Panama's Bank Profits to Decrease in 2009

©image: Tracy O

Equilibrium, a risk rating firm and a subsidiary of Moody's Investors Service, Inc., believes that credit stagnation, lower margins and higher provisions will push the results of the Panamanian banks downward.

The general manager of the rating firm, Ernesto Bazán, told Prensa.com that "delinquencies in personal consumption portfolios have increased from 4.1% in December 2007 to 5.9% in December 2008, auto loan delinquencies went from 4.5% to 6.4% and mortgage delinquencies went from 5.4% to 6.5%."

Source: Prensa.com

More on this topic

Mortgage Delinquency Increases by 6.6% in Panama

April 2009

The delinquent mortgage portfolio reached $1.032 billion on January 31, 35% of all delinquencies in the system.

An analysis on mortgages by Equilibrium risk rating revealed that the financial system’s mortgage portfolio amounts to $22.4 billion or about 24.9% of all loans. Where late payments are concerned, mortgages have a much greater weight in the system, reaching 35% of all delinquent loans.

Panama: Crisis does not halt demand for credit cards.

November 2008

In spite of inflation and the world financial crises, Panamanians continue acquiring credit cards and the banks have not increased their restrictions.

As of September of this year the banking system credit card balance reached 629.8 million dollars, up 5.6 million dollars as compared to August's numbers of 324.2 million dollars, according to the Bank Superintendent's Office.

Panamanian banks very liquid

September 2008

83% of their resources are internal deposits, thereby creating a shield against the international crisis.

While the banking system in Panama is not 100% immune from the international liquidity crisis, it does have important advantages that help to minimize the impact, declared Ernesto Bazan, general manager of the Equilibrium Risk Agency.

Panama: New Calculation of Capital Adequacy Ratio

March 2009

The new provisions for calculating Capital Adequacy Ratio will be coming into force in Panamanian banks on April 1.

Assets that under the current rules were weighted at 100%, with the change will be weighted at 125% and 150%.

The general manager of Equilibrium risk rating, Ernesto Bazán, stated in an article in Prensa.com: "This means that assets, as measured by their risk will be higher and, therefore, the capital adequacy ratio of the Panamanian banking system will be reduced globally. It is currently at 14.3% and it could drop to 13.8% or less with the change."