Financial Services
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.

Articles from this Chapter

Overview

Conservative growth: Cautious behaviour has maintained sector profitability for many years
OBG
plus

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…

Interview

Regional expansion: OBG talks to Rubens Amaral Jr, CEO, Banco Latinoamericano de Comercio Exterior
OBG
plus

Interview:Rubens Amaral Jr How difficult will it be to wean Panama’s economy off heavy public spending? RUBENS AMARAL JR: Panama has benefitted from its infrastructure investments and from having one of the region’s most open economies. We have seen important investment flows coming from different countries for sectors such as commercial real estate, logistics, distribution and retail. Panama has also been the recipient of investments from neighbouring countries such as Colombia and Venezuela.…

Analysis

Making the world go round: A look at the credit picture across the banking sector
OBG
plus

In the third quarter of 2013, credit was the main component of International Banking Centre (IBC) assets, reaching $62.5bn, 64% of the total. Interest generated by loans was the source of 58% of the IBC’s income from January to September 2013. In 2012 the volume of credit represented 154% of GDP in the IBC and 128% in the national banking system (NBS). The biggest share of the credit portfolio in the third quarter of 2013 was held by foreign private banks (FPBs), 42%, followed by Panamanian private…

Interview

Continuing growth: OBG talks to Augusto Restrepo, Vice-President, Bancolombia
OBG
plus

Interview:Augusto Restrepo Which factors will help the economy withstand any future global economic shocks? AUGUSTO RESTREPO: Panama’s distinguishing feature from other Latin American economies is its geographic position. This makes it a hub not only for transport but also for services, such as finance. In addition to attracting companies, we are also seeing that high-income expatriates are choosing to relocate to Panama. These factors, along with infrastructure investment such as the…

Interview

A mandate for growth: OBG talks to Raúl Alemán, General Manager, Banco General
OBG
plus

Interview:Raúl Alemán How do you assess current banking supervision? RAUL ALEMÁN: Since 1997, when the new banking law was approved, the Superintendency of Banks ( Superintendencia de Bancos de Panamá, SBP) has been working independently and adopting regulations to build a strong sector. More recently, this has involved greater supervision based on risks and using the same approach followed by other financial centres. This is new and is based on the model of corporate governance that…

Analysis

Numbers game: A rundown of the top players’ recent performance
OBG
plus

As in any mature banking sector, a small group of large banks dominate the market in Panama. By assets held in the third quarter of 2013, the five largest banks operating in Panama were Banco General, HSBC, Banco Nacional de Panama, Bladex and Bancolombia. Only Bancolombia does not operate in the national banking system (NBS), as it has an international licence. Banco Nacional de Panama is an official bank and the other three operate with general licence. Bancolombia began to operate in the NBS in…

Overview

Regional attraction: International transactions hold much growth potential
OBG
plus

Like its economy, Panama’s capital markets are highly internationalised. With a dollarised economy and free mobility of capital flows, Panama attracts brokers and financial institutions from other regions that choose the country to carry out their international financial operations, in other words the majority of their business. Another feature of the Panamanian capital markets is the important role played by the public sector, whose volume of issuance can make the market vacillate between good…