International banking center of Panama

With a private sector portfolio of US$19,000 million, where commercial, mortgage and consumer credits divide the pie, in almost equal parts.

Consolidated assets for US$73,739 million registered by the International Banking Center of Panama (CBIP) as of May 2008, which represents a growth on average of 35.5% compared to the same period of 2007. For Gustavo Villa, director of Economic Studies of the Superintendencia de Bancos de Panamá (SBP), the banking sector is going through the highest growth cycles in the last years. The individual base assets reached US$61.242 million, which indicates a 28.6% growth in relation to the previous year. Liquidity is moderate from several angles, assures the specialist.

The main characteristic is that it’s acquiring deposits from the public sector. At the moment “the domestic deposits or those made by individuals are growing almost 19%, which demonstrates the capacity that the banks have to acquire local funding which is the main driver of growth for the system”. The net utility grew 24%, that is to say, US$549.4 as a result of the good handling of the margin of net interest that registered 2.57%. The maintained increase of the line of loans of 26.7% resulted in the good performance of the financial income.
The increase in other income was of 88.6% for foreign banking and 55% for local private banking, and in both cases the component of greater relevance was the growth of the commissions with 49% and 54% of the total income for bank group, respectively. The internal credit shows an increase in absolute variation of US$3.043 million, representing 17.2% in relation to the same period of 2007. (See Insert: Outstanding sectors) “If we saw liquidity as the capacity to have quickly convertible assets into cash to respond to the deposits of the system, we are speaking of the liquid assets plus the investments of negotiable character, that the banks can turn cash into reason for liquidity of the instrument very quickly, those assets represent almost 35% of the total of the deposits that the system has”, Villa explains.
The Panamanian banking system is made up by organizations coming from Europe, Asia and the United States. It has 91 banks, 44 of them have general license (27 of foreign capital and 17 of Panamanian capital), 32 banks with international license, 13 representative offices and 2 that have approved licenses, but have not officially begun operations. In addition, there are 5 requests for new banks that wish to enter into the center. According to the Annual Report of the Superintendencia de Bancos de Panamá, in 2007, they closed with consolidated assets for US$68.742 million.

In addition to the growth of the internal credit to the private sector in 17%, which leaned in the base of local savings, with internal deposits of individuals that were increased by 18.8% when comparing them with the closing of 2006, “which consolidates the liquidity of the system”. The economist Adolfo Quintero considers that the growth of the economies of the region has contributed in the prosperity and consolidation of the CBIP, “because Panama in addition to being a country of merchandise transfer, it’s also the point where the monetary flow converges”. The countries of the region represent a balanced accompaniment to Villa, because Panamá has financial depth (100%) comparable to developed countries like the United States, Germany and United Kingdom.