning of the year                                         |  |  |       |  | US$ | 656,130  |   |  | 584,329 |   |  | 328,924 |  
|Changes   during the year, net                                             |  |  |       |  |     | (39,348  | ) |  | 71,801  |   |  | 255,405 |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  
|Balance   at end of the year                                               |  |  |       |  | US$ | 616,782  |   |  | 656,130 |   |  | 584,329 |  
|                                                                           |  |  |       |  |     |          |   |  |         |   |  |         |  

See accompanying notes to consolidated financial statements.

F-4

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

|For  Each of the Years in the Three - Year Period Ended December 31, 2005
(in US$ thousands)
|--------------------------------------------------------------------------------------------
|                                                                                            

|                                                                                                                                                                       |  | Note |       |  | 2005 |        | 2004 |  | 2003    |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- | ------ | ---- |  | ------- | -
|Income before cumulative   effect of changes in accounting principles                                                                                                  |  |      |       |  | US$  | 77,518 |      |  | 141,730 |  
|Cumulative effect on prior   years (to December 31, 2004) of a change in the credit loss reserve   methodology                                                         |  |      | 6     |  |      | 2,733  |      |  | 0       |  
|Cumulative effect on prior   year (to December 31, 2004) of an early adoption of the fair value-based   method of  accounting stock-based   employee compensation plan |  |      | 14,15 |  |      | (150   | )    |  | 0       |  
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Net income                                                                                                                                                             |  |      |       |  |      | 80,101 |      |  | 141,730 |  
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Other comprehensive income   (loss):                                                                                                                                   |  |      |       |  |      |        |      |  |         |  
|Unrealized gains (losses)   on securities:                                                                                                                             |  |      |       |  |      |        |      |  |         |  
|Unrealized gains (losses)   arising from the year                                                                                                                      |  |      | 4,18  |  |      | (5,257 | )    |  | (1,256  | )
|Less:  Reclassification adjustments for gains   included in net income                                                                                                 |  |      | 18    |  |      | (206   | )    |  | (2,922  | )
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Net change in unrealized   gains (losses) on securities available for sale                                                                                             |  |      |       |  |      | (5,463 | )    |  | (4,178  | )
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Unrealized gains on   derivatives arising from the year                                                                                                                |  |      | 18    |  |      | 0      |      |  | 384     |  
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Other comprehensive   income  (loss)                                                                                                                                   |  |      |       |  |      | (5,463 | )    |  | (3,794  | )
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  
|Comprehensive income                                                                                                                                                   |  |      |       |  | US$  | 74,638 |      |  | 137,936 |  
|                                                                                                                                                                       |  |      |       |  |      |        |      |  |         |  

See accompanying notes to consolidated financial statements.

F-5

---



BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

|For Each of the Years in the Three - Year Period Ended December 31, 2005
(in US$ thousands)
|-------------------------------------------------------------------------------------------
|                                                                                           

|                                                                                                                                                                     |  |     | 2005     |   |  | 2004     |   |  | 2003     |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | -------- | - |  | -------- | - |  | -------- | -
|Cash flows from operating   activities:                                                                                                                              |  |     |          |   |  |          |   |  |          |  
|Income   before cumulative effect of changes in accounting principles:                                                                                               |  | US$ | 77,518   |   |  | 141,730  |   |  | 111,496  |  
|Cumulative   effect on prior years (to December 31, 2004) of a change in the credit loss   reserve methodology                                                       |  |     | 2,733    |   |  | 0        |   |  | 0        |  
|Cumulative   effect on prior year (to December 31, 2004) of an early adoption of the   fair-value based method of accounting stock-based  employee compensation plan |  |     | (150     | ) |  | 0        |   |  | 0        |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Net   income                                                                                                                                                         |  |     | 80,101   |   |  | 141,730  |   |  | 111,496  |  
|Adjustments   to reconcile net income to net cash provided by operating activities:                                                                                  |  |     |          |   |  |          |   |  |          |  
|Derivatives   and hedging activities                                                                                                                                 |  |     | (85      | ) |  | (48      | ) |  | 1,274    |  
|Depreciation   of premises and equipment                                                                                                                             |  |     | 869      |   |  | 1,298    |   |  | 1,512    |  
|Reversal  of provision for loan losses                                                                                                                               |  |     | (54,155  | ) |  | (111,400 | ) |  | (69,508  | )
|Provision   (reversal) for losses on off-balance sheet credit risk                                                                                                   |  |     | 15,781   |   |  | (871     | ) |  | 10,603   |  
|Impairment   loss on securities                                                                                                                                      |  |     | 469      |   |  | 0        |   |  | 953      |  
|Provision   for fair value of guarantees                                                                                                                             |  |     | 0        |   |  | 0        |   |  | 5        |  
|Gain   on sale of securities available for sale                                                                                                                      |  |     | (206     | ) |  | (2,922   | ) |  | (22,211  | )
|Compensation   cost - indexed stock options plan                                                                                                                     |  |     | 555      |   |  | 0        |   |  | 0        |  
|Issuance   of restricted stock                                                                                                                                       |  |     | 95       |   |  | 95       |   |  | 95       |  
|Deferred   compensation awards                                                                                                                                       |  |     | 3        |   |  | 0        |   |  | 0        |  
|Amortization   of premiums and discounts on investments                                                                                                              |  |     | 2,343    |   |  | 1,175    |   |  | (263     | )
|Net   (increase) decrease  in accrued   interest  receivable                                                                                                         |  |     | (14,806  | ) |  | (4,517   | ) |  | 4,481    |  
|Net   increase in derivative financial instruments                                                                                                                   |  |     | 25       |   |  | (10,333  | ) |  | (1,223   | )
|Net   (increase) decrease in other assets                                                                                                                            |  |     | (5,804   | ) |  | 723      |   |  | 2,756    |  
|Net   increase (decrease) in accrued interest payable                                                                                                                |  |     | 8,259    |   |  | 385      |   |  | (6,075   | )
|Net  (decrease) increase in other liabilities                                                                                                                        |  |     | (5,958   | ) |  | 10,511   |   |  | (1,796   | )
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Net cash provided by operating activities                                                                                                                            |  |     | 27,486   |   |  | 25,826   |   |  | 32,099   |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Cash flows from investing   activities:                                                                                                                              |  |     |          |   |  |          |   |  |          |  
|(Increase)   decrease in pledged certificates of deposit                                                                                                             |  |     | (800     | ) |  | (2,000   | ) |  | 2,800    |  
|Net   (increase) decrease in loans                                                                                                                                   |  |     | (179,315 | ) |  | (173,687 | ) |  | 102,804  |  
|Net   acquisition of premises and equipment                                                                                                                          |  |     | (614     | ) |  | (688     | ) |  | (544     | )
|Proceeds   from the redemption of securities available for sale                                                                                                      |  |     | 26,000   |   |  | 19,274   |   |  | 56,815   |  
|Proceeds   from the redemption of securities held to maturity                                                                                                        |  |     | 0        |   |  | 0        |   |  | 11,818   |  
|Proceeds   from the sale of securities available for sale                                                                                                            |  |     | 276,524  |   |  | 7,657    |   |  | 40,676   |  
|Acquisition   of securities available for sale                                                                                                                       |  |     | (326,307 | ) |  | (144,425 | ) |  | 0        |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Net cash (used in) provided by investing activities                                                                                                                  |  |     | (204,512 | ) |  | (293,869 | ) |  | 214,369  |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Cash flows from financing   activities:                                                                                                                              |  |     |          |   |  |          |   |  |          |  
|Net   increase in due to depositors                                                                                                                                  |  |     | 182,458  |   |  | 161,205  |   |  | 150,982  |  
|Net   increase (decrease) in short-term borrowings    and placements with original maturity of less than 90 days                                                     |  |     | 94,998   |   |  | (183,024 | ) |  | (25,574  | )
|Proceeds   from short-term borrowings and placements with original maturity greater than   90 days                                                                   |  |     | 908,729  |   |  | 936,355  |   |  | 870,584  |  
|Repayments   of short-term borrowings and placements    with original maturity greater than 90 days                                                                  |  |     | (947,746 | ) |  | (735,828 | ) |  | (805,140 | )
|Proceeds   from medium and long-term borrowings and    placements with original maturity greater than 90 days                                                        |  |     | 309,962  |   |  | 256,728  |   |  | 100,099  |  
|Repayments   of medium and long-term borrowings and    placements with original maturity greater than 90 days                                                        |  |     | (179,723 | ) |  | (338,623 | ) |  | (900,075 | )
|Dividends   paid                                                                                                                                                     |  |     | (100,825 | ) |  | (52,867  | ) |  | (853     | )
|Proceeds   from issuance of common stocks                                                                                                                            |  |     | 0        |   |  | 0        |   |  | 146,960  |  
|Stock   offering costs                                                                                                                                               |  |     | 0        |   |  | 0        |   |  | (7,841   | )
|Redemption   of redeemable preferred stocks                                                                                                                          |  |     | (2,705   | ) |  | (2,425   | ) |  | (2,260   | )
|Repurchase   of preferred stocks                                                                                                                                     |  |     | (6       | ) |  | 0        |   |  | 0        |  
|Repurchase   of common stocks                                                                                                                                        |  |     | (13,815  | ) |  | (7,528   | ) |  | 0        |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Net cash provided by (used in) financing activities                                                                                                                  |  |     | 251,327  |   |  | 33,993   |   |  | (473,118 | )
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Net  increase (decrease) in cash and cash equivalents                                                                                                                |  |     | 74,301   |   |  | (234,050 | ) |  | (226,650 | )
|Cash and cash equivalents   at beginning of the year                                                                                                                 |  |     | 150,586  |   |  | 384,636  |   |  | 611,286  |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Cash and   cash equivalents at end of the year                                                                                                                       |  | US$ | 224,887  |   |  | 150,586  |   |  | 384,636  |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Supplemental   disclosures of cash flow information:                                                                                                                 |  |     |          |   |  |          |   |  |          |  
|Cash   paid during the year for interest                                                                                                                             |  | US$ | 63,298   |   |  | 33,742   |   |  | 50,483   |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Non-cash   investing and financing activities:                                                                                                                       |  |     |          |   |  |          |   |  |          |  
|Loan   restructured as investment                                                                                                                                    |  | US$ | 0        |   |  | 0        |   |  | 933      |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Investment   restructured as loan                                                                                                                                    |  | US$ | 0        |   |  | 0        |   |  | 3,325    |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  
|Transfer   from securities available for sale to held to maturity                                                                                                    |  | US$ | 0        |   |  | 0        |   |  | 29,821   |  
|                                                                                                                                                                     |  |     |          |   |  |          |   |  |          |  

See accompanying notes to consolidated financial statements.

F-6

---



|BANCO LATINOAMERICANO DE EXPORTACIONES, S. A. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2005 and 2004
|------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                    

|(1) | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Banco Latinoamericano de Exportaciones, S. A. (Bladex   Head Office and together with its subsidiaries Bladex or the Bank),   headquartered in Panama City, Republic of Panama is a specialized   supranational bank established to finance trade in Latin America and the   Caribbean (the Region).  The Bank was   established pursuant to a May 1975 proposal presented to the XX 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, constituted in 1978 as a corporation pursuant to the laws of the   Republic of Panama, and officially initiated operations on January 2, 1979.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Bank operates under a general banking license   issued by the National Banking Commission, predecessor of the Superintendency   of Banks of Panama, and is subject to its supervision and inspection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Bladexs subsidiaries are the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Bank has an agency in the United States of   America (the New York Agency), which began operations on March 27,   1989.  The New York Agency is   principally engaged in obtaining inter-bank deposits and short-term   borrowings to finance the Banks short-term investments and foreign trade   loans.  The Bank also has   representative offices in Buenos Aires, Argentina, and in Mexico City, D.F.,   Mexico.                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In addition, Banco Latinoamericano de Exportaciones   Limited, a wholly owned subsidiary, incorporated under the laws of the Cayman   Islands (B.W.I.) ceased its banking operations on November 30, 2004 and was   dissolved on 2005.  All financial   assets and liabilities were transferred to Bladex Head Office and recorded at   their carrying amount.                                                                                                                                                                                                                                                                                                                                                                                                           

F-7

---



|(2) | Summary   of Significant Accounting Policies
|--- | --------------------------------------------
|    |                                             
|    | (a)                                         
|    |                                             
|    |                                             
|    | (b)                                         
|    |                                             
|    |                                             
|    |                                             
|    |                                             
|    | (c)                                         
|    |                                             
|    |                                             
|    | (d)                                         
|    |                                             
|    |                                             
|    | (e)                                         
|    |                                             
|    |                                             
|    | (f)                                         
|    |                                             
|    |                                             
|    |                                             
|    |                                             

F-8

---



| |     | 2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Securities Available for Sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | These securities consist   of mostly debt instruments that the Bank buys with the intention of selling   them prior to maturity, and are subject to the same approval criteria as the   rest of the credit portfolio.  These   securities are carried at fair value, based on quoted market 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.    Unrealized gains and losses are reported as net increase or decreases   to accumulated other comprehensive income (loss) until they are realized.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | 3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Securities Held to Maturity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Securities classified as   held to maturity represent securities that the Bank has the ability and the   intent to hold until maturity and are carried at amortized cost and are   subject to the same approval criteria as the rest of the credit portfolio.                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Interests on securities are recognized based on the   interest method. Amortization of premiums and accretion of discounts, are   included in interest income as an adjustment to the yield.  Realized gains and losses from the sales   of securities, which are included in net gains on sales of securities, are   determined using the specific identification method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Declines in fair value that are determined to be   other than temporary are charged to earnings.  Accrual of income is suspended on fixed maturities that are in   default, or on which it is likely that future interest payments will not be   made as scheduled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (g) | Other   Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | An investment in a fund   and other equity investments are reported at cost and are included in other   assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Loans are reported at their principal amounts   outstanding net of unearned income, and deferred loan fees and allowance for   loan losses.  Interest income is   recognized using the interest method.    The amortization of net unearned income and deferred loan fees are   recognized as an adjustment to the related loan yield over the term of the   loan by a method that approximates the interest method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Loans are identified as impaired and placed on a   cash (non-accrual) basis when it is determined that the payment of interest   or principal is doubtful when interest or principal is past due for 90 days   or more, or before if the Banks management determines that the ultimate   collection of principal or interest is doubtful.  Any interest receivable that was accrued during the current   period is reversed and any interest accrued in prior periods is charged-off   against earnings.  Interest on   non-accrual loans is only recorded as earned when collected.  Cash basis loans are returned to an   accrual status when (1) all contractual principal and interest amounts are   reasonably assured of repayment (2) there is a sustained period of repayment   performance in accordance with the contractual terms of at least six months,   which is the minimum required by the Superintendency of Banks of Panama; and   (3) if in the Banks
Managements opinion the loan is fully collectible.  When current events or available   information confirms that specific impaired loans or portions thereof are   uncollectible, these credit losses are deducted from the allowance for loan   losses.  Factors considered by the   Banks management in determining impairment include collection status,   collateral value, the probability of collecting scheduled principal and   interest payment when due, and economic conditions in the borrowing country.

F-9

---



| |     | A loan is classified as a troubled debt   restructuring if a significant concession in amount, maturity or interest   rate is granted to the borrower due to the deterioration in its financial   condition. Securities received in exchange for loan claims in debt   restructurings are initially recorded at fair value, with any gain or loss   recorded as recovery to the allowance, and are subsequently accounted for as   securities available for sale.                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Transfers of financial assets, primarily loans, are   accounted for as sales when control over the assets has been   surrendered.  Control over transferred   assets is deemed to be surrendered when: (1) the assets have been isolated   from the Bank; (2) the transferee obtains the right (free of conditions that   constrain it from taking advantage of that right) to pledge or exchange the   transferred assets; and (3) the Bank does not maintain effective control over   the transferred assets through an agreement to repurchase them before their   maturity. Upon completion of a transfer of assets that satisfies the   conditions described above to be accounted for as a sale, the Bank recognizes   the assets as sold and records in earnings any gain or loss on the sale.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (i) | Allowance   for Credit Losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The allowance for credit losses is provided for risk   on losses, derived from the credit extension process, inherent in the loan   portfolio and off-balance sheet financial instruments, using the reserve   method of providing for credit losses.    Additions to the allowance for credit losses are made by charges to   earnings.  Credit losses are deducted   from the allowance, and subsequent recoveries are added. The allowance is   also decreased by reversals of the allowance back to earnings.                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Bladexs management estimate losses on impaired   loans, on a loan-by-loan basis.  This   estimate considers all available evidence including, as appropriate, the   present value of expected future cash flows discounted at the loans   contractual effective rate, the secondary market value of the loan, the fair   value of the collateral, and other factors.                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Bladexs management estimates probable credit losses   on the rest of its credit portfolio using an expected loss forecast model,   which considers historical loss experience, internal ratings, as well as   country, client and risk elements.    The model establishes guidelines for the application of managements   qualitative judgment to complement the statistical estimate of losses.  These guidelines take into consideration   the potential impact of portfolio concentrations, the absence of a lender of   last resort in a dollarized economy, such as Panama, model imprecision, and   external economic factors.                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The allowance attributable to loans is reported as a deduction of loans and the allowance for   off-balance sheet credit risk, such as: letters of credit and   guarantees, is reported as liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-10

---



| | (j) | Fair Value of Guarantees Including   Indirect Indebtedness of Others                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | The Bank recognizes a liability for the fair value   of all the obligations undertaken such as: stand-by letters of credit and   guarantees.  Fair value is calculated   based on the present value of the premium to be received or an specific   off-balance sheet allowance based on FAS 5 is established, whichever is   greater.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (k) | Commission Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | Loan origination fees, net   of direct loan origination costs are deferred and the net amount is   recognized over the contractual term of the loans as an adjustment to the   yield.  These fees, net of direct loan   origination costs, are not recognized during periods in which interest income   on loans is suspended because of concerns about the realization of loan   principal or interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Fees received in connection with a modification of   terms of a troubled debt restructuring are applied as a reduction of the   recorded investment in the loan.  All   related costs, including direct loan origination costs, are charged to   expense as incurred.  Fees earned on   letters of credit, guarantees and commitments are amortized over the life of   such instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (l) | Premises   and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Premises and equipment are carried at cost less   accumulated depreciation, except land, which is carried at cost.  Depreciation is charged to operations   using the straight-line method, and is provided over the estimated useful   life of the related asset.  The   estimated original useful life for building is 40 years and for furniture and   equipment is 3 to 5 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (m) | Capitalized Internal Use Software Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Bank capitalizes the cost of internal-use   software that has a useful life in excess of one year in accordance with SOP   98-1, Accounting for the Costs of Computer Software Developed or Obtained   for Internal Use.  These costs   consist of payments made to third parties related to the use of licenses and   installation of both, software and hardware, and other related costs.  Subsequent additions, modifications or   upgrades to internal-use software are capitalized only to the extent that   they allow the software to perform a task it previously did not perform.  Software maintenance and training costs   are expensed in the period in which they are incurred.  Capitalized internal use software costs   will be amortized using the straight-line method over their estimated useful   lives, generally consisting of 3 to 7 years.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | During the year 2005, the Bank disbursed US$2,445   thousand related to a project to install a software package obtained for   internal-use.  The Banks management   estimates that the project will be completed during 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (n) | Capital   Reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | According to Panamanian banking regulations, capital   reserves are established by the Bank as a carve-out of retained earnings and   are, as such, a form of retained earnings.    Reductions of these capital reserves require the approval of the   Banks Board of Directors and the Superintendency of Banks of Panama.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-11

---



| | (o) | Cash and   Stock Based Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | During the fourth quarter of 2005, the Bank chose to   make an early adoption of the Statement of Financial Accounting No.123(R)   Share-Based Payment which established the use of the fair-value-based   method, considered the preferable accounting method, of accounting for   stock-based employee compensation.  As   prescribed in this standard, the Bank elected to use the modified   prospective application for new and previously granted awards that are not   fully vested on the effective date.    Compensation cost is based on the fair value of the awards granted and   is recognized over the requisite service period of the award.  The fair value of each option is estimated   at the grant date using the Black-Scholes option-pricing model.  The Bank has the policy of re-issuing   shares from treasury shares.  As a   result of the early adoption of this rule, a compensation cost of US$555   thousand was recorded during
2005.    The adjustment of US$150 thousand to apply retroactively the new   method is included in income of 2005.    The pro forma amounts shown on the income statement have been adjusted   for the effect of retroactive application of compensation cost, which would   have been applied, had the new method been in effect.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Historically, the Bank applied the intrinsic method   as provided in Accounting Principles Board Opinion No.25 (APB 25),   Accounting for Stock Issued to Employees and related interpretations and   accordingly, no compensation cost had been recognized for stock options in   prior years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (p) | Redeemable Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Bank accounts as   liabilities all financial instruments that embody an obligation to the   issuer.  The accrual of interest   payable is charged to interest expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (q) | Derivative   Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Bank makes use of derivative financial   instruments, primarily interest rate swaps, as part of its management of   interest rate risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Interest rate swaps are   the most common type of derivative contract used to modify exposure to   interest rate risk, converting fixed-rate assets and liabilities to a   floating rate. These financial instruments are used to manage interest rate   risk through the exchange of interest payments based on a predetermined   notional principal amount.  The   underlying principal balances are not affected.  All amounts are included in earnings consistent with the   classification of related interest of the hedged item.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The accounting for changes in value of a derivative   depends on whether the contract is for trading purposes or has been   designated and qualifies for hedge accounting.  In order to qualify for hedge accounting, a derivative must be   considered highly effective at reducing the risk associated with the exposure   being hedged.  Each derivative must be   designated as a hedge, with documentation of the risk management objective   and strategy, including identification of the hedging instrument, the hedged   item and the risk exposure, as well as how effectiveness will be assessed   prospectively and retrospectively.    The extent to which a hedging instrument is effective at achieving   offsetting changes in fair value or cash flows must be assessed at least   quarterly.  Any ineffectiveness must   be reported in current-period earnings.                                                                                                                                                                                                                                                                                                                                                                                                                   

F-12

---



| |     | The Bank carries all derivatives in the balance   sheets at fair value.  For qualifying   fair value hedges, all changes in the fair value of the derivative and the   fair value of the item for the risk being hedged are recognized in earnings.  If the hedge relationship is terminated,   then the fair value adjustment to the hedge item continues to be reported as   part of the basis of the item and is amortized to earnings as a yield   adjustment.  For qualifying cash flow   hedges, the effective portion of the change in the fair value of the   derivative is recorded in other comprehensive income and recognized in the   income statement when the hedged cash flows affect earnings.  If the hedge relationship is terminated,   then the change in fair value of the derivative recorded in other   comprehensive income is recognized when the cash flows that were hedged   occurs.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (r) | Foreign   Currency Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Assets and liabilities denominated in foreign   currencies are re-measured into U.S. dollar equivalents using period-end spot   foreign exchange rates.  The effects   of re-measuring assets and liabilities into the U.S. dollar as the functional   currency are included in other income (expense) and recorded as gains   (losses) on foreign currency exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (s) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Bladex Head Office is exempt from the payment of   income taxes.  Bladex Representacao   Ltda., in Brazil, is subject to income taxes.  The New York Agency and Bladexs subsidiary incorporated in the   United States of America are subject to United States of America federal and   local taxation based on the portion of income that is effectively connected   with its operations in that country.    Such amounts have been immaterial to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (t) | Earnings   Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Earnings per share (EPS) are computed by dividing   income available to common stockholders (the numerator) by the average number   of common shares outstanding (the denominator) during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Diluted EPS measures performance incorporating the   effect that potential common shares, such as stock options outstanding during   the same period, would have on EPS.    The computation is similar to the computation of EPS, except that the   denominator is increased to include the number of additional common shares   using the treasury stock method that would have been outstanding if the   diluted potential common shares had been issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|(3) | Cash and Cash Equivalents                  
|--- | -------------------------------------------
|    |                                            
|    | Cash   and cash equivalents are as follows:

|(In   US$thousands)                     |  |     | December   31, | 
|--------------------------------------- |  | --- | -------------- | 
|                                        |  |     |                | 
|                                        |  |     | 2005           | 
|Cash and due from banks                 |  | US$ | 687            | 
|Interest bearing deposits   with banks  |  |     | 229,200        | 
|                                        |  |     |                | 
|Total                                   |  |     | 229,887        | 
|Less  Pledged certificate   of deposit |  |     | 5,000          | 
|                                        |  |     |                | 
|                                        |  | US$ | 224,887        | 
|                                        |  |     |                | 

F-13

---



| | On December 31, 2005 and 2004, the Agency of New   York had pledged certificates of deposit with a carrying value of US$5 million   and US$4.2 million respectively, with the State of New York Banking   Department, as required by law since March 1994.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Investment Securities
|--- | ---------------------
|    | a)                   
|    |                      

|(In US$ thousands) |  |  |     |  | December   31, 2005 |        
|------------------ |  |  | --- |  | ------------------- | -------
|                   |  |  |     |  |                     |        
|                   |  |  |     |  | AmortizedCost       |        
|Bonds:             |  |  |     |  |                     |        
|Corporate          |  |  | US$ |  |                     | 38,556 
|Government         |  |  |     |  |                     | 144,135
|                   |  |  |     |  |                     |        
|                   |  |  | US$ |  |                     | 182,691
|                   |  |  |     |  |                     |        

|                                     |  |  |     |  | December   31, 2004 |        
|------------------------------------ |  |  | --- |  | ------------------- | -------
|                                     |  |  |     |  |                     |        
|                                     |  |  |     |  | AmortizedCost       |        
|                                     |  |  |     |  |                     |        
|Bonds - Government                   |  |  | US$ |  |                     | 160,599
|Impaired   bonds - Argentine issuers |  |  |     |  |                     | 665    
|                                     |  |  |     |  |                     |        
|                                     |  |  | US$ |  |                     | 161,264
|                                     |  |  |     |  |                     |        

| | The following table discloses   whether these securities have had unrealized losses for less than 12 months,   or for 12 months or longer:
| | ------------------------------------------------------------------------------------------------------------------------------------------

|(In US$ thousands) |  |  |     |  | December 31, 2005     |       
|------------------ |  |  | --- |  | --------------------- | ------
|                   |  |  |     |  |                       |       
|                   |  |  |     |  | Less than   12 Months |       
|                   |  |  |     |  | FairValue             |       
|Bonds:             |  |  |     |  |                       |       
|Corporate          |  |  | US$ |  |                       | 31,096
|Government         |  |  |     |  |                       | 26,242
|                   |  |  |     |  |                       |       
|                   |  |  | US$ |  |                       | 57,338
|                   |  |  |     |  |                       |       

|(In US$ thousands) |  |  |     |  | December   31, 2004   |       
|------------------ |  |  | --- |  | --------------------- | ------
|                   |  |  |     |  |                       |       
|                   |  |  |     |  | Less than   12 Months |       
|                   |  |  |     |  | FairValue             |       
|                   |  |  |     |  |                       |       
|Bonds - Government |  |  | US$ |  |                       | 71,577
|                   |  |  |     |  |                       |       

|F-14
|----

---



| | Impairment is evaluated   considering numerous factors, and their relative significance varies case to   case.  Factors considered include the   length of time and extent to which the market value has been less than cost,   the financial condition and near-term prospects of the issuer and the intent   and ability to retain the security in order to allow for an anticipated   recovery in market value.  If, based   on the analysis, it is determined that the impairment is other-than-temporary,   the security is written down to fair value, and a loss is recognized through   earnings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | The unrealized losses are   due to overall increases in market interest rates and not due to underlying   credit concerns of the issuers.  At   December 31, 2005 and 2004, the Bank believes that none of the securities in   its investment portfolio are other-than-temporarily impaired.                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | At December 31, 2005 and   2004, securities available for sale with a carrying value of US$119.3 million   and US$62.4 million, respectively, were pledged to secure borrowings for   securities sold under repurchase agreements.                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | During 2005, the Bank   collected Argentine impaired securities for US$10.7 million which had been   written-off and charged to earnings in prior years. This recovery was   recorded in earnings as recoveries (impairment) on securities.  During the year, an impaired security with   a net carrying value of US$469 thousand was written-off and charged to   earnings.                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | The   following table presents the realized components of investment securities   transactions attributable to securities available for sale:                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|(In US$ thousands) |  | December   31, |      
|------------------ |  | -------------- | -----
|                   |  |                |      
|                   |  | 2005           |      
|                   |  |                | Gains
|                   |  |                |      
|US$                |  |                | 253  
|                   |  |                |      

| | The amortized cost and   fair value of securities available for sale distributed by contractual   maturity at December 31, 2005, are shown in the following table:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(In US$ thousands)           |  |  |     |  | AmortizedCost |         | FairValue | 
|---------------------------- |  |  | --- |  | ------------- | ------- | --------- | 
|                             |  |  |     |  |               |         |           | 
|Due   within 1 year          |  |  | US$ |  |               | 20,000  |           | 
|After   1 but within 5 years |  |  |     |  |               | 104,071 |           | 
|After   5 years              |  |  |     |  |               | 58,620  |           | 
|                             |  |  |     |  |               |         |           | 
|                             |  |  | US$ |  |               | 182,691 |           | 
|                             |  |  |     |  |               |         |           | 

| | b) | Securities   Held to Maturity                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------
| |    | The amortized cost, quoted market value, and related   unrealized gross gain of securities held to maturity are as follows:

|(In US$ thousands) |  |  |  |  |  |     |  | December   31, 2005 |       
|------------------ |  |  |  |  |  | --- |  | ------------------- | ------
|                   |  |  |  |  |  |     |  |                     |       
|                   |  |  |  |  |  |     |  | AmortizedCost       |       
|                   |  |  |  |  |  |     |  |                     |       
|Bonds - Government |  |  |  |  |  | US$ |  |                     | 26,520
|                   |  |  |  |  |  |     |  |                     |       

## F-15

---



|                   |  |  |  |  |  |     |  | December   31, 2004 |       
|------------------ |  |  |  |  |  | --- |  | ------------------- | ------
|                   |  |  |  |  |  |     |  |                     |       
|                   |  |  |  |  |  |     |  | AmortizedCost       |       
|Bonds - Government |  |  |  |  |  | US$ |  |                     | 27,984

|    |                                                            | The security held to maturity has been in unrealized   gross loss position for less than 12 month and the unrealized loss is not   considered other-than-temporary.                                                            
|--- | ---------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                            |                                                                                                                                                                                                                                
|    |                                                            | At December 31, 2005 and   2004, securities held to maturity with a carrying value of US$26.5 million   and US$27.9 million, respectively, were pledged to secure borrowings for   securities sold under repurchase agreements.
|    |                                                            |                                                                                                                                                                                                                                
|(5) | Loans                                                      |                                                                                                                                                                                                                                
|    | The remaining loan maturities are summarized as   follows:

|(In   US$ thousands)        |  |  |     |  | December 31, |          
|--------------------------- |  |  | --- |  | ------------ | ---------
|                            |  |  |     |  |              |          
|                            |  |  |     |  | 2005         |          
|Current                     |  |  |     |  |              |          
|Up to 1 month               |  |  | US$ |  |              | 397,745  
|From 1 month to 3   months  |  |  |     |  |              | 601,557  
|From 3 months to 6   months |  |  |     |  |              | 592,223  
|From 6 months to 1 year     |  |  |     |  |              | 521,367  
|Over 1 year                 |  |  |     |  |              | 468,305  
|Impaired                    |  |  |     |  |              | 0        
|                            |  |  |     |  |              |          
|                            |  |  |     |  |              | 2,581,197
|Restructured and impaired   |  |  |     |  |              | 28,822   
|Past due                    |  |  |     |  |              | 0        
|                            |  |  |     |  |              |          
|                            |  |  | US$ |  |              | 2,610,019
|                            |  |  |     |  |              |          

| | The fixed and floating interest rates distribution   of the loan portfolio is as follows:
| | -----------------------------------------------------------------------------------------

|(In   US$ thousands)    |  |  |     |  | December 31, |          
|----------------------- |  |  | --- |  | ------------ | ---------
|                        |  |  |     |  |              |          
|                        |  |  |     |  | 2005         |          
|Fixed interest rates    |  |  | US$ |  |              | 1,561,893
|Floating interest rates |  |  |     |  |              | 1,048,126
|                        |  |  |     |  |              |          
|                        |  |  | US$ |  |              | 2,610,019
|                        |  |  |     |  |              |          

| | At   December 31, 2005, 89% of the loan portfolio at fixed interest rates has   remaining maturities of less than 180 days.
| | ---------------------------------------------------------------------------------------------------------------------------

F-16

---



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

|(In   US$ thousands) |  |  |     |  | December 31, |          
|-------------------- |  |  | --- |  | ------------ | ---------
|                     |  |  |     |  |              |          
|                     |  |  |     |  | 2005         |          
|Country              |  |  |     |  |              |          
|Argentina            |  |  | US$ |  |              | 51,215   
|Brazil               |  |  |     |  |              | 1,095,055
|Chile                |  |  |     |  |              | 282,500  
|Colombia             |  |  |     |  |              | 249,025  
|Costa Rica           |  |  |     |  |              | 53,962   
|Dominican Republic   |  |  |     |  |              | 997      
|Ecuador              |  |  |     |  |              | 25,407   
|El Salvador          |  |  |     |  |              | 80,753   
|Guatemala            |  |  |     |  |              | 41,303   
|Honduras             |  |  |     |  |              | 25,654   
|Jamaica              |  |  |     |  |              | 24,018   
|Mexico               |  |  |     |  |              | 160,737  
|Nicaragua            |  |  |     |  |              | 1,977    
|Panama               |  |  |     |  |              | 156,061  
|Peru                 |  |  |     |  |              | 180,156  
|Trinidad and Tobago  |  |  |     |  |              | 177,498  
|Uruguay              |  |  |     |  |              | 3,701    
|Venezuela            |  |  |     |  |              | 0        
|                     |  |  |     |  |              |          
|                     |  |  | US$ |  |              | 2,610,019
|                     |  |  |     |  |              |          

| | In the normal course of business, at December 31,   2005 and 2004, the Bank has credit activity transactions with 22% and 23%,   respectively of its Class A and B stockholders (See Note 12).  All transactions are made based on   arms-length terms and subject to prevailing commercial criteria and market   rates and are subject to all of the Banks Corporate Governance and control   procedures.  At December 31, 2005 and   2004, approximately 40% and 49%, respectively, of the outstanding loan   portfolio is placed with the Banks Class A and B stockholders and their   related parties.  At December 31,   2005, 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 following is a summary of information on   non-accruing loans, and interest amounts on non-accruing loans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|(In   US$ thousands)                                                                          |  |  |     |  | December 31, |       
|--------------------------------------------------------------------------------------------- |  |  | --- |  | ------------ | ------
|                                                                                              |  |  |     |  |              |       
|                                                                                              |  |  |     |  | 2005         |       
|Loans on non-accrual status                                                                   |  |  | US$ |  |              | 28,822
|                                                                                              |  |  |     |  |              |       
|Interest which would had been recorded if the   loans  had not been on a non-accrual   status |  |  | US$ |  |              | 7,004 
|Interest income collected on non-accruing loans                                               |  |  |     |  |              | 7,670 
|                                                                                              |  |  |     |  |              |       
|Foregone interest revenue                                                                     |  |  | US$ |  |              | 0     
|                                                                                              |  |  |     |  |              |       

F-17

---



| | The following is a summary of information pertaining   to impaired loans:
| | -------------------------------------------------------------------------

|(In US$ thousands)                                         |  |  |     |  | December   31, |        
|---------------------------------------------------------- |  |  | --- |  | -------------- | -------
|                                                           |  |  |     |  |                |        
|                                                           |  |  |     |  | 2005           |        
|Impaired   loans with specific allowance for credit losses |  |  | US$ |  |                | 28,822 
|                                                           |  |  |     |  |                |        
|Specific   allowance for impaired loans (under SFAS 114)   |  |  | US$ |  |                | 11,184 
|                                                           |  |  |     |  |                |        
|Average   balance of impaired loans during the year        |  |  | US$ |  |                | 105,964
|                                                           |  |  |     |  |                |        
|Interest   income collected on impaired loans              |  |  | US$ |  |                | 7,670  
|                                                           |  |  |     |  |                |        

|(6) | Allowance for Credit Losses
|--- | ---------------------------

| | The allowance for credit losses is available to   absorb estimated probable credit losses existing in the credit portfolio at   the date of the consolidated balance sheets.                                                                                                                                                                                                                                                                                                                                                            
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | During the third quarter of 2005, Bladex implemented   a new methodology for estimating generic allowances for credit losses.  The new methodology incorporates eight   years of statistical data on Bladexs historical loss performance in the   calculation of expected loss and loss given default ratios replacing the use   of general probability of default information from rating agencies in the former   model.  The Bank believes that this   new methodology provide a more adequate level of allowance for credit losses.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The effect of the change in methodology for 2005   decreased the net income by US$10 million (or US$0.26 per share). The   adjustment of US$2.7 million to apply retroactively (to December 31, 2004)   the new methodology is included in income of 2005.  The pro forma amounts shown on the income statement have been   adjusted for the effect of retroactive application of credit loss reserve,   which would have been applied, had the new methodology been in effect.                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | The Bank classifies the allowance for credit losses   into two components:                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|(In US$ thousands)                                                                                             |  |  |     |  | December   31, |        
|-------------------------------------------------------------------------------------------------------------- |  |  | --- |  | -------------- | -------
|                                                                                                               |  |  |     |  |                |        
|                                                                                                               |  |  |     |  | 2005           |        
|Balance at beginning of the   year                                                                             |  |  | US$ |  |                | 106,352
|                                                                                                               |  |  |     |  |                |        
|Reversal of provision for   loan losses:                                                                       |  |  |     |  |                |        
|Reversal   - 2005                                                                                              |  |  |     |  |                | (48,180
|Reversal   - effect of a change in the credit loss reserve methodology - 2005                                  |  |  |     |  |                | (5,975 
|                                                                                                               |  |  |     |  |                |        
|                                                                                                               |  |  |     |  |                | (54,155
|                                                                                                               |  |  |     |  |                |        
|Cumulative effect on prior   years (to December 31, 2004) of a change in the credit loss reserve   methodology |  |  |     |  |                | (5,937 
|Loan recoveries                                                                                                |  |  |     |  |                | 2,612  
|Loans written-off against   the allowance for loan losses                                                      |  |  |     |  |                | (9,424 
|                                                                                                               |  |  |     |  |                |        
|Balance at end of the year                                                                                     |  |  | US$ |  |                | 39,448 
|                                                                                                               |  |  |     |  |                |        

F-18

---



| | b) | Reserve for Losses on Off-Balance Sheet Credit   Risk:
| | -- | ------------------------------------------------------

|(In US$ thousands)                                                                                             |  |  |     |  | December   31, |       
|-------------------------------------------------------------------------------------------------------------- |  |  | --- |  | -------------- | ------
|                                                                                                               |  |  |     |  |                |       
|                                                                                                               |  |  |     |  | 2005           |       
|                                                                                                               |  |  |     |  |                |       
|Balance at beginning of the   year                                                                             |  |  | US$ |  |                | 33,101
|                                                                                                               |  |  |     |  |                |       
|Provision (reversal) for   losses on off-balance sheet credit risk:                                            |  |  |     |  |                |       
|Provision   (reversal) - 2005                                                                                  |  |  |     |  |                | (210  
|Provision   - effect of a change in the credit loss reserve methodology - 2005                                 |  |  |     |  |                | 15,991
|                                                                                                               |  |  |     |  |                |       
|                                                                                                               |  |  |     |  |                | 15,781
|                                                                                                               |  |  |     |  |                |       
|Cumulative effect on prior   years (to December 31, 2004) of a change in the credit loss reserve   methodology |  |  |     |  |                | 3,204 
|                                                                                                               |  |  |     |  |                |       
|Balance at end of the year                                                                                     |  |  | US$ |  |                | 52,086
|                                                                                                               |  |  |     |  |                |       

|    | The reserve for losses on off-balance sheet credit   risk reflects the Banks management estimate of probable losses on   off-balance sheet credit risk items, such as:  confirmed letters of credit, stand-by letters of credit,   guarantees and credit commitments.    (See Note 16).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                         
|(7) | Premises and Equipment                                                                                                                                                                                                                                                                  
|    | The table below provides information on premises and   equipment:                                                                                                                                                                                                                       

|(In US$ thousands)             |  |  |     |  | December 31, |       
|------------------------------ |  |  | --- |  | ------------ | ------
|                               |  |  |     |  |              |       
|                               |  |  |     |  | 2005         |       
|Land                           |  |  | US$ |  |              | 462   
|Building and improvements      |  |  |     |  |              | 4,185 
|Furniture and equipment        |  |  |     |  |              | 7,743 
|                               |  |  |     |  |              |       
|                               |  |  |     |  |              | 12,390
|Less: accumulated depreciation |  |  |     |  |              | 9,137 
|                               |  |  |     |  |              |       
|                               |  |  | US$ |  |              | 3,253 
|                               |  |  |     |  |              |       

|(8) | Deposits                                                    
|--- | ------------------------------------------------------------
|    | The maturity profile of the Banks deposits is as   follows:

|(In US$ thousands)                                           |  |  |     |  | December 31, |          
|------------------------------------------------------------ |  |  | --- |  | ------------ | ---------
|                                                             |  |  |     |  |              |          
|                                                             |  |  |     |  | 2005         |          
|Demand                                                       |  |  | US$ |  |              | 28,385   
|Up to 1 month                                                |  |  |     |  |              | 575,362  
|From 1 month to 3 months                                     |  |  |     |  |              | 361,071  
|From 3 months to 6 months                                    |  |  |     |  |              | 81,800   
|From 6 months to 1 year                                      |  |  |     |  |              | 0        
|                                                             |  |  |     |  |              |          
|                                                             |  |  | US$ |  |              | 1,046,618
|                                                             |  |  |     |  |              |          
|Aggregate amounts of time deposits of US$100,000 or   more   |  |  | US$ |  |              | 1,018,038
|                                                             |  |  |     |  |              |          
|Aggregate amounts of deposits in offices outside of   Panama |  |  | US$ |  |              | 350,026  
|                                                             |  |  |     |  |              |          
|Interest expense                                             |  |  | US$ |  |              | 8,853    
|                                                             |  |  |     |  |              |          

F-19

---



|(9) | Short-Term Borrowings                                                                   
|--- | ----------------------------------------------------------------------------------------
|    | The breakdown of short-term borrowings due to banks   and other investors is as follows:

|(In US$ thousands)                            |  |  |     |  | December 31, |        
|--------------------------------------------- |  |  | --- |  | ------------ | -------
|                                              |  |  |     |  |              |        
|                                              |  |  |     |  | 2005         |        
|Borrowings:                                   |  |  |     |  |              |        
|At fixed interest rates:                      |  |  |     |  |              |        
|Advances from banks                           |  |  | US$ |  |              | 608,100
|Discounted acceptances                        |  |  |     |  |              | 24,000 
|Securities sold under   repurchase agreements |  |  |     |  |              | 128,599
|                                              |  |  |     |  |              |        
|Total short-term   borrowings                 |  |  | US$ |  |              | 760,699
|                                              |  |  |     |  |              |        
|Average outstanding during the year           |  |  | US$ |  |              | 601,361
|                                              |  |  |     |  |              |        
|Maximum outstanding at any month-end          |  |  | US$ |  |              | 760,699
|                                              |  |  |     |  |              |        

|                                                        |  | December 31, |     
|------------------------------------------------------- |  | ------------ | ----
|                                                        |  |              |     
|                                                        |  | 2005         |     
|Weighted average interest rate at the end of the   year |  |              | 4.73
|Weighted average interest rate during the year          |  |              | 3.39

|(10) | Medium and Long-Term Borrowings and   Placements                                                                                                                                                                                                                    
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Borrowings consist of medium term and syndicated   borrowings from international banks.    Placements consist of Euro medium-term notes.  The breakdown of medium and long-term borrowings   and placements (original maturity of more than one year) is as follows:

|(In US$ thousands)                                                                 |  |  |     |  | December 31, |        
|---------------------------------------------------------------------------------- |  |  | --- |  | ------------ | -------
|                                                                                   |  |  |     |  |              |        
|                                                                                   |  |  |     |  | 2005         |        
|Borrowings:                                                                        |  |  |     |  |              |        
|At fixed interest rates with due dates in July 2007                                |  |  | US$ |  |              | 40,000 
|At floating interest rates with due dates from April   2005 until December 2009    |  |  |     |  |              | 449,860
|                                                                                   |  |  |     |  |              |        
|Total borrowings                                                                   |  |  |     |  |              | 489,860
|                                                                                   |  |  |     |  |              |        
|Placements:                                                                        |  |  |     |  |              |        
|At fixed interest rates with due dates from January   2005 until September 2005    |  |  |     |  |              | 0      
|At floating interest rates with due dates from   September 2005 until October 2010 |  |  |     |  |              | 44,000 
|                                                                                   |  |  |     |  |              |        
|Total placements                                                                   |  |  |     |  |              | 44,000 
|                                                                                   |  |  |     |  |              |        
|Total medium and long-term borrowings and placements   outstanding                 |  |  | US$ |  |              | 533,860
|                                                                                   |  |  |     |  |              |        
|Average outstanding during the year                                                |  |  | US$ |  |              | 444,393
|                                                                                   |  |  |     |  |              |        
|Maximum outstanding at any month-end                                               |  |  | US$ |  |              | 587,998
|                                                                                   |  |  |     |  |              |        

F-20

---



|                                                        |  | December 31, |     
|------------------------------------------------------- |  | ------------ | ----
|                                                        |  |              |     
|                                                        |  | 2005         |     
|At fixed interest rates:                                |  |              |     
|Weighted average   interest rate at the end of the year |  |              | 4.33
|Weighted average   interest rate during the year        |  |              | 5.52
|                                                        |  |              |     
|At floating interest rates:                             |  |              |     
|Weighted average   interest rate at the end of the year |  |              | 4.67
|Weighted average interest   rate during the year        |  |              | 3.78

| | The future maturities of medium and long-term   borrowings and placements outstanding at December 31, 2005, are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------

|(In   US$ thousands) |  |  |     |  |  |         | 
|-------------------- |  |  | --- |  |  | ------- | 
|2006                 |  |  | US$ |  |  | 83,500  | 
|2007                 |  |  |     |  |  | 170,360 | 
|2008                 |  |  |     |  |  | 255,000 | 
|2009                 |  |  |     |  |  | 20,000  | 
|2010                 |  |  |     |  |  | 5,000   | 
|                     |  |  |     |  |  |         | 
|                     |  |  | US$ |  |  | 533,860 | 
|                     |  |  |     |  |  |         | 

|     | The Banks funding activities include a   Euro-Medium-Term Note program (EMTN Program), which, in October 1997, was increased   to a maximum of US$2.3 billion.  The   program may be used to issue notes with maturities from 90 days up to a   maximum of 30 years, at fixed, floating interest rates, or at discount, and   in various currencies.  The notes are   generally sold in bearer or registered form through one or more authorized   financial institutions.   During 2005 and 2004, the Bank issued notes for US$15 million and US$10   million, respectively, under this program.                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | Early   Extinguishment of Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | During the first quarter of 2004, the Bank   repurchased in the market at discount, notes issued under its EMTN program,   with a face value of US$5 million and due in 2004 which resulted in realized   gains of US$6 thousand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(11) | Redeemable Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | The redeemable preferred stock is non-voting. If the   Bank fails to pay the minimum dividend of 8% for three years, and certain   other conditions were not complied with, the preferred stockholders have the   right to elect a Director.  In case of   a liquidation of the Bank, the preferred stockholders are entitled to receive   a liquidation preference of US$10 per share, plus accrued and unpaid   dividends.  The Bank is required to   redeem preferred stock at its par value by means of a sinking fund designed   to retire 20% of the aggregate par value of the preferred stock outstanding   as of March 15, 2002, and on March 15 of each of the subsequent years up to   2006.  On May 16, 2005, the Bank   redeemed 304,639 outstanding shares, chosen by lot on March 23, 2005.  At December 31, 2005 and 2004, the Bank   had 202,633 and 169,719 preferred stocks, respectively, redeemed but not   claimed by preferred shareholders.     During the
2005, the Bank repurchased 630 preferred shares.

F-21

---



|     | Preferred stockholders have the right to receive an   interest on their preferred stock equivalent to the same percentage as the   common stockholders (excluding from the calculation any common stock issued   as stock dividend).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                     
|(12) | Common Stock                                                                                                                                                                                                                        
|     | The   Banks common stock is divided into three categories:                                                                                                                                                                         
|     | 1)                                                                                                                                                                                                                                  
|     | 2)                                                                                                                                                                                                                                  
|     | 3)                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                     
|     | 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.                                              
|     |                                                                                                                                                                                                                                     
|     | The following table provides detailed information on   the Banks common stock activity per class for each of the years in the   three-year period ended December 31, 2005:                                                         

|(Shares units)                   |  | Class A |            | Class B |  | Class E  |   | Total |            
|-------------------------------- |  | --------- | ---------- | --------- |  | ---------- | - | ----- | -----------
|                                 |  |           |            |           |  |            |   |       |            
|Authorized                       |  |           | 40,000,000 |           |  | 40,000,000 |   |       | 100,000,000
|                                 |  |           |            |           |  |            |   |       |            
|Outstanding at December 31, 2002 |  |           | 4,911,185  |           |  | 3,746,721  |   |       | 8,685,287  
|Conversions                      |  |           | 0          |           |  | (933,016   | ) |       | 933,014    
|Issuance   of new stock          |  |           | 1,431,004  |           |  | 652,997    |   |       | 19,915,999 
|Restricted   stock granted       |  |           | 0          |           |  | 0          |   |       | 9,547      
|                                 |  |           |            |           |  |            |   |       |            
|Outstanding at December 31, 2003 |  |           | 6,342,189  |           |  | 3,466,702  |   |       | 29,543,847 
|Conversions                      |  |           | 0          |           |  | (195,433   | ) |       | 195,432    
|Restricted   stock granted       |  |           | 0          |           |  | 0          |   |       | 6,242      
|Repurchased   stock              |  |           | 0          |           |  | 0          |   |       | (461,900   
|                                 |  |           |            |           |  |            |   |       |            
|Outstanding at December 31, 2004 |  |           | 6,342,189  |           |  | 3,271,269  |   |       | 29,283,621 
|Conversions                      |  |           | 0          |           |  | (56,925    | ) |       | 56,925     
|Restricted stock granted         |  |           | 0          |           |  | 0          |   |       | 5,320      
|Repurchased stock                |  |           | 0          |           |  | 0          |   |       | (805,900   
|Stock awards granted             |  |           | 0          |           |  | 0          |   |       | 276        
|                                 |  |           |            |           |  |            |   |       |            
|Outstanding at December 31, 2005 |  |           | 6,342,189  |           |  | 3,214,344  |   |       | 28,540,242 
|                                 |  |           |            |           |  |            |   |       |            

| | On August 3, 2004, the Board of Directors authorized   a three-year stock repurchase program under which Bladex may, from time to   time, repurchase up to an aggregate of US$50 million of its Class E shares of   common stock, in the open market at the then prevailing market price.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-22

---



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

|(In   US$ thousands, except shares data) |  | Class A |         | Class B |  | Class E |  | Total |        
|---------------------------------------- |  | --------- | ------- | --------- |  | --------- |  | ----- | -------
|                                         |  |           | Shares  |           |  | Amount    |  |       | Shares 
|Outstanding at December 31, 2002         |  |           | 318,140 |           |  | 10,708    |  |       | 568,010
|Restricted   stocks granted              |  |           | 0       |           |  | 0         |  |       | 0      
|                                         |  |           |         |           |  |           |  |       |        
|Outstanding at December 31, 2003         |  |           | 318,140 |           |  | 10,708    |  |       | 568,010
|Repurchased during 2004                  |  |           | 0       |           |  | 0         |  |       | 0      
|Restricted stocks granted                |  |           | 0       |           |  | 0         |  |       | 0      
|                                         |  |           |         |           |  |           |  |       |        
|Outstanding at December 31, 2004         |  |           | 318,140 |           |  | 10,708    |  |       | 568,010
|Repurchased   during 2005                |  |           | 0       |           |  | 0         |  |       | 0      
|Restricted   stocks granted              |  |           | 0       |           |  | 0         |  |       | 0      
|Stock   awards granted                   |  |           | 0       |           |  | 0         |  |       | 0      
|                                         |  |           |         |           |  |           |  |       |        
|Outstanding at December 31, 2005         |  |           | 318,140 |           |  | 10,708    |  |       | 568,010
|                                         |  |           |         |           |  |           |  |       |        

|(13) | Capital   Issuance and Related Costs                                                                                                                                                                                                                                                                                    
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | During 2003, the Bank increased its paid-in capital   by US$147 million through a stock rights offering.  At December 31, 2003, the accumulated direct costs provided by   the financial advisors as well as legal and others were US$11.9 million,   which was recorded as a deduction from additional paid-in capital.
|     |                                                                                                                                                                                                                                                                                                                         
|(14) | Cash and Stock Based Compensation   Plans                                                                                                                                                                                                                                                                               
|     | The Bank established equity compensation plans under   which it administers restricted stock and stock options plans to attract,   retain and motivate Directors, and key employees to compensate them for their   contributions to the growth and profits of the Bank.                                                 
|     |                                                                                                                                                                                                                                                                                                                         
|     | a)                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                         
|     | b)                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                         

F-23

---



| |  | The indexed stock options expire in seven years with   a cliff-vesting period of four years.    The exercise price is adjusted based on the change in a customized   Latin America general market index.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                         
| |  | A summary of the status of the share options granted   under the indexed stock option plans is presented below:                                                                                         

|                                                                 |  | December 31, |        
|---------------------------------------------------------------- |  | ------------ | -------
|                                                                 |  |              |        
|                                                                 |  | 2005         |        
|                                                                 |  |              |        
|                                                                 |  | Shares       |        
|Outstanding,   beginning of year                                 |  |              | 184,836
|Granted                                                          |  |              | 152,084
|Forfeited                                                        |  |              | (29,907
|                                                                 |  |              |        
|Outstanding,   end of year                                       |  |              | 307,013
|                                                                 |  |              |        
|Exercisable   at year end                                        |  |              | 0      
|                                                                 |  |              |        
|Weighted average fair value   of options granted during the year |  |              |        
|                                                                 |  |              |        

|                         |  | December   31, 2005 |        
|------------------------ |  | ------------------- | -------
|                         |  |                     |        
|Range of Exercise Prices |  | NumberOutstanding   |        
|                         |  |                     |        
|US$10.00 - 20.00         |  |                     | 307,013
|                         |  |                     |        

| | As of December 31, 2005, the Bank had an   unrecognized compensation cost of US$1.1 million related to non-vested   options granted under the Plan, which will be recognized over a period of   3.08 years.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                            
| | The fair value of each option granted is estimated   at the grant date using the Black-Scholes option-pricing model, based on the   following factors:                                                     

|                                     |  | December   31, |             
|------------------------------------ |  | -------------- | ------------
|                                     |  |                |             
|                                     |  | 2005           |             
|                                     |  |                |             
|Weighted average fair value   option |  |                | 5.25        
|Weighted average expected   term     |  |                | 6.17   years
|Expected volatility                  |  |                | 51.37       
|Risk-free rate                       |  |                | 3           
|Expected dividends                   |  |                | 6.70        

| | c) | Stock Option Plan - Directors and   Employees                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | During 2000, the Board of Directors approved a stock   option plan for non-employee Directors of the Bank.  The exercise price of each option must equal 100% of the market   value of the stock at the grant date and becomes 100% exercisable one year   after the grant date and expire on the fifth year after the grant date.

F-24

---



| |  | During 1995 and 1999, the Board of Directors   approved two stock option plans for employees (the 1995 and 1999 Stock Option   Plan).  For 1995 and 1999, stock   option plans, the stock options were granted at a purchase price equal to the   average market value of the common stock at the grant date; one third of the   options may be exercised on each successive year and two years, respectively,   after the grant date and expire on the tenth anniversary after the grant date.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | On July 19, 2003, the Board of Directors approved   discontinuing these plans therefore, no additional stock options have been   granted.                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | A summary of the status of the stock options granted   to Directors and employees is presented below:                                                                                                                                                                                                                                                                                                                                                                                            

|                               |  |        | December   31, |  
|------------------------------ |  | ------ | -------------- | -
|                               |  |        |                |  
|                               |  |        | 2005           |  
|                               |  |        |                |  
|                               |  | Shares |                |  
|Outstanding, beginning of year |  |        | 102,012        |  
|Forfeited                      |  |        | (37,483        | )
|Expired                        |  |        | (8,436         | )
|                               |  |        |                |  
|Outstanding, end of year       |  |        | 56,093         |  
|                               |  |        |                |  
|Exercisable at year end        |  |        | 56,093         |  
|                               |  |        |                |  

|                         |  | December   31, 2005   |       
|------------------------ |  | --------------------- | ------
|                         |  |                       |       
|                         |  | Options   Outstanding |       
|                         |  |                       |       
|Range of Exercise Prices |  | Number Outstanding    |       
|                         |  |                       |       
|US$20.00 - 30.00         |  |                       | 17,343
|US$30.01 - 40.00         |  |                       | 18,950
|US$40.01  50.00         |  |                       | 10,300
|Greater than US$50.00    |  |                       | 9,500 
|                         |  |                       |       
|Total                    |  |                       | 56,093
|                         |  |                       |       

| | d) | Other   Employee Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | Expatriate officers plan:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Bank sponsors a defined contribution plan
for its expatriate top executives. The Banks contributions are determined
as a percentage of the eligible officers annual salary, with each officer
contributing an additional amount withheld from his salary and deposited in a
saving account, at market interest rates. During the years 2005, 2004 and 2003,
the Bank charged to salaries expense, US$165 thousand, US$179 thousand, and
US$140 thousand, respectively.  As of December 31, 2005, 2004 and 2003, the
accumulated liability payable amounted to US$484 thousand, US$356 thousand and
US$572 thousand, respectively.

F-25

---



| |  | Deferred equity unit plan (the   DEU Plan):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The DEU Plan allowed eligible employees to invest up   to 25% of their annual profit sharing in Class E shares.  The employee received a grant of one DEU   for every two participating shares.    Every DEU represented the right to receive a Class E share.  On July 19, 2003, the Banks Board of   Directors approved discontinuing this plan and consequently, no additional   options were granted. During December 2005, 2004, and 2003, the Bank recorded   as expense the market value of the related Class E shares of US$0.2   thousand, US$0.2 thousand and US$1.9 thousand, respectively corresponding to   122 DEU to be exercisable in February 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | Deferred compensation plan (the   DC Plan):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | The DC Plan has two separate features. 
Under the first component, the Bank may grant to each eligible employee a number
of DEU equal to an amount equivalent to a percentage, not to exceed 3%, of the
employees compensation, divided by the market value of a Class
E share.  Eligible employees will vest the DEU after three
years of service.  Distributions are made in respect of DEU on the later of
(i) the date the vested DEU are credited to an employees account and (ii)
ten years after the employee is first credited with DEU under the DC Plan. 
Participating employees receive dividends, and receive additional deferred
equity units in lieu of a dividend with respect to their unvested deferred
equity units.  The second component allows employees who are not citizens
or residents of the United States to defer a percentage of their compensation,
and receive discretionary matching cash contribution.  In no event shall
the value of (i) the discretionary matching cash contribution made on behalf of
an employee and (ii) the grant of deferred equity units made to such employees
exceed 6% of the employees annual base compensation.  On July 19,
2003, the Board of Directors approved discontinuing this plan; consequently, no
additional options have been granted.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | A summary of the status of the DC Plan is presented   below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                           |  | December,   31 |       
|------------------------------------------ |  | -------------- | ------
|                                           |  |                |       
|                                           |  | 2005           |       
|                                           |  |                |       
|Outstanding at the   beginning of the year |  |                | 28,351
|Granted                                    |  |                | 0     
|Forfeited                                  |  |                | 0     
|Exercised                                  |  |                | (398  
|                                           |  |                |       
|Outstanding at end of the   year           |  |                | 27,953
|                                           |  |                |       

| |  | As of December 31, 2005, 2004 and 2003, expenses   recorded were US$67 thousand, US$32 thousand and US$59 thousand,   respectively.
| |  | -----------------------------------------------------------------------------------------------------------------------------------

F-26

---



|(15) | Earnings Per Share                                                                                                                                       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|     | The following is a reconciliation of the income and   share data used in the basic and diluted earnings per share computations for   the dates indicated:

|(In US$   thousands, except per share amounts)                                                                                                                 |  |     | December   31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | -------------- | -
|                                                                                                                                                               |  |     |                |  
|                                                                                                                                                               |  |     | 2005           |  
|                                                                                                                                                               |  |     |                |  
|Income   before cumulative effect of changes in accounting principles:                                                                                         |  | US$ | 77,518         |  
|Cumulative effect on prior   years (to December 31, 2004) of a change in the credit loss reserve   methodology                                                 |  |     | 2,733          |  
|Cumulative effect on prior   year (to December 31, 2004) of an early adoption of the fair-value-based   method of accounting stock-based employee compensation |  |     | (150           | )
|                                                                                                                                                               |  |     |                |  
|Net   income                                                                                                                                                   |  |     | 80,101         |  
|Less - Preferred stock   dividends                                                                                                                             |  |     | 0              |  
|                                                                                                                                                               |  |     |                |  
|Net   income available to common stockholders for both, basic and diluted EPS                                                                                  |  |     | 80,101         |  
|Weighted average common shares outstanding applicable to basic EPS                                                                                             |  |     | 38,550         |  
|Basic   earnings per share:                                                                                                                                    |  |     |                |  
|Income before cumulative   effect of changes in accounting principles                                                                                          |  |     | 2.01           |  
|Cumulative effect on prior   years of accounting changes                                                                                                       |  |     | 0.07           |  
|                                                                                                                                                               |  |     |                |  
|Net   income per share                                                                                                                                         |  | US$ | 2.08           |  
|                                                                                                                                                               |  |     |                |  
|Weighted   average common shares outstanding    applicable to diluted EPS                                                                                      |  |     | 38,550         |  
|Effect of dilutive securities (1):                                                                                                                             |  |     |                |  
|Indexed stock option plans                                                                                                                                     |  |     | 310            |  
|                                                                                                                                                               |  |     |                |  
|Adjusted   weighted average common shares outstanding applicable to diluted EPS                                                                                |  |     | 38,860         |  
|Diluted   earnings per share:                                                                                                                                  |  |     |                |  
|Income before cumulative   effect of changes in accounting principles                                                                                          |  |     | 1.99           |  
|Cumulative effect on prior   years of accounting changes                                                                                                       |  |     | 0.07           |  
|                                                                                                                                                               |  |     |                |  
|Net   income per share                                                                                                                                         |  | US$ | 2.06           |  
|                                                                                                                                                               |  |     |                |  
|Pro forma   amounts, assuming the changes in accounting principles are applied   retroactively:                                                                |  |     |                |  
|Income   before the effect of changes in accounting principles:                                                                                                |  | US$ | 77,518         |  
|Less - Preferred stock dividends                                                                                                                               |  |     | 0              |  
|                                                                                                                                                               |  |     |                |  
|Net income, as originally   reported                                                                                                                           |  |     | 77,518         |  
|Effect on prior years of a   change in the credit loss reserve methodology                                                                                     |  |     | 0              |  
|Effect on prior year of   early adoption of the fair-value-based method of accounting stock-based   employee compensation                                      |  |     | 0              |  
|                                                                                                                                                               |  |     |                |  
|Net   income available to common stockholders for both, basic and diluted EPS                                                                                  |  |     | 77,518         |  
|Basic earning per share                                                                                                                                        |  | US$ | 2.01           |  
|                                                                                                                                                               |  |     |                |  
|Diluted earning per share                                                                                                                                      |  | US$ | 1.99           |  
|                                                                                                                                                               |  |     |                |  

| |                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) At December 31, 2005 and 2004, weighted average   options for 98,806 and 145,460, respectively, were excluded from the   computation of diluted EPS because the options exercise price was greater   than the average quoted market price of the Banks common stock.

F-27

---



|(16) | Financial 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 financial instruments   with off-balance sheet credit risk.    These financial instruments involve, to varying degrees, elements of   credit and market risk in excess of the amount recognized in the consolidated   balance sheets.  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 financial instruments with   off-balance sheet credit risk, were as follows:                                                                                                                                                                                                                                                                                                                                                                                             

|(In US$   thousands)                       |  |  |     |  |      | December 31, |     
|------------------------------------------ |  |  | --- |  | ---- | ------------ | ----
|                                           |  |  |     |  |      |              |     
|                                           |  |  |     |  | 2005 |              | 2004
|Confirmed letters of credit                |  |  | US$ |  |      | 155,547      |     
|Stand-by letters of credit and guarantees: |  |  |     |  |      |              |     
|Country risk                               |  |  |     |  |      | 149,921      |     
|Commercial risk                            |  |  |     |  |      | 239,112      |     
|Credit commitments:                        |  |  |     |  |      |              |     
|At fixed interest rates                    |  |  |     |  |      | 138,228      |     
|At floating interest   rates               |  |  |     |  |      | 0            |     
|Reimbursement undertaking                  |  |  |     |  |      | 904          |     
|                                           |  |  |     |  |      |              |     
|                                           |  |  | US$ |  |      | 683,712      |     
|                                           |  |  |     |  |      |              |     

| | As of December 31, 2005, the maturity profile of the   Banks outstanding financial instruments with off-balance sheet credit risk   is as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(In US$ thousands) |  |  |     |  |  |         | 
|------------------ |  |  | --- |  |  | ------- | 
|                   |  |  |     |  |  |         | 
|Within 1 year      |  |  | US$ |  |  | 411,446 | 
|From 1 to 2 years  |  |  |     |  |  | 94,271  | 
|From 2 to 5 years  |  |  |     |  |  | 175,102 | 
|After 5 years      |  |  |     |  |  | 2,893   | 
|                   |  |  |     |  |  |         | 
|                   |  |  | US$ |  |  | 683,712 | 
|                   |  |  |     |  |  |         | 

F-28

---



| | As of December 31, 2005 and 2004 the breakdown of   the Banks off-balance sheet exposure by country risk is as follows:
| | ------------------------------------------------------------------------------------------------------------------------

|(In US$ thousands) |  |  |     |  |      | December 31, |     
|------------------ |  |  | --- |  | ---- | ------------ | ----
|                   |  |  |     |  |      |              |     
|                   |  |  |     |  | 2005 |              | 2004
|Country            |  |  |     |  |      |              |     
|Argentina          |  |  | US$ |  |      | 2,316        |     
|Brazil             |  |  |     |  |      | 264,160      |     
|Chile              |  |  |     |  |      | 132          |     
|Colombia           |  |  |     |  |      | 500          |     
|Costa Rica         |  |  |     |  |      | 31,797       |     
|Dominican Republic |  |  |     |  |      | 126,559      |     
|Ecuador            |  |  |     |  |      | 82,355       |     
|El Salvador        |  |  |     |  |      | 1,367        |     
|Guatemala          |  |  |     |  |      | 4,084        |     
|Jamaica            |  |  |     |  |      | 22,715       |     
|Mexico             |  |  |     |  |      | 2,957        |     
|Panama             |  |  |     |  |      | 15,350       |     
|Peru               |  |  |     |  |      | 49,779       |     
|Uruguay            |  |  |     |  |      | 3,024        |     
|United States      |  |  |     |  |      | 16,677       |     
|Venezuela          |  |  |     |  |      | 59,460       |     
|Other              |  |  |     |  |      | 480          |     
|                   |  |  |     |  |      |              |     
|                   |  |  | US$ |  |      | 683,712      |     
|                   |  |  |     |  |      |              |     

| | Letters of Credit and Guarantees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Bank, on behalf of its institutional client   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   credit, the Bank will.                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Bank provides stand-by letters of credit and   guarantees (including country risk coverage), which are issued on behalf of   institutional customers in connection with financing between the customers   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 customers contractual default   to a third party.  Risks associated   with stand-by letters of credit and guarantees are included in the evaluation   of overall credit risk.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Bank issues stand-by letters of credit and   guarantees to provide coverage for country risk arising from the risk of   convertibility and transferability of local currency of countries in the   Region into hard currency and to provide coverage for country risk arising   from political risks, such as expropriation, nationalization, war and/or   civil disturbances.                                                                                                                                                                                                                                                                                   

F-29

---



| | Credit Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Commitments to extend credit are a combination of   either non-binding or legal agreements to lend to a customer.  Commitments generally have fixed expiration   dates or other termination clauses and may 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.                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Other Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Private   Investment Fund and Other Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | The Bank is committed to   invest US$5 million in an investment fund whose main objective is investing   in the Mexican export industry and its supply chain.  Additionally, the Bank has an equity   investment in a company specialized in digital identity solutions.  These investments are recorded as other   assets and are carried at cost.  At   December 31, 2005 and 2004, these investments totaled US$2.7 and US$1.3   million, respectively.                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | At December 31, 2005, the   Bank did not estimate the fair value of these investments and has not   identified any events or changes in their financial conditions that may have   had a significant adverse effect on the fair value of these investments.  The Bank does not consider these   investments to be other-than-temporary impaired.                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Purchase Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Bank has signed service agreements with certain   vendors that provide services that are necessary for the ongoing operations   of its business and mainly related to the implementation during 2005 and   2006, of a new technology platform and telecommunications services. The terms   of these agreements are up to 8 years and some of these agreements can be   re-negotiated for annual or semi-annual price adjustments, after the fifth   year.  These agreements also include   maintenance and license payments, starting from 2007.  During 2005 amounts paid under these   agreements are US$2 million.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Under the terms of these agreements, the Bank has   committed to contractually specified minimums payments over the contractual   periods.  The contractual minimums   payments are:                                                                                                                                                                                                                                                                                                                                                                                                                                     

|(In US$   thousands)          |  |  |     |  |  |        | 
|----------------------------- |  |  | --- |  |  | ------ | 
|2006                          |  |  | US$ |  |  | 5,498  | 
|2007                          |  |  |     |  |  | 699    | 
|2008                          |  |  |     |  |  | 699    | 
|2009                          |  |  |     |  |  | 644    | 
|2010 and all years thereafter |  |  |     |  |  | 3,388  | 
|                              |  |  |     |  |  |        | 
|                              |  |  | US$ |  |  | 10,928 | 
|                              |  |  |     |  |  |        | 

| | A certain portion of these payments will be   amortized over the estimated useful lives of the assets.                                                                                                                                                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                
| | To the extent that the Bank does not purchase the   contractual minimum amount of services, the Bank must pay the shortfall to   the vendors.  The Bank believes that   it will meet the contractual minimums payments through the normal course of   business.

F-30

---



|(17) | Derivative Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | The Bank records financial instruments that are   considered to be derivatives on the consolidated balance sheets at their fair   value.  For control purposes, these   financial instruments are recorded at their nominal amount (notional   amount) on the memorandum accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | In the normal course of business, the Bank uses   interest rate and foreign exchange derivatives primarily for hedging purposes   in its consolidated balance sheet management activities.  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   payment or vice-versa. The Bank also engages in some foreign exchange trades   to serve customers transaction needs.    All 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 counter   party credit limits by client, and by adopting policies that do not allow for   open positions.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | Types   of Derivative and Foreign Exchange Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | Derivative and foreign exchange instruments   negotiated by the Bank are executed mainly over-the-counter (OTC).  These contracts are executed between two   counter parties that negotiate specific agreement terms, including notional   amount, exercise price and maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | For purposes of asset/liability activities, the Bank   uses the following instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | Interest   rate swapsare contracts in which a series of interest rate   flows in a single currency are exchanged over a prescribed period.  The Bank has designated these derivative   instruments as fair value hedges, cash flow hedges and freestanding   derivatives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | Cross-currency   swapsare contracts that generally involve the exchange of   both interest and principal amounts in two different currencies.  The Bank has designated these derivative   instruments as fair value hedges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | Forward   foreign exchange contractrepresents an agreement to   purchase or sell foreign currency on a future date at agreed-upon terms.The   Bank has not designated a hedging relationship to these derivative   instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | As of December 31, 2005, the Bank had interest rate   swaps for a notional amount of US$114.7 million and a recorded fair value of   US$0.1 million.  During 2005, the Bank   settled prior to maturity certain hedge relationships accounted for as fair   value hedges, and recorded US$2.1 million in other incomederivative and   hedging activities.  These interest   rate swaps were considered highly effective at reducing the interest rate   risk associated to available for sale securities.  As of December 31, 2005, the fair value hedge ineffective net   gain of US$84 thousand was reported in earnings.  There were no derivative financial instruments outstanding at   December 31, 2004.                                                                                        

F-31

---



|(18) | Accumulated   Other Comprehensive Income (Loss)                                                                                                                           
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | As of December 31, 2005, 2004 and 2003 the breakdown   of accumulated other comprehensive income (loss) related to investment   securities and derivatives was as follows:

|(In   US$ thousands)                                               |     |  | Investment   Securities |         |   | Derivatives      Financial Instruments |  |        | Total | 
|------------------------------------------------------------------ | --- |  | ----------------------- | ------- | - | -------------------------------------- |  | ------ | ----- | 
|                                                                   |     |  |                         |         |   |                                        |  |        |       | 
|Balance   as of December 31, 2002                                  | US$ |  |                         | 3,001   |   |                                        |  | (3,119 | )     | 
|Unrealized gains (losses)   arising from the year                  |     |  |                         | 29,470  |   |                                        |  | 2,735  |       | 
|Reclassification   adjustment for gains included in net income (1) |     |  |                         | (22,211 | ) |                                        |  | 0      |       | 
|                                                                   |     |  |                         |         |   |                                        |  |        |       | 
|Balance   as of December 31, 2003                                  |     |  |                         | 10,260  |   |                                        |  | (384   | )     | 
|Unrealized gains (losses)   arising from the year                  |     |  |                         | (1,256  | ) |                                        |  | 384    |       | 
|Reclassification   adjustment for gains included in net income (1) |     |  |                         | (2,922  | ) |                                        |  | 0      |       | 
|                                                                   |     |  |                         |         |   |                                        |  |        |       | 
|Balance   as of December 31, 2004                                  |     |  |                         | 6,082   |   |                                        |  | 0      |       | 
|Unrealized losses arising   from the year                          |     |  |                         | (5,257  | ) |                                        |  | 0      |       | 
|Reclassification   adjustment for gains included in net income (1) |     |  |                         | (206    | ) |                                        |  | 0      |       | 
|                                                                   |     |  |                         |         |   |                                        |  |        |       | 
|Balance   as of December 31, 2005                                  | US$ |  |                         | 619     |   |                                        |  | 0      |       | 
|                                                                   |     |  |                         |         |   |                                        |  |        |       | 

| |    
| | ---
| | (1)

|(19) | Fair Value Disclosure of Financial   Instruments                                                                                                                                                                                                         
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | The following disclosures represent the Banks best   estimate of the fair value of on-and-off-balance financial instruments.  The following assumptions were used by   management in estimating the fair values of each type of financial   instruments:
|     |                                                                                                                                                                                                                                                          
|     | (a)                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                          
|     | (b)                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                          
|     | (c)                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                          

F-32

---



| |     | Credit risk has been factored into the present value   analysis of cash flows associated with each loan type, by allocating   allowances for loan losses.  The   allocated portion of the allowance, adjusted by a present value factor based   upon the timing of expected losses, has been deducted from the gross cash   flows prior to calculating the present value. The fair value of the   non-performing loans has been determined net of related allowance for loan   losses.                                                                                                                                                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | The fair value of demand deposits is equal to the   amount payable on demand at the reporting date.  For time deposits, fair value has been estimated based upon   interest rates currently being offered on deposits with similar   characteristics and maturities.                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | Short-term   borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The fair value of short-term borrowings is estimated   using discounted cash flow analysis based on the current incremental   borrowing rates for similar types of borrowing arrangements, and the carrying   value approximates fair value because of the relative short period of time   between their origination and expected realization.                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | Medium   and long-term borrowings and placements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | The fair value of medium and long-term borrowings   and placements is estimated using discounted cash flow analysis based on the   current incremental borrowing rates for similar types of borrowing   arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (g) | Derivative   financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | The fair value of derivatives financial instruments   and options is based upon quoted market prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (h) | Commitments   to extend credit, stand-by letters of credit, and financial guarantees   written                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The fair value of commitments is estimated using the   fees currently charged to enter into similar agreements, taking into account   the remaining terms of the agreements and the present creditworthiness of the   counter parties.  For fixed-rate loan   commitments, fair value also considers the difference between current levels   of interest rates and the committed rates.    The fair value of guarantees and letters of credit is based on fees   currently charged for similar agreements or on the estimated cost to   terminate them or otherwise settle the obligations with the counterparts at   the reporting date.

F-33

---



| |  | Fair values have been determined based on applicable   requirements and do not necessarily represent the amount that would be   realized upon liquidation.  The   following table provides information on the carrying value and fair value of   the Banks financial instruments:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(In US$ thousands)                                                         |     | December 31,  |          
|-------------------------------------------------------------------------- | --- | ------------- | ---------
|                                                                           |     |               |          
|                                                                           |     | 2005          |          
|                                                                           |     |               |          
|                                                                           |     | CarryingValue |          
|Financial assets:                                                          |     |               |          
|Instruments with carrying value equal to fair value                        | US$ |               | 370,762  
|Securities available for sale                                              |     |               | 182,050  
|Securities held to maturity                                                |     |               | 26,520   
|Loans, net of allowance                                                    |     |               | 2,564,994
|Derivatives financial   instruments - assets                               |     |               | 357      
|                                                                           |     |               |          
|Financial   liabilities:                                                   |     |               |          
|Instruments with carrying value equal to fair value                        | US$ |               | 158,891  
|Time deposits                                                              |     |               | 1,018,233
|Short-term borrowings                                                      |     |               | 760,699  
|Medium and long-term borrowings and placements                             |     |               | 533,860  
|Derivatives financial   instruments - liabilities                          |     |               | 297      
|Commitments to extend credit, stand-by letters of   credits and guarantees |     |               | 683,712  

|(20) | Business Segment Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | The Banks businesses are grouped into three   segments for management reporting and analysis purposes: Securities,   short-term loans, medium-term loans, acceptances and contingencies (letters   of credit, guarantees and other fee generating businesses).  These segments are based upon products and   services offered and are identified in a manner consistent with the   requirements outlined on Statement of Financial Accounting Standard No. 131   (SFAS 131), Disclosures about Segments of an Enterprise and Related   Information.  The segment results   show the financial performance of the major lines of business.  These results are determined based on the   Banks management accounting process, which assigns consolidated balance   sheets, revenue and expense items to each reportable line of business on a   systematic basis.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The short-term loans (original term of up to 365
days) represent the Banks principal activity, and constitute mostly
short-term trade related financing to its stockholders banks and other selected
commercial banks in the Region, which then on-lend to businesses engaged in
foreign trade, as well as to state owned export institutions, and to private
entities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | Medium-term loans (original term of over one to five   years, and exceptionally more than five years) were mainly granted to   selected commercial banks and corporations in the Region, to support the   medium-term financing needs of the Banks clients.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-34

---



| | The contingencies constitute mainly guarantees and stand-by or commercial letters of credit covering commercial and country risk.  This business segment is the primary component of fee income generation.  Additional components of other income are commissions earned on loan origination.  The following table presents certain information regarding the Banks continuing operations by segment:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Business Segment Analysis (1)

|(In US$   million)                  |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|----------------------------------- |  |  | ---------------- |  |  | ----------------------- |  |  | -------------------------------------- |  |  | ------------ |  |  | -------------------- | - |  | ---------------------------- | 
|                                    |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|2005                                |  |  | Average   Assets |  |  | Net   Interest   Income |  |  | Net   Commissions   and Other   Income |  |  | Net Revenues |  |  | Operating   Expenses |   |  | Net   Operating   Income (2) | 
|                                    |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|Loans and securities                |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|Short-term                          |  |  | 1,573            |  |  | 23.8                    |  |  | 1.6                                    |  |  | 25.4         |  |  | (12.8                | ) |  | 12.7                         | 
|Medium-term                         |  |  | 926              |  |  | 21.4                    |  |  | 1.0                                    |  |  | 22.4         |  |  | (7.5                 | ) |  | 14.9                         | 
|                                    |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|Total loans and securities          |  |  | 2,498            |  |  | 45.3                    |  |  | 2.6                                    |  |  | 47.8         |  |  | (20.3                | ) |  | 27.5                         | 
|Acceptances and   contingencies (3) |  |  | 582              |  |  | 0                       |  |  | 5.7                                    |  |  | 5.7          |  |  | (4.5                 | ) |  | 1.2                          | 
|                                    |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 
|Credit portfolio (4)                |  |  | 3,081            |  |  | 45.3                    |  |  | 8.3                                    |  |  | 53.5         |  |  | (24.8                | ) |  | 28.7                         | 
|                                    |  |  |                  |  |  |                         |  |  |                                        |  |  |              |  |  |                      |   |  |                              | 

|2004                                |  | Average   Assets |       | Net    Interest   Income |  | Net   Commissions   and Other   Income |  | Net    Revenues |     | Operating   Expenses |  | Net   Operating   Income (2) | 
|----------------------------------- |  | ---------------- | ----- | ------------------------ |  | -------------------------------------- |  | --------------- | --- | -------------------- |  | ---------------------------- | 
|                                    |  |                  |       |                          |  |                                        |  |                 |     |                      |  |                              | 
|Loans and securities                |  |                  |       |                          |  |                                        |  |                 |     |                      |  |                              | 
|Short-term                          |  |                  | 1,884 |                          |  | 31.5                                   |  |                 | 2.4 |                      |  | 33.9                         | 
|Medium-term                         |  |                  | 448   |                          |  | 10.5                                   |  |                 | 0.6 |                      |  | 11.1                         | 
|                                    |  |                  |       |                          |  |                                        |  |                 |     |                      |  |                              | 
|Total loans and securities          |  |                  | 2,332 |                          |  | 42.0                                   |  |                 | 3.0 |                      |  | 45.0                         | 
|Acceptances and   contingencies (3) |  |                  | 373   |                          |  | 0                                      |  |                 | 5.8 |                      |  | 5.8                          | 
|                                    |  |                  |       |                          |  |                                        |  |                 |     |                      |  |                              | 
|Credit portfolio (4)                |  |                  | 2,705 |                          |  | 42.0                                   |  |                 | 8.8 |                      |  | 50.8                         | 
|                                    |  |                  |       |                          |  |                                        |  |                 |     |                      |  |                              | 

|(In US$   million)                  |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|----------------------------------- |  | ---------------- | ----- | ------------------------ |  | -------------------------------------- |  | ------------ | ---- | -------------------- |  | ---------------------------- |  |  | ----- | - |  | ---- | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|2003                                |  | Average   Assets |       | Net    Interest   Income |  | Net   Commissions   and Other   Income |  | Net Revenues |      | Operating   Expenses |  | Net   Operating   Income (2) | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|Loans and securities                |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|Short-term                          |  |                  | 1,763 |                          |  | 37.9                                   |  |              | 17.1 |                      |  | 55.0                         |  |  | (14.1 | ) |  | 40.9 | 
|Medium-term                         |  |                  | 720   |                          |  | 16.1                                   |  |              | 7.0  |                      |  | 23.1                         |  |  | (5.7  | ) |  | 17.4 | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|Total loans and securities          |  |                  | 2,483 |                          |  | 54.0                                   |  |              | 24.1 |                      |  | 78.1                         |  |  | (19.8 | ) |  | 58.3 | 
|Acceptances and   contingencies (3) |  |                  | 369   |                          |  | 0                                      |  |              | 6.1  |                      |  | 6.1                          |  |  | (2.8  | ) |  | 3.3  | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|Credit portfolio (4)                |  |                  | 2,852 |                          |  | 54.0                                   |  |              | 30.2 |                      |  | 84.2                         |  |  | (22.6 | ) |  | 61.6 | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 
|                                    |  |                  |       |                          |  |                                        |  |              |      |                      |  |                              |  |  |       |   |  |      | 

| |    
| | ---
| | (1)
| | (2)
| | (3)
| | (4)

F-35

---



| | (21) | Leasehold Commitments                                                    
| | ---- | -------------------------------------------------------------------------
| |      | At December 31, 2005, a summary of leasehold   commitments is as follows:

|Expiration Year    |     | Future RentalCommitments | 
|------------------ | --- | ------------------------ | 
|                   |     |                          | 
|(In US$ thousands) |     |                          | 
|2006               | US$ |                          | 
|2007               |     |                          | 
|2008               |     |                          | 
|2009               |     |                          | 
|2010               |     |                          | 
|                   |     |                          | 
|                   | US$ |                          | 
|                   |     |                          | 

| |      | Occupancy expense for years ended December 31, 2005,   2004 and 2003, amounted to US$447 thousand, US$311 thousand, and US$293   thousand, respectively.                                                                                                   
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                            
| | (22) | Litigation                                                                                                                                                                                                                                                 
| |      | Bladex is not engaged in any litigation that is   material to the Banks business and, to the best knowledge of the Banks   management, which is likely to have a material adverse effect on its   business, financial condition or results of operations.

F-36

---



(23)     Summary of Unaudited Quarterly Financial Information

|                                                                                                                                                  |     | 2005   |        
|------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ------ | -------
|                                                                                                                                                  |     |        |        
|(In US$ thousands, except   per share data)                                                                                                       |     | Fourth |        
|                                                                                                                                                  |     |        |        
|Interest income                                                                                                                                   | US$ |        | 35,127 
|Interest expense                                                                                                                                  |     |        | (22,630
|                                                                                                                                                  |     |        |        
|Net interest income                                                                                                                               |     |        | 12,498 
|                                                                                                                                                  |     |        |        
|Reversal (provision) for   loan losses:                                                                                                           |     |        |        
|Reversal (provision) - 2005                                                                                                                       |     |        | (715   
|Reversal (provision) -   effect of a change in the credit  loss   reserve methodology - 2005                                                      |     |        | 16,518 
|                                                                                                                                                  |     |        |        
|                                                                                                                                                  |     |        | 15,803 
|                                                                                                                                                  |     |        |        
|Net interest income after   provision (reversal) for loan losses                                                                                  |     |        | 28,301 
|Reversal (provision) for   losses on off-balance sheet credit risk:                                                                               |     |        |        
|Reversal (provision) - 2005                                                                                                                       |     |        | 1,571  
|Reversal (provision) - effect of a change in the credit loss reserve methodology - 2005                                                           |     |        | (9,854 
|                                                                                                                                                  |     |        |        
|                                                                                                                                                  |     |        | (8,283 
|                                                                                                                                                  |     |        |        
|Commission income, net                                                                                                                            |     |        | 1,667  
|Derivatives and hedging   activities                                                                                                              |     |        | 2,336  
|Recovery of impairment loss   on securities                                                                                                       |     |        | 0      
|Gain (loss) on sale of   securities available for sale                                                                                            |     |        | (40    
|Gain (loss) on foreign   currency exchange                                                                                                        |     |        | (29    
|Other income, net                                                                                                                                 |     |        | 3      
|Operating expenses                                                                                                                                |     |        | (7,407 
|                                                                                                                                                  |     |        |        
|Net income before   cumulative effect of changes in accounting principles                                                                         |     |        | 16,548 
|Cumulative effect on prior   periods (to Dec. 31, 2004) of a change in the credit loss reserve methodology                                        |     |        | 0      
|Effect on prior period (to   Dec. 31, 2004) of an early adoption of the fair-value based method of   accounting stock-based employee compensation |     |        | (150   
|                                                                                                                                                  |     |        |        
|Net income                                                                                                                                        | US$ |        | 16,398 
|                                                                                                                                                  |     |        |        
|Net income per share before   the cumulative effect of changes in accounting principles                                                           | US$ |        | 0.43   
|Cumulative effect of   changes in accounting principles                                                                                           |     |        | 0      
|Net income per share                                                                                                                              | US$ |        | 0.43   
|                                                                                                                                                  |     |        |        
|Diluted earnings per share   before cumulative effect of a change in the credit loss reserve methodology                                          | US$ |        | 0.43   
|Cumulative effect of   changes in accounting principles                                                                                           |     |        | 0      
|Diluted earnings per share                                                                                                                        | US$ |        | 0.43   
|                                                                                                                                                  |     |        |        
|Average number of common   shares outstanding (thousands)                                                                                         |     |        | 38,097 
|                                                                                                                                                  |     |        |        

|                                                                   |     | 2004 |        
|------------------------------------------------------------------ | --- | ---- | -------
|                                                                   |     |      |        
|(In US$ thousands, except   per share data)                        |     |      | Fourth 
|                                                                   |     |      |        
|Interest income                                                    | US$ |      | 20,422 
|Interest expense                                                   |     |      | (11,358
|                                                                   |     |      |        
|Net interest income                                                |     |      | 9,064  
|Reversal of provision for   loan losses                            |     |      | 45,010 
|                                                                   |     |      |        
|Net interest income after   provision for loan losses              |     |      | 54,074 
|Reversal (provision) for   losses on off-balance sheet credit risk |     |      | 4,715  
|Commission income, net                                             |     |      | 1,201  
|Derivatives and hedging   activities                               |     |      | 0      
|Gain on sale of securities   available for sale                    |     |      | 0      
|Gain on early   extinguishment of debt                             |     |      | 0      
|Gain (loss) on foreign   currency exchange                         |     |      | 7      
|Other income, net                                                  |     |      | 60     
|Operating expenses                                                 |     |      | (6,145 
|                                                                   |     |      |        
|Net income                                                         | US$ |      | 53,913 
|                                                                   |     |      |        
|Earnings per share                                                 | US$ |      | 1.39   
|Diluted earnings per share                                         | US$ |      | 1.38   
|Average number of common   shares outstanding (thousands)          |     |      | 38,916 
|                                                                   |     |      |        

F-37

---



SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

BANCO LATINOAMERICANO DE EXPORTACIONES, S.A.

|                        | 
|----------------------- | 
|/s/ JAIME RIVERA        | 
|                        | 
|Jaime Rivera            | 
|Chief Executive Officer | 
|June 15, 2006           | 

---



EXHIBIT INDEX

Exhibit

Exhibit 12.1.     Rule 13a-14(a) Certification of Principal Executive Officer

Exhibit 12.2.     Rule 13a-14(a) Certification of Principal Financial Officer

Exhibit 13.1.     Rule 13a-14(b) Certification of Principal Executive Officer

Exhibit 13.2.     Rule 13a-14(b) Certification of Principal Financial Officer

---