**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**









FORM
      20-F







 ̈ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




OR




ý ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




For
      the
      fiscal year ended December 31, 2007




OR




 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




OR




 ̈ SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




Date
      of
      event requiring this shell company report.................................




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 Stock2,660,847
            
            Shares
                of Class B Common Stock27,367,113
            
            Shares
                of Class E Common Stock36,370,149
            
            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.




 ̈ Yes  ý No




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.




 ̈ Yes  ý No




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.


ý Yes  ̈ No




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 filer” in Rule 12b-2 of the Exchange Act. (Check
      one):


 ̈ Large
      Accelerated Filer ý Accelerated Filer  ̈ Non-accelerated Filer




Indicate
      by check mark which basis of accounting the registrant has used to prepare
      the
      financial statements included in this filing:


ý U.S.
      GAAP  ̈ IFRS  ̈ Other




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


 ̈ Item
      17 ý Item
      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).


 ̈ Yes ý No










**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
              5B.
              Capitalization
                  and Indebtedness
              6C.
              Reasons
                  for the Offer and Use of Proceeds
              6D.
              Risk
                  Factors
              6**Item
                  4. Information on the Company**
              **9**A.
              History
                  and Development of the Company
              9B.
              Business
                  Overview
              9C.
              Organizational
                  Structure
              21D.
              Property,
                  Plant and Equipment
              21**Item
                  4A. Unresolved Staff Comments**
              **21****Item
                  5. Operating and Financial Review and Prospects**
              **21**A.
              Operating
                  Results
              22B.
              Liquidity
                  and Capital Resources
              33C.
              Research
                  and Development, Patents and Licenses, etc.
              38D.
              Trend
                  Information
              38E.
              Off-Balance
                  Sheet Arrangements
              39F.
              Contractual
                  Obligations and Commercial Commitments
              39**Item
                  6. Directors, Executive Officers and Employees**
              **40**A.
              Directors
                  and Executive Officers
              40B.
              Compensation
              44C.
              Board
                  Practices
              48D.
              Employees
              52E.
              Share
                  Ownership
              52**Item
                  7. Major Shareholders and Related Party
                  Transactions**
              **52**A.
              Major
                  Shareholders
              52B.
              Related
                  Party Transactions
              54C.
              Interests
                  of Experts and Counsel
              54**Item
                  8. Financial Information**
              **54**A.
              Consolidated
                  Statements and Other Financial Information
              54B.
              Significant
                  Changes
              55**Item
                  9. The Offer and Listing**
              **55**A.
              Offer
                  and Listing Details
              55B.
              Plan
                  of Distribution
              55C.
              Markets
              55D.
              Selling
                  Shareholders
              55E.
              Dilution
              56




2





F.
            Expenses
                of the Issue
            56**Item
                10. Additional Information**
            **56**A.
            Share
                Capital
            56B.
            Memorandum
                and Articles of Association
            56C.
            Material
                Contracts
            56D.
            Exchange
                Controls
            56E.
            Taxation
            56F.
            Dividends
                and Paying Agents
            60G.
            Statement
                by Experts
            60H.
            Documents
                on Display
            60I.
            Subsidiary
                Information
            60**Item
                11. Quantitative and Qualitative Disclosure About Market
                Risk**
            **60****Item
                12. Description of Securities Other than Equity
                Securities**
            **63****PART
                II****Item
                13. Defaults, Dividend Arrearages and
                Delinquencies**
            **63****Item
                14. Material Modifications to the Rights of Security Holders and
                Use of
                Proceeds**
            **63****Item
                15. Controls and Procedures**
            **63****Item
                16. Reserved**
            **65**Item
                16A. Audit and Compliance Committee Financial Expert
            65Item
                16B. Code of Ethics
            65Item
                16C. Principal Accountant Fees and Services
            65Item
                16D. Exemptions from the Listing Standards for Audit
                Committees
            66Item
                16E. Purchases of Equity Securities by the Issuer and Affiliated
                Purchasers
            66**PART
                III****Item
                17. Financial Statements**
            **67****Item
                18. Financial Statements**
            **67****Item
                19. Exhibits**
            **67**


3




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
      Jaime Celorio, 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.
      Telephone requests may be directed to Mr. Celorio at 011-507-210-8563. Written
      requests also may be faxed to Mr. Celorio at 011-507-269-6333 or sent via e-mail
      to jcelorio@bladex.com. Information is also available on the Bank’s website at:
      www.bladex.com.




Forward-Looking
      Statements




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 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.” 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 changing interest rates and of an improving macroeconomic
                environment in the Region on the Bank’s financial
                condition;


·
            the
                execution of the Bank’s strategies and initiatives, including its revenue
                diversification strategy;


·
            the
                anticipated operating income and return on equity in future
                periods;


·
            the
                implied volatility of the Bank’s Treasury and Asset Management
                revenues;


·
            the
                adequacy of the Bank’s allowance for and provisions for credit
                losses;


·
            the
                Bank’s ability to maintain its investment-grade credit
                ratings;


·
            the
                availability and mix of future sources of funding for the Bank’s lending
                operations; and


·
            the
                adequacy of the Bank’s sources of liquidity to replace large deposit
                withdrawals.




In
      addition, the statements included under the headings “Strategy” and “Trends” are
      forward-looking statements. 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.


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,
      2003,
      2004, 2005, 2006 and 2007 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”). The 2003, 2004, 2005 and
      2006 consolidated financial statements were audited by the registered public
      accounting firm KPMG, and the consolidated financial statements for the year
      ended December 31, 2007 were audited by the registered public accounting firm
      Deloitte, Inc. The consolidated financial statements of the Bank at December
      31,
      2006 and 2007 and for each of the three years in the period ended December
      31,
      2007 (the “Consolidated Financial Statements”) are included in this Annual
      Report, together with the reports of the registered public accounting firms
      KPMG
      and Deloitte Inc. The information below is qualified in its entirety by the
      detailed information included elsewhere herein and should be read in conjunction
      with Item 4, “Information on the Company”, Item 5, “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,****2003**
            
            **2004**
            
            **2005**
            
            **2006**
            
            **2007****(in
                $ thousand, except per share amounts and ratios)****Income
                Statement Data:**Net
                interest income
            
            $
            53,987
            
            $
            42,025
            
            $
            45,253
            
            $
            58,837
            
            $
            70,570Fees
                and commissions, net
            
            
            7,446
            
            
            5,928
            
            
            5,824
            
            
            6,393
            
            
            5,555Reversal
                of provision for credit losses1
            
            
            58,905
            
            
            112,271
            
            
            38,374
            
            
            13,045
            
            
            1,475Trading
                gains
            
            
            0
            
            
            0
            
            
            0
            
            
            879
            
            
            23,866Net
                gain on sale on securities available for sale
            
            
            22,211
            
            
            2,922
            
            
            206
            
            
            2,568
            
            
            9,119Total
                operating expenses
            
            
            (22,561
            )
            
            (21,352
            )
            
            (24,691
            )
            
            (28,929
            )
            
            (37,027
            )Income
                before cumulative effect of changes in accounting
                principles
            
            
            111,496
            
            
            141,730
            
            
            77,518
            
            
            57,902
            
            
            72,177Cumulative
                effect of accounting changes
            
            
            0
            
            
            0
            
            
            2,583
            
            
            0
            
            
            0Net
                income
            
            
            111,496
            
            
            141,730
            
            
            80,101
            
            
            57,902
            
            
            72,177**Balance
                Sheet Data:**Trading
                assets
            
            
            0
            
            
            0
            
            
            0
            
            
            130,076
            
            
            52,597Investment
                securities
            
            
            77,793
            
            
            192,856
            
            
            208,570
            
            
            471,351
            
            
            468,360Loans
            
            
            2,275,031
            
            
            2,441,686
            
            
            2,610,019
            
            
            2,980,772
            
            
            3,731,838Allowance
                for loan losses
            
            
            224,347
            
            
            106,352
            
            
            39,448
            
            
            51,266
            
            
            69,643Total
                assets
            
            
            2,560,612
            
            
            2,732,940
            
            
            3,159,231
            
            
            3,978,337
            
            
            4,790,532Total
                deposits
            
            
            702,955
            
            
            864,160
            
            
            1,046,618
            
            
            1,056,277
            
            
            1,462,371Trading
                liabilities
            
            
            0
            
            
            0
            
            
            0
            
            
            54,832
            
            
            90,765Short-term
                borrowings
            
            
            687,214
            
            
            704,718
            
            
            760,699
            
            
            1,595,604
            
            
            1,504,710Borrowings
                and long-term debt
            
            
            485,516
            
            
            403,621
            
            
            533,860
            
            
            558,860
            
            
            1,010,316Total
                liabilities
            
            
            1,976,283
            
            
            2,076,810
            
            
            2,542,449
            
            
            3,394,442
            
            
            4,178,281Total
                stockholders’ equity
            
            
            584,329
            
            
            656,130
            
            
            616,782
            
            
            583,895
            
            
            612,251**Average
                number of shares outstanding**
            
            
            28,675
            
            
            39,232
            
            
            38,550
            
            
            37,065
            
            
            36,349**Average
                number of diluted shares outstanding**
            
            
            28,675
            
            
            39,372
            
            
            38,860
            
            
            37,572
            
            
            36,414**Per
                Common Share Data:**Basic
                earnings per share6
            
            
            3.88
            
            
            3.61
            
            
            2.01
            
            
            1.56
            
            
            1.99Diluted
                earnings per share6
            
            
            3.88
            
            
            3.60
            
            
            1.99
            
            
            1.54
            
            
            1.98Book
                value per share (period end)
            
            
            14.84
            
            
            16.87
            
            
            16.19
            
            
            16.07
            
            
            16.83Regular
                cash dividends per share
            
            
            0.00
            
            
            0.50
            
            
            0.60
            
            
            0.75
            
            
            0.88Special
                cash dividends per share
            
            
            0.00
            
            
            1.00
            
            
            2.00
            
            
            1.00
            
            
            0.00**Selected
                Financial Ratios:***Performance
                Ratios:*Return
                on average assets
            
            
            4.24
            %
            
            5.83
            %
            
            3.00
            %
            
            1.70
            %
            
            1.71
            %Return
                on average stockholders’ equity
            
            
            23.91
            %
            
            22.75
            %
            
            12.85
            %
            
            9.96
            %
            
            11.91
            %Net
                interest margin2
            
            
            1.87
            %
            
            1.65
            %
            
            1.70
            %
            
            1.76
            %
            
            1.71
            %Net
                interest spread2
            
            
            1.23
            %
            
            0.98
            %
            
            0.67
            %
            
            0.70
            %
            
            0.80
            %Total
                operating expenses to total average assets
            
            
            0.86
            %
            
            0.88
            %
            
            0.93
            %
            
            0.85
            %
            
            0.88
            %Regular
                cash dividend payout ratio
            
            
            0.00
            %3
            
            13.84
            %
            
            29.84
            %
            
            48.01
            %
            
            44.32
            %Special
                cash dividend payout ratio
            
            
            0.00
            %3
            
            27.68
            %
            
            99.46
            %
            
            64.01
            %
            
            0.00
            %*Asset
                Quality Ratios:*Impaired
                loans to total loans4
            
            
            19.62
            %
            
            10.50
            %
            
            1.11
            %
            
            0.00
            %
            
            0.00
            %Charged-off
                loans to total loans
            
            
            6.1
            %
            
            0.5
            %
            
            0.4
            %
            
            0.00
            %
            
            0.00
            %Allowance
                for loan losses to total loans, net of unearned income and deferred
                commission
            
            
            9.89
            %
            
            4.37
            %
            
            1.51
            %
            
            1.72
            %
            
            1.87
            %Allowance
                for credit losses to non-accruing credits
            
            
            53
            %
            
            48
            %
            
            217
            %
            
            n.a.
            
            
            n.a.*Capital
                Ratios:*Stockholders’
                equity to total assets
            
            
            22.82
            %
            
            24.01
            %
            
            19.52
            %
            
            14.68
            %
            
            12.78
            %Tier
                1 capital to risk-weighted assets5
            
            
            35.42
            %
            
            42.90
            %
            
            33.74
            %
            
            24.45
            %
            
            20.92
            %Total
                capital to risk-weighted assets5
            
            
            36.67
            %
            
            44.15
            %
            
            34.99
            %
            
            25.70
            %
            
            22.17
            %




5







1 Includes
      Reversal (provision) for loan losses to on and off-balance sheet credit risks.
      For information regarding reversal (provision) for credit losses, see Item
      5,
“Operating and Financial Review and Prospects/Operating Results”.


2  For
      information regarding calculation of the net interest margin and the net
      interest spread, see Item 5A, “Operating and Financial Review and
      Prospects/Operating Results/Net Interest Income and Margins”.


3  During
      2003, the Bank suspended its dividend payment. In 2004, the Bank re-established
      its dividend payment.


4  Repossessed
      assets or troubled debt restructurings as defined in Statement of Financial
      Accounting Standards No. 15 amounted to $23 million in 2005, and $202 million
      in
      2004, and related mostly to Argentine credits.


5  Calculated
      using the U.S. Federal Reserve Board’s 1992 fully phased-in risk-weighted
      capital guidelines.


6  For
      2005,
      exclude the cumulative effect of changes in accounting principles, which
      represented $0.07 per share.




**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. The
      Bank also faces borrower concentration. Adverse economic changes in those
      countries or in the condition of the Bank’s largest borrowers could affect
      adversely the Bank’s growth, asset quality, prospects, profitability and
      financial condition.***




The
      Bank’s credit activities are concentrated in Central and South America and the
      Caribbean (the “Region”), which is a reflection of the Bank’s mission and
      strategy. Historically, economies of countries in the Region have occasionally
      experienced significant volatility characterized, in some cases, by political
      uncertainty, slow growth or recession, declining investments, government and
      private sector debt defaults and restructurings, significant inflation and/or
      devaluation. Global economic changes, including oil prices, commodities prices,
      the U.S. dollar interest rates and exchange rate, and slower economic growth
      in
      industrialized 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 quality of the Bank’s credit portfolio, including
      increased loan loss provisions, debt restructurings, and loan losses. As a
      result, this could also have an adverse impact on the Bank’s asset growth, asset
      quality, prospects, profitability and financial condition.




The
      Bank’s credit 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, results of
      operations and financial condition if one or more of those countries encounters
      economic difficulties. At December 31, 2007, approximately 67% of the Bank’s
      credit portfolio was outstanding to borrowers in the following four countries:
      Brazil ($1,728 million, or 36%); Colombia ($530 million, or 11%); Peru ($484
      million, or 10%); and Mexico ($451 million, or 9%).




6


In
      addition, at December 31, 2007, 11% of the Bank’s total credits were to five
      borrowers in Brazil, and 13% of total credits were to four borrowers from Peru
      (5%), Colombia (3%), Mexico (2%) and Venezuela (3%). A significant deterioration
      of the financial or economic condition of any of these countries or borrowers
      could have an adverse impact on the Bank’s credit portfolio, requiring the Bank
      to create additional allowances for credit losses, or suffer 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 and investments. 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.




***Increased
      risk perception in countries in the Region where the Bank has large credit
      exposure could have an adverse impact on the Bank’s credit ratings, funding
      activities and funding costs.*** ****




Increased
      risk perception in any country 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 its financing activities in the Region at
      meaningful levels could be severely hampered.




***Risks
      Relating to the Bank’s Business***




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





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





Approximately
      one third of the Bank’s funding represents short-term borrowings from
      international banks, the majority of which are European and North American
      institutions, which also compete with the Bank in its credit extension activity,
      and represent a source of business for the Bank, as well. If these international
      banks ceased to provide funding to the Bank, the Bank would have to seek funding
      from other sources, which may not be available, or if available, may be at
      higher interest cost.




Financial
      turnmoil in the international markets could negatively impact liquidity in
      the
      financial markets, reducing the Bank’s access to credit or increasing its cost
      of funding, which could lead to tighter lending standards. An example of this
      situation is the liquidity constraint experienced since the second half of
      2007
      in the international financial markets, driven by the subprime crisis in the
      United States. The persistence or worsening of these unfavorable market
      conditions could have a material adverse effect on the Bank's liquidity.




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 the
      country. Central banks in other Latin American and Caribbean 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 to resolve the liquidity shortage.




***The
      Bank’s allowances for credit losses could be inadequate to cover credit losses
      related to its loans and contingencies.***




The
      Bank
      determines the appropriate level of allowances for credit losses based on a
      process that estimates the probable loss inherent in its portfolio, which is
      the
      result of a statistical analysis supported by the Bank’s historical portfolio
      performance and the Bank’s management’s qualitative judgment. The latter
      includes assumptions and estimates made in the context of changing political
      and
      economic conditions in the Region. The Bank’s allowances could be inadequate to
      cover losses in its credit portfolio due to exposure concentration, which in
      turn, could have a material adverse effect on the Bank’s financial condition,
      results of operations and cash flows.


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 and trading
      securities, short-term borrowings, long-term debt, derivatives and trading
      positions. Among many other market conditions that may shift from time to time
      are fluctuations in interest and currency exchange rates, changes in the implied
      volatility of interest 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, cash flows and business. See
      Item 11, “Quantitative and Qualitative Disclosure About Market
      Risk”.




***The
      Bank faces interest rate risk which is caused by the mismatch in maturities
      of
      interest earning assets and interest bearing liabilities. If not properly
      managed, this mismatch can reduce net interest income as interest rates
      fluctuate.***




As
      a
      bank, Bladex faces interest rate risk because interest-bearing liabilities
      generally reprice at a different pace than interest-earning assets. Failure
      to
      adequately manage eventual mismatches may reduce the Bank’s net interest income
      during periods of fluctuating interest rates.




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




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. Operational problems or errors may occur, and their
      occurrence may have a material adverse impact on the Bank’s business, financial
      condition, results of operations and cash flows.




Bladex,
      has an Operational Risk department that evaluates the operational risk level
      of
      every key product or process that could have an impact on the financial
      statements. This department coordinates periodic training for all personnel
      and
      auto-evaluations with the participation of those personnel controlling each
      process. Each incident reported, with real or potential loss, is registered
      in
      an operational risk database, and on a quarterly basis, the Bank’s management is
      informed of the relevant incidents that occurred (if any) and the suggested
      mitigation plan.




***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 growth rate of the Region’s economy and
      trade volumes could adversely affect the growth rate of the Bank’s credit
      portfolio.




***Increased
      competition and banking industry consolidation could limit the Bank’s ability to
      grow and may adversely affect results of operations.***




Most
      of
      the competition the Bank faces in the trade finance business comes from
      international banks, the
      majority of which are European and North American institutions .
      Many of
      these international banks have substantially greater resources than the Bank
      and
      enjoy access to less expensive funding than the Bank does. There can be no
      assurance that increased competition will not adversely affect the Bank’s growth
      prospects and results of operations.




Merger
      activity in the financial services industry has produced companies that are
      capable of offering a wide array of financial products and services at
      competitive prices. Globalization of the capital markets and financial services
      industries exposes the Bank to further competition. The Bank's ability to grow
      its business and, therefore, its earnings, is affected by these competitive
      pressures.


8




***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.***




Part
      of
      the Bank’s strategy is to diversify income sources through business initiatives,
      including 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 implementing these business
      initiatives could prevent the Bank from realizing the anticipated benefits
      of
      the initiatives, which could adversely affect the Bank’s business, results of
      operations and growth prospects .




**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 supranational 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 on
      January 2, 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 Regional 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.




Bladex
      offers its services through the Bank’s head office and subsidiaries in Panama
      City, and its subsidiaries and offices in New York City, including its agency
      (the "New York Agency") and Bladex Asset Management, Inc. (“Bladex Asset
      Management”), its subsidiaries in Brazil and the Cayman Islands, its
      international administrative office in Miami and its representative offices
      in
      Mexico City and Buenos Aires as well as through a worldwide network of
      correspondent banks. Bladex’s head office is located at Calle 50 y Aquilino de
      la Guardia, Panama City, Panama, and its telephone number is 011-507-210-8500.
      See Item 18, “Financial Statements”, note 1.




**B.**  **Business
      Overview** ****




***Overview***




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 trade financing to selected commercial banks and corporations in
      the
      Region.




Bladex
      intermediates in the financial and capital markets throughout the Region,
      through three business platforms:




*The
      Commercial Division* ,
      which
      comprises the Bank’s financial intermediation and fee generation activities,
      including the Bank’s trade finance products, such as loans for pre - and
      post-export financing and import of goods, letters of credit, banker’s
      acceptances and guarantees. The majority of the Bank’s loans are extended in
      connection with specific identified foreign trade transactions. Through its
      revenue diversification strategy, the Bank’s Commercial Division has introduced
      a broader range of products, services and solutions associated with foreign
      trade, including co-financing arrangements, underwriting of syndicated credit
      facilities, structured trade financing, asset-based financing in the form of
      factoring, vendor financing and leasing, as well as other fee-based business,
      like U.S.-clearing electronic services.




*The
      Treasury Division* ,
      which
      is responsible for ensuring the Bank’s funding and liquidity, for the management
      of its interest rate, liquidity and currency risks, and for Bladex’s investments
      in fixed-income securities.




The
      Bank’s lending and investing 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 the Bank’s debt securities to financial institutions and investors in Japan,
      Europe, North America and the Region. 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.


9




*The
      Asset Management Division* ,
      which
      is based in New York and commenced operations in April 2006, provides investment
      advisory services to funds and managed accounts, and conducts business through
      the Bladex Offshore Feeder Fund (“the Feeder”) and the Bladex Capital Growth
      Fund (“the Fund”) incorporated in the Cayman Islands. The Asset Management
      Division incorporates the investment manager, Bladex Asset Management, and
      the
      Bank’s investment in any of the managed funds or accounts. The Asset Management
      Division’s objective is to achieve above average long-term rates of return,
      while also attempting to preserve capital, mitigate risk and produce returns,
      which, over the long-term, have low correlation to the returns of the major
      U.S.
      equity and investment grade fixed income indices.




At
      December 31, 2007, the Bank had 49 officers across its offices responsible
      for
      marketing the Bank’s financial products and services to existing and potential
      customers.




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, 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. 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.




***Developments
      During 2007***




During
      2007, the Bank continued the successful execution of its revenue diversification
      strategy among its three business divisions.




The
      Commercial Division achieved corporate client base growth and portfolio
      diversification, resulting in a 16% increase in its average credit portfolio
      over 2006, with approximately $8 billion in credits granted. The growth of
      the
      Bank’s credit and other business activities was achieved while maintaining
      credit quality, resulting in no past due or non-accrual loans at the end of
      the
      year 2007.




The
      Treasury Division continued the expansion of its revenue-driven activities,
      increasing its securities available-for-sale portfolio by 35%. This portfolio
      is
      comprised of liquid, Latin American fixed income securities of high credit
      quality. In addition, the Treasury Division was able to effectively manage
      and
      strengthen the Bank’s liquidity position, in spite of the increased level of
      uncertainty in international markets since August of 2007, as a result of the
      subprime crisis in the United States. During 2007, the Bank closed its
      first-ever funding transactions denominated in local currencies of the Region,
      including a bond issuance in Peruvian Nuevo Soles and inter-bank borrowings
      and
      loans denominated in Mexican Pesos; the Bank also signed a five-year
      international loan syndication for an amount of $150 million, and a three-year
      borrowing for an additional $75 million, and updated its $2.25 billion European
      Medium-Term Note (“EMTN”) program.




The
      Asset
      Management Division was successful in its proprietary asset management
      activities and earned above-average returns. As a result, along with the Bank’s
      commitment to the industry’s best practices in risk management and operational
      control, the Bank obtained the approval of U.S. regulators to offer investment
      advisory services to qualified offshore investors.




In
      quantitative terms, these activities resulted in a 25% increase in net income,
      which totaled $72 million, compared to $58 million in 2006. See Item 5,
“Operating and Financial Review and Prospects/Operating Results/Net Income” and
      Item 18, “Financial Statements”, note 22.


10


***Strategy
      for 2008***




For
      2008,
      Bladex intends to continue focusing its efforts on diversifying its revenue
      sources across its three business units, with the objective of achieving
      improved return on equity levels, while preserving and optimizing the Bank’s
      stockholders’ equity.




The
      Commercial Division intends to continue developing a stronger client base,
      focused towards a growing corporate segment, and continuing the implementation
      of a wider product range, including factoring, vendor financing and leasing,
      which in turn should result in increasing the Bank’s capacity and execution of
      fee income generation.




The
      Bank
      also intends to continue to expand its Treasury Division activities, by
      increasing its available-for-sale and held-to-maturity fixed income portfolio
      throughout the Region, and to issue additional bonds in other Latin American
      markets.




The
      Asset
      Management Division intends to continue to expand its operations and expects
      to
      offer its services to third-party investors, in order to generate additional
      fee
      income.




***Lending
      Policies***




The
      Bank
      extends credit directly to banks, corporations and state-owned export
      organizations within the Region. The Bank analyzes credit requests from eligible
      borrowers in 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.




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. Imports
      and
      exports financed by the Bank are destined for buyers/sellers in countries both
      inside and outside the Region.




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*




Bladex
      has a methodology for capital allocation by country and its risk weights for
      assets. The Credit Policy and Risk Assessment Committee of the Board of
      Directors (“CPER”) approves a level of “allocated capital” for each country,
      instead of nominal exposure limits. These country capital limits are reviewed
      at
      least annually in the quarterly meetings of the CPER. The system establishes
      the
      capital equivalent of each transaction, based on the internal numeric rating
      assigned to each country, which is approved by the CPER.




The
      amounts of capital allocated take into account the customer type (sovereign,
      state-owned or private, corporate or financial institutions), the type of
      transaction (trade or non-trade), and the average remaining term of the
      transaction (from 1 to 180 days, 181 days to a year, between one and three
      years, or more than three years). Capital utilizations by the business units
      should not exceed the Bank’s reported stockholders’ equity.




*Borrower
      Lending Limits*




Generally
      the Bank establishes lines of credit for each borrower according to the results
      of its risk analysis and potential business prospects; however, the Bank is
      not
      required to lend under these lines of credit. 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 Item 4,
“Information on the Company/Business Overview/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 Bank’s Board of
      Directors (the “Board”). Approved borrower lending limits are reported to the
      CPER quarterly. Panamanian Banking Law prescribes certain concentration limits,
      which are applicable and strictly adhered to by the Bank, including a thirty
      percent (30%) limit as a percentage of capital and reserves for any one borrower
      and borrower group, in the case of financial institutions, and a twenty-five
      percent (25%) limit as a percentage of capital and reserves for any one borrower
      and borrower group, in the case of corporate and sovereign borrowers. As of
      December 31, 2007, the legal lending limit prescribed by Panamanian law for
      corporations and sovereign borrowers amounted to approximately $153 million,
      and
      for financial institutions and financial groups amounted to approximately $184
      million. On a quarterly basis, the CPER reviews the impaired portfolio, if
      any,
      along with certain non-impaired credits.


11




At
      December 31, 2007, the Bank was in full compliance with all regulatory limits.
      See Item 4, “Information on the Company/Business Overview/Regulation/Panamanian
      Law”.




***Credit
      Portfolio***




The
      Bank’s credit portfolio consists of the commercial portfolio and the treasury
      portfolio.




The
      Bank’s credit portfolio increased from $3,616 million at December 31, 2005 to
      $4,006 million at December 31, 2006 and $4,753 million at December 31, 2007.




***Commercial
      Portfolio***




The
      commercial portfolio includes the book value of loans, securities purchased
      under agreements to resell and contingencies and other assets (including
      confirmed and stand-by letters of credit and guarantees, credit commitments,
      reimbursement undertakings, equity investments and customers’ liabilities under
      acceptances).




The
      Bank’s commercial portfolio (excluding non-accruing credits in 2005) increased
      from $3,365 million at December 31, 2005 to $3,634 million at December 31,
      2006
      and $4,281 million at December 31, 2007.




At
      December 31, 2007, 63% of the Bank’s commercial portfolio represented trade
      related credits. The corporate market segment represented 49% of the total
      commercial portfolio, of which 68% represented trade financing. The following
      table sets forth the distribution of the Bank’s commercial portfolio (excluding
      non-accruing credits), by product category at December 31 of each year:




**At
                December 31,****2003**
            ****
            **%**
            ****
            **2004**
            ****
            **%**
            ****
            **2005**
            ****
            **%**
            ****
            **2006**
            ****
            **%**
            ****
            **2007**
            ****
            **%**(in
                $ million, except percentages)Loans
            
            $
            1,830
            
            
            79.8
            
            $
            2,186
            
            
            88.7
            
            $
            2,581
            
            
            76.7
            
            $
            2,981
            
            
            82.0
            
            $
            3,732
            
            
            87.2Securities
                purchased under agreements to resell
            
            
            132
            
            
            5.8
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0.0
            
            
            0.0Contingencies
                and other assets
            
            
            330
            
            
            14.4
            
            
            277
            
            
            11.3
            
            
            784
            
            
            23.3
            
            
            654
            
            
            18.0
            
            
            550
            
            
            12.8**Total**
            
            **$**
            **2,292**
            
            
            **100.0**
            
            **$**
            **2,463**
            
            
            **100.0**
            
            **$**
            **3,365**
            
            
            **100.0**
            
            **$**
            **3,634**
            
            
            **100.0**
            
            **$**
            **4,281**
            
            
            **100.0**




*Loan
      Portfolio*




At
      December 31, 2007, the
      Bank’s total loans amounted to $3,732 million, compared to $2,981 million at
      December 31, 2006. See Item 5, “Operating and Financial Review and
      Prospects/Operating Results/Changes in Financial Condition” and Item 18,
“Financial Statements”, note 6.




*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,****2003**
            
            **%**
            
            **2004**
            
            **%**
            ****
            **2005**
            ****
            **%**
            ****
            **2006**
            ****
            **%**
            ****
            **2007**
            ****
            **%**(in
                $ million, except percentages)Argentina
            
            $
            398
            
            
            17.5
            
            $
            207
            
            
            8.5
            
            $
            51
            
            
            2.0
            
            $
            203
            
            
            6.8
            
            $
            264
            
            
            7.1Bolivia
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            5
            
            
            0.2
            
            
            5
            
            
            0.1Brazil
            
            
            1,011
            
            
            44.4
            
            
            1,054
            
            
            43.2
            
            
            1,095
            
            
            42.0
            
            
            1,317
            
            
            44.2
            
            
            1,379
            
            
            37.0Chile
            
            
            131
            
            
            5.8
            
            
            322
            
            
            13.2
            
            
            283
            
            
            10.8
            
            
            175
            
            
            5.9
            
            
            10
            
            
            0.3Colombia
            
            
            96
            
            
            4.2
            
            
            148
            
            
            6.1
            
            
            249
            
            
            9.5
            
            
            163
            
            
            5.5
            
            
            400
            
            
            10.7Costa
                Rica
            
            
            59
            
            
            2.6
            
            
            38
            
            
            1.5
            
            
            54
            
            
            2.1
            
            
            85
            
            
            2.9
            
            
            77
            
            
            2.1Dominican
                Republic
            
            
            24
            
            
            1.1
            
            
            0
            
            
            0.0
            
            
            1
            
            
            0.0
            
            
            9
            
            
            0.3
            
            
            29
            
            
            0.8Ecuador
            
            
            22
            
            
            1.0
            
            
            51
            
            
            2.1
            
            
            25
            
            
            1.0
            
            
            43
            
            
            1.4
            
            
            61
            
            
            1.6El
                Salvador
            
            
            26
            
            
            1.1
            
            
            44
            
            
            1.8
            
            
            81
            
            
            3.1
            
            
            82
            
            
            2.8
            
            
            47
            
            
            1.2Guatemala
            
            
            34
            
            
            1.5
            
            
            38
            
            
            1.6
            
            
            41
            
            
            1.6
            
            
            89
            
            
            3.0
            
            
            96
            
            
            2.6Honduras
            
            
            0
            
            
            0.0
            
            
            6
            
            
            0.2
            
            
            26
            
            
            1.0
            
            
            36
            
            
            1.2
            
            
            49
            
            
            1.3Jamaica
            
            
            14
            
            
            0.6
            
            
            26
            
            
            1.1
            
            
            24
            
            
            0.9
            
            
            49
            
            
            1.6
            
            
            77
            
            
            2.1Mexico
            
            
            183
            
            
            8.0
            
            
            262
            
            
            10.7
            
            
            161
            
            
            6.1
            
            
            168
            
            
            5.6
            
            
            410
            
            
            11.0Nicaragua
            
            
            9
            
            
            0.4
            
            
            5
            
            
            0.2
            
            
            2
            
            
            0.1
            
            
            10
            
            
            0.3
            
            
            13
            
            
            0.3Panama
            
            
            44
            
            
            1.9
            
            
            89
            
            
            3.7
            
            
            156
            
            
            6.0
            
            
            180
            
            
            6.1
            
            
            140
            
            
            3.7Paraguay
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0Peru
            
            
            65
            
            
            2.8
            
            
            55
            
            
            2.2
            
            
            180
            
            
            7.0
            
            
            262
            
            
            8.8
            
            
            454
            
            
            12.2Trinidad
                & Tobago
            
            
            100
            
            
            4.4
            
            
            92
            
            
            3.8
            
            
            177
            
            
            6.8
            
            
            104
            
            
            3.5
            
            
            88
            
            
            2.3Uruguay
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            4
            
            
            0.1
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0Venezuela
            
            
            61
            
            
            2.7
            
            
            5
            
            
            0.2
            
            
            0
            
            
            0.0
            
            
            1
            
            
            0.0
            
            
            135
            
            
            3.6**Total**
            
            **$**
            **2,275**
            
            
            **100.0**
            
            **$**
            **2,442**
            
            
            **100.0**
            
            **$**
            **2,610**
            
            
            **100.0**
            
            **$**
            **2,981**
            
            
            **100.0**
            
            **$**
            **3,732**
            
            
            **100.0**


12




*Loans
      by Type of Borrower*




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




**At
                December 31,****2003**
            
            **2004**
            
            **2005**
            
            **2006**
            
            **2007**(in
                $ million)Private
                sector commercial banks
            
            $
            986
            
            $
            1,243
            
            $
            1,583
            
            $
            1,167
            
            $
            1,491State-owned
                commercial banks
            
            
            422
            
            
            563
            
            
            118
            
            
            273
            
            
            241Central
                banks
            
            
            0
            
            
            13
            
            
            0
            
            
            0
            
            
            0Sovereign
                debt
            
            
            50
            
            
            58
            
            
            49
            
            
            123
            
            
            113State-owned
                exporting organizations
            
            
            424
            
            
            363
            
            
            402
            
            
            138
            
            
            282Private
                corporations
            
            
            392
            
            
            201
            
            
            458
            
            
            1,279
            
            
            1,605**Total**
            
            **$**
            **2,275**
            
            **$**
            **2,442**
            
            **$**
            **2,610**
            
            **$**
            **2,981**
            
            **$**
            **3,732**





During
      2007, the Bank increased its exposure to private corporations by $326 million,
      reflecting its strategy of developing a stronger client base, focused towards
      a
      growing corporate segment.




*Maturities
      and Sensitivites of the Loan Portfolio*




The
      following table sets forth the maturity profile of the loan portfolio at
      December 31, 2007, by type of rate and type of borrower:




**At
                December 31, 2007**(in
                $ million)**Due in one year or less**
            
            **Due after one year**
              **through five years**
            
            **Due after five**
              **years**
            
            **Total****FIXED RATE**Private
                sector commercial banks
            
            $
            830
            
            $
            30
            
            $
            0
            
            $
            860State-owned
                commercial banks
            
            
            145
            
            
            20
            
            
            0
            
            
            165Sovereign
                debt
            
            
            30
            
            
            83
            
            
            0
            
            
            113State-owned
                exporting organizations
            
            
            148
            
            
            0
            
            
            0
            
            
            148Private
                corporations
            
            
            538
            
            
            29
            
            
            2
            
            
            569**Sub-total**
            
            **$**
            **1,692**
            
            **$**
            **162**
            
            **$**
            **2**
            
            **$**
            **1,856****FLOATING
                RATE**Private
                sector commercial banks
            
            $
            355
            
            $
            220
            
            $
            56
            
            $
            631State-owned
                commercial banks
            
            
            41
            
            
            35
            
            
            0
            
            
            76State-owned
                exporting organizations
            
            
            131
            
            
            3
            
            
            0
            
            
            134Private
                corporations
            
            
            307
            
            
            710
            
            
            19
            
            
            1,036**Sub-total**
            
            **$**
            **833**
            
            **$**
            **968**
            
            **$**
            **75**
            
            **$**
            **1,876****Total**
            
            **$**
            **2,525**
            
            **$**
            **1,129**
            
            **$**
            **77**
            
            **$**
            **3,732**




13


*Contingencies
      and other assets*




The
      Bank’s contingencies and other assets included in the commercial portfolio
      consist of selected financial instruments with off-balance sheet credit risk
      and
      customer liabilities under acceptances.




The
      Bank,
      on behalf of its client base, advises and confirms letters of credit to
      facilitate foreign trade transactions. The Bank also provides stand-by letters
      of credit and guarantees, including country risk guarantees, which cover the
      country risk arising from the risk of convertibility and transferability of
      local currency of countries in the Region into hard currency and from political
      risks, such as expropriation, nationalization, war and/or civil disturbances.
      The Bank also provides commitments to extend credit, which are a combination
      of
      either non-binding or legal agreements to lend to a customer.




The
      Bank
      applies the same credit policies used in its lending process to its evaluation
      of these instruments, and, once issued, the commitment is irrevocable and
      remains valid until its expiration. At December 31, 2007, total contingencies
      and other assets in the commercial portfolio amounted to $550 million,
      representing 13% of the Bank’s total commercial portfolio. See Item 18,
“Financial Statements,” note 16.




***Treasury
      Portfolio***




The
      treasury portfolio includes investment securities and credit default swaps
      (an
      off-balance sheet credit derivative product), which totaled $468 million and
      $3
      million, respectively, at December 31, 2007.




*Investment
      Securities*




The
      Bank’s investment securities consist mostly of debt securities held to maturity
      and securities available for sale. See Item 18, “Financial Statements”, notes 2
      (g) and 5.




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




At
      December 31, 2007, the Bank's investment securities portfolio totaled $468
      million and consisted of investments with issuers in the Region, of which 67%
      were banks and sovereign borrowers and 33% were corporations. For the year
      2007,
      the Bank’s total securities portfolio had a weighted average interest rate of
      5.99% per annum.




***Asset
      Management Portfolio***




The
      asset
      management portfolio includes trading assets and liabilities of the Asset
      Management Division, which is the investment manager of the Fund. At December
      31, 2007, the fair value of trading assets was $53 million and the fair value
      of
      trading liabilities was $91 million. See Item 18, “Financial Statements”, notes
      1, 2 (f), 4, and 20.




The
      Fund
      follows a multi-strategy/multi-product trading approach striving to take
      advantage of Latin American and Caribbean opportunities. The Fund takes long
      and
      short positions within the equity, fixed income and foreign exchange
      markets.




The
      Board
      of Directors of the Fund controls the exposure of the Fund to certain risks
      through a risk matrix, which contains guidelines and parameters that the Fund’s
      managers must follow. Specific risk management guidelines include constraints
      regarding capital usage, portfolio concentration, among other factors.




***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-bearing deposits
      in other banks, investment securities, trading assets and loans, but not
      including contingencies and other assets (collectively “cross-border
      outstandings”) at December 31 of each year:




14




**2005**
            
            **2006**
            
            **2007****Amount**
            
            **% of Total**
              **Outstandings**
            
            **Amount**
            
            **% of Total**
              **Outstandings**
            
            **Amount**
            
            **% of Total**
              **Outstandings**(in
                $ million, except percentages)Argentina
            
            $
            55
            
            
            1.8
            
            $
            229
            
            
            5.9
            
            $
            283
            
            
            6.0Austria
            
            
            0
            
            
            0.0
            
            
            0
            
            
            0.0
            
            
            45
            
            
            1.0Brazil
            
            
            1,193
            
            
            39.1
            
            
            1,494
            
            
            38.2
            
            
            1,544
            
            
            32.7Chile
            
            
            315
            
            
            10.3
            
            
            210
            
            
            5.4
            
            
            52
            
            
            1.1Colombia
            
            
            260
            
            
            8.5
            
            
            278
            
            
            7.1
            
            
            526
            
            
            11.1Costa
                Rica
            
            
            54
            
            
            1.8
            
            
            85
            
            
            2.2
            
            
            77
            
            
            1.6Ecuador
            
            
            25
            
            
            0.8
            
            
            43
            
            
            1.1
            
            
            61
            
            
            1.3El
                Salvador
            
            
            101
            
            
            3.3
            
            
            87
            
            
            2.2
            
            
            57
            
            
            1.2France
            
            
            1
            
            
            0.0
            
            
            50
            
            
            1.3
            
            
            45
            
            
            1.0Germany
            
            
            40
            
            
            1.3
            
            
            0
            
            
            0.0
            
            
            60
            
            
            1.3Guatemala
            
            
            41
            
            
            1.4
            
            
            89
            
            
            2.3
            
            
            96
            
            
            2.0Honduras
            
            
            26
            
            
            0.8
            
            
            36
            
            
            0.9
            
            
            49
            
            
            1.0Jamaica
            
            
            24
            
            
            0.8
            
            
            51
            
            
            1.3
            
            
            77
            
            
            1.6Mexico
            
            
            199
            
            
            6.5
            
            
            268
            
            
            6.8
            
            
            442
            
            
            9.4Panama
            
            
            161
            
            
            5.3
            
            
            200
            
            
            5.1
            
            
            212
            
            
            4.5Peru
            
            
            180
            
            
            5.9
            
            
            271
            
            
            6.9
            
            
            484
            
            
            10.2Spain
            
            
            48
            
            
            1.6
            
            
            73
            
            
            1.9
            
            
            48
            
            
            1.0Trinidad
                & Tobago.
            
            
            177
            
            
            5.8
            
            
            104
            
            
            2.6
            
            
            88
            
            
            1.9United
                States
            
            
            5
            
            
            0.2
            
            
            135
            
            
            3.5
            
            
            110
            
            
            2.3Venezuela.
            
            
            0
            
            
            0.0
            
            
            1
            
            
            0.0
            
            
            135
            
            
            2.8Other
                countries1
            
            
            142
            
            
            4.6
            
            
            209
            
            
            5.3
            
            
            240
            
            
            5.1**Total**
            
            **$**
            **3,048**
            
            
            **100.0**
            
            **$**
            **3,914**
            
            
            **100.0**
            
            **$**
            **4,730**
            
            
            **100.0**





1  Other
      consists of cross-border outstandings to countries in which cross-border
      outstandings did not exceed 1% of total assets outstandings.




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 principally to the
      Bank’s liquidity placements. See Item 5, “Operating and Financial Review and
      Prospects/Liquidity and Capital Resources/Liquidity”.




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




**2005**
            
            **2006**
            
            **2007**(in
                $ million)Private
                sector commercial banks
            
            $
            1,784
            
            $
            1,595
            
            $
            1,943State-owned
                commercial banks
            
            
            184
            
            
            324
            
            
            306Central
                banks
            
            
            20
            
            
            0
            
            
            0Sovereign
                debt
            
            
            157
            
            
            424
            
            
            436State-owned
                exporting organizations
            
            
            434
            
            
            219
            
            
            364Private
                corporations
            
            
            470
            
            
            1,352
            
            $
            1,680**Total**
            
            **$**
            **3,048**
            
            **$**
            **3,914**
            
            **$**
            **4,730**




***Revenues
      Per Country***




The
      following table sets forth information regarding the Bank’s net revenues per
      country at the dates indicated, with net revenues calculated as the sum of
      net
      interest income, fees and commissions, net, activities of hedging derivative
      instruments, trading gains, net gain on sale of securities available for sale,
      gain (loss) on foreign currency exchange and other income (expense),
      net 1 .




**For
                the year ended December 31,****2005**
            
            **2006**
            
            **2007**(in
                $ million)Argentina
            
            $
            5.7
            
            $
            4.2
            
            $
            4.8Brazil
            
            
            23.4
            
            
            31.4
            
            
            33.2Chile
            
            
            2.9
            
            
            2.7
            
            
            1.4Colombia
            
            
            3.4
            
            
            3.6
            
            
            7.8Costa
                Rica
            
            
            0.0
            
            
            1.6
            
            
            0.9Dominican
                Republic
            
            
            1.0
            
            
            1.0
            
            
            0.9Ecuador
            
            
            2.5
            
            
            2.9
            
            
            3.2El
                Salvador
            
            
            1.2
            
            
            1.5
            
            
            0.9Guatemala
            
            
            0.0
            
            
            1.3
            
            
            1.5Jamaica
            
            
            1.2
            
            
            1.5
            
            
            1.5Mexico
            
            
            4.7
            
            
            5.0
            
            
            12.4Panama
            
            
            1.6
            
            
            3.6
            
            
            3.8Peru
            
            
            1.4
            
            
            3.4
            
            
            4.5Trinidad
                and Tobago
            
            
            0.0
            
            
            1.8
            
            
            2.4Venezuela
            
            
            0.7
            
            
            1.0
            
            
            3.3Other
                countries2
            
            
            3.9
            
            
            1.2
            
            
            1.5Asset
                Management Division
            
            
            0.0
            
            
            0.6
            
            
            24.1**Total**
            
            **$**
            **53.6**
            
            **$**
            **68.2**
            
            **$**
            **108.2**




1
              Net
                  revenues per country exclude operating expenses, reversal (provision)
                  for
                  loan losses, reversal (provision) for losses on off-balance sheet
                  credit
                  risk, recoveries on assets, net of impairments and cumulative effect
                  on
                  prior years of changes in accounting principles.
 2
              Other
                  consists of net revenues per country in which net revenues did
                  not exceed
                  $1 million for any of the periods indicated
                  above


15




Net
      revenues per country reflect the net revenues derived from the Bank’s commercial
      portfolio (loans and contingencies), treasury portfolio (investment securities
      and credit default swaps) and asset management portfolio (trading assets and
      liabilities), throughout the Region. See Item 4, “Information on the
      Company/Business Overview/Commercial Portfolio, Treasury Portfolio and Asset
      Management Portfolio” and Item 5, “Operating and Financial Review and
      Prospects/Operating Results/Net Income”.




***Competition***




The
      Bank
      operates in a highly competitive environment in most of its markets, and faces
      competition principally from regional and international banks in making loans,
      and providing fee-generating services. 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. 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 tends 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
      trade
      finance business is subject to change. Increased open account exports and new
      financing requirements from multinational corporations are changing the way
      banks 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.




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
      and
      quality of service. See Item 3, “Key Information/Risk Factors”.




***Regulation***




*General*




The
      Superintendency of Banks of Panama (the “Superintendency of Banks”) regulates,
      supervises and examines Bladex. The New York Agency is regulated, supervised
      and
      examined by the New York Banking Department and the Federal Reserve Board and
      the Florida International Administrative Office is regulated, supervised and
      examined by the Florida Office of Financial Regulation and the Federal Reserve
      Board. Bladex Offshore Feeder Fund and Bladex Capital Growth Fund are regulated
      by government authorities in the Cayman Islands. 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.




The
      Superintendency of Banks has signed and executed agreements or letters of
      understanding with twenty-four foreign supervisory authorities for the sharing
      of supervisory information under the principles of reciprocity, appropriateness,
      national agreement, and confidentiality. Those twenty-four entities include
      the
      Federal Reserve System, the Office of the Comptroller of Currency and the Board
      of Governors, the Federal Deposit Insurance Corporation and the Office of Thrift
      Supervision. In addition, the Statement of Cooperation between the United States
      and Panama 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.


16




*Panamanian
      Law*




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, pursuant to
      Decree-Law No. 9 of February 26, 1998 (the “Banking Law”). Banks operating under
      a General Banking License (“General License Banks”) may engage in all aspects of
      the banking business in Panama, including taking local and offshore deposits,
      as
      well as making local and international loans.




General
      License Banks must have 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, banks cannot grant loans or issue guarantees or any other
      obligation (“Credit Facilities”) to any one person or a group of related persons
      in excess of twenty-five percent (25%) of the Bank’s total capital. However, the
      Banking Law established that in cases of loans and other credits granted by
      mixed-capital banks with headquarters in Panama whose principal business is
      the
      granting of loans to other banks, the limit will be thirty percent (30%) of
      the
      Bank ́s capital funds. As confirmed by the Superintendency of Banks, the Bank
      currently applies the limit of thirty percent (30%) of the Bank’s total capital
      with respect to the Bank’s credit facilities in favor of financial institutions
      and the limit of twenty-five percent (25%) of the Bank’s total capital with
      respect to the Bank’s credit facilities in favor of corporations and sovereign
      borrowers.




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) 50% of its total capital in the case of loans secured by deposits in
      the
      bank. 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 issued and outstanding 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 the 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
      bank's capital, or may not amount to any sum that would ensure his or her
      majority control over the decisions of the 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 any
      sum that would ensure his or her majority control over the decisions of the
      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, 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 will determine the amount
      of
      the exclusion in the case of each loan or credit submitted for its
      consideration.


17




The
      Banking Law contains additional limitations and restrictions with respect to
      related party loans and credit facilities. 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 will 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. Shares of a
      bank cannot be pledged or offered as security for loans or credit facilities
      issued by the 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, (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, (3) a requirement that a bank must notify
      the
      Superintendency of Banks, within sixty (60) days prior to the beginning of
      each
      fiscal term, the name of the certified public accounting firm that it wishes
      to
      contract to carry out the duty of external auditing for the new fiscal term,
      and
      (4) a requirement that a bank obtains prior approval from the Superintendency
      of
      Banks of the risk rating entity it wishes to hire to perform the risk rating.
      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 2006, 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 annual
      information, including financial statements, an 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.




On
      February 22, 2008, the Panamanian cabinet voted to adopt Decree-Law No. 2 (the
      “New Banking Law”), which is a revision and restatement of the Banking Law. This
      new legislation will take effect on August 25, 2008. The New Banking Law
      regulates banks and the entire “banking group” to which each bank belongs.
      Banking groups are defined as the holding company and all direct and indirect
      subsidiaries of the holding company, including the bank in question. Banking
      groups must comply with audit standards and various limitations set forth in
      the
      New Banking Law, in addition to all compliance required of the bank in question.




Under
      the
      New Banking Law, a bank’s capital composition will include tertiary capital in
      addition to primary and secondary capital, and the sum of secondary and tertiary
      capital cannot exceed primary capital. Tertiary capital will be made up of
      short-term subordinated debt incurred for the management of market risk. Capital
      adequacy standards will require primary capital equal to no less than 4% of
      the
      bank’s assets and off-balance sheet operations that represent a contingency to
      the bank, as well as the previous requirement of maintaining a minimum capital
      of 8% of its total risk-weighted assets. Additionally, the Superintendency
      of
      Banks may take into account market risks, operational risks and country risks,
      among others, to evaluate capital adequacy standards.




The
      New
      Banking Law will limit loans, guarantees and other similar obligations granted
      to “related parties” by the bank as well as by the ultimate parent of the
      banking group. The new definition of related parties also includes parties
      related to the ultimate parent of the banking group.




The
      supervisory powers of the Superintendency of Banks will extend to the bank
      and
      the banking group, and any inspection carried out by the Superintendency of
      Banks may involve an inspection of the banking group. As a result, the bank,
      as
      well as the banking group, must 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.


18




The
      Bank
      has not been significantly impacted by the incorporation of these changes
      regarding the New Banking Law.




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




*United
      States Law*




Bladex
      operates a New York state-licensed agency in New York, New York and maintains
      a
      direct wholly-owned non-banking subsidiary in Delaware, Bladex Holdings Inc.
      (“Bladex Holdings”), that is not engaged in activities other than owning one
      wholly owned subsidiary incorporated under the laws of the State of Delaware:
      Bladex Asset Management, Inc. incorporated on May 24, 2006. In february 2007,
      another wholly-owned subsidiary Clavex, LLC,which was incorporated on June
      15,
      2006, was dissolved. On October 30, 2006, the Bank established an International
      Administrative Office in Miami, Florida (the “Florida International
      Administrative Office”).




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
      a
      minimum of $2 million with respect to its total third-party liabilities and
      such
      pledge may be up to 1% of the agency’s third party liabilities, or upon meeting
      eligibility criteria, up to a maximum amount of $100 million. At December 31,
      2007, the New York Agency maintained a pledge of $5.5 million, complying with
      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
      New
      York Banking Law generally limits the amount of loans to any one person to
      15
      percent of the capital, surplus fund and undivided profits of a bank. For
      foreign bank agencies, the lending limits are based on the capital of the
      foreign bank and not that of the 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.




Florida
      Law .
      The
      Florida International Administrative Office, established in October 2006, is
      licensed and supervised by the
      Florida Office of Financial Regulation under
      the
      Florida Financial Institutions Codes. The activities of the Florida
      International Administrative Office are subject to the restrictions described
      below as well as to Florida banking laws and regulations that are applicable
      generally to foreign banks that operate offices in Florida. The Florida
      International Administrative Office is also subject to regulation by the Federal
      Reserve Board under the International Banking Act of 1978 (the
“IBA”).




Pursuant
      to Florida law, the Florida International Administrative Office is authorized
      to
      conduct certain “back office” functions on behalf of the Bank, including
      administration of the Bank’s personnel and operations, data processing and
      record keeping activities, and negotiating and servicing loans or extensions
      of
      credit and investments. Under the provisions of the IBA and the regulations
      of
      the Federal Reserve Board, the Florida International Administrative Office
      is
      also permitted to function as a representative office of the Bank. In this
      capacity it may solicit new business for the Bank and conduct research. It
      may
      also act in a liaison capacity between the Bank and its
      customers.


19




Federal
      Law .
      In
      addition to being subject to New York and Florida state laws and regulations,
      the New York Agency and the Florida International Administrative Office are
      subject to federal regulations, primarily under the IBA, and are subject to
      examination and supervision by the Federal Reserve Board. The IBA generally
      extends federal banking supervision and regulation to the U.S. offices of
      foreign banks and to the foreign bank itself. Under the IBA, the U.S. 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 Federal Reserve 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.




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 non-banking activities in the United States, to
      the
      same extent as a U.S. 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 a declaration with the
      Federal Reserve Board. At present, Bladex has one subsidiary in the United
      States, Bladex Holdings that is incorporated under Delaware law. That subsidiary
      is not engaged in any activity, other than owning one Delaware company, which
      is
      Bladex Asset Management, Inc.




In
      addition, pursuant to the Financial Services Regulatory Relief Act of 2006,
      the
      Securities and Exchange Commission (“SEC”) and the Federal Reserve Board
      finalized Regulation R. Regulation R defines the scope of exceptions provided
      for in the GLB Act for securities activities which banks may conduct without
      registering with the SEC as securities brokers or moving such activities to
      a
      broker-dealer affiliate. The “push out” rules exceptions contained in Regulation
      R enable banks, subject to certain conditions, to continue to conduct securities
      transactions for customers as part of the bank’s trust and fiduciary, custodial,
      and deposit “sweep” functions, and to refer customers to securities
      broker-dealer pursuant to a networking arrangement with the broker-dealer.
      The
      New York Agency is subject to Regulation R with respect to its securities
      activities.




USA
      PATRIOT Act of 2001 .
      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. Both the New
      York Agency and the Florida International Administrative Office are “financial
      institutions” within the meaning of the PATRIOT Act. The New York Agency has
      adopted comprehensive policies and procedures to address the requirements of
      the
      PATRIOT Act.


20




*Cayman
      Islands Law*




Bladex
      Offshore Feeder Fund and Bladex Capital Growth Fund are exempted companies
      incorporated in the Cayman Islands with limited liability, incorporated on
      February 21, 2006 under the Companies Law of the Cayman Islands. The registered
      office of these companies is at PO Box 309GT, Ugland House, South Church Street,
      George Town, Grand Cayman, KY1-1104, Cayman Islands.




The
      Companies Law (2007 Revision) of the Cayman Islands (the "Companies Law") is
      derived, to a large extent, from the older Companies Acts of England, although
      there are significant differences between the Companies Law and the current
      Companies Act of England. Section 193 of the Companies Law requires that Bladex
      Offshore Feeder Fund and Bladex Capital Growth Fund shall not trade in the
      Cayman Islands with any person, firm or corporation except in furtherance of
      the
      business of these companies carried on outside the Cayman Islands. This does
      not
      prevent Bladex Offshore Feeder Fund and Bladex Capital Growth Fund from
      effecting and concluding contracts in the Cayman Islands and exercising in
      the
      Cayman Islands all of its powers necessary for the carrying on of its business
      outside the Cayman Islands.




The
      Proceeds of Criminal Conduct Law (2007 Revision) and the Terrorism Law, 2003
      of
      the Cayman Islands impose reporting obligations on residents of the Cayman
      Islands who know or suspect the involvement of another person in money
      laundering or terrorist activities.




**C.**  **Organizational
      Structure** ****




For
      information regarding the Bank’s organizational structure see Item 18,
“Financial Statements”, note 1.




**D.**  **Property,
      Plant and Equipment** ****




The
      Bank
      owns its main branch, with space of 6,161 square meters, located at Calle 50
      and
      Aquilino de la Guardia in Panama City. The Bank leases 11.2 square meters of
      computer equipment hosting located at Gavilan Street Balboa in Panama City
      and
      21.2 square meters of office space and Internet access to be used in case of
      a
      contingency, located at 75E Street San Francisco in Panama City. In addition,
      the Bank leases office space for its representative offices in Mexico and Buenos
      Aires, Bladex Representação Ltda. in Brazil, its New York Agency, Bladex Asset
      Management in New York, and its International Administrative Office in Miami.
      See Item 18, “Financial Statements”, notes 2 (m) and 17.




**** **Item
      4A.**  **Unresolved
      Staff Comments**




None.




**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 from net interest income, fees and commissions, trading gains,
      and net gains on sale of securities available-for-sale. 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 fees and commissions mainly through the issuance, confirmation and
      negotiation of letters of credit and guarantees covering commercial and country
      risk, and through loan origination and sales.


21


A.OperatingResults




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,****2005**
            
            **2006**
            
            **2007**(in $ thousand, except per share amounts and percentages)Total
                interest income
            
            $
            116,823
            
            $
            203,350
            
            $
            264,869Total
                interest expense
            
            
            71,570
            
            
            144,513
            
            
            194,299Net
                interest income
            
            
            45,253
            
            
            58,837
            
            
            70,570Reversal
                (provision) for loan losses
            
            
            54,155
            
            
            (11,846
            )
            
            (11,994
            )Net
                interest income after reversal of (provision for) loan losses
            
            
            99,408
            
            
            46,991
            
            
            58,576**Other
                income (expense):**Reversal
                (provision) for losses on off-balance sheet credit risk
            
            
            (15,781
            )
            
            24,891
            
            
            13,468Fees
                and commissions, net
            
            
            5,824
            
            
            6,285
            
            
            5,555Activities
                of hedging derivatives instruments
            
            
            2,338
            
            
            (225
            )
            
            (989
            )Recoveries
                of assets, net of impairments
            
            
            10,206
            
            
            5,551
            
            
            (500
            )Trading
                gains
            
            
            0
            
            
            879
            
            
            23,866Net
                gain on sale of securities available for sale
            
            
            206
            
            
            2,568
            
            
            9,119Gain
                (loss) on foreign currency exchange
            
            
            3
            
            
            (253
            )
            
            115Other
                income (expense), net
            
            
            5
            
            
            144
            
            
            (6
            )Net
                other income
            
            
            2,801
            
            
            39,840
            
            
            50,628Total
                operating expenses
            
            
            (24,691
            )
            
            (28,929
            )
            
            (37,027
            )Income
                before cumulative effect of changes in accounting principles
            
            $
            77,518
            
            $
            57,902
            
            $
            72,177Cumulative
                effect on prior years (to December 31, 2004) of a change in the credit
                loss reserve methodology
            
            
            2,733
            
            
            0
            
            
            0Cumulative
                effect on prior years (to December 31, 2004) of an early adoption
                of the
                fair-value-based method of accounting stock-based employee
                compensation
            
            
            (150
            )
            
            0
            
            
            0**Net
                income**
            
            $
            80,101
            
            $
            57,902
            
            $
            72,177Basic
                earnings per share
            
            $
            2.01
            
            $
            1.56
            
            $
            1.99Diluted
                earnings per share
            
            $
            1.99
            
            $
            1.54
            
            
            1.98Return
                on average assets
            
            
            3.0
            %
            
            1.7
            %
            
            1.7
            %Return
                on average stockholders’ equity
            
            
            12.9
            %
            
            10.0
            %
            
            11.9
            %




*Net
      Income*




For
      2007,
      net income was $72 million, compared with $58 million for 2006, a $14 million,
      or 25%, increase, mainly attributable to a $12 million, or 20%, increase in
      net
      interest income (mostly from the Commercial Division), $23 million in higher
      trading gains from the Asset Management Division, and a $7 million increase
      from
      gain on sale of securities available-for-sale from the Treasury Division. These
      increases were partly offset mainly by an $8 million increase in operating
      expenses.




The
      Commercial Division’s net income, which includes net interest income from loans,
      fees and commissions and other income derived from financial services and
      off-balance sheet credits (such as letters of credit, guarantees and credit
      commitments), allocated operating expenses and reversals (provisions) for credit
      losses, amounted to $43 million in 2007, compared to $47 million in 2006. The
      $4
      million decrease was mainly driven by lower reversals for credit losses which
      amounted to $1 million in 2007 compared to $13 million in 2006. This decrease
      was partly offset mainly by net interest income growth, due to higher average
      balances of the loan portfolio and higher weighted average lending spreads
      over
      cost of funds.




The
      Treasury Division’s net income, which includes net interest income on investment
      securities, gains and losses on the sale of securities, on activities of hedging
      derivative instruments and on foreign currency exchange transactions, allocated
      operating expenses and recoveries on assets, net of impairment, amounted to
      $10
      million in 2007, compared to $11 million in 2006. The $1 million, or 7%,
      decrease is mainly attributable to recoveries on assets which amounted to $0
      during 2007, compared to $6 million during 2006 (related to collections of
      Argentine securities which had been written-off and charged to earnings in
      prior
      years). This decrease was partly offset mainly by gains in the
      available-for-sale portfolio.




22




The
      Asset
      Management Division’s net income, which includes net interest income on trading
      securities, trading gains and allocated operating expenses, totaled $19 million
      for the year 2007, compared to $21 thousand in 2006. The increase is
      attributable principally to higher trading gains from asset management
      activities, which amounted to $24 million in 2007 compared to $0.9 million
      in
      2006.




For
      2006,
      net income was $58 million, compared to $80 million for 2005. The $22 million
      reduction in net income during 2006 mainly resulted from lower reversals of
      credit provisions and recoveries on assets, net of impairments, which, for
      2006,
      amounted to $19 million, compared to $51 million in 2005. This reduction was
      partly offset mainly by higher net interest income derived from the Commercial
      Division’s loan portfolio growth and diversification.




For
      further information on net income by business segment, see Item 18, “Financial
      Statements”, note 22.




*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,****2005**
            
            **2006**
            
            **2007**(in
                $ million, except percentages)Net
                interest incomeCommercial
                DivisionAccruing
                portfolio
            
            $
            33.2
            
            $
            49.0
            
            $
            64.1Non-accruing
                portfolio
            
            
            6.2
            
            
            2.0
            
            
            0.0Commercial
                Division
            
            $
            39.4
            
            $
            50.9
            
            $
            64.1Treasury
                Division
            
            
            5.9
            
            
            6.9
            
            
            6.2Asset
                Management Division
            
            
            0.0
            
            
            1.0
            
            
            0.2**Consolidated**
            
            **$**
            **45.3**
            
            **$**
            **58.8**
            
            **$**
            **70.6**Net
                interest margin
            
            
            1.70
            %
            
            1.76
            %
            
            1.71
            %Net
                interest spread
            
            
            0.67
            %
            
            0.70
            %
            
            0.80
            %




The
      $12
      million, or 20%, increase in net interest income in 2007 compared to 2006 was
      the result of higher average balances in the loan portfolio (24%) and increased
      weighted average lending spreads over the cost of funds. The increase in loan
      portfolio average balances and lending spreads is attributable to the Bank’s
      strategy to improve client and geographic portfolio diversification, by
      increasing its exposure to the corporate client segment in several countries
      in
      the Region. The 5 basis point decrease in net interest margin during 2007
      compared to 2006 was mainly due to higher leveraging of the balance sheet and
      by
      non-recurring interest income on non-accrual loans received on a cash basis
      during 2006, both of which offset higher lending spreads during 2007.




The
      $14
      million increase in net interest income and the 6 basis point increase in net
      interest margin in 2006 compared to 2005 were mainly due to an increase in
      the
      average accruing loan and investment portfolio, increasing interest rates on
      the
      Bank’s available capital, wider lending spreads reflecting changes in the Bank’s
      portfolio mix, and a lower cost of funds. These factors were partially offset
      by
      the lower interest collections on the Bank’s non-accruing portfolio over 2006,
      compared to 2005.




*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,
      the dollar amounts of interest expense and average interest-bearing liabilities,
      and corresponding information regarding rates. All impaired loans are on a
      non-accruing basis, 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.




23




**Year
                ended December 31,****2005**
            
            **2006**
            
            **2007****Description**
            
            **Average
                balance**
            
            **Interest**
            
            **Average
                yield/rate**
            
            **Average
                balance**
            
            **Interest**
            
            **Average
                yield/rate**
            
            **Average
                balance**
            
            **Interest**
            
            **Average
                yield/rate**(in
                $ million, except percentages)**Interest-Earning
                Assets**Interest-bearing
                deposits with banks
            $
            158
            
            $
            5
            
            
            3.19
            %
            $
            180
            
            $
            9
            
            
            4.90
            %
            $
            327
            
            $
            17
            
            
            5.12
            %Loans,
                net
            
            2,211
            
            
            93
            
            
            4.15
            
            
            2,697
            
            
            163
            
            
            5.96
            
            
            3,366
            
            
            222
            
            
            6.49Impaired
                loans
            
            106
            
            
            9
            
            
            8.10
            
            
            18
            
            
            3
            
            
            14.77
            
            
            0
            
            
            0
            
            
            n.a.Trading
                assets
            
            0
            
            
            0
            
            
            n.a.
            
            
            50
            
            
            6
            
            
            11.46
            
            
            84
            
            
            5
            
            
            6.27Investment
                securities
            
            181
            
            
            10
            
            
            5.43
            
            
            390
            
            
            23
            
            
            5.76
            
            
            345
            
            
            21
            
            
            5.99**Total
                interest-earning assets**
            **$**
            **2,656**
            
            **$**
            **117**
            
            
            **4.34**
            **%**
            **$**
            **3,336**
            
            **$**
            **203**
            
            
            **6.01**
            **%**
            **$**
            **4,122**
            
            **$**
            **265**
            
            
            **6.34**
            **%**Non-interest-earning
                assets
            $
            81
            
            
            
            
            
            
            
            $
            90
            
            
            
            
            
            
            
            $
            90Allowance
                for loan losses
            
            (79
            )
            
            
            
            
            
            
            
            (44
            )
            
            
            
            
            
            
            
            (62
            )Other
                assets
            
            9
            
            
            
            
            
            
            
            
            21
            
            
            
            
            
            
            
            
            59**Total
                Assets**
            **$**
            **2,667**
            
            
            
            
            
            
            
            **$**
            **3,403**
            
            
            
            
            
            
            
            **$**
            **4,209****Interest-Bearing
                Liabilities**Deposits
            $
            869
            
            $
            30
            
            
            3.36
            %
            
            1,106
            
            $
            57
            
            
            5.05
            %
            $
            1,321
            
            $
            70
            
            
            5.26
            %Trading
                liabilities
            
            0
            
            
            0
            
            
            n.a.
            
            
            35
            
            
            5
            
            
            13.17
            
            
            59
            
            
            4
            
            
            6.98Securities
                sold under repurchase agreements
            
            40
            
            
            1
            
            
            2.92
            
            
            306
            
            
            16
            
            
            5.29
            
            
            253
            
            
            14
            
            
            5.30Short-term
                borrowings
            
            565
            
            
            19
            
            
            3.36
            
            
            738
            
            
            39
            
            
            5.16
            
            
            1,019
            
            
            57
            
            
            5.49Borrowings
                and long-term debts
            
            451
            
            
            22
            
            
            4.72
            
            
            500
            
            
            28
            
            
            5.57
            
            
            809
            
            
            49
            
            
            6.02**Total
                interest-bearing liabilities**
            **$**
            **1,925**
            
            **$**
            **72**
            
            
            **3.67**
            **%**
            **$**
            **2,684**
            
            **$**
            **145**
            
            
            **5.31**
            **%**
            **$**
            **3,462**
            
            **$**
            **194**
            
            
            **5.54**
            **%**Non-interest
                bearing liabilities and other liabilities
            $
            118
            
            
            
            
            
            
            
            $
            137
            
            
            
            
            
            
            
            $
            141**Total
                Liabilities**
            **$**
            **2,044**
            
            
            
            
            
            
            
            **$**
            **2,821**
            
            
            
            
            
            
            
            **$**
            **3,603**Stockholders’
                equity
            
            **623**
            
            
            
            
            
            
            
            
            **581**
            
            
            
            
            
            
            
            
            **606****Total
                Liabilities, Redeemable Preferred Stock and Stockholders’
                Equity**
            **$**
            **2,667**
            
            
            
            
            
            
            
            **$**
            **3,403**
            
            
            
            
            
            
            
            **$**
            **4,209**Net
                Interest Spread
            
            
            
            
            
            
            
            0.67
            %
            
            
            
            
            
            
            
            0.70
            %
            
            
            
            
            
            
            
            0.80
            %Net
                Interest Income and Net Interest Margin
            
            
            
            $
            45
            
            
            1.70
            %
            
            
            
            $
            59
            
            
            1.76
            %
            
            
            
            $
            71
            
            
            1.71
            %




*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 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 2006 compared to 2005 and for 2007 compared to 2006. 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.




**2006
                vs. 2005**
            
            **2007
                vs. 2006****Volume**
            
            **Rate**
            
            **Net
                Change**
            
            **Volume**
            
            **Rate**
            
            **Net
                Change**(in
                $ thousand)**Increase
                (decrease) in interest income**Interest-bearing
                deposits with banks
            
            $
            914
            
            $
            2,939
            
            $
            3,853
            
            $
            7,461
            
            $
            566
            
            $
            8,027Loans,
                net
            
            
            24,916
            
            
            45,141
            
            
            70,058
            
            
            42,262
            
            
            16,278
            
            
            58,540Impaired
                loans
            
            
            (10,180
            )
            
            4,196
            
            
            (5,984
            )
            
            (1,360
            )
            
            (1,360
            )
            
            (2,721
            )Trading
                assets
            
            
            2,905
            
            
            2,905
            
            
            5,810
            
            
            3,024
            
            
            (3,518
            )
            
            (495
            )Investment
                securities
            
            
            11,836
            
            
            955
            
            
            12,791
            
            
            (2,677
            )
            
            844
            
            
            (1,832
            )**Total
                increase (decrease)**
            
            **$**
            **30,391**
            
            **$**
            **56,135**
            
            **$**
            **86,527**
            
            **$**
            **48,710**
            
            **$**
            **12,810**
            
            **$**
            **61,519****Increase
                (decrease) in interest expense**Deposits
            
            
            10,090
            
            
            16,961
            
            
            27,051
            
            
            11,275
            
            
            2,557
            
            
            13,832Trading
                liabilities
            
            
            2,320
            
            
            2,320
            
            
            4,640
            
            
            2,505
            
            
            (2,948
            )
            
            (443
            )Securities
                sold under repurchase agreements
            
            
            11,065
            
            
            4,167
            
            
            15,232
            
            
            (2,860
            )
            
            11
            
            
            (2,848
            )Short-term
                borrowings
            
            
            7,460
            
            
            11,901
            
            
            19,361
            
            
            15,205
            
            
            2,939
            
            
            18,144Borrowings
                and long term debt
            
            
            2,540
            
            
            4,120
            
            
            6,660
            
            
            18,147
            
            
            2,954
            
            
            21,101**Total
                increase (decrease)**
            
            **$**
            **33,474**
            
            **$**
            **39,469**
            
            **$**
            **72,943**
            
            **$**
            **44,273**
            
            **$**
            **5,513**
            
            **$**
            **49,786****Increase
                (decrease) in net interest income**
            
            **$**
            **(3,082**
            **)**
            **$**
            **16,666**
            
            **$**
            **13,584**
            
            **$**
            **4,437**
            
            **$**
            **7,297**
            
            **$**
            **11,734**


24




As
        depicted in the table above, the main factor contributing to the $12 million
        increase in net interest income during 2007 compared to 2006 was the increase
        in
        rates, which resulted in a $7 million increase in net interest income,
        reflecting higher average lending spreads over the cost of funds for the
        Bank’s
        loan portfolio and higher average inter-bank market rates in the Bank’s assets
        and liabilities. The $4 million increase in net interest income derived from
        higher volumes during 2007 is mainly attributable to an increase in the average
        loan portfolio and higher average liquidity balances (interest-bearing deposits
        with banks), partly offset by an increase in the Bank’s funding through higher
        average liability deposits and borrowings.
  For
        2006,
        the $13 million increase in net interest income compared to 2005 was mainly
        attributable to higher inter-bank market rates in the Bank’s assets and
        liabilities, partly offset by a reduction in the average balance of the Bank’s
        impaired portfolio.
   *Reversal
        (Provision) for Loan Losses*
  During
        2007, as the Bank reduced its impaired portfolio to zero at December 31,
        2006,
        there were no reversals of specific provisions for loan losses related to
        the
        impaired and restructured portfolio. These impaired portfolio reversals totaled
        $11 million in 2006 and $61 million in 2005.
 
 The
        Bank’s $12 million provision for loan losses during 2007 was mainly due to the
        net effect of:
 ·  an
        $18
        million generic provision charge, due to increased loan exposure; and
 ·  a
        $6
        million recovery on previously charged-off loans.
  The
        Bank’s $12 million provision for loan losses during 2006 was mainly due to the
        net effect of:
 ·  a
        $23
        million generic provision charge, due to increased loan exposure;
 ·
              a
                  $10 million reversal related to the collection of Argentine restructured
                  loans during the year; and
 ·  a
        $1
        million reversal related to the collection of a Brazilian restructured loan
        during the year.
  The
        Bank’s $54 million reversal of provision for loan losses during 2005 was mainly
        due to the net effect of:
 ·
              a
                  $48 million reversal related to the decrease in Argentine restructured
                  loans, reflecting loan sales, payments and prepayments during the
                  year;
 ·
              a
                  $13 million reversal related to the decrease in Brazilian restructured
                  loans, reflecting payments and prepayments during the
                  year;
 ·  a
        $3
        million recovery on previously charged-off loans;
 ·  a
        $16
        million generic provision charge, due to increased loan exposure;
        and
 ·  a
        $6
        million reversal due to the change in the credit loss reserve methodology
        during
        2005.
  For
        detailed information, see Item 5, “Operating and Financial Review and
        Prospects/Operating Results/Asset Quality and Allowance for Credit
        Losses”.
  *Reversal
        (provision) for Losses on Off-Balance Sheet Credit Risk*
  The
        $13
        million reversal of provision for losses on off-balance sheet credit risk
        in
        2007 was mainly due to decreased letter of credit exposure in higher risk
        countries, as well as improved risk profiles in certain countries.
 
 The
        $25
        million reversal of provision for losses on off-balance sheet credit risk
        in
        2006 was mainly due to a $15 million reduction in generic reserves driven
        by
        exposure reductions in certain countries and a $10 million reversal in specific
        reserves resulting from the maturity of Argentine impaired contingencies.
        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.
  *Fees
        and Commissions, net*
  The
        Bank
        generates fee and commission income primarily from originating letters of
        credit
        confirmation, guarantees (including commercial and country risk coverage),
        loan
        origination and distribution, and service activities. The following table
        shows
        the components of the
        Bank’s fees and
        commissions, net, for the periods indicated.
  25
  
 **For
                  the Year Ended December 31,****2005**
              
              **2006**
              
              **2007**(in $ thousand)Letters
                  of credit
              
              $
              3,396
              
              $
              4,121
              
              $
              2,842Guarantees
              
              
              2,012
              
              
              1,419
              
              
              1,088Loans
              
              
              297
              
              
              556
              
              
              836Other(1)
              
              
              119
              
              
              297
              
              
              789**Fees
                  and commissions, net**
              
              **$**
              **5,824**
              
              **$**
              **6,393**
              
              **$**
              **5,555**
 (1)Net
        of commission expense.
  The
        decrease of $838 thousand in net fees and commissions for 2007 compared to
        2006
        is attributable to lower letter of credit and guarantee activity during the
        first part of the year, partially offset by increased loan fees and other
        service activities.
  The
        increase of $569 thousand in net fees and commissions for 2006 compared to
        2005
        reflects mainly a 12% increase in the average volume of letters of
        credit.
 
 *Activities
        of Hedging Derivative Instruments*
  During
        2007 and 2006, the Bank recorded losses of $989 thousand and $225 thousand,
        respectively, related to hedging derivative instruments. During 2005, the
        Bank
        recorded income of $2 million mainly related to the unwinding of interest
        rate
        swaps associated with the sale of securities available-for-sale. The 2007
        losses
        relate mainly to the fair value at their inception of interest rate swaps
        contracted for fair value hedge relationships that classify under the short-cut
        method. The difference in price at inception of these derivatives is
        attributable solely to differing prices within the bid-ask spread between
        the
        entry transaction and a hypothetical exit transaction. The Bank has the policy
        of recognizing this difference in prices in the results of operations at
        the
        inception of a hedge relationship. For additional information, see Item 11,
        “Quantitative and Qualitative Disclosure about Market Risk”.
  *Recoveries
        on Assets, Net of Impairments*
  For
        information, see Item 18, “Financial Statements”, notes 2(g) and 5.
  *Trading
        gains*
  During
        2007, the Bank achieved $24 million in trading gains compared to $879 thousand
        in 2006.
  *Net
        Gain on 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.
  For
        the
        year 2007, the Bank’s net gains on the sale of securities available-for-sale
        were $9 million. This net gain relates to the sale of securities for a nominal
        amount of $509 million.
  During
        2006, the Bank’s net gain on the sale of securities available-for-sale was $3
        million, compared to $0.2 million in 2005. The 2006 gain was related to the
        sale
        of securities available-for-sale for a nominal amount of $105 million.
  *Operating
        Expenses*
  The
        following table shows a breakdown of the components of the Bank’s total
        operating expenses for the periods indicated.
  26
  
 **For
                  the Year Ended December 31,****2005**
              
              **2006**
              
              **2007**(in
                  $ thousand)Salaries
                  and other employee expenses
              
              $
              13,073
              
              $
              16,826
              
              $
              22,049Depreciation
                  and amortization
              
              
              869
              
              
              1,406
              
              
              2,555Professional
                  services
              
              
              3,281
              
              
              2,671
              
              
              3,562Maintenance
                  and repairs
              
              
              1,172
              
              
              1,000
              
              
              1,188Other
                  operating expenses
              
              
              6,295
              
              
              7,026
              
              
              7,673**Total
                  Operating Expenses**
              
              **$**
              **24,691**
              
              **$**
              **28,929**
              
              **$**
              **37,027**
 
 The
        $8
        million, or 28%, increase in operating expenses for 2007 compared to 2006
        was
        mainly due to:
 
 ·
              a
                  $5 million increase in salaries and other employee expenses mainly
                  driven
                  by a $3 million increase in performance-based variable compensation
                  for
                  the Bank's proprietary asset management team, and the remaining
                  $2 million
                  mainly related to higher senior management’s stock compensation plan, a
                  one-time event accrual of employee vacation, and an increase in
                  performance-based variable compensation provision for business
                  lines other
                  than proprietary asset management.
 ·
              a
                  $1 million increase in maintenance and depreciation expenses related
                  to
                  the Bank’s new technology platform;
 ·
              a
                  $1 million increase in professional services, mainly due to legal
                  expenses
                  related to the Bank’s business; and
 ·
              a
                  $1 million increase in expenses related to marketing and business
                  travel.
  The
        $4
        million, or 17%, increase in operating expenses for 2006 compared to 2005
        was
        mainly due to higher salary expenses associated with the development of the
        corporate segment and the implementation of new business initiatives, including
        proprietary asset management, leasing, and digital identity, as well as
        increased depreciation expenses related to the Bank’s new technology
        platform.
  ***Changes
        in Financial Condition***
  The
        following table presents components on the Bank’s balance sheet at December 31
        of each year:
  27
 
 **2005**
              
              **2006**
              
              **2007**(in
                  $ thousand)**Assets**Cash
                  and due from banks
              
              $
              687
              
              $
              401
              
              $
              596Interest-bearing
                  deposits in banks
              
              
              229,200
              
              
              331,764
              
              
              476,983Trading
                  assets
              
              
              0
              
              
              130,076
              
              
              52,597Investment
                  securities
              
              
              208,570
              
              
              471,351
              
              
              468,360Loans
              
              
              2,610,019
              
              
              2,980,772
              
              
              3,731,838Less:Allowance
                  for loan losses
              
              
              (39,448
              )
              
              (51,266
              )
              
              (69,643
              )Unearned
                  income and deferred loan fees
              
              
              (5,577
              )
              
              (4,425
              )
              
              (5,961
              )Loans,
                  net
              
              
              2,564,994
              
              
              2,925,081
              
              
              3,656,234Customers’
                  liabilities under acceptances
              
              
              110,621
              
              
              46,006
              
              
              9,104Premises
                  and equipment, net
              
              
              3,253
              
              
              11,136
              
              
              10,176Accrued
                  interest receivable
              
              
              30,254
              
              
              55,238
              
              
              62,884Derivative
                  instruments-used for hedging - receivable
              
              
              357
              
              
              541
              
              
              122Other
                  assets
              
              
              11,295
              
              
              6,743
              
              
              53,476**Total
                  Assets**
              
              **$**
              **3,159,231**
              
              **$**
              **3,978,337**
              
              **$**
              **4,790,532****Liabilities
                  and Stockholders’ Equity**Deposits
              
              
              1,046,618
              
              
              1,056,277
              
              
              1,462,371Trading
                  liabilities
              
              
              0
              
              
              54,832
              
              
              90,765Securities
                  sold under repurchase agreements
              
              
              128,599
              
              
              438,356
              
              
              283,210Short-term
                  borrowings
              
              
              632,100
              
              
              1,157,248
              
              
              1,221,500Borrowings
                  and long-term debt
              
              
              533,860
              
              
              558,860
              
              
              1,010,316Acceptances
                  outstanding
              
              
              110,621
              
              
              46,006
              
              
              9,104Accrued
                  interest payable
              
              
              14,736
              
              
              28,420
              
              
              39,198Derivative
                  instruments used for hedging - payable
              
              
              297
              
              
              2,634
              
              
              16,899Reserve
                  for losses on off-balance sheet credit risk
              
              
              52,086
              
              
              27,195
              
              
              13,727Redeemable
                  preferred stock
              
              
              5,149
              
              
              0
              
              
              0Other
                  liabilities
              
              
              18,383
              
              
              24,614
              
              
              31,191**Total
                  Liabilities**
              
              **$**
              **2,542,449**
              
              **$**
              **3,394,442**
              
              **$**
              **4,178,281****Stockholders’
                  Equity**Common
                  stock, no par value
              
              
              279,979
              
              
              279,980
              
              
              279,980Capital
                  surplus
              
              
              134,340
              
              
              134,945
              
              
              135,142Capital
                  reserves
              
              
              95,210
              
              
              95,210
              
              
              95,210Retained
                  earnings
              
              
              212,916
              
              
              205,200
              
              
              245,348Accumulated
                  other comprehensive income (loss)
              
              
              619
              
              
              3,328
              
              
              (9,641
              )Treasury
                  stock
              
              
              (106,282
              )
              
              (134,768
              )
              
              (133,788
              )**Total
                  Stockholders’ Equity**
              
              **$**
              **616,782**
              
              **$**
              **583,895**
              
              **$**
              **612,251****Total
                  Liabilities and Stockholders’ Equity**
              
              **$**
              **3,159,231**
              
              **$**
              **3,978,337**
              
              **$**
              **4,790,532**
 
 The
        $812
        million increase in total assets during 2007 was mainly due to a $751 million
        increase in the loan portfolio, resulting from the continued execution of
        the
        Bank’s strategy of diversifying its portfolio concentration specifically by
        increasing its loans within the corporate segment. At December 31, 2007,
        the
        average maturity of the loan portfolio was 429 days, and 68% of the portfolio
        was scheduled to mature within one year. 60% of the portfolio was trade related
        and 40% constituted non-trade loans mainly extended to banks, sovereign or
        exporting corporations. The corporate segment (which includes state-owned
        exporting organizations and private corporations) represented 51% of the
        loan
        portfolio in 2007 compared to 48% in 2006 and, of this corporate segment,
        66%
        and 74% was trade related in 2007 and 2006, respectively.
 
 The
        increase in assets during 2007 was mainly financed by a $406 million increase
        in
        deposits from central and commercial banks of the Region, and by a $451 million
        increase in medium- and long-term borrowings and debt, including a bond issuance
        in Peruvian Nuevo Soles, interbank borrowings in Mexican Pesos, a five-year
        international loan syndication for an amount of $150 million, and a three-year
        borrowing for an additional $75 million, among other borrowings.
  The
        $819
        million increase in assets during 2006, compared to 2005, was mainly due
        to a
        $371 million increase in loans which reflects the Bank’s strategy to diversify
        its client base, involving principally an increase in its activity with
        corporations. The corporate portfolio increased $600 million and represented
        45%
        of the total portfolio, as compared to one third of the portfolio in 2005.
        In
        addition, during 2006, the Bank increased its investment securities portfolio
        -which mainly consisted of debt securities available-for-sale and
        held-to-maturity with banks and sovereign borrowers-, and its trading assets,
        as
        the Bank initiated operations of its Asset Management Division, which acts
        as
        investment manager for the Fund engaged in the management of a multi-strategy
        portfolio of Latin American fixed income investment securities, foreign exchange
        and equity securities and derivatives.
  28
  The
        increase in assets during 2006 was mainly financed by a $525 million increase
        in
        short-term borrowings primarily from North American and European banks, and
        by a
        $310 million increase in securities sold under repurchase agreements related
        to
        the investment securities portfolio.
  ***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’s management and the CPER 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. For
        more information on impaired loans, see Item 18, “Financial Statements”, notes 2
        (i) and 6. For
        more
        information on impaired securities, see Item 18, “Financial Statements”, notes 2
        (g) and
        5.
  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 its
        ultimate collection of principal or commission is doubtful. For more information
        on contingencies, see Item 18, “Financial Statements”, note 16.
  The
        following table sets forth information regarding the Bank’s impaired assets and
        contingencies at December 31 of each year:
  **2003**
              
              **2004**
              
              **2005**
              
              **2006**
              
              **2007**(in
                  $ million, except percentages)Impaired
                  loans
              
              $
              445
              
              $
              256
              
              $
              29
              
              $
              0
              
              $
              0Allocation
                  from the allowance for loan losses
              
              
              191
              
              
              82
              
              
              11
              
              
              0
              
              
              0Impaired
                  loans as a percentage of total loans, net of unearned income and
                  deferred
                  commission
              
              
              19.6
              %
              
              10.5
              %
              
              1.1
              %
              
              0.0
              %
              
              0.0
              %Impaired
                  contingencies
              
              $
              32
              
              $
              32
              
              $
              13
              
              $
              0
              
              $
              0Allocation
                  from the reserve for losses on off balance-sheet credit
                  risks
              
              
              20
              
              
              21
              
              
              9
              
              
              0
              
              
              0Impaired
                  contingencies as a percentage of total contingencies
              
              
              8.8
              %
              
              10.5
              %
              
              1.7
              %
              
              0.0
              %
              
              0.0
              %Impaired
                  securities (par value)
              
              $
              10
              
              $
              5
              
              $
              0
              
              $
              0
              
              $
              0Estimated
                  fair value adjustments on options and impaired securities1
              
              
              5
              
              
              4
              
              
              0
              
              
              0
              
              
              0Estimated
                  fair value of impaired securities
              
              $
              5
              
              $
              1
              
              $
              0
              
              $
              0
              
              $
              0Impaired
                  securities as a percentage of total securities2
              
              
              6.8
              %
              
              0.5
              %
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %Impaired
                  assets and contingencies as a percentage of total credit
                  portfolio3
              
              
              17.0
              %
              
              9.8
              %
              
              1.2
              %
              
              0.0
              %
              
              0.0
              %
 ______________________
 1  Includes
        impairment losses on securities, estimated unrealized gain (loss) on impaired
        securities, premiums and discounts.
 2 Total
        securities consist of investment securities considered part of the Bank’s credit
        portfolio.
 3 The
        total
        credit portfolio consists of loans net of unearned income, fair value of
        investment securities, securities purchased under agreements to resell and
        contingencies.
  As
        of
        December 31, 2006 and 2007 the Bank did not have any impaired credits on
        its
        portfolio nor any credits with specific reserves.
  ***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. The allowance for credit losses includes an
        asset-specific component and a formula-based component in line with Statement
        of
        Financial Accounting Standard (“SFAS”) No. 5 “Accounting for Contingencies”
(“SFAS No. 5”). The asset-specific component relates to a provision for losses
        on credits considered impaired and measured on a case-by-case basis pursuant
        to
        SFAS No. 114 “Accounting by Creditors for Impairment of a Loan”. For additional
        information regarding allowance for credit losses, see Item 18, “Financial
        Statements”, notes 2 (j) and 7.
  29
  During
        2005, Bladex implemented a new methodology for estimating generic allowances
        for
        credit losses. The new methodology is driven primarily by Bladex’s own
        historical default and loss experience, as well as an internal country risk
        classification, rather than relying exclusively on third-party data, as was
        formerly the case. This change in methodology was the result of the Bank’s
        decision to adopt best practices in the banking industry, and is in line
        with
        SFAS No.5, which calls for the use of internal historical performance data
        in
        estimating credit loss reserves. The Bank began compiling its eight-year
        historical database in 2004 and completed this effort during 2005.
  The
        reserve balances for estimating generic allowances, for both on and off-balance
        sheet credit exposures are calculated applying the following
        formula:
  Reserves
        = S (E
        x PD x
        LGD)
  where:
  a)
              Exposure
                  (E) = the total accounting balance (on and off-balance sheet) at
                  the end
                  of the period under review, segregated by
                  country.
  b)
              Probabilities
                  of Default (PD) = one-year probability of default applied to the
                  portfolio
                  in each country. Default rates are based on Bladex’s historical portfolio
                  performance per rating category during a ten-year period, complemented
                  by
                  probabilities of default data from international credit rating
                  agencies
                  for high risk cases, in view of the greater robustness of credit
                  rating
                  agencies data for such cases.
  c)
              Loss
                  Given Default (LGD) = a factor of 45% is utilized, based on best
                  practices
                  in the banking industry. This factor applies to all countries,
                  except
                  those classified as higher risk, in which case management applies
                  historical loss experience on a case-by-case basis.
  The
        effect of this new methodology for 2005 was a decrease in net income by $10
        million, or $0.26 per share (resulting from a loan loss reserve provision
        reversal of $6 million, and an off-balance sheet reserve provision charge
        of $16
        million). In addition, the adjustment to apply retroactively the new methodology
        (to December 31, 2004) increased net income for 2005 by $3 million (resulting
        from a loan loss reserve provision reversal of $6 million and an off-balance
        sheet reserve provision charge of $3 million). See Item 18, “Financial
        Statements”, notes 2 (j) and 7.
  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:
 **2003**
              
              **2004**
              
              **2005**
              
              **2006**
              
              **2007**(in
                  $ million, except percentages)*Components
                  of the allowance for credit losses*Allowance
                  for loan lossesBalance
                  at beginning of the year
              
              $
              430
              
              $
              224
              
              $
              106
              
              $
              39
              
              $
              51Provision
                  (reversal)
              
              
              (70
              )
              
              (111
              )
              
              (48
              )
              
              12
              
              
              12Effect
                  of change in methodology
              
              
              0
              
              
              0
              
              
              (6
              )
              
              0
              
              
              0Cumulative
                  effect on prior years (2004) of a change in credit loss reserve
                  methodology
              
              
              0
              
              
              0
              
              
              (6
              )
              
              0
              
              
              0Recoveries
              
              
              2
              
              
              6
              
              
              3
              
              
              0
              
              
              6Loans
                  charged-off
              
              
              (138
              )
              
              (13
              )
              
              (9
              )
              
              0
              
              
              0Balance
                  at the end of the year
              
              $
              224
              
              $
              106
              
              $
              39
              
              $
              51
              
              $
              70Reserve
                  for losses on off-balance sheet credit risk:Balance
                  at beginning of the year
              
              $
              23
              
              $
              34
              
              $
              33
              
              $
              52
              
              $
              27Provision
                  (reversal)
              
              
              11
              
              
              (1
              )
              
              (0
              )
              
              (25
              )
              
              (13
              )Effect
                  of change in methodology
              
              
              0
              
              
              0
              
              
              16
              
              
              0
              
              
              0Cumulative
                  effect on prior years (2004) of a change in credit loss reserve
                  methodology
              
              
              0
              
              
              0
              
              
              3
              
              
              0
              
              
              0Balance
                  at end of the year
              
              $
              34
              
              $
              33
              
              $
              52
              
              $
              27
              
              $
              14**Total
                  allowance for credit losses**
              
              **$**
              **258**
              
              **$**
              **139**
              
              **$**
              **92**
              
              **$**
              **78**
              
              **$**
              **83**Allowance
                  for credit losses to total credit portfolio
              
              
              9.1
              %
              
              4.7
              %
              
              2.5
              %
              
              2.0
              %
              
              1.8
              %
  30
  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:
  **2005**
              
              **2006**
              
              **2007**Total
              
              %
              
              Total
              
              %
              
              Total
              
              %(in
                  $ million, except percentages)Argentina
              
              $
              21
              
              
              23.0
              
              $
              25
              
              
              32.4
              
              $
              32
              
              
              38.4Brazil
              
              
              19
              
              
              20.2
              
              
              11
              
              
              14.3
              
              
              11
              
              
              13.2Colombia
              
              
              1
              
              
              0.5
              
              
              2
              
              
              2.2
              
              
              2
              
              
              2.7Dominican
                  Republic
              
              
              1
              
              
              1.3
              
              
              3
              
              
              3.3
              
              
              0
              
              
              0.3Ecuador
              
              
              46
              
              
              50.4
              
              
              30
              
              
              38.3
              
              
              17
              
              
              20.2Jamaica
              
              
              0
              
              
              0.3
              
              
              2
              
              
              3.1
              
              
              4
              
              
              5.0Mexico
              
              
              0
              
              
              0.1
              
              
              1
              
              
              1.6
              
              
              3
              
              
              3.5Nicaragua
              
              
              0
              
              
              0.1
              
              
              0
              
              
              0.6
              
              
              1
              
              
              1.7Peru
              
              
              3
              
              
              3.0
              
              
              1
              
              
              0.8
              
              
              2
              
              
              2.9Venezuela
              
              
              0
              
              
              0.3
              
              
              0
              
              
              0.1
              
              
              7
              
              
              8.3Other1
              
              
              1
              
              
              0.9
              
              
              3
              
              
              3.4
              
              
              3
              
              
              3.7**Total
                  Allowance for Credit Losses**
              
              **$**
              **92**
              
              
              **100.0**
              
              **$**
              **79**
              
              
              **100.0**
              
              **$**
              **83**
              
              
              **100.0**
 ____________________
 1 Other
        consists of allowance for credit losses allocated to countries in which
        allowance for credit losses outstanding did not exceed $1 million as of December
        31, 2007.
  The
        following table sets forth information regarding the Bank’s allowance for credit
        losses by type of borrower at December 31 of each year:
  **2005**
              
              
              **2006**
              
              
              **2007**(in
                  $ million)Private
                  sector commercial banks
              
              $
              20
              
              $
              15
              
              $
              22State-owned
                  commercial banks
              
              
              18
              
              
              5
              
              
              2Central
                  banks
              
              
              36
              
              
              21
              
              
              9Sovereign
                  debt
              
              
              1
              
              
              1
              
              
              1State-owned
                  exporting organization
              
              
              3
              
              
              2
              
              
              10Private
                  corporations
              
              
              14
              
              
              35
              
              
              39**Total**
              
              **$**
              **92**
              
              **$**
              **79**
              
              **$**
              **83**
  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:
  **2003**
              ****
              **%**
              ****
              **2004**
              ****
              **%**
              ****
              **2005**
              ****
              **%**
              ****
              **2006**
              ****
              **%**
              ****
              **2007**
              
              **%**(in
                  $ million, except percentages)Argentina
              
              $
              137
              
              
              99.4
              
              $
              13
              
              
              100.0
              
              $
              5
              
              
              53.7
              
              $
              0
              
              
              0.0
              
              $
              0
              
              
              
              0.0Brazil
              
              
              0
              
              
              0.0
              
              
              0
              
              
              0.0
              
              
              4
              
              
              46.3
              
              
              0
              
              
              0.0
              
              
              0
              
              
              
              0.0Paraguay
              
              
              1
              
              
              0.6
              
              
              0
              
              
              0.0
              
              
              0
              
              
              0.0
              
              
              0
              
              
              0.0
              
              
              0
              
              
              
              0.0**Total**
              
              **$**
              **138**
              
              
              **100.0**
              
              **$**
              **13**
              
              
              **100.0**
              
              **$**
              **9**
              
              
              **100.0**
              
              **$**
              **0**
              
              
              **0.0**
              
              **$**
              **0**
              
              
              
              **0.0**
  *Reversals
        of Argentine Specific Provision for Credit Losses*
  At
        the
        end of 2001 and during 2002, the Bank classified as impaired most of its
        $1
        billion Argentine credit exposure at the time, due to the country’s economic and
        financial crisis of 2001, which caused the Bank’s Argentine obligors to face
        payment difficulties. Accordingly, the Bank increased its allowance for credit
        losses during 2001 and 2002 by $77 million and $279 million, respectively,
        bringing the total credit reserves assigned to its Argentine portfolio to
        $380
        million at December 31, 2002. From 2002 to 2005, the Bank negotiated the
        restructuring of its Argentine portfolio and sold at a discount most of the
        positions that the Bank estimated had the lowest probability of collection.
        At
        the close of 2005, the Bank had restructured, sold or charged-off all of
        its
        non-performing exposures.
  As
        a
        result, the Bank was able to decrease its impaired Argentine loan portfolio
        to
        $23 million at December 31, 2005 and to zero at December 31, 2006, resulting
        in
        reversals of loan loss provisions related to the portfolio for $48 million
        and
        $10 million for 2005 and 2006, respectively. These reversals resulted from
        loan
        collections and sales that exceeded their respective net book values.
  The
        following table sets forth information regarding the Bank’s reversals
        (provisions) of allowance for loan losses during the years indicated:
  31
  **For
                  the year ended December 31,****2005**
              
              **2006**
              
              **2007**(in
                  $ million)Argentine
                  reversals related to sale of loans
              
              $
              2.9
              
              $
              0.0
              
              $
              0.0Argentine
                  reversals related to credit restructurings and collections, and
                  changes in
                  expected loss levels
              
              
              45.1
              
              
              10.2
              
              
              0.0Total
                  Argentine Specific Reserves Reversals
              
              $
              47.9
              
              $
              10.2
              
              $
              0.0Brazil
                  Specific Reserves Reversals (Provisions)
              
              
              13.2
              
              
              1.0
              
              
              0.0**Total
                  Specific Reserves Reversals**
              
              **$**
              **61.1**
              
              **$**
              **11.2**
              
              **$**
              **0.0**Generic
                  Reserves Reversals (Provisions) - due to changes in credit portfolio
                  composition and risk levels
              
              $
              (15.5
              )
              $
              (23.0
              )
              
              (18.4
              )Generic
                  Reserves Reversals - due to change in credit loss reserve methodology
              
              
              6.0
              
              
              0.0
              
              
              0.0**Total
                  Generic Reserves Reversals (Provisions)**
              
              **$**
              **(9.6**
              **)**
              **$**
              **(23.0**
              **)**
              **$**
              **(18.4**
              **)**Recoveries
                  - Argentine credits
              
              
              0.3
              
              
              0.0
              
              
              2.0Recoveries
                  - Other credits
              
              
              2.3
              
              
              0.0
              
              
              4.4**Total
                  Recoveries**
              
              **$**
              **2.6**
              
              **$**
              **0.0**
              
              **$**
              **6.4****Total
                  Reversals (Provisions) of Allowance for Loan
                  Losses**
              
              **$**
              **54.2**
              
              **$**
              **(11.8**
              **)**
              **$**
              **(12.0**
              **)**
  **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 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 significant accounting policies, see Item 18, “Financial
        Statements”, note 2.
 
 *Allowance
        for Credit Losses*
 
 The
        classification of the Bank’s credit portfolio for allowances for credit losses
        under U.S. GAAP is determined through statistical modeling and estimates.
        Informed judgments must be made when identifying deteriorated loans, the
        probability of default, the expected loss, the value of collateral and current
        economic conditions. Even though the Bank’s management considers its allowances
        for credit losses to be adequate, the use of different estimates and assumptions
        could produce different allowances for credit losses, and amendments to the
        allowances may be required in the future due to changes in the value of
        collateral, the amount of cash to be received or other economic events. See
        Item
        18, “Financial Statements”, note 2(j).
  The
        estimates of the Bank’s portfolio’s inherent risks and overall recovery vary
        with changes in the economy, individual industries, and countries and individual
        borrowers’ or counterparties’ ability and willingness to repay their
        obligations. The degree to which any particular assumption affects the allowance
        for credit losses depends on the severity of the change and its relationship
        to
        the other assumptions. The methods and assumptions used by management in
        estimating the fair values of each type of financial instruments are described
        in Item 18, “FInancial Statements”, note 20.
  *Fair
        Value of Financial Instruments*
 
 In
        calculating the fair value of the Bank’s financial instruments, the Bank’s
        management uses market data available and its best judgment. However, there
        are
        limitations in any estimation technique. The estimated fair value amounts
        have
        been measured as of their respective year-ends. Fair value calculations are
        only
        provided for a limited portion of the Bank’s assets and liabilities. See Item
        18, “Financial Statements”, note 20.
  32
  Notwithstanding
        the level of subjectivity inherent in determining fair value, the Bank’s
        management believes that its estimates of fair value are adequate. The use
        of
        different models or assumptions could lead to changes in the Bank’s reported
        results.
   **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 mainly in demand deposits, overnight funds and time deposits
        with well-known international banks, as well as highly rated marketable
        securities. These liquid assets are adequate to cover 24-hour deposits from
        customers, which theoretically could be withdrawn on the same day. At December
        31, 2007, the Bank’s 24-hour deposits from customers (overnight deposits, demand
        deposit accounts and call deposits) amounted to $111 million, representing
        8% of the Bank’s total deposits *.* The
        liquidity requirement resulting from these maturities is met by the Bank’s
        liquid assets, which at December 31, 2007, were $418 million (representing
        29% of total deposits), and by daily maturities of approximately $172 million
        to
        $205 million.
  As
        established by the Bank’s liquidity policy, the Bank’s liquid assets are held in
        the form of inter-bank deposits with reputable international banks that have
        A1,
        P1, or F1 ratings from 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,
        including Euro certificates of deposit, commercial paper, bankers’ acceptances
        and other liquid instruments with maturities of up to three years. These
        instruments must be of investment grade quality A or better and must have
        a
        liquid secondary market.
  The
        Bank
        performs daily review and controls on its liquidity position, including the
        application of a series of limits to restrict its overall liquidity risk.
        Specific limits have been established to control cumulative maturity “gaps”
between assets and liabilities, for each maturity classification presented
        in
        the Bank’s internal liquidity reports, as well as to control concentrations of
        deposits taken from any client or economic group maturing in one day and
        total
        maximum deposits maturing in one day. The Bank has also established a minimum
        amount of liquidity to be maintained at the end of each day, as a percentage
        of
        total assets. As a precautionary measure, since the onset of the global
        liquidity crisis in August 2007, Bladex has consistently maintained a cash
        position substantially in excess of the minimum required.
  In
        2007,
        Bladex updated its Contingent Liquidity Plan, which provides for regular
        stress-testing of its liquidity position. The plan contemplates the regular
        monitoring of several quantified internal and external reference points (such
        as
        deposit level, quality of assets, Emerging Markets Bonds Index Plus (“EMBI+”),
        cost of funds and market interest rates), which, in moments of high volatility,
        would trigger implementation of a series of precautionary measures to reinforce
        the Bank's liquidity position.
  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 of each year:
  **At
                  December 31,****2005**
              
              **2006**
              
              **2007**(in
                  $ million)Europe
              
              $
              189
              
              $
              224
              
              $
              298United
                  States
              
              
              1
              
              
              49
              
              
              39Other
                  O.E.C.D.
              
              
              35
              
              
              54
              
              
              81**Total**
              
              **$**
              **225**
              
              **$**
              **327**
              
              **$**
              **418**
  While
        the
        Bank’s liabilities generally mature over somewhat shorter periods than its
        assets, the associated liquidity risk is diminished by the short-term nature
        of
        the loan portfolio, as the Bank is engaged primarily in the financing of
        foreign
        trade. At December 31, 2007, the average original term to maturity of the
        Bank’s
        short-term loan portfolio was approximately 217 days.
  33
  Medium
        term assets (maturing beyond one year) totaled $1.6 billion as of December
        31,
        2007. Of that amount, $448 million was comprised of liquid bonds held primarily
        in the Bank’s securities available-for-sale portfolio. The remaining $1.2
        billion in medium-term assets represented commercial loans. These medium-term
        loans are funded by medium-term borrowings (49%) and the Bank’s equity
        (51%).
  ***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, the exact
        composition of the Bank ́s funding sources, 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 of each
        year:
  **At
                  December 31,****2005**
              
              **2006**
              
              **2007**(in percentages)Inter-bank
                  deposits
              
              
              41.2
              %
              
              31.1
              %
              
              35.0
              %Securities
                  sold under repurchase agreements
              
              
              5.1
              %
              
              12.9
              %
              
              6.8
              %Borrowings
                  and debts
              
              
              45.9
              %
              
              50.6
              %
              
              53.4
              %Other
                  liabilities.
              
              
              7.9
              %
              
              5.4
              %
              
              4.8
              %**Total
                  liabilities**
              
              
              **100.0**
              **%**
              
              **100.0**
              **%**
              
              **100.0**
              **%**
  *Deposits*
  The
        Bank
        obtains deposits principally from central and commercial banks in the Region.
        At
        December 31, 2007, approximately 31% 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, 2007 and 2006 was 36 days and 44 days, respectively. The
        bulk of the Bank’s other deposits is obtained primarily from commercial banks
        located in the Region. At December 31, 2007, deposits from the Bank ́s five
        largest depositors, of which three were central banks in the Region, represented
        43% of the Bank’s total deposits.
  The
        following table shows the Bank’s deposits by country at December 31 of each
        year:
  **2005**
              
              **2006**
              
              **2007**(in $ million)Argentina
              
              $
              75
              
              $
              91
              
              $
              75Barbados
              
              
              10
              
              
              5
              
              
              28Brazil
              
              
              424
              
              
              400
              
              
              322Cayman
                  Island
              
              
              0
              
              
              27
              
              
              33Colombia
              
              
              44
              
              
              47
              
              
              154Costa
                  Rica
              
              
              2
              
              
              7
              
              
              10Dominican
                  Republic
              
              
              22
              
              
              27
              
              
              21Ecuador
              
              
              182
              
              
              99
              
              
              70El
                  Salvador
              
              
              32
              
              
              27
              
              
              26Finland
              
              
              0
              
              
              10
              
              
              10Guatemala
              
              
              0
              
              
              1
              
              
              0Haiti
              
              
              2
              
              
              3
              
              
              3Honduras
              
              
              10
              
              
              14
              
              
              27Jamaica
              
              
              2
              
              
              2
              
              
              2Mexico
              
              
              128
              
              
              35
              
              
              332The
                  Netherlands
              
              
              17
              
              
              18
              
              
              21Nicaragua
              
              
              0
              
              
              2
              
              
              11Panama
              
              
              15
              
              
              48
              
              
              80Peru
              
              
              5
              
              
              43
              
              
              41Trinidad
                  and Tobago
              
              
              11
              
              
              10
              
              
              20United
                  Kingdom
              
              
              0
              
              
              0
              
              
              40United
                  States
              
              
              0
              
              
              19
              
              
              20Venezuela
              
              
              65
              
              
              121
              
              
              117**Total**
              
              **$**
              **1,047**
              
              **$**
              **1,056**
              
              **$**
              **1,462**
  34
  *Short-Term
        Borrowings and Securities Sold Under Repurchase Agreements*
  The
        Bank’s short-term borrowings consist of borrowings from banks that 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
        35
        European and North American banks provide these short-term borrowings to
        the
        Bank.
  As
        of
        December 31, 2007, short-term borrowings amounted to $1,222 million, an increase
        of $64 million from the amount as of December 31, 2006. The increase in
        short-term borrowings was due to funding, liquidity and asset/liability
        management needs.
  The
        average term remaining to maturity of short-term borrowings at December 31,
        2007
        was approximately 104 days. See Item 18, “Financial Statements”, note
        10.
  The
        Bank
        also enters into repurchase agreements (“repos”) with international banks,
        utilizing its investment securities portfolio as collateral to secure
        cost-effective funding. As of December 31, 2007, repos amounted to $283 million,
        a decrease of $155 million from the amount as of December 31, 2006, reflecting
        an increase of borrowings as a funding strategy.
  The
        following table presents information regarding the amounts outstanding, and
        interest rates on, the Bank’s short-term borrowings and securities sold under
        repurchase agreements at the dates and during the periods
        indicated.
  **At
                  and for the Year Ended December 31,****2005**
              
              **2006**
              
              **2007**(in $
                  million, except percentages)**Short-term
                  borrowings and securities sold under repurchase
                  agreements**Advances
                  from banks
              
              $
              608
              
              $
              1,147
              
              $
              1,222Discounted
                  acceptances
              
              
              24
              
              
              10
              
              
              0Securities
                  sold under repurchase agreements
              
              
              129
              
              
              438
              
              
              283Total
                  short-term borrowings and securities sold under repurchase
                  agreements
              
              **$**
              **761**
              
              **$**
              **1,596**
              
              **$**
              **1,505**Maximum
                  amount outstanding at any month-end
              
              $
              761
              
              $
              1,634
              
              $
              1,505Amount
                  outstanding at year-end
              
              $
              761
              
              $
              1,596
              
              $
              1,505Average
                  amount outstanding
              
              $
              601
              
              $
              1,044
              
              $
              1,272Weighted
                  average interest rate on average amount outstanding
              
              
              3.39
              %
              
              5.20
              %
              
              5.45
              %Weighted
                  average interest rate on amount outstanding at year end
              
              
              4.73
              %
              
              5.51
              %
              
              5.34
              %
  *Borrowings
        and Long-Term Debt*
  The
        interest rates on long-term borrowings are adjusted semi-annually based on
        short-term LIBOR rates plus a credit spread (which is based on several factors,
        including credit ratings, risk perception, and the remaining term to maturity).
        The Bank uses these funds to finance its medium-term and long-term loan
        portfolio. At December 31, 2007 the average term remaining to maturity of
        the
        Bank’s medium and long-term debt was two years.
  The
        Bank’s EMTN Program has a maximum aggregate limit of $2.3 billion. Notes issued
        under the EMTN Program are placed in the Euro (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. As of December 31,
        2007,
        the total amount outstanding under the EMTN Program with medium-term maturities
        was $25 million.
 
 During
        the third quarter of 2007, the Bank established a program for bond issuances
        in
        Peru. The program has a maximum aggregate limit of the equivalent of $300
        million. Bonds issued under the program are denominated in Peruvian Nuevo
        Soles
        (PEN), may be issued in several series with different maturities and interest
        rate structures, will be offered exclusively to institutional investors
        domiciled in the Republic of Peru, and will rank pari-passu with other debt
        obligations of the Bank. The funds raised from the program will be used to
        finance the Bank’s credit portfolio and to cover its general long-term financial
        needs. The first placement of bonds under the program consisted of bonds
        with a
        maturity of seven years and a fixed rate of interest, and was subsequently
        swapped into U.S. dollars through a cross-currency swap. As of December 31,
        2007, the total amount outstanding under the program was PEN 123,000,000
        (equivalent to $41.0 million).
  35
 
 As
        part
        of its interest rate and currency risk management, the Bank may from time
        to
        time, enter into foreign exchange forwards, cross-currency contracts and
        interest rate swaps to hedge the risk associated with a portion of the notes
        issued under its various programs. See Item 18, “Financial Statements”, note 11,
        and Item 11, “Quantitative and Qualitative Disclosure About Market Risk”.
  *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, 2007:
  **Amount**
              
              **Weighted
                  Average Cost**(in $
                  million)Short-term
                  borrowings at fixed interest rateDue
                  in 0 to 30 days
              
              $
              250
              
              
              5.47
              %Due
                  in 31 to 90 days
              
              
              403
              
              
              5.45
              %Due
                  in 91 to 180 days
              
              
              255
              
              
              5.30
              %Due
                  in 181 to 365 days
              
              
              298
              
              
              5.01
              %**Total**
              
              **$**
              **1,207**
              
              
              **5.31**
              **%**Short-term
                  borrowings at floating interest rateDue
                  in 0 to 30 days
              
              $
              283
              
              
              5.49
              %Due
                  in 181 to 365 days
              
              
              15
              
              
              5.17
              %**Total**
              
              **$**
              **298**
              
              
              **5.48**
              **%**Medium
                  and long-term borrowings at fixed interest rateDue
                  in 0 to 30 days
              
              $
              3
              
              
              8.31
              %
                1Due
                  in 31 to 90 days
              
              
              5
              
              
              8.31
              %
                1Due
                  in 91 to 180 days
              
              
              18
              
              
              6.83
              %
                1Due
                  in 181 to 365 days
              
              
              78
              
              
              5.74
              %
1Due
                  in 1 through 6 years
              
              
              132
              
              
              6.85
              %
1**Total**
              
              **$**
              **236**
              
              
              **6.53**
              **%**Medium
                  and long-term borrowings at floating interest rateDue
                  in 91 to 180 days
              
              $
              25
              
              
              5.08
              %Due
                  in 181 to 365 days
              
              
              270
              
              
              5.57
              %Due
                  in 1 through 6 years
              
              
              414
              
              
              5.41
              %**Total**
              
              **$**
              **709**
              
              
              **5.46**
              **%**Medium
                  and long-term at fixed-rate placementsDue
                  in 7 through 12 years
              
              $
              41
              
              
              6.50
              %**Total**
              
              **$**
              **41**
              
              
              **6.50**
              **%**Medium
                  and long-term floating-rate placementsDue
                  in 0 to 30 days
              
              $
              10
              
              
              6.19
              %Due
                  in 91 to 180 days
              
              
              10
              
              
              5.33
              %Due
                  in 1 through 6 years
              
              
              5
              
              
              5.65
              %**Total**
              
              **$**
              **25**
              
              
              **5.74**
              **%**
  1  Represent
        fixed-rate interest-bearing liabilities booked in local currency to fund
        fixed-rate interest-earning assets in the same local currency.
  *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 degrees of risk, but also
        liquidity requirements, including minimum cash reserves, withdrawal and maturity
        of deposits and additional demand for funds. 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.
  36
  *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, 2007. 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
        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
                  $ million, except percentages)**Interest-earning
                  assets**Cash
                  and due from banks
              
              $
              72
              
              $
              72
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0Interest-bearing
                  deposits with banks
              
              
              405
              
              
              405
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Investment
                  securitiesTrading
                  assets
              
              
              53
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              16
              
              
              36Securities
                  available for sale
              
              
              468
              
              
              148
              
              
              190
              
              
              84
              
              
              0
              
              
              47
              
              
              0Loans,
                  net
              
              
              3,656
              
              
              992
              
              
              1,310
              
              
              985
              
              
              210
              
              
              234
              
              
              (76
              )**Total
                  interest-earning assets**
              
              
              **4,655**
              
              
              **1,617**
              
              
              **1,500**
              
              
              **1,069**
              
              
              **210**
              
              
              **298**
              
              
              **(39**
              **)**Non-interest
                  earning assets
              
              
              133
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              133Other
                  assets
              
              
              2
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              2**Total
                  assets**
              
              **$**
              **4,791**
              
              **$**
              **1,617**
              
              **$**
              **1,500**
              
              **$**
              **1,069**
              
              **$**
              **210**
              
              **$**
              **298**
              
              **$**
              **97****Interest-bearing
                  liabilities**DepositsDemand
              
              $
              111
              
              $
              111
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0Time
              
              
              1,351
              
              
              1,061
              
              
              207
              
              
              73
              
              
              10
              
              
              0
              
              
              0Trading
                  liabilities
              
              
              91
              
              
              1
              
              
              0
              
              
              0
              
              
              0
              
              
              32
              
              
              58Securities
                  sold under repurchase agreements
              
              
              283
              
              
              283
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Short-term
                  borrowings(1)
              
              
              1,287
              
              
              250
              
              
              408
              
              
              280
              
              
              350
              
              
              0
              
              
              0Borrowings
                  and long-term debt(1)
              
              
              945
              
              
              376
              
              
              232
              
              
              101
              
              
              20
              
              
              216
              
              
              0**Total
                  interest-bearing liabilities**
              
              
              **4,068**
              
              
              **2,083**
              
              
              **847**
              
              
              **453**
              
              
              **380**
              
              
              **248**
              
              
              **58**Non-interest-bearing
                  liabilities
              
              
              110
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              110Total
                  liabilities
              
              
              **4,178**
              
              
              **2,083**
              
              
              **847**
              
              
              **453**
              
              
              **380**
              
              
              **248**
              
              
              **168**Stockholders’
                  equity
              
              
              612
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              612**Total
                  liabilities and stockholders’ equity**
              
              
              **4,791**
              
              
              **2,083**
              
              
              **847**
              
              
              **453**
              
              
              **380**
              
              
              **248**
              
              
              **780**Interest
                  rate sensitivity gap
              
              
              
              
              
              (466
              )
              
              653
              
              
              616
              
              
              (170
              )
              
              51
              
              
              (684
              )Cumulative
                  interest rate sensitivity gap
              
              
              
              
              
              (466
              )
              
              187
              
              
              803
              
              
              633
              
              
              684Cumulative
                  gap as a % of total interest-earning assets
              
              
              
              
              
              -10
              %
              
              4
              %
              
              17
              %
              
              14
              %
              
              15
              %
  (1)
        The sum of totals of Short-term borrowings and Borrowings and long-term debt
        are
        equal as the sum of these same accounts presented on Balance Sheet of financial
        statements.
  The
        Bank’s interest rate risk is the exposure of earnings (current and potential)
        and capital to adverse changes in interest rates and is managed by attempting
        to
        match the term and repricing characteristics of the Bank’s interest rate
        sensitive assets and liabilities. 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 from interest rate increases. The Bank’s policy with
        respect to interest rate risk provides that the Bank establishes limits with
        regards to: (i) changes in net interest income due to a potential impact
        given
        certain movements in interest rates, (ii) changes in the amount of available
        equity funds of the Bank (given a one basis point movement in interest rates)
        and (iii) changes in value-at-risk (“VaR”) of the Bank’s portfolio (based on
        statistical analysis of the historical volatility of the Bank’s portfolio). The
        Bank also has used interest rate swaps 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.
  ***Stockholders’
        Equity***
  The
        following table presents information concerning the Bank’s capital position at
        the dates indicated.
 **At
                    December 31,****2005**
                
                **2006**
                
                **2007**(in
                    $ thousand)Common
                    stock
                
                $
                279,978
                
                $
                279,980
                
                $
                279,980Capital
                    surplus
                
                
                134,340
                
                
                134,945
                
                
                135,142Capital
                    reserves
                
                
                95,210
                
                
                95,210
                
                
                95,210Retained
                    earnings
                
                
                212,916
                
                
                205,200
                
                
                245,348Accumulated
                    other comprehensive income (loss)
                
                
                619
                
                
                3,328
                
                
                (9,641
                )Treasury
                    stock
                
                
                (106,282
                )
                
                (134,768
                )
                
                (133,788
                )**Total
                    stockholders’ equity**
                
                **$**
                **616,782**
                
                **$**
                **583,895**
                
                **$**
                **612,252**
  37
 The
        $28
        million increase in stockholders’ equity during 2007 was mainly due to the
        following factors:
  ·
              Increased
                  retained earnings due to the Bank’s net income of $72 million, partially
                  offset by a total of $32 million in dividends paid to common stockholders;
                  offset by
 ·
              Decreased
                  accumulated other comprehensive income related to derivative hedging
                  instruments, due to the lowering of interest rates by the Federal
                  Reserve
                  Board during the credit crisis. This loss was not offset by the
                  investment
                  securities portfolio, which is covered by interest rate swaps,
                  due to an
                  increase in credit spreads as a result of the liquidity shortage
                  in the
                  market.
  The
        net
        decrease in stockholders’ equity during 2006 was mainly due to the following
        factors:
  ·
              Dividends
                  paid to common stockholders of $66 million ($27 million paid in
                  quarterly
                  dividends and $38 million paid in special dividends);
                  and
 ·
              The
                  repurchase of $29 million Class E shares pursuant to the Bank’s stock
                  repurchase program.
 ·
              These
                  factors were offset by net income of $58 million and higher accumulated
                  other comprehensive income related to the available-for-sale
                  portfolio.
  The
        Bank
        completed its $50 million stock repurchase program at December 31, 2006,
        which
        was commenced in August 2004. See Item 10, “Additional Information/Dividends”
and Item 16E, “Purchases of Equity Securities by the Issuer and Affiliated
        Purchasers”.
  Capital
        reserves are established by the Bank from retained earnings and are a form
        of
        retained earnings required by 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, 2007, the capital ratio of total stockholders’ equity to total
        assets was 12.8%. 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, 2007, the Bank’s Tier 1 and total capital ratios calculated according to
        these guidelines were 21% and 22%, respectively. The Banking Law (as defined
        under Item 4, “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, 2007, the Bank’s total capital to
        risk-weighted asset ratio, calculated according to the guidelines of the
        Banking
        Law, was 14.12%. See Item 4, “Information on the Company/Business
        Overview/Regulation/Panamanian Law”.
  **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 of 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 mayhave on the economic condition of countries in the Region, including
                  the
                  Region ́s foreign trade growth, and hence on the Bank’s capacity to grow
                  its trade financing business.
 ·
              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 which could affect spreads
                  over the
                  cost of funds on the Bank’s loan portfolio, and in turn, reduce the Bank’s
                  net interest spreads.
  38
  ·
              A
                  downturn in the capital markets or a downturn in investor confidence
                  which
                  could affect the Bank’s access to funding or increase its costs of
                  funding.
  In
        addition, see Item 3, “Key Information/Risk Factors” for a discussion of the
        risks the Bank faces, which could affect the Bank’s business, results of
        operations or financial condition.
  **E.**  **Off-Balance
        Sheet Arrangements** ****
  In
        the
        ordinary course of business, in order to meet the financing needs of its
        customers, the Bank enters into arrangements that are not recognized on its
        balance sheet. At December 31, 2007, the Bank’s off-balance sheet arrangements
        included stand-by letters of credit, guarantees (commercial risk and country
        risk), credit default swaps and credit commitments (including unused commitments
        and other commitments). See Item 18, “Financial Statements”, note 16. 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.
  For
        2007,
        fees and commission income from off-balance sheet arrangements amounted to
        $6
        million. For additional information, see Item 5, “Operating and Financial Review
        and Prospects/Operating Results/Fees and Commissions, net”. In 2007, the Bank
        was committed to invest $1.5 million, ($1.9 million in 2006) in a private
        investment fund whose main objective is to generate capital appreciation
        in the
        long-term through the purchase of equity securities and convertible debt
        mainly
        from Mexican manufacturing corporations or foreign corporations looking to
        establish or expand their operations in Mexico.
  No
        obligations have arisen from variable interest entities as defined in Financial
        Interpretation (“FIN”) 46R “Consolidation of Variable Interest Entities -
        Revised” (“FIN 46R”), including 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.
  **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, 2007.
 
 **Payments
                  Due by Period****Contractual
                  Obligations**
              
              **Total**
              
              **Less than 1 year**
              
              **1 - 3 years**
              
              **3 - 5 years**
              
              **More than 5 years**(in $
                  million)Deposits
              
              $
              1,462
              
              $
              1,462
              
              $
              0
              
              $
              0
              
              $
              0Trading
                  liabilities
              
              
              91
              
              
              91
              
              
              0
              
              
              0
              
              
              0Securities
                  sold under repurchase agreement
              
              
              283
              
              
              283
              
              
              0
              
              
              0
              
              
              0Short-term
                  borrowings
              
              
              1,222
              
              
              1,222
              
              
              0
              
              
              0
              
              
              0Borrowings
                  and long-term debt1
              
              
              1,010
              
              
              357
              
              
              352
              
              
              260
              
              
              41Accrued
                  Interest Payable
              
              
              39
              
              
              33
              
              
              5
              
              
              1
              
              
              0Service
                  agreements
              
              
              3
              
              
              1
              
              
              1
              
              
              1
              
              
              0Leasehold
                  obligations
              
              
              4
              
              
              1
              
              
              1
              
              
              1
              
              
              1**Total
                  contractual obligations**
              
              **$**
              **4,114**
              
              **$**
              **3,450**
              
              **$**
              **359**
              
              **$**
              **263**
              
              **$**
              **42**
  **Amount
                  of Commitment Expiration by Period****Other
                  Commercial Commitments**
              
              **Total**
              
              **Less than 1 year**
              
              **1 - 3 years**
              
              **3 - 5 years**
              
              **More than 5 years****(in
                  $ million)**Letters
                  of credit
              
              
              97
              
              
              97
              
              
              0
              
              
              0
              
              
              0Stand-by
                  letters of credit
              
              
              152
              
              
              152
              
              
              0
              
              
              0
              
              
              0Guarantees
              
              
              159
              
              
              111
              
              
              48
              
              
              0
              
              
              0Credit
                  default swaps
              
              
              3
              
              
              0
              
              
              3
              
              
              0
              
              
              0Other
                  commercial commitments
              
              
              129
              
              
              67
              
              
              61
              
              
              0
              
              
              22**Total
                  Commercial Commitments**
              
              **$**
              **541**
              
              **$**
              **427**
              
              **$**
              **112**
              
              **$**
              **0**
              
              **$**
              **2**
 ______________________
  1  Certain
        debt obligations are subject to covenants that could accelerate the payment
        of
        these obligations.
 2  This
        amount is without maturity.
  39
 
 *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 are mainly related
        to the maintenance of a new technology platform and telecommunications services.
        The terms of these agreements are up to eight years and some of them can
        be
        re-negotiated for annual or semi-annual price adjustments after the fifth
        year.
        Under the terms of these agreements, the Bank has committed to contractually
        specified minimum payments over the contractual periods. See Item 18, “Financial
        Statements”, note 17.
  **Item
        6.**  **Directors,
        Executive Officers and Employees** ****
  **A.**  **Directors
        and** **Executive
        Officers** ****
  ***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**
              
              **Year**
                **Term Expires**
              
              **Director**
                **Since**
              
              **Age****CLASS
                  A**Guillermo
                  Güémez García
                Deputy
                  Governor
                Banco
                  de Mexico, Mexico
              
              
              Mexico
              
              
              Director
              
              
              2011
              
              
              1997
              
              
              67José
                  Maria Rabelo
                Vice-President
                  of International Wholesale Business
                Banco
                  do Brasil, Brazil
              
              
              Brazil
              
              
              Director
              
              
              2010
              
              
              2007
              
              
              52Roberto
                  Feletti
                Vice-President
                Banco
                  de la Nación Argentina
              
              
              Argentina
              
              
              Director
              
              
              2011
              
              
              2008
              
              
              49**CLASS
                  E**Mario
                  Covo
                Chief
                  Executive Officer
                FinaccessInternational, Inc., U.S.A.
              
              
              U.S.A
              
              
              Director
              
              
              2011
              
              
              1999
              
              
              50Will
                  C. Wood
                Principal
                Kentwood
                  Associates, U.S.A.
              
              
              U.S.A.
              
              
              Director
              
              
              2009
              
              
              1999
              
              
              68Herminio
                  Blanco
                Chief
                  Executive Officer
                Soluciones
                  Estratégicas Consultoría, Mexico
              
              
              Mexico
              
              
              Director
              
              
              2010
              
              
              2004
              
              
              57William
                  D. Hayes
                President
                Wellstone
                  Global Finance, LLC, U.S.A.
              
              
              U.S.A.
              
              
              Director
              
              
              2010
              
              
              2004
              
              
              64Maria
                  da Graça França
                Brazil
              
              
              Brazil
              
              
              Director
              
              
              2010
              
              
              2004
              
              
              59**ALL
                  CLASSES OF COMMON STOCK**Gonzalo
                  Menéndez Duque
                Director
                Banco
                  de Chile, Chile
              
              
              Chile
              
              
              Chairman
                  of the
                Board
                  of Directors
              
              
              2009
              
              
              1990
              
              
              59Jaime
                  Rivera
                Chief
                  Executive Officer
                Bladex,
                  Panama
              
              
              Guatemala
              
              
              Director
              
              
              2009
              
              
              2004
              
              
              55
  **Guillermo
        Güémez García** has
        served as Deputy Governor of Banco de Mexico since 1995 and served as a Board
        Member of the National Insurance Commission and Casa de Moneda de Mexico
        since
        1995. He served as President of the Executive Committee in Grupo Azucarero
        Mexico and Vice Chairman of Grupo de Embotelladoras Unidas, S.A. de C. V.
        from
        1993 to 1994. Mr. Güémez served
        as
        Co-Chairman of the North American Committee, Board Member of Home Mart, S.A.
        de
        C.V. and Vice Chairman of the Board of Grupo Embotelladoras Unidas, S.A.
        de C.V.
        from 1986 to 1994. Mr. Güémez served on the Mexican Business Coordinating
        Council for the North American Free Trade Agreement (“NAFTA”) in the capacity of
        Executive Director from 1991 to 1993. He was employed by Banco Nacional de
        Mexico (Banamex) in various capacities from 1974 to 1991, including Manager
        for
        Foreign Currency Funding and International Credits from 1974 to 1978,
        Representative in London from 1979 to 1981, Executive Vice President of
        International Treasury and Foreign Exchange, Exchange Controls and Ficorca
        from
        1982 to 1986, and Executive Vice President for International Products. He
        also
        was the founder and President of Euromex Casa de Cambio and Euroamerican
        Capital
        Corporation from 1986 to 1990. He has also served as a Board Member of the
        Institute of International Finance and Board Member and Chairman of the
        Executive Committee of the International Mexican Bank Ltd. Prior to that
        he was
        employed by Bank of America in Mexico as Assistant Representative.
  40
 **José
        Maria Rabelo** has
        served as Vice President of International and Wholesale Business of Banco
        do
        Brasil, since July 2005. He has been employed by Banco do Brasil in various
        capacities since 1996, holding the positions of Director of Foreign Trade
        from
        2004 to 2005, General Manager of the Operational Assets Restructuring Unit
        from
        2003 to 2004, Executive Superintendent of the Credit Unit from 1999 to 2000,
        Executive Superintendent of the Sao Paulo Business Unit from 1998 to 1999,
        Executive Manager of the Credit Function Unit in 1997, Executive Manager
        of the
        Distribution Unit from 1996 to 1997, and Superintendent of the Rio Grande
        do
        Norte State Unit in 1996. Mr. Rabelo was Commercial Director of Aliança do
        Brasil Insurance Company from 2000 to 2002.
  **Roberto
        Feletti** has
        served as Vice President of Banco de la Nación Argentina, Argentina since 2006,
        President of Nación Fideicomisos since March 2008, Member of the Administrative
        Council of Economic and Finance Center Foundation for Argentina’s Development
        since April 2007, Technical Representative for the Third Meeting of the
        Strategic Commission of Reflection on South American Integration Process
        held in
        September and October 2006 and March 2007. He also served as Secretary of
        Infrastructure and Planning of Government of the City of Buenos Aires from
        2003
        to 2006. Mr. Feletti served as President of Banco de la Ciudad de Buenos
        Aires,
        Argentina from 2001 to 2003 and Director from 1998 to 2000. He also served
        as
        Director of Red Link from 2002 to 2003 and Chairman of the Board from 2001
        to
        2002. Mr. Feletti was Coordinator of Economic Studies Area of the Institute
        of
        Studies on State and Participation of State Workers’Association, Argentina from
        1991 to 1997. Mr. Feletti was employed by Banco Central de la Republica
        Argentina from 1981 to 1991 in various capacities in the Supervising Equipments
        of Banking and Financial Institutions division. Mr. Feletti was a fiscal
        audit
        assistant for General Tax Administration, Argentina from 1980 to 1981 and
        a cost
        analyst for La Vascongada in Argentina from 1978 to 1979.
 
 **Mario
        Covo** is a
        founding partner of Finaccess International, Inc. and has been Managing Partner
        of Helios Advisors in New York since 2000. He also is one of the founders
        of
        Columbus Advisors, where he worked from 1995 to 1999. Mr. Covo
        was previously at Merrill Lynch, where he was Head of Emerging
        Markets-Capital Markets from 1989 to 1995.  Prior to working at Merrill
        Lynch, he was employed by Bankers Trust Company  of  New York 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.
  **Will
        C. Wood** has
        served as the founding principal of Kentwood Associates of Menlo Park,
        California since 1993. He is a trustee of the Dodge & Cox mutual funds.
        He 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, Mr.
        Wood
        also was a Director of the Bankers’ Association for Foreign Trade and PEFCO, a
        privately owned export finance company. He 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. Mr. Wood previously
        worked
        for Citibank in La Paz, Bolivia, Lima, Peru and Rio de Janeiro and Sao Paulo,
        Brazil, and began his career with Citibank’s Overseas Division in New York
        in 1964.
  **Herminio
        A. Blanco** has
        served as Chief Executive Officer of Soluciones Estrategicas Consultoria,
        Mexico
        City, since 2002, business consultant to some of the leading corporations
        in the
        world, advisor to the Inter-American Development Bank, advisor to national
        governments on trade negotiations, member of the International Advisory
        Committee of Mitsubishi Corporation and member of the Trilateral Commission
        since 2000. He was Secretary of Trade and Industry of Mexico, Chairman of
        the
        National Council for Deregulation of Mexico, Chairman of the Advisory Council
        for Trade Negotiations of Mexico, 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. Mr. Blanco was Under Secretary 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, he was Mexico’s Chief Negotiator of NAFTA. Mr. Blanco
        was one of the three members of the Council of Economic Advisors to the
        President of Mexico from 1985 to 1988. He was Assistant Professor of Economics
        at Rice University, Houston, Texas from 1980 to 1985. Mr. Blanco was senior
        advisor to the Finance Minister of Mexico from 1978 to 1980.
  41
  **William
        D. Hayes** has
        served as President of Whaleco, Inc., New York, President of Wellstone Global
        Finance, LLC, San Francisco, California and Connecticut, and Managing Director
        and charter member of the Board of Directors and the Investment Committee
        of
        WestLB-Tricon Forfaiting Fund Limited, Bermudas since 1999. He served as
        Managing Director-Emerging Markets and in various other capacities for West
        Merchant Bank and Chartered WestLB from 1987 to 1999. Mr. Hayes served as
        Senior
        Vice President- Trading for Libra Bank Limited, New York Agency from 1986
        to
        1987, Principal of W.D. Hayes and Associates, California from 1984 to 1986,
        and
        in various capacities for Wells Fargo Bank, N.A., San Francisco, California
        from
        1969 to 1984.
  **Maria
        da Graça França** served
        as Director of Internal Control of Banco do Brasil from 2006 to 2007. She
        also
        has been employed by Banco do Brasil in various other capacities since 1971,
        including 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’s foreign network from 1992 to
        1993, Deputy General Manager for foreign exchange from 1989 to 1992, Assistant
        Manager within the Risk Management Area from 1988 to 1989, Assistant Manager
        for
        foreign exchange internal controls from 1984 to 1987 and employee in the
        Foreign
        Exchange Department from 1971 to 1984.
  **Gonzalo
        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 Corredores de
        Bolsa,
        S.A. since 2007 and Inversiones Vita since 2000. Previously, Mr. Menéndez Duque
        served as a director and President of several companies related to Grupo
        Luksic
        since 1985, including the following: Banco de A. Edwards and related companies,
        Banco Santiago, Empresas Lucchetti, S.A., Banco O’Higgins, Antofagasta Group,
        and Banchile Administradora General de Fondos.
  **Jaime
        Rivera** has
        served as a director of the Bank since 2004, when he was appointed Chief
        Executive Officer. He joined the Bank in 2002 as Chief Operating Officer.
        Previously, Mr. Rivera served in various capacities for Bank of America
        Corporation beginning in 1978, including Managing Director of the Latin America
        Financial Institutions Group in Miami and 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. He 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 Board of Directors of the New
        York
        Stock Exchange. He
        has an
        MBA degree from Cornell University, a Master of Science degree from Northwestern
        University and a Bachelor of Science degree from Northrop
        University.
  42
  ***Executive
        Officers***
  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 with The Bank**
              
              **Country of Citizenship**
              
              **Age**Jaime
                  Rivera
              
              Chief
                  Executive Officer
              
              Guatemala
              
              55Rubens
                  V. Amaral Jr.
              
              Executive
                  Vice President - Chief Commercial Officer
              
              Brazil
              
              49Gregory
                  D. Testerman
              
              Executive
                  Vice President - Senior Managing Director, Treasury & Capital
                  Markets
              
              U.S.A.
              
              45Miguel
                  Moreno
              
              Executive
                  Vice President, Chief Operating Officer
              
              Colombia
              
              55Miguel
                  A. Kerbes
              
              Senior
                  Vice President, Chief Risk Officer
              
              Uruguay
              
              48Bismark
                  E. Rodriguez
              
              Senior
                  Vice President, Controller
              
              Venezuela
              
              40Jaime
                  Celorio
              
              Senior
                  Vice President, Chief Financial Officer
              
              Mexico
              
              36Ana
                  Maria de Arias
              
              Senior
                  Vice President, Human Resources and Administration
              
              Panama
              
              44Manuel
                  Mejía-Aoun
              
              Head
                  of Asset Management Division
                (Bladex
                  Asset Management)
              
              Panama
              
              49
 
 **Jaime
        Rivera** has
        served as a director of the Bank since 2004, when he was appointed Chief
        Executive Officer. He joined the Bank in 2002 as Chief Operating Officer.
        Previously, Mr. Rivera served in various capacities for Bank of America
        Corporation beginning in 1978, including Managing Director of the Latin America
        Financial Institutions Group in Miami and 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. He 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 Board of Directors of the New
        York
        Stock Exchange. He has an MBA degree from Cornell University, a Master of
        Science degree from Northwestern University and a Bachelor of Science degree
        from Northrop University.
  **Rubens
        V. Amaral Jr.** became
        Executive Vice President, Chief Commercial Officer of the Bank in March 2004.
        He
        previously served as General Manager and Managing Director for North America
        of
        Banco do Brasil, New York Branch, since 2000. Mr. Amaral served in various
        capacities with Banco do Brasil since 1975, holding the positions of Managing
        Director of the International Division and alternate member of the board
        of
        directors in 1998, Executive General Manager of the International Division
        in
        Sao Paulo from 1998 to 2000, Deputy General Manager in the New York Branch
        in
        charge of the Trade Finance and Correspondent Banking Department from 1994
        to
        1998, 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 Department Division - Head Office from 1989 to 1993. Mr. Amaral
        also served as a representative in banking supervision for the Central Bank
        of
        Brazil from 1982 to 1988.
  **Gregory
        D. Testerman** has
        served as Executive Vice President - Senior Managing Director, Treasury and
        Capital Markets of the Bank since 2007. Mr. Testerman previously served as
        Senior Vice President, Treasury of the Bank from 2005 to 2006. Mr. Testerman
        served in various capacities with Banco Santander Central Hispano, S.A. from
        1986 to 2003, including General Manager, Miami Agency, from 1999 to 2003,
        General Manager, Tokyo Branch and Country Manager in Japan from 1995 to 1999,
        Vice President, Head of Financial Control, Benelux and Asia Pacific, from
        1991
        to 1995, Second Vice President, Special Credit Valuation Assignment, London
        Branch, in 1991, Second Vice President, Treasury Operations Manager, Belgium,
        from 1989 to 1991, and 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.
  **Miguel
        Moreno** became
        Executive Vice President, Chief Operating Officer in July 2007 after the
        replacement of Mr. Ernesto Bruggia. He previously served as Senior Vice
        President and Controller of the Bank since September 2001. He was a Management
        Consulting Partner 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 of TM Ingeniería, Bogotá, Colombia, from 1983 to 1987, and as
        Head of 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 served as Advisor to the
        Minister for the Finance and Public Credit Ministry of Colombia from 1976
        to
        1977.
  43
  **Miguel
        A. Kerbes** has
        served as Senior Vice President, Chief Risk Officer for the Bank since July
        2002. Mr. Kerbes previously served as Vice President, Risk Management from
        2000
        to 2002. He served as the Risk Officer, Southern Cone Area for Banco Santander,
        with domicile in Chile, from 1995 to 2000, overseeing the Country Risk Managers
        for the area. From 1992 to 1995, he served with Bank of Boston, Chile as
        the
        Risk Director for credit and treasury risks and as Senior Risk Officer. From
        1989 to 1992, Mr. Kerbes participated in the start-up of ING Bank in Chile,
        continuing as its Risk Officer, with domicile in Chile. He had previously
        served
        with ING Bank in Uruguay and participated in the start-up of ING Bank in
        Argentina from 1982 to 1992.
  **Bismark
        E. Rodríguez** became
        the Bank’s Controller on July 2007 after being appointed by the Bank in
        replacement of Mr. Miguel Moreno. Previously Mr. Rodriguez served as the
        Bank’s
        Vice President of the Internal Audit Department since 2004. Mr. Rodriguez
        also
        served as Senior Manager at PricewaterhouseCoopers in various capacities
        and
        countries from 1991 to 2003. Mr. Rodriguez is a Certified Internal Auditor
        (CIA), a Certified Financial Services Auditor (CFSA), and a Certified Control
        Self-Assessment Specialist (CCSA), which are all designations granted by
        The
        Institute of Internal Auditors (IIA).
  **Jaime
        Celorio** was
        appointed Senior Vice President, Chief Financial Officer of the Bank, after
        the
        retirement of Mr. Carlos Yap in February 2008. Mr. Celorio previously served
        as
        Chief Financial Officer and Chief Administrative Officer for Merrill Lynch
        México, S.A. de C.V., Casa de Bolsa, Mexico from 2002 to 2007. Mr. Celorio
        served as Controller Associate of Emerging Markets in New York from 1998
        to
        2001, and served as a Controller Associate in Mexico from 1995 to 1998, both
        for
        the Goldman Sachs Group. Mr. Celorio also served in various capacities in
        PricewaterhouseCoopers, Mexico, from 1991 to 1994, as a Senior Auditor in
        the
        Audit Division, and as Supervisor in Financial Advisory Services.
  **Ana
        Maria de Arias** has
        served as Senior Vice President of Human Resources and Administration since
        July
        2007. Ms. Arias previously served as Senior Vice President of Human Resources
        and Corporate Operations of the Bank from 2004 to 2007. Prior to her employment
        with 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 served in various capacities with the Panama
        Canal Commission, Panama from 1990 to 1999.
 
 **Manuel
        Mejía-Aoun** ,
        has
        served as Head of Asset Management Division (Bladex Asset Management) since
        November 2005. Mr. Mejía-Aoun has over 19 years of investment experience in
        emerging markets. Prior to joining the Bank, he was Chief Executive Officer
        of
        Maxblue, Deutsche Bank’s first personal financial consultancy business, focusing
        on high net worth investors in Latin America. Prior to that, he headed the
        Latin
        American Foreign Exchange and Local Money Markets Sales and Trading Group
        at
        Deutsche Bank. In 1995, Mr. Mejía-Aoun served as Chief Emerging Markets
        Strategist at Merrill Lynch covering fixed income securities in Latin America,
        Eastern Europe, Africa and Asia. From 1987 to 1995, he established and headed
        the Emerging Markets Trading Group at Merrill Lynch.
  **B.**  **Compensation** ****
  ***Cash
        and Stock-Based Compensation***
  ***Executive
        Officers Compensation***
  The
        aggregate amount of cash compensation paid by the Bank during the year ended
        December 31, 2007 to the executive officers employed in the Bank’s Head Office
        as a group for services in all capacities was $2,587,413. During the fiscal
        year
        ended December 31, 2007, the Bank accrued, and in February 12, 2008 paid
        performance-based bonuses to the Bank’s executive officers in the aggregate
        amount of $1,585,000. At December 31, 2007, the total amount set aside or
        accrued by the Bank to provide pension, retirement or similar benefits for
        executive officers was approximately $651,389.
  44
 
 In
        addition, the aggregate amount of cash compensation paid by the Bank during
        the
        year ended December 31, 2007 to the executive and non-executive employees
        of
        Bladex Asset Management, as a group for services in all capacities was $730,579.
        During the fiscal year ended December 31, 2007, the Bank accrued, and on
        February 12, 2008 paid performance-based bonuses to this group of executives
        in
        the aggregate amount of $3,225,000.
 
 The
        aggregate number of stock options awarded during the year ended December
        31,
        2007 to executive officers and other non-executive employees of the Bank
        as a
        group under the Bank’s 2006 Stock Option Plan was 188,634, representing a total
        compensation cost of $889,956, of which $281,022 was charged against income
        in
        2007, and $635,223 will be charged to income over a period of 3.12 years.
        The
        options granted have a vesting period of four years and are based on the
        level
        of achievement by the Bank’s executive officers measured against established
        corporate financial performance goals. The 2006 Stock Option Plan was
        discontinued by the Board on February of 2008. Options granted under this
        plan
        have an exercise price of $16.34 and will expire on February 13, 2014.
  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 until March 2007, when the Bank transferred all contributions
        to a
        trust administered by an independent third party. During the year 2007, the
        Bank
        charged to salaries expense $175,466 with respect to this plan. As of December
        31, 2007, the accumulated liability payable under this contribution plan
        amounted to $381,760.
   ***2007
        Chief Executive Officer Compensation***
  The
        2007
        compensation of the Bank's Chief Executive Officer included a base salary
        of
        $300,000, a performance-based cash bonus of $286,000, a performance-based
        stock
        option grant with a value of $250,000, a retirement plan that included a
        contribution from the Bank of $21,310 during 2007, and other benefits amounting
        to $8,570. During the fiscal year ended December 31, 2007, the Bank accrued,
        and
        in February 2008 paid a performance-based bonus to the Bank’s Chief Executive
        Officer in the aggregate amount of $350,000. At December 31, 2007, the total
        amount set aside or accrued by the Bank to provide pension, retirement or
        similar benefits for the Chief Executive Officer was approximately $249,623.
        In
        addition, the Chief Executive Officer has a contractual severance payment
        in
        case of termination without cause of $300,000.
  ***Board
        of Directors Compensation***
  In
        July
        2007, the Board adopted a new compensation policy for non-employee directors.
        Each non-employee director of the Bank receives an annual cash retainer of
        $40,000 for his services as a director and the Chairman of the Board receives
        an
        annual cash retainer in the amount of $85,000. This annual retainer covers
        seven
        Board and/or shareholders meetings. When the Board has met more than seven
        times, the Bank will pay each director an attendance fee of $1,500 for each
        additional Board and/or stockholders meeting. The Chairman of the Board is
        eligible to receive an additional 50% for each such additional Board,
        stockholders or Committee meeting attended. The aggregate amount of cash
        compensation paid by the Bank during the year ended December 31, 2007 to
        the
        directors of the Bank as a group for their services as directors was
        $738,000.
 
 In
        July
        2007, the Board amended the Bank’s restricted stock plan (the “Board Restricted
        Stock Plan”). Under the amended terms of the Board Restricted Stock Plan, each
        non-employee director of the Bank is awarded annually a number of shares
        of
        Class E common stock equal to the number that results from dividing $50,000
        ($75,000 in the case of the Chairman of the Board) by the market price of
        a
        Class E share on the date the award is made.
 
 The
        aggregate number of shares of restricted stock awarded during the year ended
        December 31, 2007 to non-employee directors of the Bank as a group under
        the
        Board Restricted Stock Plan was 22,240 Class E shares and the compensation
        expense charged against income in 2007 relating to such issuances was $42,929
        and $431,895 will be charged to income over a period of 4.55 years.
  45
 
 In
        addition, the aggregate number of options awarded during the year ended December
        31, 2007 to non-employee directors under the Bank’s 2006 Stock Option Plan was
        20,131, representing a total compensation cost of $94,976, of which $20,947
        was
        charged against income in 2007, and $74,029 will be charged to income over
        a
        period of 3.12 years.
 
 For
        a
        detailed description of the Board Restricted Stock Plan and other discontinued
        stock based compensation plans, see Item 18, “Financial Statements”,
        note 14.
 
 ***2008
        Stock Incentive Plan***
 
 On
        February 12, 2008, the Board of Directors approved the 2008 Stock Incentive
        Plan
        (the “2008 Plan”). The 2008 Plan replaces the 2006 Stock Option Plan and the
        Board Restricted Stock Plan. The 2008 Plan covers non-executive directors,
        executive officers and other employees of the Bank and gives the Board greater
        flexibility to grant stock options, restricted stock units, restricted stock
        grants, dividend equivalent rights and stock appreciation rights, under terms
        and conditions to be determined from time to time by the Board and specified
        in
        the award agreements.
 
 On
        February 12, 2008, the Bank awarded an aggregate number of 39,239 restricted
        stock units and 172,106 stock options to executive officers of the Bank.
        An
        additional aggregate number of 13,743 restricted stock units and 60,297 stock
        options were granted to other non-executive employees of the Bank on February
        12, 2008. The
        stock options granted have an exercise price of $15.43 and will expire on
        February 12, 2015. The restricted stock units have a four-year cliff vesting
        period.
 
 No
        grants
        have been made to directors of the Bank under the 2008 Plan to this date.
 
 On
        April
        14, 2008, the Board of Directors modified stock option grants made under
        the
        2004 Indexed Option Plan, the 2006 Stock Option Plan, and the 2008 Stock
        Incentive Plan, converting part of the grants to restricted stock
        units.
  ***Beneficial
        Ownership***
  As
        of
        December 31, 2007, the Bank’s executive officers and directors, as a group,
        owned an aggregate of 59,246 Class E shares, which was approximately 0.2%
        of all
        issued and outstanding Class E shares.
  The
        following table sets forth information regarding the number of shares, stock
        options, deferred equity units, and indexed stock options owned by the Bank’s
        executive officers as of December 31, 2007, as well as the restricted stock
        units and stock options granted in February 2008 under the 2008 Plan.
  46
  
 **Name
                  and Position of**
                **Executive Officer**
              
              **Number of**
                **Shares**
                **Beneficially**
                **Owned as of**
                **Dec. 31, 2007**
              
              **Number of**
                **Shares that**
                **may be**
                **Acquired**
                **within 60 days**
                **of Dec. 31, 2007**
              
              **Stock**
                **Options****(1)**
              
              **Deferred**
                **Equity**
                **Units****(2)**
              
              **Indexed**
                **Stock**
                **Options****(3)**
              
              **2008 Stock**
                **Plan**
                **Restricted**
                **Stock Units****(4)**
              
              **2008**
                **Stock**
                **Plan**
                **Options****(4)**Jaime Rivera
                Chief
                  Executive Officer
              
              
              1,400
              
              
              0
              
              
              52,989
              
              
              770
              
              
              155,709
              
              
              9,721
              
              
              42,636Rubens
                  V. Amaral Jr.
                Executive
                  Vice President
                Chief
                  Commercial Officer
              
              
              0
              
              
              0
              
              
              26,494
              
              
              0
              
              
              102,638
              
              
              8,101
              
              
              35,530Gregory
                  D. Testerman
                Executive
                  Vice President
                Senior
                  Managing Director,
                Treasury
                  & Capital Markets
              
              
              0
              
              
              0
              
              
              21,195
              
              
              0
              
              
              20,998
              
              
              9,397
              
              
              41,215Miguel
                  Moreno
                Executive
                  Vice President,
                Chief
                  Operating Officer
              
              
              2,000
              
              
              0
              
              
              10,597
              
              
              597
              
              
              35,757
              
              
              5,184
              
              
              22,739Miguel
                  A. Kerbes
                Senior
                  Vice President,
                Chief
                  Risk Officer
              
              
              0
              
              
              0
              
              
              19,646
              
              
              621
              
              
              29,830
              
              
              3,240
              
              
              14,212Bismark
                  E. Rodriguez L.
                Senior
                  Vice President
                Controller
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              1,296
              
              
              5,684Carlos
                  Yap S.(5)
                Senior
                  Vice President,
                Chief
                  Financial Officer
              
              
              0
              
              
              0
              
              
              21,163
              
              
              545
              
              
              26,574
              
              
              0
              
              
              0Jaime
                  Celorio
                Senior
                  Vice President,
                Chief
                  Financial Officer
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              437
              
              
              1,918Ana
                  Maria de Arias
                Senior
                  Vice President,
                Human
                  Resources and Administration
              
              
              590
              
              
              0
              
              
              10,597
              
              
              0
              
              
              21,176
              
              
              1,863
              
              
              8,172**Total****(6)**
              
              
              **3,990**
              
              
              **0**
              
              
              **162,681**
              
              
              **2,533**
              
              
              **392,682**
              
              
              **39,239**
              
              
              **172,106**
 ______________________
  (1)
              Includes
                  137,768 stock options granted to executive officers on February
                  13, 2007
                  under the 2006 Stock Option Plan and 24,913 stock options granted
                  under
                  the Bank's 1995 and 1999 Stock Option Plans. In addition, an aggregate
                  amount of 34,970 stock options were granted to other non-executive
                  employees and 15,896 were granted to Mr. Ernesto Bruggia, who resigned
                  as
                  the Bank’s Chief Operations Officer in July 2007, under the 2006 Stock
                  Option Plan. Vested options under the 1995 and 1999 Stock Option
                  Plans and
                  options expected to vest under the 2006 Stock Option Plan have
                  no
                  intrinsic value as of December 31, 2007 because the options’ exercise
                  price was greater than the quoted market price of the Bank’s common stock
                  at that date.
 (2)
              Deferred
                  equity units granted under the Bank's Deferred Compensation Plan
                  (the “DC
                  Plan”). In addition, as of the date hereof, there are 1,894 outstanding
                  units that were granted to former executive officers of the Bank
                  under the
                  DC Plan.
 (3)
              An
                  aggregate amount of 23,549 stock options were granted to other
                  non-executive employees and 37,992 stock options were granted to
                  Mr.
                  Ernesto Bruggia, under the Bank’s 2004 Indexed Stock Option Plan. Options
                  expected to vest under this plan have no intrinsic value as of
                  December
                  31, 2007 because the options’ strike price was greater than the quoted
                  market price of the Bank’s common stock at that date.
 (4)
              In
                  addition, an aggregate amount of 60,297 stock options and 13,743
                  restricted stock units were granted to other employees of the Bank
                  (other
                  than the named executive officers) on February 12, 2008.
 (5)
              Mr.
                  Carlos Yap, who resigned as the Bank’s Chief Financial Officer on February
                  22, 2008, is eligible to exercise 15,163 stock options, granted
                  under the
                  Bank’s 1995 and 1999 Stock Option Plans, by May 22, 2008. 6,000 stock
                  options granted to Mr. Yap under these same plans were forfeited
                  on
                  February 6, 2008. In addition, Mr. Yap is eligible to exercise
                  10,498
                  indexed stock options by June 1, 2008. 16,076 indexed stock options
                  granted to Mr. Yap under this plan were forfeited on February 22,
                  2008.
 (6)
              The
                  executive and non-executive employees of Bladex Asset Management,
                  Inc. are
                  not eligible to receive grants under the 2008 Plan.
  47
  The
        following table sets forth information regarding ownership of the Bank’s shares
        by members of its Board, including restricted shares, indexed stock options,
        and
        stock options, held
        as
        of December 31, 2007.
  **Name
                  of**
                **Director**
              
              **Number of**
                **Shares**
                **Beneficially**
                **Owned as of**
                **Dec. 31, 2007****(**1)
              
              **Number of**
                **Shares that may**
                **be Acquired**
                **within 60 days**
                **of Dec. 31, 2007**
              
              **Stock Options**
              
              **Restricted**
                **Shares**(2)
              
              **Indexed Stock**
                **Options**Guillermo
                  Güémez García(3)
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Santiago
                  Perdomo Maldonado(4)
              
              
              5,191
              
              
              0
              
              
              2,119
              
              
              5,191
              
              
              5,960José
                  Maria Rabelo(5)
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Will
                  C. Wood
              
              
              7,191
              
              
              0
              
              
              2,119
              
              
              5,191
              
              
              5,960Mario
                  Covo
              
              
              5,191
              
              
              0
              
              
              2,119
              
              
              5,191
              
              
              5,960Herminio
                  Blanco
              
              
              4,186
              
              
              0
              
              
              2,119
              
              
              4,186
              
              
              5,960William
                  Hayes
              
              
              12,986
              
              
              0
              
              
              2,119
              
              
              4,186
              
              
              5,960Maria
                  da Graça França
              
              
              2,341
              
              
              0
              
              
              0
              
              
              2,341
              
              
              0Gonzalo
                  Menéndez Duque
              
              
              7,788
              
              
              0
              
              
              3,179
              
              
              7,788
              
              
              8,942**Total**
              
              
              **44,874**
              
              
              **0**
              
              
              **13,774**
              
              
              **34,074**
              
              
              **38,742**
 ______________________
  (1)
              Includes
                  Class E shares held under the Board Restricted Stock Plan.
 (2)
              Under
                  the Board Restricted Stock Plan, directors receiving restricted
                  shares
                  will have all the rights of stockholders of the Bank, except that
                  all such
                  shares will be subject to restrictions on transferability, which
                  will
                  lapse on the fifth anniversary of the award date.
 (3)
              5,191
                  Class E shares corresponding to Mr. Güémez’s entitlement under the Board
                  Restricted Stock Plan have been issued to his employer, Banco de
                  Mexico.
                  In addition, an aggregate number of 2,119 stock options to which
                  Mr.
                  Güémez was entitled under the 2006 Stock Option Plan have been granted
                  to
                  Banco de Mexico.
 (4)
              Mr.
                  Santiago Perdomo served as a director until April 14, 2008.
 (5)
              2,341
                  Class E shares corresponding to Mr. Rabelo’s entitlement under the Board
                  Restricted Stock Plan have been issued to his employer, Banco do
                  Brasil.
 
 For
        additional information regarding stock options granted to executive officers
        and
        directors, see Item 18, “Financial Statements”, note 14.
  **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 at the Board level and
        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 Listed Company
        Manual/Corporate Governance Rules of the New York Stock Exchange (the “NYSE”) on
        its website (www.bladex.com/InvestorsCenter/Corporate Governance). 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.
  Shareholders,
        employees of the Bank, and other interested parties may communicate directly
        with the Board by corresponding to the address below. Relevant 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
 Calle
        50
        and Aquilino de la Guardia
 P.O.
        Box
        0819-08730
 Panama
        City, Republic of Panama
  In
        addition, Bladex has selected EthicsPoint, an on-line reporting system, 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.bladex.com/Investors Center/Corporate Governance) under “Corporate
        Governance - Private Filing of Reports”.
  48
  **Information
        as to Non-Executive Officers of the Board (“Dignatarios”)**
  The
        following table sets forth the names, countries of citizenship, and ages
        of the
        Bank’s non-executive officers (“ *Dignatarios”)* ,
        and
        their current office or position with other institutions. *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).
 
 **Name**
              
              **Country
                  of Citizenship**
              
              **Position
                  held by*****Dignatario***
                **with
                  the Bank**
              
              **Age**Gonzalo
                  Menéndez Duque1
                Director
                Banco
                  de Chile, Chile
              
              Chile
              
              Chairman
                  of the Board
              
              59Maria
                  da Graça França
              
              Brazil
              
              Treasurer
              
              59Ricardo
                  Manuel Arango
                Partner
                Arias,
                  Fábrega & Fábrega
              
              Panama
              
              Secretary
              
              47
 ______________________
  1 Mr.
        Gonzalo Menéndez Duque was re-elected Chairman in April 2008 by the
        Board.
 
 *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, 2007, the Board held eleven meetings.
        Each director attended an average of 98% of the total number of Board meetings
        held during the fiscal year ended December 31, 2007. Each director also attended
        the prior year’s annual meeting.
  The
        following table sets forth the five 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,
        2007:
  **Committee**
              
              **Number of members**
              
              **Total number of meetings held**Audit and
                  Compliance Committee
              
              
              4
              
              
              10Credit
                  Policy and Risk Assessment Committee
              
              
              5
              
              
              5Assets
                  and Liabilities Committee
              
              
              5
              
              
              12Nomination
                  and Compensation Committee
              
              
              4
              
              
              5Business
                  Committee1
              
              
              5
              
              
              0
 ______________________
  1
        Established in February of 2008.
 
 The
        Bank
        has included the charters of its four committees established by the Board
        on its
        website at www.bladex.com/Investors Center/Corporate Governance/Committees
        of
        the Board of Directors-Charters.
   *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
        independent directors. As of April 15, 2008 the current members of the Audit
        and
        Compliance Committee are Will C. Wood (Chairman of the Committee), Gonzalo
        Menéndez Duque, Maria da Graça França and Roberto Feletti.
  The
        Board
        has determined that all members of the Audit and Compliance Committee are
        independent directors, as defined under the terms defined by applicable laws
        and
        regulations, including rules promulgated by the SEC under the Sarbanes-Oxley
        Act
        of 2002, Section 303A of the rules of the NYSE, and Agreement No. 04-2001
        of the
        Superintendency of Banks. In addition, at least one of the members of the
        committee is a “financial expert,” as defined in the rules enacted by the SEC
        under the Sarbanes-Oxley Act of 2002. The Audit and Compliance Committee’s
        financial expert is Gonzalo Menéndez Duque.
  The
        purpose of the Audit and Compliance Committee is to provide assistance to
        the
        Board in fulfilling its oversight responsibilities regarding the processing
        of
        the Bank’s financial information, the integrity of the Bank’s financial
        statements, the Bank’s system of internal controls over financial reporting, the
        process of internal and external audit, the Bank’s corporate governance,
        compliance with legal and regulatory requirements and the Bank’s Code of
        Ethics.
  49




The
      Audit
      and Compliance Committee meets at least six times a year, as required by the
      Superintendency of Banks, or more often if the circumstances so require. During
      the fiscal year ended December 31, 2007, the Audit and Compliance Committee
      met
      ten times.




The
      Audit
      and Compliance Committee, in its capacity as a committee of the Board, is
      directly responsible for the appointment, compensation, and oversight of the
      Bank’s independent auditors, including the resolution of disagreements regarding
      financial reporting between the Bank’s management and such independent auditors.
      The Bank’s independent auditors are required to report directly to the Audit and
      Compliance Committee.




The
      Audit
      and Compliance Committee pre-approves all audit and non-audit services. The
      Charter of the Audit and Compliance Committee requires an annual self-evaluation
      of the committee’s performance. The Audit and Compliance Committee’s Charter may
      be found on the Bank’s website at www.bladex.com /Investors
      Center/Corporate Governance/Committees of the Board of
      Directors-Charters.




See
      Item
      16A, “Audit and Compliance Committee Financial Expert” and Item 16C, “Principal
      Accountant Fees and Services”.




*Credit
      Policy and Risk Assessment Committee (“CPER”)*




The
      CPER
      is a standing committee of the Board. No member of the CPER can be an employee
      of the Bank. The Board has determined that all members of the CPER are
      independent. The current members of the CPER are Guillermo Güémez García
      (Chairman), Gonzalo Menéndez Duque, Will C. Wood, Herminio Blanco, and José
Maria Rabelo.




The
      CPER
      is in charge of reviewing and recommending to the Board all credit policies
      and
      procedures related to the management of the Bank’s risks. It also reviews the
      quality and profile of the Bank’s credit facilities, and the risk levels that
      the Bank is willing to assume. The CPER’s responsibilities also include, among
      others, the review of operational and legal risks, the presentation for Board
      approval of country limits and limits exceeding delegated authority, and the
      approval of exemptions to credit policies.




The
      CPER
      performs its duties through the review of periodic reports from Risk Management,
      and by way of its interaction with the Chief Risk Officer and other members
      of
      the Bank’s management team. The CPER meets at least four times per year. During
      the fiscal period ended December 31, 2007, the CPER held five meetings.




The
      Credit Policy and Risk Assessment Committee’s Charter may be found on the Bank’s
      website at www.bladex.com /Investors
      Center/Corporate Governance/Committees of the Board of
      Directors-Charters.




*Assets
      and Liabilities Committee*




The
      Assets and Liabilities Committee is a standing committee of the Board. No member
      of the Assets and Liabilities Committee can be an employee of the Bank. The
      Board has determined that all members of the Assets and Liabilities Committee
      are independent directors. The current members of the Assets and Liabilities
      Committee are Mario Covo (Chairman), Herminio Blanco, Guillermo Güémez García,
      William Hayes, and José Maria Rabelo.




The
      Assets and Liabilities Committee is responsible for reviewing and recommending
      to the Board all policies and procedures related to the Bank’s management of
      assets and liabilities to meet profitability, liquidity, and market risk control
      objectives. As part of its responsibilities, the committee reviews and
      recommends to the Board, among others, policies related to the Bank’s funding,
      interest rate and liquidity gaps, investment of liquidity, derivative positions,
      funding strategies, and market risk.




The
      Assets and Liabilities Committee carries out its duties by reviewing periodic
      reports that it receives from management, and by way of its interaction with
      the
      Executive Vice President-Senior Managing Director, Treasury & Capital
      Markets and other members of the Bank’s management team. The committee meets at
      least four times per year. During the fiscal year ended December 31, 2007,
      the committee held twelve meetings.




The
      Assets and Liabilities Committee’s Charter may be found on the Bank’s website at www.bladex.com /Investors
      Center/Corporate Governance/Committees of the Board of Directors-Charters.




50


*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, under the terms defined by applicable
      laws and regulations, including rules promulgated by the SEC under the
      Sarbanes-Oxley Act of 2002, Section 303A of the rules of the NYSE, and Agreement
      No.04-2001 of the Superintendency of Banks. As of April 15, 2008, the current
      members of the Nomination and Compensation Committee are Maria da Graça França
      (Chairman), Mario Covo, William Hayes, and Roberto Feletti.




The
      Nomination and Compensation Committee meets at least four times per year. During
      the fiscal year ended December 31, 2007, the committee held five
      meetings.




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 executive
      officers and counseling on succession planning for executive officers; by
      recommending compensation for Board members and committee members, including
      cash and equity compensation; by recommending compensation for executive
      officers 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
      executive officers on issues related to the Bank’s personnel.




The
      Nomination and Compensation Committee will consider qualified director
      candidates recommended by stockholders. All director candidates will be
      evaluated in the same manner regardless of how they are recommended, including
      recommendations by stockholders. For director nominees, the committee considers
      candidate qualifications and other factors, including, but not limited to,
      diversity in background and experience, industry knowledge, educational level
      and the needs of the Bank. Stockholders can mail any such recommendations and
      an
      explanation of the qualifications of such candidates to the Secretary of the
      Bank at Calle 50 and Aquilino de la Guardia, P.O. Box 0819-08730, Panama City,
      Republic of Panama.




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




The
      Nomination and Compensation Committee’s Charter may be found on the Bank’s
      website at www.bladex.com /Investors
      Center/Corporate Governance/Committees of the Board of
      Directors-Charters.




Mr.
      Rivera is the only executive officer that serves as a member of the Board.
      None
      of the Bank’s executive officers serves as a director or a member of the
      Nomination and Compensation Committee, or any other committee serving an
      equivalent function, of any other entity that has one or more of its executive
      officers serving as a member of the Board or the Nomination and Compensation
      Committee. None of the members of the Nomination and Compensation Committee
      has
      ever been an employee of the Bank.




*Business
      Committee*




The
      Business Committee is a standing committee of the Board that was established
      in
      February 2008. The Board has determined that all members of the Business
      Committee are independent directors. The current members of the Business
      Committee are William Hayes (Chairman), Gonzalo Menéndez Duque, Mario Covo,
      Herminio Blanco and José Maria Rabelo.




The
      Business Committee is primarily responsible for reviewing commercial and
      treasury business development and providing strategic guidance.




The
      Business Committee carries out its duties by supporting the business divisions
      in the achievement of their business objectives, following up on business
      strategies articulated by the Board of Directors, evaluating new business ideas
      and their profitability and focusing on continued improvement in business
      efficiency through adequate management of capital and resources. The committee
      will meet at least four times per year.




The
      Business Committee’s Charter, once approved in its final form by the Board, will
      be found on the Bank’s website at www.bladex.com /Investors
      Center/Corporate Governance/Committees of the Board of Directors-Charters.




51




*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 for services rendered by the Advisory Council
      during 2007 amounted to $15,000. During the fiscal year ended December 31,
      2007,
      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**Roberto
                Teixeira da Costa
            
            
            Board
                Member
              Sul
                America, S.A.
            
            
            Brazil
            
            
            73Carlos
                Martabit
            
            
            General
                Manager, Finance Division
              Banco
                del Estado de Chile
            
            
            Chile
            
            
            54Alberto
                Motta, Jr
            
            
            President
              Inversiones
                Bahía Ltd.
            
            
            Panama
            
            
            61Enrique
                Cornejo
            
            
            Secretary
              Ministry
                of Housing, Construction and Sanitation, Peru
            
            
            Peru
            
            
            51Santiago
                Perdomo(1)
            
            
            President
              Banco
                Colpatria - Red Multibanca Colpatria
            
            
            Colombia
            
            
            50


(1) As of
        April 15, 2008, Mr. Perdomo was included as part of the Advisory
        Council.




**D.**  **Employees** ****




As
      of
      December 31, 2007, the total number of permanent employees was 188, which were
      geographically distributed as follows: Head Office in Panama: 157; New York
      Agency: 8; Bladex Asset Management: 3; Representative Office in Argentina:
      3;
      Representative Office in Brazil: 10; Representative Office in Mexico: 4; and
      an
      International Administrative Office in Miami: 3.




**E.**  **Share
      Ownership** ****




See
      Item
      6, “Directors, Senior Management and Employees/Compensation/Beneficial
      Ownership”.




**Item
      7.**  **Major
      Shareholders and Related Party Transactions**




**A.**  **Major
      Shareholders** ****




As
      of
      December 31, 2007, 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 10% of the total outstanding shares of voting
      capital stock of the Bank .




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 Bank’s voting
      stock at December 31, 2007 :




52




**At December 31, 2007****Number of Shares**
            
            **% of Class**
            
            **% of Total****Class A**Banco
                de la Nación Argentina
              Bartolomé
                Mitre 326
              1036
                Buenos Aires, Argentina
            
            
            1,045,348.00
            
            
            16.5
            
            
            2.9Banco
                do Brasil1
              SBS
                Cuadra 1-Bloco A
              CEP
                70.0070-100
              Brasilia,
                Brazil
            
            
            974,551.00
            
            
            15.4
            
            
            2.7Banco
                de Comercio Exterior de Colombia
              Edif.
                Centro de Comercio Internacional
              Calle
                28 No. 13A-15
              Bogotá,
                Colombia
            
            
            488,547.00
            
            
            7.7
            
            
            1.3Banco
                de la Nación (Perú)
              Ave.
                Republica de Panamá 3664
              San
                Isidro, Lima, Perú
            
            
            446,556.00
            
            
            7.0
            
            
            1.2Banco
                Central del Paraguay
              Federación
                Rusa y Sargento Marecos
              Asunción,
                Paraguay
            
            
            434,658.00
            
            
            6.9
            
            
            1.2Banco
                Central del Ecuador
              Ave.
                Amazonas entre Juan Pablo Sanz y Atahualpa
              Quito,
                Ecuador
            
            
            431,217.00
            
            
            6.8
            
            
            1.2Banco
                del Estado de Chile
              Ave.
                Libertador Bernardo O’Higgins 1111
              Santiago,
                Chile
            
            
            323,412.75
            
            
            5.1
            
            
            0.9Sub-total
                shares of Class A Common Stock
            
            
            4,144,289.75
            
            
            65.4
            %
            
            11.4
            %**Total
                Shares of Class A Common Stock**
            
            
            **6,342,189.16**
            
            
            **100.0**
            **%**
            
            **17.4**
            **%****Class
                B**
            
            
            **Number of Shares**
            
            
            **% of Class**
            
            
            **% of Total**Banco de
                la Provincia de Buenos Aires.
              San
                Martin 137
              C1004AAC
                Buenos Aires, Argentina
            
            
            884,460.98
            
            
            33.2
            
            
            2.4Banco
                de la Nación Argentina
              Bartolomé
                Mitre 326
              1036
                Buenos Aires, Argentina
            
            
            295,944.50
            
            
            11.1
            
            
            0.8The
                Korea Exchange Bank
              181,
                Euljiro 2GA
              Jengu,
                Seoul, Korea
            
            
            147,172.50
            
            
            5.5
            
            
            0.4Sub-total
                shares of Class B Common Stock
            
            
            1,327,577.98
            
            
            49.8
            %
            
            3.6
            %**Total
                Shares of Class B Common Stock**
            
            
            **2,660,846.63**
            
            
            **100.0**
            **%**
            
            **7.3**
            **%****Class
                E**2
            
            
            **Number of Shares**
            
            
            **% of Class**
            
            
            **% of Total**Oppenheimer
                Funds Inc
              6803
                South Tucson Way
              Centennial,
                Colorado 80112-3924
            
            
            3,588,615.00
            
            
            13.1
            
            
            9.9Brandes
                Investment Partners, LP
              11988
                El Camino Real, Suite 500
              San
                Diego, California 92130
            
            
            3,403,361.00
            
            
            12.4
            
            
            9.4Arnhold
                and S. Bleichroeder Advisers, LLC
              1345
                Avenue of the Americas
              New
                York, New York 10105-4300
            
            
            2,480,070.00
            
            
            9.1
            
            
            6.8Mondrian
                Investment Partners Ltd
              5thFloor, 10 Gresham Street
              London,
                EC2V 7JD
            
            
            1,862,300.00
            
            
            6.8
            
            
            5.1Sub-total
                shares of Class E Common Stock
            
            
            11,334,346.00
            
            
            41.4
            %
            
            31.2
            %**Total
                Shares of Class E Common Stock**
            
            
            **27,367,113.00**
            
            
            **100.0**
            **%**
            
            **75.2**
            **%****Total
                Shares of Common Stock**
            
            
            **36,370,148.79**
            
            
            
            
            
            **100.0**
            **%**







1 Does
      not
      include an aggregate of 2,341 Class E shares corresponding to Mr. José Maria
      Rabelo’s entitlement under the Board Restricted Stock Plan issued to his
      employer, Banco do Brasil.


2  Source:
      Schedule 13F filings with the SEC dated December 31, 2007.


53




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 (1) to dissolve and liquidate the Bank,
                (2) to
                amend certain material provisions of the Amended and Restated Articles
                of
                Incorporation, (3) to merge or consolidate the Bank with another
                entity
                and (4) to authorize the Bank to engage in activities other than
                those
                described in its Amended and Restated Articles of Incorporation;


·
            The
                Class E 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 shares do not;
                and ·
            All 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, 2007, the Bank did not have any outstanding credit facility with
      related parties as defined by the Superintendency of Banks.




**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
      Board’s policy is to declare and distribute quarterly cash dividends on the
      Bank’s common stock, and, from time to time has declared special dividends to
      its stockholders. Dividends are declared at the Board’s discretion.




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




**Payment date**
            
            **Record date**
            
            **Dividend per share**January 18, 2007
            
            
            January 8, 2007
            
            $
            0.19April 10, 2007
            
            
            March 30, 2007
            
            $
            0.22July 6, 2007
            
            
            June 26, 2007
            
            $
            0.22October 5, 2007
            
            
            September 25, 2007
            
            $
            0.22January 17, 2008
            
            
            January 7, 2008
            
            $
            0.22April 4, 2008
            
            
            March 25, 2008
            
            $
            0.22




On
      February 2007, the Board declared an increase in the quarterly dividend from
      $0.1875 per share to $0.22 per share.




54




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
            
            $
            0.40November 15, 2004
            
            
            November 8, 2004
            
            $
            1.90May 16, 2005
            
            
            April 29, 2005
            
            $
            2.15November 15, 2005
            
            
            October 31, 2005
            
            $
            2.18May 15, 2006
            
            
            April 28, 2006
            
            $
            2.22





**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 NYSE under the symbol “BLX”. The following table shows
      the high and low sales prices of the Class E shares on the NYSE for the periods
      indicated.




**Price per Class E Share (in $)****High**
            
            **Low**2003
            
            
            19.95
            
            
            4.012004
            
            
            20.00
            
            
            14.002005
            
            
            25.50
            
            
            15.342006
            
            
            18.70
            
            
            14.592007
            
            
            23.17
            
            
            15.522006:First
                Quarter
            
            
            18.70
            
            
            15.65Second
                Quarter
            
            
            17.44
            
            
            14.59Third
                Quarter
            
            
            16.90
            
            
            15.38Fourth
                Quarter
            
            
            17.05
            
            
            15.102007:First
                Quarter
            
            
            17.12
            
            
            15.52Second
                Quarter
            
            
            21.60
            
            
            16.50Third
                Quarter
            
            
            23.17
            
            
            16.53Fourth
                Quarter
            
            
            21.29
            
            
            15.812008:First
                Quarter
            
            
            16.53
            
            
            13.332007:December
            
            
            18.76
            
            
            15.812008:March
            
            
            16.53
            
            
            14.33February
            
            
            16.34
            
            
            13.44March
            
            
            15.94
            
            
            13.33April
            
            
            19.46
            
            
            15.50May
            
            
            19.14
            
            
            16.39




**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 NYSE), represent
      approximately 75% of the total shares of the Bank’s common stock issued and
      outstanding at December 31, 2007. 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.




55




**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 SEC on February
      24, 2003, and Item 10.B of the Form 20-F for the fiscal year ended December
      31,
      2004 filed with the SEC on June 23, 2005 are referred to and incorporated by
      reference into this Item 10.B.




**C.**  **Material
      Contracts** ****




The
      Bank
      has not entered into any material contract outside the ordinary course of
      business during the two-year period immediately preceding the date of this
      Annual Report. See Item 18, “Financial Statements”, note 17.




**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 Class A 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.




56


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). If a partnership (including
      for
      this purpose any entity treated as a partnership for U.S. federal income tax
      purposes) is a beneficial owner of Class E shares, the U.S. federal income
      tax
      consequences to a partner in the partnership will generally depend on the status
      of the partner and the activities of the partnership. A holder of Class E shares
      that is a partnership and the partners in such partnership should consult their
      own tax advisors regarding the U.S. federal income tax consequences of the
      ownership and disposition of Class E shares.




*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 Item 10,
“Additional Information/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
      nor in 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, “general category
      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.


57




*Taxation
      of Capital Gains*




Subject
      to the “Passive Foreign Investment Company Status” discussion below, gain or
      loss realized by a U.S. Holder on the sale or other disposition of Class E
      shares will generally 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.




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. However, 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
      extended to a foreign corporation that is not licensed to do business as a
      bank
      in the United States so long as such foreign corporation is an “active foreign
      bank.” 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 active
      foreign 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) an 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.




58


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.




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.


59




*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 to the extent such dividends are paid from income derived
      by
      the Bank from Panamanian sources.




*Taxation
      of Capital Gains*




Inasmuch
      as the Bank’s Class E shares are listed on the NYSE, any capital gains realized
      by an individual or a corporation, regardless of its nationality or residency,
      on the sale or other disposition outside of Panama, would be exempted from
      capital gains taxes or any other taxes in Panama.




**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
      Mr. Jaime Celorio, 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. Celorio at 011-507-210-8563.
      Written requests may also be faxed to Mr. Celorio at 011-507-269-6333 or sent
      via e-mail to jcelorio@bladex.com. Information is also available on the Bank’s
      website at: www.bladex.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 meets on a regular basis and monitors and controls 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 investment 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 Item 5, “Operating and Financial Review and Prospects/Liquidity and
      Capital Resources” and Item 18, “Financial Statements”, notes 2 (q)  and
      18.




60


For
      information regarding derivative financial instruments see Item 18, “Financial
      Statements”, notes 2 (q) and 18. For information regarding investment
      securities, see Item 4, “Information on the Company/Business Overview/Investment
      Securities”, and Item 18, “Financial Statements”, note 5.






The
      table
      below lists for each of the years 2008 to 2012 the notional amounts and weighted
      interest rates, as of December 31, 2007, for derivative financial instruments
      and other financial instruments that are sensitive to changes in interest rates:
      the Bank’s investment securities, loans, borrowings and placements, interest
      rate swaps, cross currency swaps, forward currency exchange agreements, and
      trading assets and liabilities.






**Expected maturity dates****2008**
            
            **2009**
            
            
            **2010**
            
            
            **2011**
            
            
            **2012**
            
            
            **There-**
              **after**
            
            
            **Without**
              **Maturity**
            
            
            **Total**
              **2007**
            
            
            **Fair Value**
              **2007**($ Equivalent in thousand)**NON-TRADING****ASSETS****Investment
                Securities**Fixed
                rateUS
                Dollars
            
            15,000
            
            24,000
            
            
            40,000
            
            
            33,296
            
            
            30,000
            
            
            245,700
            
            
            
            
            
            387,996
            
            
            437,038Average
                fixed rate
            
            4.38
            %
            8.69
            %
            
            7.63
            %
            
            9.24
            %
            
            9.79
            %
            
            9.18
            %
            
            
            
            
            8.86
            %Variable
                rateUS
                Dollars
            
            5,000
            
            
            
            
            11,000
            
            
            
            
            
            5,000
            
            
            10,000
            
            
            
            
            
            31,000
            
            
            31,322Average
                variable rate
            
            5.82
            %
            
            
            
            6.29
            %
            
            
            
            
            5.72
            %
            
            6.68
            %
            
            
            
            
            6.25
            %**Loans**Fixed
                rateUS
                Dollars
            
            1,661,392
            
            1,949
            
            
            34,245
            
            
            21,886
            
            
            20,806
            
            
            1,966
            
            
            
            
            
            1,742,244
            
            
            1,708,544Average
                fixed rate
            
            6.05
            %
            7.06
            %
            
            7.42
            %
            
            7.07
            %
            
            6.29
            %
            
            7.03
            %
            
            
            
            
            6.09
            %Mexican
                Peso
            
            30,334
            
            33,564
            
            
            37,143
            
            
            12,255
            
            
            
            
            
            
            
            
            
            
            
            113,296
            
            
            125,160Average
                fixed rate
            
            10.15
            %
            10.17
            %
            
            10.18
            %
            
            9.32
            %
            
            
            
            
            
            
            
            
            
            
            10.08
            %Variable
                rateUS
                Dollars
            
            813,945
            
            362,788
            
            
            195,486
            
            
            200,230
            
            
            205,084
            
            
            75,347
            
            
            
            
            
            1,852,880
            
            
            1,819,231Average
                variable rate
            
            6.16
            %
            6.44
            %
            
            6.64
            %
            
            6.31
            %
            
            6.37
            %
            
            6.97
            %
            
            
            
            
            6.34
            %Mexican
                Peso
            
            18,322
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            18,322
            
            
            16,984Average
                variable rate
            
            9.89
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9.89
            %Euro
            
            1,091
            
            1,354
            
            
            1,648
            
            
            820
            
            
            183
            
            
            
            
            
            
            
            
            5,096
            
            
            5,059Average
                variable rate
            
            4.89
            %
            5.01
            %
            
            4.91
            %
            
            5.12
            %
            
            5.58
            %
            
            
            
            
            
            
            
            4.99
            %**LIABILITIES****Borrowings
                and Placements**(1)Fixed
                rateUS
                Dollars
            
            1,267,300
            
            35,000
            
            
            30,203
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,332,503
            
            
            1,333,315Average
                fixed rate
            
            5.31
            %
            5.03
            %
            
            4.52
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            5.28
            %Mexican
                Peso
            
            32,783
            
            32,783
            
            
            32,782
            
            
            11,227
            
            
            
            
            
            
            
            
            
            
            
            109,575
            
            
            122,157Average
                fixed rate
            
            8.31
            %
            8.31
            %
            
            8.31
            %
            
            8.23
            %
            
            
            
            
            
            
            
            
            
            
            8.30
            %Peruvian
                Soles
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            41,048
            
            
            
            
            
            41,048
            
            
            40,442Average
                fixed rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6.50
            %
            
            
            
            
            6.50
            %Variable
                rateUS
                Dollars
            
            594,710
            
            103,000
            
            
            184,190
            
            
            
            
            
            150,000
            
            
            
            
            
            
            
            
            1,031,900
            
            
            1,032,209Average
                variable rate
            
            5.52
            %
            5.41
            %
            
            5.47
            %
            
            
            
            
            5.32
            %
            
            
            
            
            
            
            
            5.47
            %**DERIVATIVES
                INSTRUMENTS****Interest
                Rate Swaps**US
                Dollars variable to fixed
            
            
            
            24,000
            
            
            40,000
            
            
            33,296
            
            
            50,000
            
            
            245,700
            
            
            
            
            
            392,996
            
            
            (14,415
            )Average
                pay rate
            
            
            
            8.69
            %
            
            7.63
            %
            
            9.24
            %
            
            8.25
            %
            
            9.18
            %
            
            
            
            
            8.88
            %Average
                receive rate
            
            
            
            8.62
            %
            
            7.58
            %
            
            9.5
            %
            
            8.64
            %
            
            9.24
            %
            
            
            
            
            8.98
            %**Cross
                Currency Swaps**Receive
                US Dollars
            
            1,016
            
            1,109
            
            
            1,432
            
            
            716
            
            
            162
            
            
            
            
            
            
            
            
            4,435
            
            
            (622
            )US
                Dollars fixed rate
            
            6.43
            %
            6.45
            %
            
            6.45
            %
            
            6.45
            %
            
            6.47
            %
            
            
            
            
            
            
            
            6.45
            %Pay
                US Dollars
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            41,020
            
            
            
            
            
            41,020
            
            
            (857
            )US
                Dollars fixed rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5.35
            %
            
            
            
            
            5.35
            %Pay
                EUR
            
            1,016
            
            1,109
            
            
            1,432
            
            
            716
            
            
            162
            
            
            
            
            
            
            
            
            4,435EUR
                fixed rate
            
            5.46
            %
            5.49
            %
            
            5.48
            %
            
            5.51
            %
            
            5.58
            %
            
            
            
            
            
            
            
            5.49
            %Received
                Peruvian Soles
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            41,020
            
            
            
            
            
            41,020Peruvian
                Soles fixed rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            6.50
            %
            
            
            
            
            6.50
            %




61




**Expected maturity dates****2008**
            
            **2009**
            
            
            **2010**
            
            
            **2011**
            
            
            **2012**
            
            
            **There-**
              **after**
            
            
            **Without**
              **Maturity**
            
            
            **Total**
              **2007**
            
            
            **Fair Value**
              **2007**


**Forward Currency Exchange Agreements**Receive
                US Dollars/Pay Mexican Pesos
            
            19,196
            
            2,235
            
            
            4,749
            
            
            982
            
            
            
            
            
            
            
            
            
            
            
            27,162
            
            
            (885
            )Average
                exchange rate
            
            11.08
            
            11.79
            
            
            11.83
            
            
            11.94
            
            
            
            
            
            
            
            
            
            
            
            11.30Pay
                US Dollars/Receive Mexican Pesos
            
            853
            
            27
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            880
            
            
            2Average
                exchange rate
            
            11.03
            
            11.23
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            11.04**TRADING****Trading
                Assets****Investments
                in securities****Debt
                securities:**Fixed
                rateUS
                Dollars
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,000
            
            
            
            
            
            15,000
            
            
            16,097Average
                fixed rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5.54
            %
            
            
            
            
            5.54
            %**Equities:**US
                Dollars
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            36,315
            
            
            36,315
            
            
            36,315**Credit
                default swaps**US
                Dollars
            
            10,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,000
            
            
            20Average
                fixed rate
            
            0.8
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            0.8
            %US
                Dollars
            
            (10,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (10,000
            )
            
            10Average
                fixed rate
            
            1.4
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1.4
            %**Interest
                rate swaps**Brasilian
                Real fixed to floating
            
            
            
            
            
            
            
            
            
            
            
            
            50,837
            
            
            
            
            
            
            
            
            50,837
            
            
            155Average
                paying rate
            
            
            
            
            
            
            
            
            
            
            
            
            12.8
            %
            
            
            
            
            
            
            
            12.8
            %Average
                receiving rate
            
            
            
            
            
            
            
            
            
            
            
            
            11.1
            %
            
            
            
            
            
            
            
            11.1
            %**Trading
                Liabilities****Securities
                sold short**Fixed
                rateUS
                Dollars
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            31,860
            
            
            
            
            
            31,860
            
            
            31,734Average
                fixed rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8.48
            %
            
            
            
            
            8.48
            %**Equities:**US
                Dollars
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            57,863
            
            
            57,863
            
            
            57,863**Forward
                currency exchange agreements**Receive
                US Dollars/Pay Brazilian Reales
            
            (171,173
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (171,173
            )
            
            788Average
                exchange rate
            
            1.794
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1.794Pay
                US Dollars/Receive Brazilian Reales
            
            171,173
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            171,173Average
                exchange rate
            
            1.793
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1.793Receive
                US Dollars/Pay Mexican Pesos
            
            (20,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (20,000
            )
            
            -Average
                exchange rate
            
            10.93
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10.93Pay
                US Dollars/Receive Mexican Pesos
            
            20,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,000
            
            
            -Average
                exchange rate
            
            10.93
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10.93Receive
                US Dollars/Pay Colombian Pesos
            
            (89,849
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (89,849
            )
            
            326Average
                exchange rate
            
            2,042
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,042Pay
                US Dollars/Receive Colombian Pesos
            
            89,849
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            89,849Average
                exchange rate
            
            2,034
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,034Receive
                US Dollars/Pay Chilean Pesos
            
            (10,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (10,000
            )
            
            41Average
                exchange rate
            
            500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            500Pay
                US Dollars/Receive Chilean Pesos
            
            10,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,000Average
                exchange rate
            
            500
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            500**Credit
                default swaps**US
                Dollars
            
            
            
            
            
            
            3,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3,000
            
            
            13Average
                fixed rate
            
            
            
            
            
            
            0.50
            %
            
            
            
            
            
            
            
            
            
            
            
            
            
            0.50
            %




(1) Borrowings
      and placements include securities sold under repurchase agreements, and short
      and long-term borrowings and debt.




62


Although
      certain assets and liabilities may have similar maturities or periods of
      re-pricing, they may be impacted in varying degrees to changes in market
      interest rates. The maturity of certain types of assets and liabilities may
      fluctuate in advance of changes in market rates, while the maturity of other
      types of assets and liabilities may lag behind changes in market rates. In
      the
      event of a change in interest rates, prepayment and early withdrawal levels
      could deviate significantly from the maturities assumed in calculating the
      table
      above.





For
      information regarding the fair value disclosure of financial instruments, see
      Item 18, “Financial Statements”, note 20.




***Foreign
      Exchange Risk Management and Sensitivity***




The
      Bank
      accepts deposits and raises funds principally in U.S. dollars, and makes loans
      mostly in U.S. dollars. Currency exchange risk arises when the Bank accepts
      deposits or raises funds in one currency and lends or invests the proceeds
      in
      another. Whenever possible, foreign currency-denominated assets are funded
      with
      liability instruments denominated in the same currency. In those cases where
      assets were funded in different currencies, forward foreign exchange or
      cross-currency swap contracts were used to fully hedge the risk resulting from
      this cross currency funding. During 2007, the Bank did not hold significant
      open
      foreign exchange positions, except for trading purposes. The Fund invests in
      securities denominated in foreign currency as well as in forward foreign
      currency exchange contracts, for trading purposes. At December 31, 2007, the
      Bank had an equivalent of $288 million of non-dollar financial liabilities,
      which matched funded asset transactions in the same currency.




**Item
      12.**  **Description
      of Securities Other than Equity Securities**




Not
      applicable.




**PART
      II**




**Item
      13.**  **Defaults,
      Dividend Arrearages and Delinquencies** ****




None.




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




None.




**Item
      15.**  **Controls
      and Procedures** ****




**a)
      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 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 accumulated and
      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 the 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, 2007. 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.


63






**b)
      Management’s Annual Report on Internal Control Over Financial
      Reporting**




Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting as such term is defined in Exchange Act Rule 13a-15(f)
      or
      15d-15(f). With the participation and supervision of the Bank ́s CEO and CFO, its
      management has assessed the effectiveness of its internal control over financial
      reporting as of December 31, 2007.





The
      assessment includes the documentation and understanding of the Bank’s internal
      control over financial reporting. Management evaluated the design effectiveness
      and tested the operational effectiveness of internal controls over financial
      reporting to form its conclusion.





Management’s
      evaluation was based on criteria set forth by the Committee of Sponsoring
      Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
      Framework.





Internal
      control over financial reporting is a process designed to provide reasonable
      assurance regarding the reliability of financial reporting and the preparation
      of financial statements for external purposes in accordance with generally
      accepted accounting principles. Bank ́s internal control over financial reporting
      includes those policies and procedures that:





(1)
      pertain to the maintenance of records that, in reasonable detail, accurately
      and
      fairly reflect the Bank ́s transactions and dispositions of its assets;





(2)
      provide reasonable assurance that transactions are recorded as necessary to
      permit preparation of financial statements in accordance with generally accepted
      accounting principles, and that the Bank ́s receipts and expenditures are being
      made only in accordance with authorizations of the Bank ́s management and the
      Board; and





(3)
      provide reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of the Bank’s assets that could
      have a material effect on its financial statements.





Because
      of its inherent limitations, internal control over financial reporting
      determined to be effective can provide only reasonable assurance with respect
      to
      financial statement preparation and may not prevent or detect all misstatements.
      Also, projections of any evaluation of effectiveness to future periods are
      subject to the risk that controls may become inadequate because of changes
      in
      conditions, or that the degree of compliance with the policies or procedures
      may
      deteriorate.





Based
      on
      the COSO criteria and the Bank ́s management’s evaluation, the Bank’s management
      has concluded that its internal control over financial reporting was effective
      as of December 31, 2007.





**c)
      Attestation Report of the Registered Public Accounting
      Firm**




The
      Company's independent registered public accounting firm, Deloitte Inc, has
      issued an attestation report on the effectiveness of the Bank's internal control
      over financial reporting, which is included in Item 18, “Financial Statements”,
      for reference.





**d)
      Changes in Internal Controls**




There
      has
      been no change in the Bank ́s internal control over financial reporting during
      the fiscal year ended December 31, 2007 that has materially affected, or is
      reasonably likely to materially affect, its internal control over financial
      reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
      Exchange Act.


64


**Item
      16.**  **Reserved** ****





**Item
      16A.**  **Audit
      and Compliance Committee Financial Expert** ****




The
      Bank’s Board of Directors has determined that at least one member of the Audit
      and Compliance Committee is a “financial expert,” as defined in the rules
      enacted by the SEC under the Sarbanes-Oxley Act of 2002. The Audit and
      Compliance Committee’s financial expert is Mr. Gonzalo Menéndez
      Duque.




**Item
      16B.**  **Code
      of Ethics**




The
      Bank
      has adopted a code of ethics that applies to the Bank’s principal executive
      officers and principal financial and accounting officers. The Bank includes
      the
      information regarding its corporate governance practices necessary to comply
      with Section 303A of the NYSE's Listed Company Manual/Corporate Governance
      Rules. A current copy of this code of ethics is file as Exhibit 14.1 to this
      Form 20-F. Shareholders
      may request a hard copy of Bladex’s code of ethics, free of charge, from the
      following contact:




Mr.
      Jaime
      Celorio


Chief
      Financial Officer


Banco
      Latinoamericano de Exportaciones, S.A. (Bladex)


Tel.:
      (507) 210-8563


Fax:
      (507) 269-6333


e-mail: jcelorio@bladex.com




**Item
      16C.**  **Principal
      Accountant Fees and Services** ****




At
      the
      Bank’s Annual Shareholders’ Meeting held on April 18, 2007, in Panama City,
      Panama, stockholders appointed Deloitte Inc. as the Bank’s new independent
      auditors for the fiscal year ending December 31, 2007. The change was approved
      and recommended to stockholders by the Audit and Compliance Committee of the
      Bank’s Board of Directors. The recommendation was based on cost efficiency
      reasons.




Deloitte
      Inc. is a registered public accounting firm. In the year ended December 31,
      2006, and prior to the appointment on April 18, 2007, the Bank did not engage
      Deloitte Inc. on any matters. The Bank has been advised by Deloitte Inc. that
      neither that firm nor any of its affiliates has any relationship with the Bank
      or its subsidiaries, other than the relationship that typically exists between
      independent auditors and their clients.




The
      reports of Deloitte Inc., the Bank’s independent auditor from April 19, 2007
      through December 31, 2007, on the Bank’s consolidated financial statements for
      the year ended December 31, 2007 contained no adverse opinion or disclaimer
      of
      opinion and were not qualified or modified as to uncertainty, audit scope or
      accounting principle.




The
      reports of KPMG, the Bank’s independent auditor through April 18, 2007, on the
      Bank’s consolidated financial statements for the year ended December 31, 2006
      contained no adverse opinion or disclaimer of opinion and were not qualified
      or
      modified as to uncertainty, audit scope or accounting principle. In addition,
      there have been no reportable events, as defined in Item 304 (a) (1) (v) of
      Regulation S-K. The following table sets forth the aggregate fees billed for
      each of the fiscal years ended December 31, 2006 for professional services
      rendered by the Bank’s former independent auditors, KPMG, and for the
      professional services rendered by the Bank’s current independent auditors,
      Deloitte Inc.:




**Year 2006**
            
            **Year 2007****KPMG**
            
            **Deloitte Inc.**Audit Fees
            
            $
            471,693
            
            $
            426,495Tax
                Fees
            
            
            37,500
            
            
            0All
                Other Fees
            
            
            22,485
            
            $
            39,509**Total**
            
            **$**
            **531,678**
            
            **$**
            **466,004**








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
                Deloitte Inc.in
                2007 and KPMG in 2006,for
                the audit of the Bank’s annual financial statements or services that are
                normally provided in connection with statutory and regulatory filings
                or
                engagements for those fiscal years. During 2007 and 2006, no audit-related
                fees (which relate to the assurance and services related to the
                performance of the audit or review of the Bank’s financial statements)
                were paid by the Bank.


65


·
            Tax
                fees include aggregate fees billed for professional services rendered
                by
                Deloitte Inc. in 2007 and KPMG in 2006 for tax compliance, tax advice
                and
                tax planning. For the year 2007, the Bank hired PricewaterhouseCoopers
                to
                prepare and sign as a preparer the Bank’s U.S. Federal, New York State and
                New York City, and Florida, and corporate income/franchise tax returns,
                as
                well as calculate quarterly estimated tax payments and prepare required
                estimated tax payment forms.


·
            All
                other fees include aggregate fees billed for products and services
                provided by Deloitte Inc. in 2007 and KPMG in 2006 to the Bank, other
                than
                the services reported in the three preceding paragraphs.






***Audit
      and Compliance Committee Pre-Approval Policies and
      Procedures***




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.





**Item
      16D.**  **Exemptions
      from the Listing Standards for Audit Committees**




Not
      applicable.




**Item
      16E.**  **Purchases
      of Equity Securities by the Issuer and Affiliated
      Purchasers**




On
      August
      5, 2004, the Bank established a $50 million three-year open market stock
      repurchase program under which it could, 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 were made in accordance with applicable law and
      subject to all required regulatory approvals. The repurchases were made using
      Bladex’s cash resources, and the program could have been suspended or discounted
      at any time without prior notice.




On
      July
      17, 2006, the Bank completed the $50 million repurchase program with 3,042,618
      shares repurchased. The following table shows information regarding shares
      repurchased by the Bank in the open market.




**Period**
            
            **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
            
            
            2,814,811October
                2004 (10.5.04 – 10.20.04)
            
            
            230,700
            
            $
            16.18
            
            
            230,700
            
            
            2,625,136March
                2005 (03.17.05)
            
            
            10,000
            
            $
            21.93
            
            
            10,000
            
            
            1,926,724May
                2005 (05.13.05 – 05.26.05)
            
            
            297,500
            
            $
            17.08
            
            
            297,500
            
            
            2,175,838August
                2005 (08.11.05 – 08.31.05)
            
            
            121,500
            
            $
            17.06
            
            
            121,500
            
            
            2,057,247September
                2005 (09.1.05 – 09.30.05)
            
            
            376,000
            
            $
            17.09
            
            
            376,000
            
            
            1,677,895November
                2005 (11.18.05 – 11.18.05)
            
            
            900
            
            $
            17.07
            
            
            900
            
            
            1,678,808February
                2006 (02.23.06 – 02.23.06)
            
            
            3,200
            
            $
            17.80
            
            
            3,200
            
            
            1,606,478March
                2006 (03.7.06 – 03.31.06)
            
            
            278,700
            
            $
            17.10
            
            
            278,700
            
            
            1,393,462April
                2006 (04.3.06 – 04.13.06)
            
            
            102,700
            
            $
            17.28
            
            
            102,700
            
            
            1,276,706May
                2006 (05.11.06 – 05.31.06)
            
            
            188,500
            
            $
            16.63
            
            
            188,500
            
            
            1,137,953June
                2006 (06.1.06 – 06.30.06)
            
            
            992,200
            
            $
            15.70
            
            
            992,200
            
            
            213,097July
                2006 (07.3.06 – 07.17.06)
            
            
            209,518
            
            $
            15.97
            
            
            209,518
            
            
            0**Total**
            
            
            **3,042,618**
            
            **$**
            **16.43**
            
            
            **3,042,618**







66




**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 StatementsReports
                of Independent Registered Public Accounting Firms
            
            F-3Consolidated
                Balance Sheets at December 31, 2007 and 2006
            
            F-8Consolidated
                Statements of Income for the Years Ended December 31, 2007, 2006
                and
                2005
            
            F-9Consolidated
                  Statements of Changes in Stockholders’ Equity for the Years Ended December
                  31, 2007, 2006
                  and 2005
            
            F-10Consolidated
                Statements of Comprehensive Income for the Years Ended December 31,
                2007,
                2006 and 2005
            
            F-11Consolidated
                Statements of Cash Flows for the Years Ended December 31, 2007, 2006
                and
                2005
            
            F-12Notes
                to Consolidated Financial Statements
            
            F-13




**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 OfficerExhibit
                12.2.
            
            Rule
                13a-14(a) Certification of Principal Financial OfficerExhibit
                13.1.
            
            Rule
                13a-14(b) Certification of Principal Executive OfficerExhibit
                13.2.
            
            Rule
                13a-14(b) Certification of Principal Financial OfficerExhibit
                14.1.
            
            Code
                of Ethics




*
      Filed
      as an exhibit to the Form 20-F for the fiscal year ended December 31, 2002
      filed
      with the SEC on February 24, 2003.


67





**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 RIVERAJaime
                Rivera*Chief
                Executive Officer*June
                19, 2008


68




**Banco
      Latinoamericano**


**de
        Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **With
        Report of Independent Registered Public**
 **Accounting
        Firm**
 
 
 **Consolidated
        financial statements**
 Years
        ended December 31, 2007 and 2006
 
 **Deloitte-Panamá**
 
 F-1
 
 **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        subsidiaries**
 
 **Independent
        Auditors’ Report and**
 **Consolidated
        Financial Statements 2007 and 2006**
 
 **Contents**
              **Pages**Report
                  of Independent Registered Public Accounting Firms
              F-3Consolidated
                  balance sheet
              F-8Consolidated
                  statement of income
              F-9Consolidated
                  statement of changes in stockholders’ equity
              F-10Consolidated
                  statements of comprehensive income
              F-11Consolidated
                  statement of cash flows
              F-12Notes
                  to consolidated financial statements
              F-13
 
 F-2
 F-3
 
  F-4
 
  F-5
 
  F-6
 
  F-7
 
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          subsidiaries**
 
 **Consolidated
                    balance sheets****December
                    31, 2007 and 2006**(in
                    US$ thousand, except per share
                    amounts)
 
 **Notes**
                
                **2007**
                
                **2006****Assets**Cash
                    and due from banks
                
                
                3,20
                
                
                596
                
                
                401Interest-bearing
                    deposits in banks (including pledged deposits of $59,308 in 2007
                    and
                    $33,470 in 2006)
                
                
                3,20
                
                
                476,983
                
                
                331,764Trading
                    assets
                
                
                4,20
                
                
                52,597
                
                
                130,076Securities
                    available for sale
                
                
                5,20
                
                
                468,360
                
                
                346,194Securities
                    held to maturity (market value of $125,118 in 2006)
                
                
                5,20
                
                
                -
                
                
                125,157Loans
                
                
                6,20
                
                
                3,731,838
                
                
                2,980,772Less:Allowance
                    for loan losses
                
                
                7,20
                
                
                69,643
                
                
                51,266Unearned
                    income and deferred fees
                
                
                
                
                
                5,961
                
                
                4,425**Loans,
                    net**
                
                
                
                
                
                3,656,234
                
                
                2,925,081Customers'
                    liabilities under acceptances
                
                
                20
                
                
                9,104
                
                
                46,006Premises
                    and equipment (net of accumulated depreciation and amortization
                    of $9,704
                    in 2007 and $8,043 in 2006)
                
                
                
                
                
                10,176
                
                
                11,136Accrued
                    interest receivable
                
                
                20
                
                
                62,884
                
                
                55,238Derivative
                    instruments used for hedging - receivable
                
                
                18,20
                
                
                122
                
                
                541Brokerage
                    receivable
                
                
                20
                
                
                44,289
                
                
                -Other
                    assets
                
                
                8
                
                
                9,187
                
                
                6,743**Total
                    assets**
                
                
                
                
                
                4,790,532
                
                
                3,978,337**Liabilities
                    and stockholders' equity**Deposits:
                
                
                9,20Noninterest-bearing
                    - Demand
                
                
                
                
                
                890
                
                
                1,620Interest-bearing
                    - Demand
                
                
                
                
                
                110,606
                
                
                130,510Time
                
                
                
                
                
                1,350,875
                
                
                924,147Total
                    deposits
                
                
                
                
                
                1,462,371
                
                
                1,056,277Trading
                    liabilities
                
                
                4,20
                
                
                90,765
                
                
                54,832Securities
                    sold under repurchase agreements
                
                
                5,20
                
                
                283,210
                
                
                438,356Short-term
                    borrowings
                
                
                10,20
                
                
                1,221,500
                
                
                1,157,248Borrowings
                    and long-term debt
                
                
                11,20
                
                
                1,010,316
                
                
                558,860Acceptances
                    outstanding
                
                
                20
                
                
                9,104
                
                
                46,006Accrued
                    interest payable
                
                
                20
                
                
                39,198
                
                
                28,420Derivative
                    instruments used for hedging - payable
                
                
                18,20
                
                
                16,899
                
                
                2,634Reserve
                    for losses on off-balance sheet credit risk
                
                
                7
                
                
                13,727
                
                
                27,195Other
                    liabilities
                
                
                12
                
                
                31,191
                
                
                24,614Total
                    liabilities
                
                
                
                
                
                4,178,281
                
                
                3,394,442Stockholders'
                    equity:
                
                
                13,14,15,19Class
                    "A" common stock, no par value, assigned value of $6.67 (Authorized
                    40,000,000; outstanding 6,342,189)
                
                
                
                
                
                44,407
                
                
                44,407Class
                    "B" common stock, no par value, assigned value of $6.67 (Authorized
                    40,000,000; outstanding 2,660,847 in 2007 and 2,725,390 in
                    2006)
                
                
                
                
                
                21,528
                
                
                21,959Class
                    "E" common stock, no par value, assigned value of $6.67 (Authorized
                    100,000,000; outstanding 27,367,113 in 2007 and 27,261,495 in
                    2006)
                
                
                
                
                
                214,045
                
                
                213,614Additional
                    paid-in capital in excess of assigned value to common
                    stock
                
                
                
                
                
                135,142
                
                
                134,945Capital
                    reserves
                
                
                
                
                
                95,210
                
                
                95,210Retained
                    earnings
                
                
                
                
                
                245,348
                
                
                205,200Accumulated
                    other comprehensive income (loss)
                
                
                5,19
                
                
                (9,641
                )
                
                3,328Treasury
                    stock
                
                
                13
                
                
                (133,788
                )
                
                (134,768
                )**Total
                    stockholders' equity**
                
                
                
                
                
                612,251
                
                
                583,895Commitments
                    and contingent liabilities
                
                
                8,16,17,18,21**Total
                    liabilities and stockholders' equity**
                
                
                
                
                
                4,790,532
                
                
                3,978,337
 
 The
          accompanying notes are part of these consolidated financial
          statements.
  F-8
 
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          subsidiaries**
 
 **Consolidated
                    statements of income**Years
                    ended december 31, 2007, 2006 and 2005(in
                    US$ thousand, except per share
                    amounts)
 
 **Notes**
                
                **2007**
                
                **2006**
                
                **2005**Interest
                    income:Deposits
                    with banks
                
                
                
                
                
                17,001
                
                
                8,973
                
                
                5,121Trading
                    assets
                
                
                
                
                
                5,315
                
                
                5,810
                
                
                -Investment
                    securities:Available
                    for sale
                
                
                
                
                
                19,595
                
                
                16,780
                
                
                7,755Held
                    to maturity
                
                
                
                
                
                1,337
                
                
                5,985
                
                
                2,219Loans
                
                
                
                
                
                221,621
                
                
                165,802
                
                
                101,728Total
                    interest income
                
                
                
                
                
                264,869
                
                
                203,350
                
                
                116,823Interest
                    expense:Deposits
                
                
                
                
                
                70,443
                
                
                56,611
                
                
                29,559Trading
                    liabilities
                
                
                
                
                
                4,197
                
                
                4,639
                
                
                -Short-term
                    borrowings
                
                
                
                
                
                70,244
                
                
                55,000
                
                
                20,408Borrowings
                    and long-term debt
                
                
                
                
                
                49,415
                
                
                28,263
                
                
                21,603Total
                    interest expense
                
                
                
                
                
                194,299
                
                
                144,513
                
                
                71,570Net
                    interest income
                
                
                
                
                
                70,570
                
                
                58,837
                
                
                45,253Reversal
                    (provision) for loan losses
                
                
                7
                
                
                (11,994
                )
                
                (11,846
                )
                
                54,155Net
                    interest income, after reversal of provision for loan losses
                
                
                
                
                
                58,576
                
                
                46,991
                
                
                99,408Other
                    income (expense):Reversal
                    (provision) for losses on off-balance sheet credit risk
                
                
                7
                
                
                13,468
                
                
                24,891
                
                
                (15,781
                )Fees
                    and commissions, net
                
                
                
                
                
                5,555
                
                
                6,393
                
                
                5,824Activities
                    of hedging derivative instruments
                
                
                18
                
                
                (989
                )
                
                (225
                )
                
                2,338Recoveries
                    on assets, net of impairments
                
                
                5,8
                
                
                (500
                )
                
                5,551
                
                
                10,206Trading
                    gains
                
                
                
                
                
                23,866
                
                
                879
                
                
                -Net
                    gain on sale of securities available for sale
                
                
                5
                
                
                9,119
                
                
                2,568
                
                
                206Gain
                    (loss) on foreign currency exchange
                
                
                
                
                
                115
                
                
                (253
                )
                
                3Other
                    income (expense), net
                
                
                
                
                
                (6
                )
                
                36
                
                
                5Net
                    other income
                
                
                
                
                
                50,628
                
                
                39,840
                
                
                2,801Operating
                    expenses:Salaries
                    and other employee expenses
                
                
                
                
                
                22,049
                
                
                16,826
                
                
                13,073Depreciation
                    and amortization of premises and equipment
                
                
                
                
                
                2,555
                
                
                1,406
                
                
                869Professional
                    services
                
                
                
                
                
                3,562
                
                
                2,671
                
                
                3,281Maintenance
                    and repairs
                
                
                
                
                
                1,188
                
                
                1,000
                
                
                1,172Other
                    operating expenses
                
                
                
                
                
                7,673
                
                
                7,026
                
                
                6,296Total
                    operating expenses
                
                
                
                
                
                37,027
                
                
                28,929
                
                
                24,691Income
                    before cumulative effect of changes in accounting
                    principles
                
                
                
                
                
                72,177
                
                
                57,902
                
                
                77,518Cumulative
                    effect on prior years (to December 31, 2004) of a change in the
                    credit
                    loss reserve methodology
                
                
                7,15
                
                
                -
                
                
                -
                
                
                2,733Cumulative
                    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
                )Net
                    income
                
                
                
                
                
                72,177
                
                
                57,902
                
                
                80,101Basic
                    earnings per share:
                
                
                7,14,15Income
                    before cumulative effect of changes in accounting
                    principles
                
                
                
                
                
                1.99
                
                
                1.56
                
                
                2.01Cumulative
                    effect of changes in accounting principles
                
                
                
                
                
                0.00
                
                
                0.00
                
                
                0.07Net
                    income per share
                
                
                
                
                
                1.99
                
                
                1.56
                
                
                2.08Diluted
                    earnings per share:
                
                
                7,14,15Income
                    before cumulative effect of changes in accounting
                    principles
                
                
                
                
                
                1.98
                
                
                1.54
                
                
                1.99Cumulative
                    effect of changes in accounting principles
                
                
                
                
                
                0.00
                
                
                0.00
                
                
                0.07Net
                    income per share
                
                
                
                
                
                1.98
                
                
                1.54
                
                
                2.06Basic
                    earnings per share
                
                
                
                
                
                1.99
                
                
                1.56
                
                
                2.01Diluted
                    earnings per share
                
                
                
                
                
                1.98
                
                
                1.54
                
                
                1.99Average
                    basic shares
                
                
                
                
                
                36,349
                
                
                37,065
                
                
                38,550Average
                    diluted shares
                
                
                
                
                
                36,414
                
                
                37,572
                
                
                38,860
 
 The
          accompanying notes are part of these consolidated financial
          statements.
  F-9
 
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          Subsidiaries**
 
 **Consolidated
                    statements of changes in stockholders' equity**Years
                    ended december 31, 2007, 2006 and 2005(in
                    US$ thousand)
 
 **Accumulated****Additional**
                
                
                
                
                
                **other**
                
                
                
                **Total****Common**
                
                **paid-in**
                
                **Capital**
                
                **Retained**
                
                **comprehensive**
                
                **Treasury**
                
                **stockholders’****stock**
                
                **capital**
                
                **reserves**
                
                **earnings**
                
                **income (loss)**
                
                **stock**
                
                **equity****Balances
                    at January 1, 2005**
                
                
                279,978
                
                
                133,786
                
                
                95,210
                
                
                233,701
                
                
                6,082
                
                
                (92,627
                )
                
                656,130Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                80,101
                
                
                -
                
                
                -
                
                
                80,101Other
                    comprehensive income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (5,463
                )
                
                -
                
                
                (5,463
                )Compensation
                    cost - indexed stock options plan
                
                
                -
                
                
                555
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                555Issuance
                    of restricted stocks
                
                
                -
                
                
                -
                
                
                -
                
                
                (57
                )
                
                -
                
                
                152
                
                
                95Exercised
                    stock options pursuant to compensation plan
                
                
                -
                
                
                -
                
                
                -
                
                
                (4
                )
                
                -
                
                
                8
                
                
                4Repurchase
                    of Class "E" common stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (13,815
                )
                
                (13,815
                )Difference
                    in fractional shares in conversion of common stocks
                
                
                1
                
                
                (1
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Dividends
                    declared
                
                
                -
                
                
                -
                
                
                -
                
                
                (100,825
                )
                
                -
                
                
                -
                
                
                (100,825
                )**Balances
                    at December 31, 2005**
                
                
                279,979
                
                
                134,340
                
                
                95,210
                
                
                212,916
                
                
                619
                
                
                (106,282
                )
                
                616,782Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                57,902
                
                
                -
                
                
                -
                
                
                57,902Comprehensive
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,709
                
                
                -
                
                
                2,709Compensation
                    cost - indexed stock options plan
                
                
                -
                
                
                606
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                606Issuance
                    of restricted stocks
                
                
                -
                
                
                -
                
                
                -
                
                
                (49
                )
                
                -
                
                
                144
                
                
                95Exercised
                    stock options pursuant tocompensation
                    plan
                
                
                -
                
                
                -
                
                
                -
                
                
                (14
                )
                
                -
                
                
                27
                
                
                13Repurchase
                    of Class "E" common stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (28,657
                )
                
                (28,657
                )Difference
                    in fractional shares in conversion of common stocks
                
                
                1
                
                
                (1
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Dividends
                    declared
                
                
                -
                
                
                -
                
                
                -
                
                
                (65,555
                )
                
                -
                
                
                -
                
                
                (65,555
                )**Balances
                    at December 31, 2006**
                
                
                279,980
                
                
                134,945
                
                
                95,210
                
                
                205,200
                
                
                3,328
                
                
                (134,768
                )
                
                583,895Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                72,177
                
                
                -
                
                
                -
                
                
                72,177Comprehensive
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (12,969
                )
                
                -
                
                
                (12,969
                )Compensation
                    cost - stock options plan
                
                
                -
                
                
                1,130
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,130Issuance
                    of restricted stocks
                
                
                -
                
                
                (644
                )
                
                -
                
                
                -
                
                
                -
                
                
                531
                
                
                (113
                )Exercised
                    stock options pursuant to compensation plan
                
                
                -
                
                
                (289
                )
                
                -
                
                
                -
                
                
                -
                
                
                449
                
                
                160Dividends
                    declared
                
                
                -
                
                
                -
                
                
                -
                
                
                (32,029
                )
                
                -
                
                
                -
                
                
                (32,029
                )**Balances
                    at December 31, 2007**
                
                
                **279,980**
                
                
                **135,142**
                
                
                **95,210**
                
                
                **245,348**
                
                
                **(9,641**
                **)**
                
                **(133,788**
                **)**
                
                **612,251**
 
 The
          accompanying notes are part of these consolidated financial
          statements.
  F-10
 
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          Subsidiaries**
 
 **Consolidated
                    statements of comprehensive income**Years
                    ended december 31, 2007, 2006 and 2005(in
                    US$ thousand)
 
 **Notes**
                
                **2007**
                
                **2006**
                
                **2005****Net
                    income:**Income
                    before cumulative effect of changes in accounting
                    principles
                
                
                
                
                
                72,177
                
                
                57,902
                
                
                77,518Cumulative
                    effect on prior years (to December 31, 2004) of a change in the
                    credit
                    loss reserve methodology
                
                
                7
                
                
                -
                
                
                -
                
                
                2,733Cumulative
                    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
                )Net
                    income
                
                
                
                
                
                72,177
                
                
                57,902
                
                
                80,101**Other
                    comprehensive income (loss):**Unrealized
                    gains (losses) on securities available for sale:Unrealized
                    gains (losses) arising from the year
                
                
                19
                
                
                (1,912
                )
                
                5,349
                
                
                (5,257
                )Less:
                    Reclassification adjustments for gains included in net
                    income
                
                
                5,19
                
                
                (9,119
                )
                
                (2,568
                )
                
                (206
                )Net
                    change in unrealized gains (losses) on securities available for
                    sale
                
                
                
                
                
                (11,031
                )
                
                2,781
                
                
                (5,463
                )Unrealized
                    losses on derivative financial instruments:Unrealized
                    losses arising from the year
                
                
                19
                
                
                (2,081
                )
                
                (72
                )
                
                -Less:
                    Reclassification adjustments for net losses included in net
                    income
                
                
                19
                
                
                143
                
                
                -
                
                
                -Net
                    change in unrealized losses on derivative financial
                    instruments
                
                
                
                
                
                (1,938
                )
                
                (72
                )
                
                -Other
                    comprehensive income (loss)
                
                
                
                
                
                (12,969
                )
                
                2,709
                
                
                (5,463
                )Comprehensive
                    income
                
                
                
                
                
                59,208
                
                
                60,611
                
                
                74,638
 
 The
          accompanying notes are part of these consolidated financial
          statements.
  F-11
 
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          Subsidiaries**
 
 **Consolidated
                    Statements of Cash Flows**Years
                    Ended December 31, 2007, 2006 and 2005(in
                    US$ thousand)
 
 **2007**
                
                **2006**
                
                **2005****Cash
                    flows from operating activities:**Income
                    before cumulative effect of changes in accounting
                    principles
                
                
                72,177
                
                
                57,902
                
                
                77,518Cumulative
                    effect on prior years (to December 31, 2004) of a change in the
                    credit
                    loss reserve methodology
                
                
                -
                
                
                -
                
                
                2,733Cumulative
                    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
                )Net
                    income
                
                
                72,177
                
                
                57,902
                
                
                80,101Adjustments
                    to reconcile net income to net cash provided by (used in) operating
                    activities:Activities
                    of hedging derivative instruments
                
                
                1,258
                
                
                312
                
                
                (85
                )Depreciation
                    and amortization of premises and equipment
                
                
                2,555
                
                
                1,406
                
                
                869Provision
                    (reversal) for loan losses
                
                
                11,994
                
                
                11,846
                
                
                (54,155
                )Provision
                    (reversal) for losses on off-balance sheet credit risk
                
                
                (13,468
                )
                
                (24,891
                )
                
                15,781Impairment
                    loss on assets
                
                
                500
                
                
                -
                
                
                469Net
                    gain on sale of securities available for sale
                
                
                (9,119
                )
                
                (2,568
                )
                
                (206
                )Compensation
                    cost - stock options plans
                
                
                1,130
                
                
                606
                
                
                555Issuance
                    of restricted stock
                
                
                (113
                )
                
                95
                
                
                95Deferred
                    compensation awards
                
                
                -
                
                
                13
                
                
                3Amortization
                    of premiums and discounts on investments
                
                
                6,268
                
                
                4,748
                
                
                2,343Net
                    decrease (increase) in operating assets:Trading
                    assets
                
                
                77,479
                
                
                (130,076
                )
                
                -Accrued
                    interest receivable
                
                
                (7,646
                )
                
                (24,984
                )
                
                (14,806
                )Derivative
                    financial instruments
                
                
                -
                
                
                -
                
                
                25Brokerage
                    receivable
                
                
                (44,289
                )
                
                -
                
                
                -Other
                    assets
                
                
                (2,944
                )
                
                4,552
                
                
                (5,804
                )Net
                    increase (decrease) in operating liabilities:Trading
                    liabilities
                
                
                35,933
                
                
                54,832
                
                
                -Accrued
                    interest payable
                
                
                10,778
                
                
                13,684
                
                
                8,259Other
                    liabilities
                
                
                4,261
                
                
                2,108
                
                
                (5,958
                )Net
                    cash provided by (used in) operating activities
                
                
                146,754
                
                
                (30,415
                )
                
                27,486**Cash
                    flows from investing activities:**Net
                    increase in pledged interest bearing deposits
                
                
                (25,838
                )
                
                (28,470
                )
                
                (800
                )Net
                    increase in loans
                
                
                (864,971
                )
                
                (384,433
                )
                
                (179,315
                )Proceeds
                    from the sale of loans
                
                
                121,824
                
                
                12,500
                
                
                -Net
                    acquisition of premises and equipment
                
                
                (1,595
                )
                
                (9,289
                )
                
                (614
                )Proceeds
                    from the redemption of securities available for sale
                
                
                19,074
                
                
                20,000
                
                
                26,000Proceeds
                    from the maturity of securities held to maturity
                
                
                125,000
                
                
                9,000
                
                
                -Proceeds
                    from the sale of securities available for sale
                
                
                578,697
                
                
                129,731
                
                
                276,524Purchases
                    of investment securities
                
                
                (716,472
                )
                
                (419,143
                )
                
                (326,307
                )Net
                    cash used in investing activities
                
                
                (764,281
                )
                
                (670,104
                )
                
                (204,512
                )**Cash
                    flows from financing activities:**Net
                    increase in due to depositors
                
                
                406,094
                
                
                9,659
                
                
                182,458Net
                    (decrease) increase in short-term borrowings and securities sold
                    under
                    repurchase agreements
                
                
                (90,894
                )
                
                834,905
                
                
                55,981Proceeds
                    from borrowings and long-term debt
                
                
                613,126
                
                
                133,680
                
                
                309,962Repayments
                    of borrowings and long-term debt
                
                
                (161,670
                )
                
                (108,680
                )
                
                (179,723
                )Dividends
                    paid
                
                
                (29,713
                )
                
                (63,364
                )
                
                (100,825
                )Redemption
                    of redeemable preferred stock
                
                
                -
                
                
                (3,216
                )
                
                (2,711
                )Exercised
                    stock options
                
                
                160
                
                
                -
                
                
                -Repurchase
                    of common stock
                
                
                -
                
                
                (28,657
                )
                
                (13,815
                )Net
                    cash provided by financing activities
                
                
                737,103
                
                
                774,327
                
                
                251,327Net
                    increase (decrease) in cash and cash equivalents
                
                
                119,576
                
                
                73,808
                
                
                74,301Cash
                    and cash equivalents at beginning of the year
                
                
                298,695
                
                
                224,887
                
                
                150,586**Cash
                    and cash equivalents at end of the year**
                
                
                418,271
                
                
                298,695
                
                
                224,887**Supplemental
                    disclosures of cash flow information:**Cash
                    paid during the year for interest
                
                
                183,521
                
                
                130,829
                
                
                63,298
 
 The
          accompanying notes are part of these consolidated financial
          statements.
  F-12
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 
 **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
                  Assembly of Governors of Central Banks in the Region, which recommended
                  the creation of a multinational organization to increase the foreign
                  trade
                  financing capacity of the Region. The Bank was organized in 1977,
                  incorporated in 1978 as a corporation pursuant to the laws of the
                  Republic
                  of Panama, and officially initiated operations on January 2,
                  1979.
 
 The
        Bank
        operates under a general banking license issued by the National Banking
        Commission of Panama, predecessor of the Superintendency of Banks of Panama
        (the
“SBP”), and is subject to its supervision and inspection. Bladex Head Office’s
        subsidiaries are the following:
 
 Bladex
        Holdings Inc., is a wholly owned subsidiary, incorporated under the laws
        of the
        State of Delaware, United States of America (USA), on May 30, 2000. Its wholly
        owned subsidiaries are:
 
 ·
              Bladex
                  Asset Management, Inc., incorporated on May 24, 2006, under the
                  laws of
                  the State of Delaware, USA, serves as investment manager for Bladex
                  Offshore Feeder Fund (the “Feeder”) and Bladex Capital Growth Fund (the
                  “Fund”).
 
 ·
              Clavex
                  LLC, incorporated on June 15, 2006, under the laws of the State
                  of
                  Delaware, USA, ceased operations in February 2007.
 
 The
        Feeder is a wholly owned subsidiary, incorporated on February 21, 2006 under
        the
        laws of Cayman Islands, and in turn is the sole owner of the Fund, which
        was
        also incorporated under the laws of Cayman Islands on February 21, 2006.
        Both
        companies are investment funds that started operations in April 2006 and
        share
        the same investment objectives. The Feeder invests substantially all of its
        assets in the Fund. The objective of the Fund is to achieve capital appreciation
        by investing in Latin American debt securities, indexed funds, currencies,
        and
        trading derivative instruments.
 
 Bladex
        Representacao Ltda., incorporated under the laws of Brazil on January 7,
        2000,
        acts as the Bank’s representative office in Brazil. Bladex Representacao Ltda.
        is 99.999% owned by Bladex Head Office and 0.001% owned by Bladex Holdings
        Inc.
 
 Clavex,
        S.A., is a wholly owned subsidiary, incorporated on May 18, 2006, under the
        laws
        of the Republic of Panama, to mainly provide specialized training.
 
 Bladex
        Head Office has an agency in New York City, USA (the "New York Agency"),
        which
        began operations on March 27, 1989. The New York Agency is principally engaged
        in financing transactions related to international trade, mostly the
        confirmation and financing of letters of credit for customers of the Region.
        The
        New York Agency is also licensed by the State of New York Banking Department,
        USA, to operate an International Banking Facility (“IBF”). The Bank also has
        representative offices in Buenos Aires, Argentina, and in Mexico City, D.F.,
        Mexico, and an international administrative office in Miami, Florida,
        USA.
  F-13
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
  In
        addition, Banco Latinoamericano de Exportaciones Limited, a wholly owned
        subsidiary incorporated under the laws of the Cayman Islands ceased its banking
        operations on November 30, 2004 and was dissolved in 2005. All financial
        assets
        and liabilities were transferred to Bladex Head Office and recorded at their
        carrying amount on the date of the transfer.
 
 **2.**  **Summary
        of significant accounting policies**
 
 ***a)***
              ***Basis
                  of presentation***
 
 These
        consolidated financial statements have been prepared under accounting principles
        generally accepted in the United States of America (“U.S. GAAP”). All amounts
        presented in the consolidated financial statements and notes are expressed
        in
        dollars of the United Stated of America (“US$”), which is the Bank’s functional
        currency. The accompanying consolidated financial statements have been
        translated from Spanish version to English version for users outside of the
        Republic of Panama.
 
 ***b)***
              ***Principles
                  of consolidation***
 
 The
        consolidated financial statements include the accounts of Bladex Head Office,
        its agencies and subsidiaries. All intercompany balances and transactions
        have
        been eliminated for consolidation purposes.
 
 ***c)***
              ***Use
                  of estimates***
 
 The
        preparation of the consolidated financial statements requires management
        to make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent liabilities at the date of the
        consolidated financial statements and the reported amounts of revenues and
        expenses during the reporting period. Material estimates that are particularly
        susceptible to significant changes relate to the determination of the allowances
        for credit losses, impairment losses on assets, impairment of securities
        available for sale and held to maturity, and the fair value of financial
        instruments. Actual results could differ from those estimates. Management
        believes these estimates are adequate.
 
 ***d)***
              ***Cash
                  equivalents***
 
 Cash
        equivalents consist of due from banks and interest-bearing deposits in banks
        with original maturities of three months or less, except deposits pledged.
 
 ***e)***
              ***Repurchase
                  agreements*******
 
 Repurchase
        agreements represent collateralized financing transactions used to increase
        liquidity and are carried at the amounts at which the securities will be
        subsequently reacquired including accrued interest, as specified in the
        respective agreements. The Bank’s policy is to relinquish possession of the
        securities sold under agreements to repurchase. The market value of securities
        to be repurchased is permanently monitored, and additional collateral is
        provided where appropriate, to protect against credit exposure.
  F-14
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 ***f)***
              ***Trading
                  assets and
                  liabilities***
 
 Trading
        assets include mainly debt instruments and shares in indexed funds that have
        been bought and held principally for the purpose of selling them in the near
        term. Trading liabilities include debt instruments that the Bank has sold
        to
        other parties but does not own (“short” positions). The Bank is obliged to
        purchase securities at a future date to cover short positions. Included in
        trading assets and liabilities are the reported receivables (unrealized gains)
        and payables (unrealized losses) related to derivative instruments. These
        amounts include the derivative assets and liabilities net of cash received
        or
        paid, respectively, under legally enforceable master netting agreements.
        Trading
        assets and liabilities are carried at fair value, which is determined based
        upon
        quoted prices when available, or if quoted market prices are not available,
        on
        discounted expected cash flows using market rates commensurate with the credit
        quality and maturity of the security. Unrealized and realized gains and losses
        on trading assets and liabilities are recorded in earnings as trading gains
        (losses).
 
 Transactions
        traded not yet settled at the consolidated balance sheet date are recorded
        as
        brokerage receivables and payables.
 
 ***g)***
              ***Investment
                  securities***
 
 Securities
        are classified at the date of purchase based on the ability and intent to
        sell
        or hold them as investments. These securities consist of debt securities
        such
        as: negotiable commercial paper, bonds and floating rate notes.
 
 Securities
        available for sale
 
 These
        securities consist of debt instruments that the Bank buys with the intention
        of
        selling them prior to maturity and are subject to the same approval criteria
        as
        the rest of the credit portfolio. These securities are carried at fair value,
        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) in equity until they are realized.
 
 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. These securities are carried
        at
        amortized cost and are subject to the same approval criteria as the rest
        of the
        credit portfolio.
  Interest
        on securities is 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 realized gain (loss) from investment securities, are
        determined using the specific identification method.
  F-15
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 Impairment
            of investments is evaluated considering numerous factors, and their relative
            significance varies case by 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
            of
            the Bank 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 its fair value,
            and a loss
            is recognized through earnings as impairment loss on assets. 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 received as
            scheduled.
 
 ***h)***
              ***Other
                  Investments***
 
 Other
        investments, that mainly consist of unlisted stock, are recorded at cost
        and are
        included in other assets. The Bank determined that it is not practicable
        to
        obtain the market value of these investments, as these shares are not traded
        in
        a secondary market. Impairment of these investments is evaluated periodically
        and declines that are determined to be other than temporary are charged to
        earnings as impairment on assets.
 
 ***i)***
              ***Loans***
 
 Loans
        are
        reported at their principal amounts outstanding net of unearned income, deferred
        fees and allowance for loan losses. Interest income is recognized using the
        interest method. The amortization of net unearned income and deferred fees
        are
        recognized as an adjustment to the related loan yield using the interest
        method.
 
 Purchased
        loans are recorded at acquisition cost. The difference between the principal
        and
        the acquisition cost of loans, the premiums and discounts, is amortized over
        the
        life of the loan as an adjustment to the yield. All other costs related to
        acquisition of loans are expensed when incurred.
 
 Loans
        are
        identified as impaired and placed on a cash (non-accrual) basis 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.
        Factors considered by the Bank’s management in determining impairment include
        collection status, collateral value, the probability of collecting scheduled
        principal and interest payments when due, and economic conditions in the
        borrower’s country of residence. Any interest receivable is reversed and
        charged-off against earnings. Interest on non-accruing loans is only recorded
        as
        earned when collected. Non-accruing loans are returned to an accrual status
        when
        (1) all contractual principal and interest amounts are current (2) there
        is a
        sustained period of repayment performance in accordance with the contractual
        terms of at least six months; and (3) if in the Bank management’s opinion the
        loan is fully collectible. When current events or available information confirm
        that specific impaired loans or portions thereof are uncollectible, such
        impaired loans are charged-off against the allowance for loan losses.
 
 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. Marketable securities received
        in
        exchange for loan under debt restructurings are initially recorded at fair
        value, with any gain or loss recorded as recovery or charge to the allowance,
        and are subsequently accounted for as securities available for
        sale.
  F-16
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 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. The Bank may retain interest in loans sold
        in the
        form of servicing rights. Service rights are only recognized when the benefits
        of the service exceeds the costs associated with the responsibility of that
        service.
 
 ***j)***
              ***Allowance
                  for credit losses***
 
 The
        allowance for credit losses is provided for 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. 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 a liability.
 
 The
        allowance for possible credit losses includes an asset-specific component
        and a
        formula-based component. The asset-specific component relates to provision
        for
        losses on credits considered impaired and measured on a case-by-case basis.
        An
        allowance is established when the discounted cash flows (or collateral value
        of
        observable market price) of the credit is lower than the carrying value of
        that
        credit. The formula-based component covers the Bank’s performing credit
        portfolio and is established based in a process that estimates the probable
        loss
        inherent in the portfolio, based on statistical analysis and management’s
        qualitative judgment. The statistical calculation is a product of internal
        risk
        classifications, probabilities of default and loss given default. The
        probability of default is supported by Bladex’s historical portfolio performance
        complemented by probabilities of default provided by external sources for
        higher
        risk cases, in view of the greater robustness of this external data for such
        cases. The loss given default is based on Bladex’s historical losses experience
        and best practices.
 
 ***k)***
              ***Fair
                  value of guarantees including indirect indebtedness of
                  others***
 
 The
        Bank
        recognizes a liability for the fair value of 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 a specific allowance for
        off-balance sheet credit contingencies, whichever is greater.
  F-17
 
 **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 ***l)***
              ***Fees
                  and commissions***
 
 Loan
        origination fees, net of direct loan origination costs, are deferred, and
        the
        net amount is recognized as revenue over the contractual term of the loans
        as an
        adjustment to the yield. These net fees are not recognized as revenue during
        periods in which interest income on loans is suspended because of concerns
        about
        the realization of loan principal or interest. Underwriting fees are recognized
        as revenue when the Bank has rendered all services to the issuer and is entitled
        to collect the fee from the issuer, when there are no contingencies related
        to
        the fee. Underwriting fees are recognized net of syndicate expenses. In
        addition, the Bank recognizes credit arrangement and syndication fees as
        revenue
        after satisfying certain retention, timing and yield criteria. 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. Fees earned
        on
        letters of credit, guarantees and other commitments are amortized using the
        straight-line method over the life of such instruments.
 
 ***m)***
              ***Premises
                  and equipment***
 
 Premises
        and equipment, including the electronic data processing equipment, are carried
        at cost less accumulated depreciation and amortization, except land, which
        is
        carried at cost. Depreciation and amortization are charged to operations
        using
        the straight-line method, 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.
 
 The
        Bank
        defers 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. 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 5 years.
  ***n)***
              ***Capital
                  reserves***
 
 Capital
        reserves are established as a segregation of retained earnings and are, as
        such,
        a form of retained earnings. Even though their constitution is not required
        by
        the SBP, reductions of these capital reserves require the approval of the
        Bank’s
        Board of Directors and the SBP.
 
 ***o)***
              ***Cash
                  and stock-based compensation
                  plan***
 
 In
        year
        2005, the Bank chose to early adopt Statement of Financial Accounting Standards
        (“SFAS”) No.123(R), “Share-Based Payment”, which established the use of the
        fair-value-based method of accounting for stock-based compensation to key
        employees and directors. 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, when options are exercised.
  F-18
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 ***p)***
              ***Redeemable
                  preferred stock***
 
 The
        Bank
        accounts for as liabilities all financial instruments that embody an obligation
        to the Bank. The accrual of interest payable is charged to interest
        expense.
 
 ***q)***
              ***Derivative
                  financial instruments and hedge
                  accounting***
 
 The
        Bank
        makes use of derivative financial instruments for its management of interest
        rate and foreign exchange risks, which represent the majority of the Bank’s
        derivatives, as well as for trading purposes. 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.
 
 Derivatives
        held for trading purposes include interest rate swaps, forward foreign exchange
        contracts and credit default swaps, as part of the Fund’s trading activity, and
        those used for risk management purposes that do not qualify for hedge
        accounting. The fair value of trading derivatives is reported as trading
        assets
        and trading liabilities, as applicable. Changes in realized and unrealized
        gains
        and losses and interest flows from these trading instruments are included
        in
        trading gains (losses).
 
 Derivatives
        for hedging purposes primarily include interest rate swaps and forward foreign
        exchange contracts. Derivative contracts designated and qualifying as fair
        value
        hedge are reported as other assets and other liabilities and hedge accounting
        is
        applied. 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. The Bank discontinues hedge
        accounting prospectively in the following situations:
 
 1.
              It
                  is determined that the derivative is no longer effective in offsetting
                  changes in the fair value or cash flows of a hedged
                  item.
 2.
              The
                  derivative expires or is sold, terminated or
                  exercised.
 3.
              The
                  Bank otherwise determines that designation of the derivative as
                  a hedging
                  instrument is no longer
                  appropriate.
  The
        Bank
        carries all derivatives in the consolidated balance sheet 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. Ineffective
        portion
        is recognized in the income statement as activities of hedging derivative
        instruments. If the cash flow hedge relationship is terminated, related amounts
        in other comprehensive income are reclassified into earnings when hedged
        cash
        flows occur.
  F-19
 
 **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 ***r)***
              ***Foreign
                  currency transactions***
 
 Assets
                  and liabilities denominated in foreign currencies are translated
                  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
                  earnings.
 
 ***s)***
              ***Income
                  taxes***
 
 *·*
              Bladex
                  Head Office is exempted from payment of income taxes in Panama
                  in
                  accordance to its Constitutive Law that granted special benefits,
                  including the total exemption of income tax
                  payment.
 *·*
              The
                  Feeder and the Fund are not subject to income taxes in accordance
                  to Laws
                  of the Caiman Islands.
 *·*
              Clavex,
                  S.A. is subject to income taxes in Panama on profits from local
                  operations.
 *·*
              Bladex
                  Representacao Ltd. is subject to income taxes in Brazil.
 *·*
              The
                  New York Agency and Bladex’s subsidiaries incorporated in the USA are
                  subject to USA federal and local taxation based on the portion
                  of income
                  that is effectively connected with its operations in that country.
 
 Such
        amounts of income taxes have been immaterial to date.
 
 ***t)***
              ***Earnings
                  per share***
 
 Basic
        earnings per share is computed by dividing income available to common
        stockholders (the numerator) by the weighted average number of common shares
        outstanding (the denominator) during the year. Diluted earning per share
        measures performance incorporating the effect that potential common shares,
        such
        as stock options outstanding during the same period, would have on earning
        per
        share. The computation is similar to the computation of earning per share,
        except that the denominator is increased to include the number of additional
        common shares that would have been outstanding if the diluted potential common
        shares had been issued.
 
 ***u)***
              ***Recently
                  Issued Accounting
                  Standards***
 
 *SFAS
        No. 157: Fair Value Measurement*
 
 SFAS
        No.
        157 defines fair value, establishes a framework for measuring fair value
        under
        U.S. GAAP, and enhances disclosures about fair value measurements. This Standard
        applies when other accounting pronouncements require fair value measurements.
        This Standard is effective for financial statements issued for fiscal years
        beginning after November 15, 2007, and interim periods within those years.
        The
        Bank does not anticipate any significant effect on its consolidated financial
        position, operations and cash flows with the adoption of SFAS
        No.157.
 
 SFAS
        No. 159: The Fair Value Option for Financial Assets and Financial
        Liabilities.
  SFAS
        No.
        159 will allow the Bank to report at fair value many of its financial
        instruments and certain other items that are not currently required to be
        reported at fair value. The valuation of a financial instrument at fair value
        is
        irrevocable once adopted. All changes in fair value are reported in earnings.
        This standard is effective for years beginning after November 15, 2007. The
        Bank
        is currently evaluating the potential impact on its consolidated financial
        statements of adopting this standard.
  F-20
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 **3.**
              **Cash
                  and cash equivalents**
 
 Cash
                  and cash equivalents are as follows:
 
 **December
                  31,****2007**
              
              **2006***(In
                  thousand of US$)*Cash
                  and due from banks
              
              
              596
              
              
              401Interest
                  bearing deposits in banks
              
              
              476,983
              
              
              331,764Total
              
              
              477,579
              
              
              332,165Less:Pledged
                  deposits
              
              
              59,308
              
              
              33,470418,271
              
              
              298,695
 
 At
        December 31, 2007 and 2006 pledged deposits in banks include $53.8 million
        and
        $28 million, respectively, of collateral advanced on trading liabilities.
        On
        December 31, 2007 and 2006, the Agency of New York had pledged certificates
        of
        deposit with a carrying value of $5.5 million, with the State of New York
        Banking Department, as required by law since March 1994.
 
 **4.**
              **Trading
                  assets and liabilities**
 
 The
        fair
        value of trading assets and liabilities is as follows:
 
 **December
                  31,****2007**
              
              **2006***(In
                  thousand of US$)***Trading
                  assets:**Government
                  bonds
              
              
              10,891
              
              
              81,077Corporate
                  bonds
              
              
              5,206
              
              
              48,655Shares
                  in indexed funds
              
              
              36,315
              
              
              -Derivative
                  instruments
              
              
              185
              
              
              344Total
              
              
              52,597
              
              
              130,076**Trading
                  liabilities:**Government
                  bonds sold short
              
              
              31,734
              
              
              54,039Shares
                  in indexed funds sold short
              
              
              57,863
              
              
              -Derivative
                  instruments
              
              
              1,168
              
              
              793Total
              
              
              90,765
              
              
              54,832
 
 Trading
        assets secure all short sale transactions.
  F-21
 
 **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 **5.**
              **Investment
                  securities**
 
 Securities
        available for sale
 
 The
        amortized cost, related unrealized gross gain (loss) and fair value of
        securities available for sale, are as follows:
 
 **December
                  31, 2007***(In
                  thousand of US$)*
              
              **Amortized**
                **Cost**
              
              **Unrealized**
                **Gross Gain**
              
              **Unrealized**
                **Gross Loss**
              
              **Fair**
                **Value**Corporate
                  debt:Brazil
              
              
              67,971
              
              
              78
              
              
              660
              
              
              67,389Chile
              
              
              42,849
              
              
              -
              
              
              549
              
              
              42,300Panama
              
              
              20,019
              
              
              669
              
              
              -
              
              
              20,688130,839
              
              
              747
              
              
              1,209
              
              
              130,377Government
                  debt:Argentina
              
              
              19,546
              
              
              22
              
              
              28
              
              
              19,540Brazil
              
              
              59,464
              
              
              1,897
              
              
              18
              
              
              61,343Colombia
              
              
              123,084
              
              
              2,797
              
              
              206
              
              
              125,675Dominican
                  Republic
              
              
              13,093
              
              
              -
              
              
              182
              
              
              12,911El
                  Salvador
              
              
              10,984
              
              
              -
              
              
              84
              
              
              10,900Mexico
              
              
              27,045
              
              
              -
              
              
              89
              
              
              26,956Panama
              
              
              50,008
              
              
              1,462
              
              
              112
              
              
              51,358Peru
              
              
              29,291
              
              
              24
              
              
              15
              
              
              29,300332,515
              
              
              6,202
              
              
              734
              
              
              337,983Total
              
              
              463,354
              
              
              6,949
              
              
              1,943
              
              
              468,360
 
 **December
                  31, 2006***(In
                  thousand of US$)*
              
              **Amortized**
                **Cost**
              
              **Unrealized**
                **Gross Gain**
              
              **Unrealized**
                **Gross Loss**
              
              **Fair**
                **Value**Corporate
                  debt:Brazil
              
              
              16,985
              
              
              69
              
              
              129
              
              
              16,925Chile
              
              
              16,086
              
              
              -
              
              
              144
              
              
              15,942Panama
              
              
              20,026
              
              
              -
              
              
              254
              
              
              19,77253,097
              
              
              69
              
              
              527
              
              
              52,639Government
                  debt:Argentina
              
              
              9,421
              
              
              69
              
              
              6
              
              
              9,484Brazil
              
              
              112,370
              
              
              3,315
              
              
              61
              
              
              115,624Colombia
              
              
              97,335
              
              
              776
              
              
              16
              
              
              98,095Chile
              
              
              16,091
              
              
              -
              
              
              444
              
              
              15,647El
                  Salvador
              
              
              4,981
              
              
              19
              
              
              -
              
              
              5,000Mexico
              
              
              48,350
              
              
              1,516
              
              
              161
              
              
              49,705288,548
              
              
              5,695
              
              
              688
              
              
              293,555Total
              
              
              341,645
              
              
              5,764
              
              
              1,215
              
              
              346,194
  F-22
 **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          Subsidiaries**
 
 **Notes
            to consolidated financial statements**
 At
        December 31, 2007 and 2006, securities available for sale with a carrying
        value
        of $323 million each year, were pledged to secure repurchase agreements.
 
 The
        following table discloses those securities that have had unrealized losses
        for
        less than 12 months or for 12 months or longer:
 
 **December
                  31, 2007***(In
                  thousand of US$)*
              
              **Less than 12 months**
              
              **12 months or longer**
              
              **Total****Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**
              
              **Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**
              
              **Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**Corporate
                  debt
              
              
              68,244
              
              
              1,107
              
              
              30,495
              
              
              102
              
              
              98,739
              
              
              1,209Government
                  debt
              
              
              113,093
              
              
              706
              
              
              15,962
              
              
              28
              
              
              129,055
              
              
              734181,337
              
              
              1,813
              
              
              46,457
              
              
              130
              
              
              227,794
              
              
              1,943
 
 **December
                  31, 2006***(In
                  thousand of US$)*
              
              **Less than 12 months**
              
              **12 months or longer**
              
              **Total****Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**
              
              **Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**
              
              **Fair**
                **Value**
              
              **Unrealized**
                **Gross**
                **Losses**Corporate
                  debt
              
              
              19,772
              
              
              254
              
              
              30,791
              
              
              273
              
              
              50,563
              
              
              527Government
                  debt
              
              
              6,187
              
              
              16
              
              
              36,004
              
              
              672
              
              
              42,191
              
              
              68825,959
              
              
              270
              
              
              66,795
              
              
              945
              
              
              92,754
              
              
              1,215
 
 Gross
        unrealized losses are related mainly to an overall increase in market interest
        rates and market credit spreads and not due to underlying credit concerns
        about
        the issuers. At December 31, 2007, the Bank believes that none of the securities
        in its investment portfolio are other-than-temporarily impaired.
 
 During
        2006 and 2005, the Bank collected Argentine impaired securities for $5.6
        million
        and $10.7 million, respectively, which had been written-off and charged to
        earnings in prior years. These recoveries were recorded in earnings as
        recoveries on assets. During the year 2005, an impaired security with a net
        carrying value of $0.5 million was written-off and charged to earnings as
        a
        decrease to recoveries on assets.
 
 The
        following table presents the realized gains and losses on securities available
        for sale:
 
 *(In
                  thousand of US$)*
              
              **Year
                  ended December 31,****2007**
              
              **2006**
              
              **2005**Gains
              
              
              9,550
              
              
              2,568
              
              
              253Losses
              
              
              (431
              )
              
              -
              
              
              (47
              )Net
              
              
              9,119
              
              
              2,568
              
              
              206
  F-23
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 The
        amortized cost and fair value of securities available for sale distributed
        by
        contractual maturity at December 31, 2007, are shown in the following table:
 
 *(In
                  thousand of US$)*
              
              **Amortized**
                **Cost**
              
              **Fair**
                **Value**Due
                  within 1 year
              
              
              19,998
              
              
              19,953After
                  1 year but within 5 years
              
              
              153,382
              
              
              153,628After
                  5 years but within 10 years
              
              
              289,974
              
              
              294,779463,354
              
              
              468,360
 
 Securities
        held to maturity
 
 The
        amortized cost, related unrealized gross gain (loss) and fair value of
        securities held to maturity are as follows:
 
 **December
                  31, 2006***(In
                  thousand of US$)*
              
              **Amortized**
                **Cost**
              
              **Unrealized**
                **Gross Gain**
              
              **Unrealized**
                **Gross Loss**
              
              **Fair**
                **Value**Corporate
                  debt:Switzerland
              
              
              40,044
              
              
              -
              
              
              10
              
              
              40,034United
                  States of America
              
              
              60,048
              
              
              -
              
              
              27
              
              
              60,021100,092
              
              
              -
              
              
              37
              
              
              100,055Government
                  debt:Mexico
              
              
              25,065
              
              
              -
              
              
              2
              
              
              25,063Total
              
              
              125,157
              
              
              -
              
              
              39
              
              
              125,118
 
 At
        December 31, 2006, the contractual maturity of the securities held to maturity
        was within one year and none of the securities in this portfolio was considered
        other-than-temporarily impaired since such securities did not maintain
        significant gross unrealized losses for more then 12 months. **** At
        December 31, 2006, securities held to maturity with a carrying value of $125.2
        million were pledged to secure repurchase agreements. All held to maturity
        investments matured during the first semester of 2007.
 
 **6.**
              **Loans**
 
 The
        following table set forth details of the Bank’s loan portfolio:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006**Corporate
              
              
              1,886,580
              
              
              1,417,777Banks:Private
              
              
              1,485,313
              
              
              1,130,490State-owned
              
              
              241,322
              
              
              273,090Other
              
              
              118,623
              
              
              159,415Total
              
              
              3,731,838
              
              
              2,980,772
  F-24
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 The
        remaining loan maturities are summarized as follows:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006****Maturities:**Up
                  to 1 month
              
              
              667,612
              
              
              297,920From
                  1 month to 3 months
              
              
              667,393
              
              
              719,966From
                  3 months to 6 months
              
              
              572,597
              
              
              649,147From
                  6 months to 1 year
              
              
              617,482
              
              
              456,528From
                  1 year to 2 years
              
              
              399,655
              
              
              375,954From
                  2 years to 5 years
              
              
              729,786
              
              
              412,565More
                  than 5 years
              
              
              77,313
              
              
              68,6923,731,838
              
              
              2,980,772
 
 The
        following table provides a breakdown of loans by country risk:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006****Country:**Argentina
              
              
              263,814
              
              
              203,015Bolivia
              
              
              5,000
              
              
              5,000Brazil
              
              
              1,379,394
              
              
              1,316,650Chile
              
              
              10,000
              
              
              175,147Colombia
              
              
              400,458
              
              
              163,132Costa
                  Rica
              
              
              76,506
              
              
              85,028Dominican
                  Republic
              
              
              28,770
              
              
              8,805Ecuador
              
              
              60,529
              
              
              42,926El
                  Salvador
              
              
              46,563
              
              
              82,250Guatemala
              
              
              95,902
              
              
              88,573Honduras
              
              
              48,631
              
              
              36,466Jamaica
              
              
              77,401
              
              
              48,904Mexico
              
              
              410,164
              
              
              167,808Nicaragua
              
              
              12,616
              
              
              10,121Panama
              
              
              139,720
              
              
              180,511Peru
              
              
              454,226
              
              
              261,617Trinidad
                  and Tobago
              
              
              87,565
              
              
              103,513Venezuela
              
              
              134,579
              
              
              1,3063,731,838
              
              
              2,980,772
 
 The
        fixed
        and floating interest rate distribution of the loan portfolio is as
        follows:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006**Fixed
                  interest rates
              
              
              1,855,540
              
              
              1,498,338Floating
                  interest rates
              
              
              1,876,298
              
              
              1,482,4343,731,838
              
              
              2,980,772
  F-25
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
 
 At
        December 31, 2007 and 2006, 84% and 89%, respectively, of the loan portfolio
        at
        fixed interest rates has remaining maturities of less than 180
        days.
 
 The
        following is a summary of information on non-accruing loans, and interest
        amounts on non-accruing loans:
 *(In
                    thousand of US$)*
                
                **December
                    31,****2007**
                
                **2006**
                
                **2005**Loans
                    on non-accrual status
                
                
                -
                
                
                -
                
                
                28,822Interest
                    which would had been recorded if the loanshad
                    not been on a non-accrual status
                
                
                -
                
                
                -
                
                
                7,004Interest
                    income collected on non-accruing loans
                
                
                -
                
                
                2,721
                
                
                7,670Foregone
                    interest revenue
                
                
                -
                
                
                -
                
                
                -
 
 The
        following is a summary of information pertaining to impaired loans:
 *(In
                    thousand of US$)*
                
                **December
                    31,****2007**
                
                **2006**
                
                **2005**Impaired
                    loans with specific allowance for credit losses
                
                
                -
                
                
                -
                
                
                28,822Specific
                    allowance for impaired loans (under SFAS 114)
                
                
                -
                
                
                -
                
                
                11,184Average
                    balance of impaired loans during the year
                
                
                -
                
                
                18,168
                
                
                105,964Interest
                    income collected on impaired loans
                
                
                -
                
                
                2,721
                
                
                7,670
 
 At
        December 31, 2007 and 2006, the Bank has credit transactions in the normal
        course of business with 18% and 22%, respectively, of its Class “A” and “B”
stockholders (see Note 13). 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, 2007 and 2006, approximately 22% and 27%, respectively, of the
        outstanding loan portfolio is placed with the Bank’s Class “A” and “B”
stockholders and their related parties. At December 31, 2007, 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.
 
 During
        the year 2007, the Bank sold loans with a book value of $121.8 million, with
        a
        net gain of $271 thousand.
  F-26
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
          to consolidated financial statements**
  **7.**
              **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 2005, Bladex implemented a new methodology for estimating
        generic
        allowances for credit losses. The new methodology incorporates statistical
        data
        on Bladex’s historical loss performance to calculate the expected loss and loss
        given default ratios, replacing the use of general probability of default
        information from rating agencies used in the former model. The Bank believes
        that this new methodology represents a change in determining an adequate
        level
        of allowance for credit losses. The effect of the change in methodology for
        periods ending before December 31, 2005 is included into the 2005 earnings
        and
        represented a net reversal of provisions for $2.7 million (reversal of $5.9
        million in provision for loan losses and increase of $3.2 million in provision
        for off-balance sheet risk). The net effect of the change for the year ended
        December 31, 2005 was a decrease of $10 million in net income ($0.26 per
        share).
 
 The
        Bank
        classifies the allowance for credit losses into two components:
 
 a)
              Allowance
                  for loan losses:
 *(In
                    thousand of US$)*
                
                **December
                    31,****2007**
                
                **2006**
                
                **2005**Balance
                    at beginning of the year
                
                
                51,266
                
                
                39,448
                
                
                106,352Provision
                    (reversal) for loan losses:Current
                    year allocation
                
                
                11,994
                
                
                11,846
                
                
                (48,180
                )Effect
                    of a change in the credit loss reserve methodology - 2005
                
                
                -
                
                
                -
                
                
                (5,975
                )11,994
                
                
                11,846
                
                
                (54,155
                )Cumulative
                    effect on prior years (to December 31, 2004) of a change in the
                    credit
                    loss reserve methodology
                
                
                -
                
                
                -
                
                
                (5,937
                )Loan
                    recoveries
                
                
                6,434
                
                
                3
                
                
                2,612Loans
                    written-off against the allowance for loan losses
                
                
                (51
                )
                
                (31
                )
                
                (9,424
                )Balance
                    at end of the year
                
                
                69,643
                
                
                51,266
                
                
                39,448
 
 Reversal
                  of provision for credit losses are mostly related to reserves assigned
                  and
                  recovery of the Bank’s Argentine non-accruing portfolio, which was
                  collected during the last three
                  years.
 
 b)  Reserve
        for losses on off-balance sheet credit risk:
 *(In
                    thousand of US$)*
                
                **December
                    31,****2007**
                
                **2006**
                
                **2005**Balance
                    at beginning of the year
                
                
                27,195
                
                
                52,086
                
                
                33,101Provision
                    (reversal) for losses on off-balance sheet credit risk:Current
                    year allocation
                
                
                (13,468
                )
                
                (24,891
                )
                
                (210
                )Effect
                    of a change in the credit loss reserve methodology - 2005
                
                
                -
                
                
                -
                
                
                15,991(13,468
                )
                
                (24,891
                )
                
                15,781Cumulative
                    effect on prior years (to December 31, 2004) of a change in the
                    credit
                    loss reserve methodology
                
                
                -
                
                
                -
                
                
                3,204Balance
                    at end of the year
                
                
                13,727
                
                
                27,195
                
                
                52,086
  F-27
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
  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).
 
 **8.**
              **Other
                  Assets**
 
 At
        December 31, 2007 and 2006, other assets include an equity investment in
        a
        private investment fund for $2.4
        million and $3.1 million, respectively. Its main objective is to generate
        capital gains in the long term through the purchase of shares and convertible
        debt, mainly from Mexican manufacturing corporations or foreign corporations
        looking for establishing or expanding its operations in Mexico. During 2007,
        the
        Bank invested $0.4 million in the fund, and received a total of $1.1 million
        of
        capital distribution that generated a net loss of $106 thousand. During 2006
        the
        Bank invested $0.9 million.
 
 At
        December 31, 2007 the Bank is committed to invest $1.5 million in this fund.
 
 At
        December 31, 2007 and 2006, the Bank has not identified any events or changes
        in
        their financial condition that may have had a significant adverse effect
        on the
        carrying value of this investment. The Bank does not consider this investment
        to
        be other-than-temporary impaired.
 
 At
        December 31, 2006, other assets also included an equity investment of $500
        thousand in a company specialized in digital solutions. During the first
        semester of 2007, this investment was written off and charged to earnings
        as its
        impairment was considered other than temporary.
 
 **9.**
              **Deposits**
 
 The
                  maturity profile of the Bank’s deposits is as
                  follows:
 
 *(In
                  thousand of US$)*
              
              **December 31,****2007**
              
              **2006**Demand
              
              
              111,496
              
              
              132,130Up
                  to 1 month
              
              
              1,060,706
              
              
              578,220From
                  1 month to 3 months
              
              
              206,889
              
              
              317,153From
                  3 months to 6 months
              
              
              73,280
              
              
              28,774From
                  6 months to 1 year
              
              
              10,000
              
              
              -1,462,371
              
              
              1,056,277
  F-28
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 The
        following table presents additional information about deposits:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006**Aggregate
                  amounts of time deposits of $100,000 or more
              
              
              1,350,875
              
              
              924,147Aggregate
                  amounts of deposits in offices outside Panama
              
              
              290,501
              
              
              422,359Interest
                  expense paid to deposits in offices outside Panama
              
              
              22,636
              
              
              19,963
 
 **10.**
              **Short-term
                  borrowings**
 
 The
        breakdown of short-term borrowings due to banks and other creditors is as
        follows:
  *(In
                    thousand of US$)*
                
                **December 31,****2007**
                
                **2006**At
                    fixed interest rates:Advances
                    from corporations
                
                
                25,000
                
                
                -Advances
                    from banks
                
                
                1,181,500
                
                
                1,147,248Discounted
                    acceptances
                
                
                -
                
                
                10,0001,206,500
                
                
                1,157,248At
                    floating interest rates:Advances
                    from banks
                
                
                15,000
                
                
                -Total
                    short-term borrowings
                
                
                1,221,500
                
                
                1,157,248Average
                    outstanding balance during the year
                
                
                1,272,986
                
                
                497,830Maximum
                    balance at any month-end
                
                
                1,221,500
                
                
                1,208,348Weighted
                    average interest rate at end of the year
                
                
                5.31
                %
                
                5.56
                %Weighted
                    average interest rate during the year
                
                
                5.48
                %
                
                5.50
                %
  F-29
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **11.**
              **Borrowings
                  and long-term debt**
 
 Borrowings
        consist of long-term and syndicated loans obtained from international banks.
        Debt instruments consist of Euro-Notes and other issuances in Latin America.
        The
        breakdown of borrowings and long-term debt (original maturity of more than
        one
        year) is as follows:
 
 *(In
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006****Borrowings:**At
                  fixed interest rates with due dates from June 2008 to July
                  2011
              
              
              235,578
              
              
              105,180At
                  floating interest rates with due dates from January 2008 to March
                  2012
              
              
              708,690
              
              
              428,680Total
                  borrowings
              
              
              944,268
              
              
              533,860**Debt:**At
                  fixed interest rates with due dates in November 2014
              
              
              41,048
              
              
              -At
                  floating interest rates with due dates from January 2008 until
                  October
                  2010
              
              
              25,000
              
              
              25,000Total
                  debt
              
              
              66,048
              
              
              25,000Total
                  borrowings and long-term debt outstanding
              
              
              1,010,316
              
              
              558,860Average
                  outstanding balance during the year
              
              
              808,890
              
              
              497,830Maximum
                  outstanding balance at any month-end
              
              
              1,059,224
              
              
              558,860Weighted
                  average interest rate at the end of the year
              
              
              5.75
              %
              
              5.82
              %Weighted
                  average interest rate during the year
              
              
              5.94
              %
              
              5.50
              %
 
 The
        Bank's funding activities include a Euro-Note program, which may be used
        to
        issue notes for up to $2.3 billion, with maturities from 90 days up to a
        maximum
        of 30 years, at fixed or floating interest rates, or at discount, and in
        various
        currencies.
 
 During
        2007 the Bank issued long-term debt for a total of 123 million Peruvian Soles
        with maturity in November 2014. This issuance is hedged with cross-currency
        swaps at fixed interest rate.
 
 The
        notes
        are generally sold in bearer or registered form through one or more authorized
        financial institutions.
 
 Some
        borrowing agreements include various events of default and covenants related
        to
        minimum capital adequacy ratios, incurrence of additional liens, and asset
        sales, as well as other customary covenants, representations and warranties.
        At
        December 31, 2007, the Bank was in compliance with all
        covenants.
  F-30
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 The
        future maturities of long-term debt and borrowings outstanding at December
        31,
        2007, are as follows:
 
 *(In
                  thousand of US$)***Due
                  in:**
              
              **Outstanding**2008
              
              
              357,3002009
              
              
              138,0002010
              
              
              214,3932011
              
              
              109,5752012
              
              
              150,0002013
              
              
              -2014
              
              
              41,0481,010,316
  **12.**
              **Other
                  liabilities**
 
 Redeemed
        Preferred Stock:
 
 On
        May
        15, 2006, the Bank redeemed all non-voting preferred shares outstanding.
        In case
        of a liquidation of the Bank, the preferred stockholders were entitled to
        receive a liquidation preference of $10 per share, plus accrued and unpaid
        dividends. The Bank redeemed preferred stock at its par value by 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. At December 31, 2007
        and
        2006, the Bank had $1.3 million and $1.9 million, respectively, representing
        126,448 and 193,623 preferred shares, respectively, redeemed but not claimed
        by
        preferred shareholders, which are recorded in other liabilities. Preferred
        stockholders had the right to receive an interest equivalent to the same
        percentage as the common stockholders (excluding from the calculation any
        common
        stock issued as stock dividend).
 
 **13.**
              **Common
                  stock**
 
 The
                  Bank’s common stock is divided into three
                  categories:
 
 1)
              Class
                  “A”; shares may only be issued to Latin American Central Banks or
                  banks in
                  which the state or other government agency is the majority shareholder.
 2)
              Class
                  “B”; shares may only be issued to banks or financial
                  institutions.
 3)
              Class
                  “E”; shares may be issued to any person whether a natural person or
                  a
                  legal entity.
 
 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. 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 $50 million of its Class E shares of common
        stock, in the open market at the prevailing market price. In July 2006, this
        stock repurchase program was completed at an average price of $16.43 per
        share.
  F-31
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 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, 2007:
 
 *(Share
                  units)*
              
              **Class
                  “A”**
              
              **Class
                  “B”**
              
              **Class
                  “E”**
              
              **Total**Authorized
              
              
              40,000,000
              
              
              40,000,000
              
              
              100,000,000
              
              
              180,000,000**Outstanding
                  at December 31, 2004**
              
              
              6,342,189
              
              
              3,271,269
              
              
              29,283,621
              
              
              38,897,079Conversions
              
              
              -
              
              
              (56,925
              )
              
              56,925
              
              
              -Restricted
                  stock issued
              
              
              -
              
              
              -
              
              
              5,320
              
              
              5,320Repurchased
                  stock
              
              
              -
              
              
              -
              
              
              (805,900
              )
              
              (805,900
              )Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              276
              
              
              276**Outstanding
                  at December 31, 2005**
              
              
              6,342,189
              
              
              3,214,344
              
              
              28,540,242
              
              
              38,096,775Conversions
              
              
              -
              
              
              (488,954
              )
              
              488,954
              
              
              -Restricted
                  stock issued
              
              
              -
              
              
              -
              
              
              5,967
              
              
              5,967Repurchased
                  stock
              
              
              -
              
              
              -
              
              
              (1,774,818
              )
              
              (1,774,818
              )Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              1,150
              
              
              1,150**Outstanding
                  at December 31, 2006**
              
              
              6,342,189
              
              
              2,725,390
              
              
              27,261,495
              
              
              36,329,074Conversions
              
              
              -
              
              
              (64,540
              )
              
              64,540
              
              
              -Accumulated
                  difference in fraccional shares in coversion of common
                  stocks
              
              
              
              
              
              (3
              )
              
              
              
              
              (3
              )Restricted
                  stock issued
              
              
              -
              
              
              -
              
              
              22,240
              
              
              22,240Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              18,838
              
              
              18,838**Outstanding
                  at December 31, 2007**
              
              
              6,342,189
              
              
              2,660,847
              
              
              27,367,113
              
              
              36,370,149
 
 The
        following table presents information regarding shares repurchased but not
        retired by the Bank and accordingly classified as treasury stock:
 
 *(In
                  thousand, except for share data)*
              
              **Class
                  “A”**
              
              **Class
                  “B”**
              
              **Class
                  “E”**
              
              **Total****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount****Outstanding
                  at December 31, 2004**
              
              
              **318,140**
              
              
              **10,708**
              
              
              **568,010**
              
              
              **15,655**
              
              
              **2,196,616**
              
              
              **66,264**
              
              
              **3,082,766**
              
              
              **92,627**Repurchased
                  during 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              805,900
              
              
              13,815
              
              
              805,900
              
              
              13,815Restricted
                  stockissued
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,320
              )
              
              (152
              )
              
              (5,320
              )
              
              (152
              )Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (276
              )
              
              (8
              )
              
              (276
              )
              
              (8
              )**Outstanding
                  at December 31, 2005**
              
              
              **318,140**
              
              
              **10,708**
              
              
              **568,010**
              
              
              **15,655**
              
              
              **2,996,920**
              
              
              **79,919**
              
              
              **3,883,070**
              
              
              **106,282**Repurchased
                  during 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,774,818
              
              
              28,657
              
              
              1,774,818
              
              
              28,657Restricted
                  stock issued
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,967
              )
              
              (144
              )
              
              (5,967
              )
              
              (144
              )Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,150
              )
              
              (27
              )
              
              (1,150
              )
              
              (27
              )**Outstanding
                  at December 31, 2006**
              
              
              **318,140**
              
              
              **10,708**
              
              
              **568,010**
              
              
              **15,655**
              
              
              **4,764,621**
              
              
              **108,405**
              
              
              **5,650,771**
              
              
              **134,768**Restricted
                  stock issued
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (22,240
              )
              
              (531
              )
              
              (22,240
              )
              
              (531
              )Exercised
                  stock options - compensation plan
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (18,838
              )
              
              (449
              )
              
              (18,838
              )
              
              (449
              )**Outstanding
                  at December 31, 2007**
              
              
              **318,140**
              
              
              **10,708**
              
              
              **568,010**
              
              
              **15,655**
              
              
              **4,723,543**
              
              
              **107,425**
              
              
              **5,609,693**
              
              
              **133,788**
  **14.**
              **Cash
                  and stock-based compensation plans**
 
 The
                  Bank established equity compensation plans under which it administers
                  restricted stock and stock option plans to attract, retain and
                  motivate
                  Directors, and key employees and compensate them for their contributions
                  to the growth and profitability of the Bank.
  F-32
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 During
        2005 the Bank adopted SFAS No. 123(R) “Share-Based Payment”. As a result of the
        early adoption of this rule, compensation cost of $555 thousand was recorded
        in
        2005. The adjustment of $150 thousand to retroactively apply the new method
        was
        charged to income of 2005.
 
 Restricted
        Stock - Directors
 
 During
        2003, the Board of Directors approved a restricted stock award plan for
        Directors of the Bank that was amended during 2007. These Class “E” stocks may
        be sourced from treasury stock, or authorized unissued shares. Until 2006,
        the
        plan allowed Directors to receive Class “E” shares for each Director on an
        annual basis worth $10 thousand, and to the Chairman of the Board worth $15
        thousand. Following the amendment of this award plan, starting in 2007, annually
        the Board may grant Class “E” shares for each Director worth $50 thousand, and
        to the Chairman of the Board worth $75 thousand, all based on Bladex’s closing
        price in the New York Stock Exchange (“NYSE”) at the trading date of the grant.
        The restricted stocks have a cliff vesting period of five years after the
        grant
        date. During 2007, 2006, and 2005, the Bank issued under this plan 22,240,
        5,967, and 5,320 Class “E” common shares, respectively. Costs of restricted
        stock issued under this plan for $475 thousand in 2007, and $95 thousand
        in 2006
        and 2005, are amortized during the cliff vesting period. Related costs charged
        against income totaled $118 thousand, $65 thousand and $46 thousand in 2007,
        2006 and 2005, respectively. At December 31, 2007 remaining compensation
        cost
        for $587 thousand will be amortized over 3.06 years.
  Stock
        Option Plan 2006 - Directors and Key Employees
 
 On
        December 12, 2006, the Bank’s Board of Directors adopted the 2006 Stock Option
        Plan. The maximum aggregate number of shares which may be issued under the
        2006
        Stock Option Plan is two million Class E common shares. However, if there
        are
        any modifications to the number of shares representing the outstanding common
        stock of the Bank, as a result of a stock dividend, combination of stock
        or
        change in the corporate structure, the number of shares that may be issued
        under
        the 2006 Stock Option Plan will be revised. Under the 2006 Stock Option Plan,
        the Bank’s Board of Directors, with the recommendation and advice of the
        Nomination and Compensation Committee, may authorize the grant of options
        to any
        one or more key employees or directors of the Bank, as well as determine
        or
        impose conditions upon the grant or exercise of Options under the Plan. The
        Options expire seven years after the grant date and, except otherwise provided
        in the award agreement, shall be exercisable beginning on the fourth anniversary
        of the date of grant.
 
 During
        2007, the Board of Directors granted $95 thousand in stock options to members
        of
        the Board of Directors and $890 thousand in stock options to key employees
        of
        the Bank. At December 31, 2007, related cost charged against income was $302
        thousand. Remaining compensation cost for $709 thousand will be amortized
        over
        3.12 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****,**
                **2007**Weighted
                  average fair value option
              
              $
              4.72Weighted
                  average expected terms, in years
              
              
              5.50Expected
                  volatility
              
              
              36
              %Risk-free
                  rate
              
              
              4.81
              %Expected
                  dividend
              
              
              3.54
              %
  F-33
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 A
        summary
        of the status of the share options granted to Directors and key employees
        is
        presented below:
 
 **2007****Options**
              
              **Weighted
                  Average Option Price****Exercisable****Outstanding,
                  beginning of year**
              
              
              -
              
              
              -Granted
              
              
              208,765
              
              $
              16.34Forfeited
              
              
              -
              
              
              -**Outstanding,
                  end of year**
              
              
              208,765
              
              $
              16.34
 
 Indexed
        Stock Option Plan
 
 During
        2003, the Board of Directors approved an indexed stock option plan for Directors
        and key employees of the Bank, which was subsequently terminated in April
        2006.
        On an annual basis, the plan allowed Directors to receive options to purchase
        Class “E” shares from treasury shares already held, for an equivalent amount of
        $10 thousand, and for the Chairman of the Board, an equivalent amount of
        $15
        thousand. The number of options granted for key employees was determined
        by the
        Board of Directors based on the target of each eligible position and the
        value
        of the option at grant date. 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. As of December
        31, 2007, the Bank had an unrecognized compensation cost of $689 thousand
        related to non-vested options granted under the indexed stock option plan,
        which
        will be recognized over a period of 1.70 years. Related costs charged against
        income amounted to $828 thousand in 2007, $635 thousand in 2006, and $385
        thousand in 2005. 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:
 
 **2007**
              
              **2006**
              
              **2005**Weighted
                  average fair value option
              
              $
              6.02
              
              $
              4.5
              
              $
              5.3Weighted
                  average expected term, in years
              
              
              4.11
              
              
              6.1
              
              
              6.2Expected
                  volatility
              
              
              51.4
              %
              
              51.4
              %
              
              51.4
              %Risk-free
                  rate
              
              
              3
              %
              
              3
              %
              
              3
              %Expected
                  dividend
              
              
              6.7
              %
              
              6.7
              %
              
              6.7
              %
 
 A
        summary
        of the status of the share options granted under the indexed stock option
        plans
        is presented below:
 
 **2007**
              
              **2006**
              
              **2005****Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price****Outstanding,
                  beginning of year**
              
              
              523,723
              
              $
              14.53
              
              
              307,013
              
              $
              12.42
              
              
              184,836
              
              $
              18.53Granted
              
              
              -
              
              $
              -
              
              
              216,710
              
              $
              16.00
              
              
              152,084
              
              $
              17.30Forfeited
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              
              (29,907
              )
              $
              17.30Exercised
              
              
              (18,838
              )
              $
              8.50
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -**Outstanding,
                  end of year**
              
              
              504,885
              
              $
              14.47
              
              
              523,723
              
              $
              13.90
              
              
              307,013
              
              $
              17.30Weighted
                  average fair value of options granted during the year
              
              
              
              
              $
              -
              
              
              
              
              $
              4.48
              
              
              
              
              $
              5.18
 
  F-34
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **December
                  31, 2007****Range
                  of Exercise Prices**
              
              **Number**
                **Outstanding**
              
              **Weighted**
                **Average**
                **Exercise Price**
              
              **Weighted Average**
                **Contractual Life**
                **Remaining**
                **(in years)**$10.00
                  - 20.00
              
              
              504,885
              
              $
              14.47
              
              
              4.11
 
 Stock
        Option Plan - Discontinued
 
 During
        2000, the Board of Directors approved a stock option plan for Directors and
        employees 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 expires on the fifth year after the grant date.
        In
        addition, during 1995 and 1999, the Board of Directors approved two stock
        option
        plans for employees. Under these stock option plans, stock options were granted
        at a purchase price equal to the average market value of the common stock
        at the
        grant date. One third of the options may be exercised on each successive
        year
        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:
 
 **2007**
              
              **2006**
              
              **2005****Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price****Outstanding,
                  beginning of year**
              
              
              49,613
              
              $
              34.84
              
              
              56,093
              
              $
              34.34
              
              
              102,012
              
              $
              36.12Forfeited
              
              
              (2,850
              )
              $
              30.95
              
              
              (4,200
              )
              $
              34.47
              
              
              (37,483
              )
              $
              35.35Expired
              
              
              (8,600
              )
              $
              51.19
              
              
              (2,280
              )
              $
              32.88
              
              
              (8,436
              )
              $
              37.88**Outstanding,
                  end of year**
              
              
              38,163
              
              $
              31.46
              
              
              49,613
              
              $
              34.84
              
              
              56,093
              
              $
              34.34**Exercisable
                  at year end**
              
              
              38,163
              
              $
              31.46
              
              
              49,613
              
              $
              34.84
              
              
              56,093
              
              $
              34.34
 
 **December
                  31, 2007****Outstanding
                  Options**
              
              **Exercisable
                  Options****Range
                  of Exercise Prices**
              
              **Number
                  Outstanding**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Weighted**
                **Average
                  Contractual**
                **Life**
                **Remaining**
              
              **Number
                  Outstanding**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**$20.00
                  - 30.00
              
              
              14,143
              
              $
              23.12
              
              
              2
                  years
              
              
              14,143
              
              $
              23.12$30.01
                  - 40.00
              
              
              15,370
              
              $
              32.88
              
              
              4
                  years
              
              
              15,370
              
              $
              32.88$40.01
                  - 50.00
              
              
              8,650
              
              $
              42.56
              
              
              1
                  year
              
              
              8,650
              
              $
              42.56Total
              
              
              38,163
              
              $
              31.46
              
              
              
              
              
              38,163
              
              $
              31.46
 F-35
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 Other
        employee plans
 
 *Expatriate
        Officer 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 salaries, with each officer contributing an additional amount withheld
        from his salary. Contributions from officers were deposited in a saving account
        with the Bank at market interest rates until March 2007, when the Bank
        transferred the balance of contributions from both, the Bank and the officers,
        to a trust that is managed by a fund manager. Officers are entitled to the
        contributions from the Bank once they have worked with the Bank for at least
        three years. During the years 2007, 2006 and 2005, the Bank charged to salaries
        expense, $175 thousand, $261 thousand and $165 thousand, respectively. As
        of
        December 31, 2007, 2006 and 2005, the accumulated liability payable amounted
        to
        $382 thousand, $745 thousand and $484 thousand, respectively.
 
 *Deferred
        Equity Unit Plan (the “DEU Plan”):*
 In
        1999,
        the Board of Directors approved the adoption of the DEU Plan, which was
        subsequently terminated in July 2003. This plan expired in February 2006
        and
        employees exercised their rights in cash or shares.
 
 *Deferred
        Compensation Plan (the “DC Plan”):*
 In
        1999,
        the Board of Directors approved the adoption of the DC Plan, which was
        subsequently terminated in July 2003. The DC Plan has two separate features.
        Under the first component, the Bank could 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 would vest the DEU after three years of service.
        Distributions were made in respect of DEU on the later of (i) the date the
        vested DEU were credited to an employee’s account and (ii) ten years after the
        employee was first credited with DEU under the DC Plan. Participating employees
        receive dividends, with respect to their unvested deferred equity units.
        The
        second component allowed employees who are not citizens or residents of the
        United States of America to defer a percentage of their compensation, and
        receive discretionary matching cash contribution. In no event could 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. A summary of the status of the DC Plan
        is presented bellow:
 
 **2007**
              
              **2006**
              
              **2005**Outstanding,
                  beginning of year
              
              
              23,779
              
              
              27,953
              
              
              28,351Exercised
              
              
              (1,597
              )
              
              (4,174
              )
              
              (398
              )Outstanding,
                  end of year
              
              
              22,182
              
              
              23,779
              
              
              27,953
  As
        of
        December 31, 2007, 2006, and 2005, expenses recorded were $20 thousand, $48
        thousand, and $67 thousand, respectively.
  F-36
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **15.**
              **Earnings
                  Per Share**
 
 The
                  following is a reconciliation of the income and share data used
                  in the
                  basic and diluted earnings per share (“EPS”) computations for the dates
                  indicated:
 
 *(In
                  thousand of US$, except per share amounts)*
              
              **Year
                  ended December 31,****2007**
              
              **2006**
              
              **2005**Income
                  before cumulative effect of changes in accounting
                  principles:
              
              
              72,177
              
              
              57,902
              
              
              77,518Cumulative
                  effect on prior years (to December 31, 2004) of a change in the
                  credit
                  loss reserve methodology
              
              
              -
              
              
              -
              
              
              2,733Cumulative
                  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 available to common stockholders for both, basic and diluted
                  EPS
              
              
              72,177
              
              
              57,902
              
              
              80,101Weighted
                  average common shares outstanding - applicable to basic
                  EPS
              
              
              36,349
              
              
              37,065
              
              
              38,550Basic
                  earnings per share:Income
                  before cumulative effect of changes in accounting
                  principles
              
              
              1.99
              
              
              1.56
              
              
              2.01Cumulative
                  effect on prior years of accounting changes
              
              
              0.00
              
              
              0.00
              
              
              0.07Net
                  income per share
              
              
              1.99
              
              
              1.56
              
              
              2.08Weighted
                  average common shares outstandingapplicable
                  to diluted EPS
              
              
              36,349
              
              
              37,065
              
              
              38,550Effect
                  of dilutive securities (1):Indexed
                  stock option plans
              
              
              65
              
              
              507
              
              
              310Adjusted
                  weighted average common shares outstandingApplicable
                  to diluted EPS
              
              
              36,414
              
              
              37,572
              
              
              38,860Diluted
                  earnings per share:Income
                  before cumulative effect of changes in accounting
                  principles
              
              
              1.98
              
              
              1.54
              
              
              1.99Cumulative
                  effect on prior years of accounting changes
              
              
              0.00
              
              
              0.00
              
              
              0.07Net
                  income per share
              
              
              1.98
              
              
              1.54
              
              
              2.06Basic
                  earning per share
              
              
              1.99
              
              
              1.56
              
              
              2.01Diluted
                  earning per share
              
              
              1.98
              
              
              1.54
              
              
              1.99
 
 (1)
        At
        December 31, 2007, 2006, 2005, weighted average options for 38,467, 53,177
        and
        98,806, respectively, were excluded from the computation of diluted earning
        per
        share because the option’s exercise price was greater than the average quoted
        market price of the Bank’s common stock.
  F-37
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **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
                  thousand of US$)*
              
              **December
                  31,****2007**
              
              **2006**Confirmed
                  letters of credit
              
              
              97,211
              
              
              109,102Stand-by
                  letters of credit and guarantees:Country
                  risk
              
              
              113,924
              
              
              123,924Commercial
                  risk
              
              
              197,528
              
              
              168,295Other
              
              
              -
              
              
              20,000Credit
                  derivatives
              
              
              3,000
              
              
              -314,452
              
              
              312,219Credit
                  commitments
              
              
              129,378
              
              
              200,191Reimbursement
                  undertaking
              
              
              -
              
              
              2,687541,041
              
              
              624,199
 
 As
        of
        December 31, 2007, the maturity profile of the Bank’s outstanding financial
        instruments with off-balance sheet credit risk is as follows:
 
 *(In
                  thousand of US$)***Maturities**
              
              **Amount**Within
                  1 year
              
              
              427,146From
                  1 to 2 years
              
              
              70,502From
                  2 to 5 years
              
              
              41,807After
                  5 years
              
              
              1,586541,041
  F-38
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 As
                  of December 31, 2007 and 2006 the breakdown of the Bank’s off-balance
                  sheet exposure by country risk is as follows:
 
 *(In
                  thousand of US$)***2007**
              
              **2006****Country:**Argentina
              
              
              4,057
              
              
              1,055Brazil
              
              
              220,281
              
              
              213,956Chile
              
              
              590
              
              
              461Colombia
              
              
              4,225
              
              
              67,830Costa
                  Rica
              
              
              71,871
              
              
              11,553Dominican
                  Republic
              
              
              60,601
              
              
              112,234Ecuador
              
              
              81,379
              
              
              80,570El
                  Salvador
              
              
              1,675
              
              
              1,175Guatemala
              
              
              6,293
              
              
              5,980Honduras
              
              
              400
              
              
              -Jamaica
              
              
              15,615
              
              
              -Mexico
              
              
              11,750
              
              
              37,526Panama
              
              
              10,565
              
              
              40,152Peru
              
              
              10
              
              
              18,743Trinidad
                  and Tobago
              
              
              5,000
              
              
              -United
                  States
              
              
              18,616
              
              
              -Venezuela
              
              
              27,963
              
              
              32,782Other
              
              
              150
              
              
              182541,041
              
              
              624,199
 
 Letters
        of credit and guarantees
 The
        Bank,
        on behalf of its 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 guarantees, which are issued on behalf of institutional customers in
        connection with financing between its 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 the Bank’s
        overall credit risk. The Bank issues stand-by letters 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.
 
 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.
  F-39
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **17.**
              **Leasehold
                  and other commitments**
 
 Leasehold
        commitments
 
 At
        December 31, 2007, a summary of leasehold commitment is as follows:
 
 *(In thousand of*
                *US$)***Year**
              
              **Future
                  Rental****Commitments**2008
              
              
              6542009
              
              
              6602010
              
              
              6672011
              
              
              6182012
              
              
              417Thereafter
              
              
              1,1224,138
 
 Occupancy
        expense for years ended December 31, 2007, 2006 and 2005, amounted to $593
        thousand, $637 thousand, and $447 thousand, respectively.
 
 Other
        commitments
 
 *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 maintenance of a new technology platform and telecommunications services.
        The terms of these agreements are up to 8 years and some of them can be
        renegotiated for annual or semiannual price adjustments, after the fifth
        year.
 
 Under
        the
        terms of these agreements, the Bank has committed to contractually specified
        minimums payments over the contractual periods as follows:
 
 The
        contractual minimum payments are:
 
 *(In
                  thousand of US$)***Due
                  in:**
              
              **Amount**2008
              
              
              5772009
              
              
              5302010
              
              
              5192011
              
              
              3112012
              
              
              323Thereafter
              
              
              3362,596
 
 To
        the
        extent that the Bank does not fulfill 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-40
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 **18.**
              **Derivative
                  financial instruments**
 
 At
        December 31, 2007 and 2006, quantitative information on derivative financial
        instruments held for hedging purposes is as follows:
  **2007**
                
                **2006***(In
                    thousand of US$)*
                
                **Nominal**
                
                **Fair
                    Value**
                
                **Nominal**
                
                **Fair
                    Value****Amount**
                
                **Asset**
                
                **Liability**
                
                **Amount**
                
                **Asset**
                
                **Liability****Fair
                    value hedges:**Interest
                    rate swaps
                
                
                372,996
                
                
                122
                
                
                13,408
                
                
                249,338
                
                
                541
                
                
                2,196Forward
                    foreign exchange
                
                
                -
                
                
                -
                
                
                -
                
                
                13,146
                
                
                -
                
                
                201Cross-currency
                    interest rate swaps
                
                
                45,455
                
                
                -
                
                
                1,479
                
                
                3,600
                
                
                -
                
                
                164**Cash
                    flow hedges:**Interest
                    rate swaps
                
                
                20,000
                
                
                -
                
                
                1,129
                
                
                -
                
                
                -
                
                
                -Forward
                    foreign exchange
                
                
                26,282
                
                
                -
                
                
                883
                
                
                5,022
                
                
                -
                
                
                73**Total**
                
                
                464,733
                
                
                122
                
                
                16,899
                
                
                271,106
                
                
                541
                
                
                2,634Net
                    loss on the ineffective portion of hedging activities
                
                
                (989
                )
                
                
                
                
                
                
                
                (225
                )
 
 For
        control purposes, derivative instruments are recorded at their nominal amount
        ("notional amount") in memorandum accounts. Interest rate swaps are made
        either
        in a single currency or cross currency for a prescribed period to exchange
        a
        series of interest rate flows, which involve fixed for floating interest
        payments. The Bank also engages in some foreign exchange trades to serve
        customers’ transaction needs and to manage the foreign currency risk. All such
        positions are hedged with an offsetting contract for the same currency. The
        Bank
        manages and controls the risks on these foreign exchange trades by establishing
        counter party credit limits by customer and by adopting policies that do
        not
        allow for open positions in the credit and investment portfolio. 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. During 2005, the Bank settled, prior to maturity, certain
        hedge relationships accounted for as fair value hedges and recorded $2.1
        million
        in other income under derivative and hedging activities. These interest rate
        swaps were considered highly effective at reducing the interest rate risk
        associated with available for sale securities.
 
 The
        Bank
        estimates that approximately $127 thousand of gains reported in other
        comprehensive income (loss) at December 31, 2007, related to forward foreign
        exchange contracts were expected to be reclassified into interest expense
        as an
        adjustment to yield adjustment of hedged liabilities during the twelve-month
        period ending December 31, 2008.
 
 The
        Bank
        estimates that approximately $183 thousand of losses reported in other
        comprehensive income (loss) at December 31, 2007 related to forward foreign
        exchange contracts were expected to be reclassified into interest income
        as an
        adjustment to yield of hedged loans during the twelve-month period ending
        December 31, 2008.
  F-41
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 Types
        of Derivative and Foreign Exchange Instruments
 Interest
        rate swaps are contracts in which a series of interest rate flows in a single
        currency are exchanged over a prescribed period. The Bank has designated
        a
        portion of these derivative instruments as fair value hedges. Cross currency
        swaps ** are
        contracts that generally involve the exchange of both interest and principal
        amounts in two different currencies. The Bank has designated a portion of
        these
        derivative instruments as fair value hedges. Forward foreign exchange contracts
        represent an agreement to purchase or sell foreign currency on a future date
        at
        agreed upon term. The Bank has designated a portion of these derivative
        instruments as fair value and cash flow hedges.
 
 **19.**
              **Accumulated
                  other comprehensive income
                  (loss)**
 
 As
                  of December 31, 2007, 2006 and 2005 the breakdown of accumulated
                  other
                  comprehensive income (loss) related to investment securities available
                  for
                  sale and derivatives is as follows:
 
 *(In
                  thousand of US$)*
              
              **Investment**
                **Securities**
              
              **Derivative**
                **Financial**
                **Instruments**
              
              **Total****Balance
                  as of December 31, 2004**
              
              
              6,082
              
              
              -
              
              
              6,082Net
                  unrealized losses arising from the year
              
              
              (5,257
              )
              
              -
              
              
              (5,257
              )Reclassification
                  adjustment for gains included in net income(1)
              
              
              (206
              )
              
              -
              
              
              (206
              )**Balance
                  as of December 31, 2005**
              
              
              619
              
              
              -
              
              
              619Net
                  unrealized gains (losses) arising from the year
              
              
              5,349
              
              
              (72
              )
              
              5,277Reclassification
                  adjustment for gains included in net income(1)
              
              
              (2,568
              )
              
              -
              
              
              (2,568
              )**Balance
                  as of December 31, 2006**
              
              
              3,400
              
              
              (72
              )
              
              3,328Net
                  unrealized gains (losses) arising from the year
              
              
              (1,912
              )
              
              (2,081
              )
              
              (3,993
              )Reclassification
                  adjustment for gains included in net income(1)
              
              
              (9,119
              )
              
              143
              
              
              (8,976
              )**Balance
                  as of December 31, 2007**
              
              
              (7,631
              )
              
              (2,010
              )
              
              (9,641
              )
 (1)
        Reclassification adjustments include amounts recognized in net income during
        the
        current year that had been part of other comprehensive income in this and
        previous years.
 
 **20.**
              **Fair
                  value of financial
                  instruments**
 
 Bank’s
                  management uses its best judgment in estimating the fair value
                  of the
                  Bank’s financial instruments; however, there are limitations in any
                  estimation technique. Therefore, for substantially all financial
                  instruments, the fair value estimates herein are not necessarily
                  an
                  indicative of the amounts the Bank could have realized in a sale
                  transaction on the dates indicated. The estimated fair value amounts
                  have
                  been measured as of their respective year-ends, and have not been
                  re-expressed or updated subsequent to the dates of these consolidated
                  financial statements. As such, the estimated fair values of these
                  financial instruments subsequent to the respective reporting dates
                  may be
                  different than the amounts reported at each
                  year-end.
 
 The
                  following information should not be interpreted as an estimate
                  of the fair
                  value of the Bank. Fair value calculations are only provided for
                  a limited
                  portion of the Bank’s assets and liabilities. Due to a wide range of
                  valuation techniques and the degree of subjectivity used in making
                  the
                  estimates, comparison of fair value information of the Bank and
                  other
                  companies may not be meaningful for comparative analysis. The following
                  methods and assumptions were used by management in estimating the
                  fair
                  values of each type of financial
                  instruments:
  F-42
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 Financial
        instruments with carrying value equal to fair value
 
 The
        carrying value of certain financial assets, including cash and due from banks,
        interest-bearing deposits in banks, accrued interest receivable, customers’
liabilities under acceptances and certain financial liabilities including,
        customer’s demand and time deposits, short-term borrowings and securities sold
        under repurchase agreement, accrued interest payable, and acceptances
        outstanding, as a result of their short-term nature, are considered to be
        equal
        to fair value.
 
 Trading
        assets, trading liabilities and investment securities
 
 The
        fair
        value of investment securities has been based upon current market quotations,
        where available. If quoted market prices are not available, fair value has
        been
        estimated based upon quoted price of similar instruments, or where these
        are not
        available, on discounted expected cash flows using market rates commensurate
        with the credit quality and maturity of the security.
 
 Loans
 
 The
        fair
        value of the performing loan portfolio has been determined principally based
        upon a discounted analysis of anticipated cash flows adjusted for expected
        credit losses. The loans have been grouped to the extent possible, into
        homogeneous pools, segregated by maturity and the weighted average maturity
        of
        the loans within each pool. Depending upon the type of loan involved, maturity
        assumptions have been based on either contractual or expected maturity. 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 the related allowance for loan losses.
 
 Borrowings
        and long *-term
        debt*
 
 The
        fair
        value of long-term debt and borrowings is estimated using discounted cash
        flow
        analysis based on the current incremental borrowing rates for similar types
        of
        borrowing arrangements.
 
 Derivative
        financial instruments
 
 All
        derivative instruments are recognized in the consolidated balance sheet at
        fair
        value. Fair value is based on dealer quotes, pricing models, discounted cash
        flow analysis or quoted prices for instruments with similar characteristics.
  F-43
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
  The
        following table provides information on the carrying value and fair value
        of the
        Bank’s financial instruments:
  **December
                  31,***(In
                  thousand of US$)*
              
              **2007**
              
              **2006****Carrying**
              
              **Fair**
              
              **Carrying**
              
              **Fair****Value**
              
              **Value**
              
              **Value**
              
              **Value****Financial
                  assets:**Instruments
                  with carrying value equal to fair value
              
              
              593,856
              
              
              593,856
              
              
              433,409
              
              
              433,409Trading
                  assets
              
              
              52,597
              
              
              52,597
              
              
              130,076
              
              
              130,076Securities
                  available for sale
              
              
              468,360
              
              
              468,360
              
              
              346,194
              
              
              346,194Securities
                  held to maturity
              
              
              -
              
              
              -
              
              
              125,157
              
              
              125,118Loans,
                  net of allowance
              
              
              3,656,234
              
              
              3,674,978
              
              
              2,925,081
              
              
              2,940,941Derivative
                  financial instruments - assets
              
              
              122
              
              
              122
              
              
              541
              
              
              541**Financial
                  liabilities:**Instruments
                  with carrying value equal to fair value
              
              
              3,015,383
              
              
              3,015,383
              
              
              2,726,307
              
              
              2,726,307Borrowings
                  and long-term debt
              
              
              1,010,316
              
              
              1,023,413
              
              
              558,860
              
              
              563,183Trading
                  liabilities
              
              
              90,765
              
              
              90,765
              
              
              54,832
              
              
              54,832Derivative
                  financial instruments - liabilities
              
              
              16,899
              
              
              16,899
              
              
              2,634
              
              
              2,634
 
 **21.**
              **Litigation**
 
 Bladex
                  is not engaged in any litigation that is material to the Bank’s business
                  or, to the best of the knowledge of the Bank’s management, that is likely
                  to have an adverse effect on its business, financial condition
                  or results
                  of operations.
 
 **22.**
              **Business
                  segment information**
 
 The
        Bank’s activities are operated and managed by three segments, Commercial,
        Treasury and Asset Management. The segment information reflects this operational
        and management structure, in a manner consistent with the requirements outlined
        in SFAS No. 131, “Disclosures about Segments of an Enterprise and Related
        Information”. The segment results are determined based on the Bank’s management
        accounting process, which assigns consolidated balance sheets, revenue and
        expense items to each reportable division on a systematic basis.
 
 In
        2007
        the Bank segregated the Asset Management activities from the Treasury Segment.
        Business segment information reported in the financial statements for the
        years
        ended December 31, 2006 and 2005 has been restated to segregate the new Asset
        Management Segment.
 
 Commercial
        incorporates all of the Bank’s financial intermediation and fee generation
        activities. Operating income from the Commercial Segment includes net interest
        income from loans, fee income and allocated operating expenses.
  F-44
  **Banco
        Latinoamericano de Exportaciones, S. A.**
 **and
        Subsidiaries**
 
 **Notes
        to consolidated financial statements**
 
 Treasury
        incorporates deposits in banks and all of the Bank’s securities available for
        sale and held to maturity. Operating income from the Treasury Segment includes
        net interest income from deposits and securities available for sale and held
        to
        maturity, derivative and hedging activities, gain and losses on sale of
        securities available for sale, gain and losses on foreign exchange, and
        allocated operating expenses.
 
 Asset
        Management incorporates all of the Fund’s deposits and trading assets. Operating
        income from the Asset Management Segment includes net interest income from
        deposits with brokers, trading assets, derivative instruments for trading,
        gains
        and losses on trading, and allocated operating expenses.
 
 The
        following table provides certain information regarding the Bank’s continuing
        operations by segment:
  **Business
        Segment Analysis** **(1)**
 
 *(In
                  millions of US$)*
              
              **2007**
              
              **2006**
              
              **2005**COMMERCIALInterest
                  income
              
              
              221.6
              
              
              165.8
              
              
              101.7Interest
                  expense
              
              
              (157.5
              )
              
              (114.9
              )
              
              (62.3
              )Net
                  interest income
              
              
              64.1
              
              
              50.9
              
              
              39.4Net
                  other income (2)
              
              
              5.3
              
              
              6.4
              
              
              5.8Operating
                  expenses
              
              
              (27.2
              )
              
              (23.7
              )
              
              (21.7
              )Net
                  operating income (3)
              
              
              **42.3**
              
              
              **33.6**
              
              
              **23.5**Reversals
                  for loans and off-balance sheet credit losses
              
              
              1.5
              
              
              13.0
              
              
              38.4Impairment
                  on assets
              
              
              (0.5
              )
              
              0.0
              
              
              0.0Net
                  income, before cumulative effect of accounting change
              
              
              43.2
              
              
              46.6
              
              
              61.9Cumulative
                  effect on prior years (to December 31, 2004) of a change in the
                  credit
                  loss reserve methodology
              
              
              0.0
              
              
              0.0
              
              
              2.7Cumulative
                  effect on prior years (to December 31, 2004) of an early adoption
                  of the
                  fair value-based method of accounting stock-based employee compensation
                  plan
              
              
              0.0
              
              
              0.0
              
              
              (0.2
              )Net
                  income
              
              
              **43.2**
              
              
              **46.6**
              
              
              **64.5**Commercial
                  Assets and Contingencies (end of period balances):Interest-earning
                  assets (4)
              
              
              3,725.9
              
              
              2,976.3
              
              
              2,604.4Other
                  assets and contingencies (5)
              
              
              549.5
              
              
              653.7
              
              
              796.9Total
                  Interest-Earning Assets, Other Assets and Contingencies
              
              
              **4,275.4**
              
              
              **3,630.0**
              
              
              **3,401.4**TREASURYInterest
                  income
              
              
              33.7
              
              
              28.8
              
              
              15.1Interest
                  expense
              
              
              (27.5
              )
              
              (21.9
              )
              
              (9.2
              )Net
                  interest income
              
              
              6.2
              
              
              6.9
              
              
              5.9Net
                  other income(2)
              
              
              8.5
              
              
              2.1
              
              
              2.5Operating
                  expenses
              
              
              (4.3
              )
              
              (3.5
              )
              
              (2.7
              )Net
                  operating income (3)
              
              
              **10.3**
              
              
              **5.6**
              
              
              **5.8**Recoveries
                  on assets
              
              
              0.0
              
              
              5.6
              
              
              10.2Net
                  income
              
              
              **10.3**
              
              
              **11.1**
              
              
              **16.0**Treasury
                  assets and contingencies (end of period of balances):Interest-earning
                  assets (6)
              
              
              819.6
              
              
              775.2
              
              
              438.5Total
                  Interest-earning assets, other assets and contingencies
              
              
              **819.6**
              
              
              **775.2**
              
              
              **438.5**ASSET
                  MANAGEMENTInterest
                  income
              
              
              9.6
              
              
              8.7
              
              
              0.0Interest
                  expense
              
              
              (9.4
              )
              
              (7.7
              )
              
              (0.0
              )Net
                  interest income
              
              
              0.2
              
              
              1.0
              
              
              0.0Net
                  other income (2)
              
              
              23.9
              
              
              0.9
              
              
              0.0Operating
                  expenses
              
              
              (5.5
              )
              
              (1.9
              )
              
              (0.3
              )Net
                  operating income (3)
              
              
              18.6
              
              
              0.0
              
              
              (0.3
              )Net
                  income
              
              
              18.6
              
              
              0.0
              
              
              (0.3
              )Fund’s
                  Assets and Contingencies (end of period of balances):Interest-earning
                  assets (6)
              
              
              178.9
              
              
              158.4
              
              
              0Total
                  interest-earning assets, other assets and contingencies
              
              
              **178.9**
              
              
              **158.4**
              
              
              **0**
 (Continues)
  F-45
  **Banco
          Latinoamericano de Exportaciones, S. A.**
 **and
          Subsidiaries**
 
 **Notes
          to consolidated financial statements**
  *(In
                  US$ million)*
              
              **2007**
              
              **2006**
              
              **2005**TOTALInterest
                  income
              
              
              264.9
              
              
              203.3
              
              
              116.8Interest
                  expense
              
              
              (194.3
              )
              
              (144.5
              )
              
              (71.5
              )Net
                  interest income
              
              
              70.6
              
              
              58.8
              
              
              45.3Net
                  other income(2)
              
              
              37.7
              
              
              9.4
              
              
              8.4Operating
                  expenses
              
              
              (37.0
              )
              
              (28.9
              )
              
              (24.7
              )Net
                  operating income (3)
              
              
              **71.2**
              
              
              **39.3**
              
              
              **28.9**Reversals
                  for loans and off-balance sheet credit losses
              
              
              1.5
              
              
              13.0
              
              
              38.4Recoveries
                  (impairment) on assets
              
              
              (0.5
              )
              
              5.6
              
              
              10.2Net
                  income, before cumulative effect of accounting change
              
              
              72.2
              
              
              57.9
              
              
              77.5Cumulative
                  effect on prior years (to December 31, 2004) of a change in the
                  credit
                  loss reserve methodology
              
              
              0.0
              
              
              0.0
              
              
              2.7Cumulative
                  effect on prior years (to December 31, 2004) of an early adoption
                  of the
                  fair value-based method of accounting stock-based employee compensation
                  plan
              
              
              0.0
              
              
              0.0
              
              
              (0.2
              )Net
                  income
              
              
              **72.2**
              
              
              **57.9**
              
              
              **80.1**Total
                  Assets and Contingencies (end of period balances):Interest-earning
                  assets (4 & 6)
              
              
              4,724.4
              
              
              3,909.9
              
              
              3,042.9Other
                  assets and contingencies (5)
              
              
              552.5
              
              
              653.7
              
              
              796.9Total
                  Interest-Earning Assets, Other Assets and Contingencies
              
              
              **5,276.9**
              
              
              **4,563.6**
              
              
              **3,839.8**
  (1)
                The
                    numbers set out in these tables have been rounded and accordingly
                    may not
                    total exactly.(2)
                Net
                    other income excludes reversals (provisions) for loans and off-balance
                    sheet credit losses, and recoveries on assets.(3)
                Net
                    operating income refers to net income excluding reversals (provisions)
                    for
                    loans and off-balance sheet credit losses, recoveries on assets,
                    and
                    cumulative effect on prior years of changes in accounting
                    principles.(4)
                Includes
                    loans, net of unearned income and deferred loan fees.(5)
                Includes
                    customers’ liabilities under acceptances, letters of credit and guarantees
                    covering commercial and country risk, and credit commitments
                    and equity
                    investments recorded as other assets.(6)
                Includes
                    cash and due from banks, interest-bearing deposits in banks,
                    securities
                    available for sale and held to maturity and trading
                    securities.
 
 F-46


**E** **XHIBIT
      INDEX**




**Exhibit**




Exhibit 12.1.
            
            Rule
                13a-14(a) Certification of Principal Executive OfficerExhibit 12.2.
            
            Rule
                13a-14(a) Certification of Principal Financial OfficerExhibit 13.1.
            
            Rule
                13a-14(b) Certification of Principal Executive OfficerExhibit 13.2.
            
            Rule
                13a-14(b) Certification of Principal Financial OfficerExhibit 14.1.
            
            Code
                of Ethics