FOREIGN TRADE BANK OF LATIN AMERICA, INC. | CIK:0000890541 | 3

  • Filed: 4/30/2018
  • Entity registrant name: FOREIGN TRADE BANK OF LATIN AMERICA, INC. (CIK: 0000890541)
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  • SEC filing page: http://www.sec.gov/Archives/edgar/data/890541/000114420418023750/0001144204-18-023750-index.htm
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    • ifrs-full:DisclosureOfOperatingSegmentsExplanatory

    17.
    Business segment information
     
    The Bank’s activities are managed and executed in two business segments: Commercial and Treasury. The business segment results are determined based on the Bank’s managerial accounting process as defined by IFRS 8 – Operating Segments, which assigns consolidated statement of financial positions, revenue and expense items to each business segment on a systematic basis. The Chief Operating Decision Maker (CODM), represented by the Chief Executive Officer (CEO) and the Management Committee reviews internal management reports from each division at least quarterly. Segment profit, as included in the internal management reports is used to measure performance as management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate within the same industry.
     
    The Bank’s net interest income represents the main driver of profits; therefore, the Bank presents its interest-earning assets by business segment, to give an indication of the size of business generating net interest income. Interest-earning assets also generate gains and losses on sales, such as for financial instruments at fair value through OCI and financial instruments at fair value through profit or loss, which are included in net other income, in the Treasury Segment. The Bank also discloses its other assets and contingencies by business segment, to give an indication of the size of business that generates net fees and commissions, also included in net other income, in the Commercial Business Segment.
     
    The Commercial Business Segment incorporates all of the Bank’s financial intermediation and fees generated by the commercial portfolio. The commercial portfolio includes book value of loans at amortized cost, acceptances, loan commitments and financial guarantee contracts. Profits from the Commercial Business Segment include net interest income from loans at amortized cost, fee income, gain on sale of loans at amortized cost, impairment loss from expected credit losses on loans at amortized cost, impairment loss from expected credit losses on loan commitments and financial guarantee contracts, and allocated expenses.
     
    The Treasury Business Segment incorporates deposits in banks and all of the Bank’s financial instruments at fair value through profit or loss, financial instruments at fair value through OCI and securities at amortized cost. Profits from the Treasury Business Segment include net interest income from deposits with banks, financial instruments at fair value through OCI and securities at amortized cost, derivative financial instruments foreign currency exchange, gain (loss) for financial instrument at fair value through profit or loss, gain (loss) for financial instrument at fair value through OCI, impairment loss for expected credit losses on investment securities, other income and allocated expenses.
     
    The following table provides certain information regarding the Bank’s operations by segment:
     
     
     
    Years ended December 31,
     
     
     
    2017(1)
     
    2016(1)
     
    2015(1)
     
    Commercial
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Interest income
     
     
    213,326
     
     
    236,392
     
     
    209,858
     
    Interest expense
     
     
    (92,745)
     
     
    (96,017)
     
     
    (82,697)
     
     
     
     
     
     
     
     
     
     
     
     
    Net interest income
     
     
    120,581
     
     
    140,375
     
     
    127,161
     
    Net other income (2)
     
     
    18,926
     
     
    16,333
     
     
    21,492
     
     
     
     
     
     
     
     
     
     
     
     
    Total income
     
     
    139,507
     
     
    156,708
     
     
    148,653
     
    Impairment loss from expected credit losses on loans and impairment loss from expected credit losses on loan commitments and financial guarantee contracts
     
     
    (9,928)
     
     
    (35,112)
     
     
    (12,800)
     
    Expenses, less impairment loss from expected credit losses
     
     
    (35,916)
     
     
    (34,599)
     
     
    (40,429)
     
     
     
     
     
     
     
     
     
     
     
     
    Profit for the year
     
     
    93,663
     
     
    86,997
     
     
    95,424
     
    Commercial assets and loan commitments and financial guarantee contracts (end of year balances):
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Interest-earning assets (3 and 5)
     
     
    5,500,673
     
     
    6,013,482
     
     
    6,682,445
     
    Other assets and loan commitments and financial guarantee contracts (4)
     
     
    493,794
     
     
    422,422
     
     
    437,436
     
    Total interest-earning assets, other assets and loan commitments and financial guarantee contracts
     
     
    5,994,467
     
     
    6,435,904
     
     
    7,119,881
     
     
     
     
     
     
     
     
     
     
     
     
    Treasury
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Interest income
     
     
    12,753
     
     
    9,506
     
     
    10,454
     
    Interest expense
     
     
    (13,519)
     
     
    5,328
     
     
    7,864
     
     
     
     
     
     
     
     
     
     
     
     
    Net interest income
     
     
    (766)
     
     
    14,834
     
     
    18,318
     
    Net other income (2)
     
     
    (428)
     
     
    (3,568)
     
     
    6,887
     
     
     
     
     
     
     
     
     
     
     
     
    Total income
     
     
    (1,194)
     
     
    11,266
     
     
    25,205
     
    Impairment loss for expected credit losses on investment securities
     
     
    489
     
     
    (3)
     
     
    (5,290)
     
    Expenses, less impairment loss for expected credit losses
     
     
    (10,959)
     
     
    (11,216)
     
     
    (11,355)
     
     
     
     
     
     
     
     
     
     
     
     
    Profit (loss) for the year
     
     
    (11,664)
     
     
    47
     
     
    8,560
     
    Treasury assets (end of year balances):
     
     
     
     
     
     
     
     
     
     
    Interest-earning assets (3 and 5)
     
     
    757,911
     
     
    1,177,961
     
     
    1,603,921
     
    Total interest-earning assets
     
     
    757,911
     
     
    1,177,961
     
     
    1,603,921
     
     
     
     
    Years ended December 31,
     
     
     
    2017(1)
     
    2016(1)
     
    2015(1)
     
    Combined business segment total
     
     
     
     
     
     
     
     
     
     
    Interest income
     
     
    226,079
     
     
    245,898
     
     
    220,312
     
    Interest expense
     
     
    (106,264)
     
     
    (90,689)
     
     
    (74,833)
     
     
     
     
     
     
     
     
     
     
     
     
    Net interest income
     
     
    119,815
     
     
    155,209
     
     
    145,479
     
    Net other income (2)
     
     
    18,498
     
     
    12,765
     
     
    28,379
     
     
     
     
     
     
     
     
     
     
     
     
    Total income
     
     
    138,313
     
     
    167,974
     
     
    173,858
     
    Impairment loss from expected credit losses on loans and impairment loss from expected credit losses on loan commitments and financial guarantee contracts
     
     
    (9,928)
     
     
    (35,112)
     
     
    (12,800)
     
    Impairment loss from expected credit losses on investment securities
     
     
    489
     
     
    (3)
     
     
    (5,290)
     
    Expenses, less impairment loss from expected credit losses
     
     
    (46,875)
     
     
    (45,814)
     
     
    (51,784)
     
    Profit for the year
     
     
    81,999
     
     
    87,045
     
     
    103,984
     
     
     
     
    December 31,
    2017
     
    December 31,
    2016
     
    Total assets and loan commitments and financial guarantee contracts (end of year balances):
     
     
     
     
     
     
     
    Interest-earning assets (3 and 5)
     
     
    6,258,584
     
     
    7,191,443
     
    Other assets and loan commitments and financial guarantee contracts (4)
     
     
    493,794
     
     
    422,422
     
    Total interest-earning assets, other assets and loan commitments and financial guarantee contracts
     
     
    6,752,378
     
     
    7,613,865
     
     
    (1)
    The numbers set out in these tables have been rounded and accordingly may not total exactly.
     
    (2)
    Net other income consists of other income including gains on sale of loans, gains (loss) per financial instrument at FVTPL and FVOCI, derivative instruments and foreign currency exchange.
     
    (3)
    Includes deposits and loans, net of unearned interest and deferred fees.
     
    (4)
    Includes customers’ liabilities under acceptances, loans commitments and financial guarantees contracts.
     
    (5)
    Includes cash and cash equivalents, interest-bearing deposits with banks, financial instruments at fair value through OCI, financial instruments at amortized cost and financial instruments at fair value through profit or loss.
     
     
     
    December 31,
    2017
     
    December 31,
    2016
     
    Reconciliation of total assets:
     
     
     
     
     
     
     
    Interest-earning assets – business segment
     
     
    6,258,584
     
     
    7,191,443
     
    Equity instruments
     
     
    8,402
     
     
    -
     
    Allowance for expected credit losses on loans
     
     
    (81,294)
     
     
    (105,988)
     
    Allowance for expected credit losses on securities at amortized cost
     
     
    (196)
     
     
    (602)
     
    Customers’ liabilities under acceptances
     
     
    6,369
     
     
    19,387
     
    Intangibles, net
     
     
    5,425
     
     
    2,909
     
    Accrued interest receivable
     
     
    30,872
     
     
    44,187
     
    Property and equipment, net
     
     
    7,420
     
     
    8,549
     
    Derivative financial instruments used for hedging - receivable
     
     
    13,338
     
     
    9,352
     
    Other assets
     
     
    18,827
     
     
    11,546
     
    Total assets – consolidated financial statements
     
     
    6,267,747
     
     
    7,180,783