Divided between a national and an international banking system, the Panamanian banking sector was once dominated by foreign banks and global transactions, but now domestic and Latin American institutions are the main players. Despite the sector’s strong performance, large global banks like HSBC and BBVA decided to cease local operations, selling to regional counterparts. With these departures and the lack of a central bank or a lender of last resort, many banks are cautious about lending. Credit…
From The Report: Panama 2014
View in Online Reader
High economic growth over the past few years has benefitted Panama’s banking sector, which has shown a strong and stable performance. From the third quarter of 2012 to the same period in 2013 there was a 12% increase in total assets, with liquid assets registering the highest growth, at 22%. Assets, deposits and credit continue to grow, although profitability indicators are showing signs of deceleration. With a dollarised economy and free mobility of capital flows, Panama’s highly internationalised capital markets are also showing signs of expansion. In 2013 the traded volume of stocks increased 7% compared to the previous year, reaching $120m. The public sector plays a central role, with a volume of issuance that can make the market vacillate between good and bad years, as happened in 2012-13. Even so, Panama has significant potential to serve as a regional base for international financial institutions operating in global financial markets.
This chapter features interviews with Rubens V Amaral Jr, CEO, Banco Latinoamericano de Comercio Exterior; Augusto Restrepo, Vice-President, Bancolombia; and Raúl Alemán, General Manager, Banco General.