Assets of the Panamanian banking center increased by US$5.6 billion

Panama’s International Banking Center (CBI) recorded assets of US$136.7 billion at the end of September 2022, representing an increase of US$5.6 billion compared to the same period of 2021, a year-on-year increase of 4.2%.

It was the result of a 14.2% increase in the net loan portfolio and a 6.8% increase in the investment component, according to the latest report from the Superintendency of Banks.

The entity points out that, as mentioned in previous reports, on the liquid assets side, even though it shows a lower performance of minus 26.5%, this is the counterpart reflection of the increase in credit.

“Regarding the net credit portfolio as of September 2022, the CBI presented an increase of 14.2% to reach a balance of US$82.9 million. Thus, CBI’s credit portfolio continues to evolve favorably,” the official report states.

On the other hand, it reveals that the local portfolio of the National Banking System (SBN) registered a growth of the gross credit portfolio, which reached a balance of US$58.1 billion, with a 12-month dynamism of 6.2% (US$3.4 billion), related to the higher qualified demand for credit.

It is indicated that with this result, the private bank credit portfolio registered the highest annual growth since January 2018.

Referring to the flow of new credit, during the period January to September 2022, an increase of 57% was recorded, higher than that granted in the same period of the previous year, which is still influenced by a comparison base effect.

Although the performance of this flow of disbursements is positive, it has begun to show signs of moderation in its growth rate, according to the banking superintendency.

It adds that, most recently, the quality of bank assets has shown slight improvements. The delinquency segment registered 4.0%, of which 1.6% represents loans more than 30 days overdue and 2.3% for those loans more than 90 days overdue.

The performance in delinquency activity is influenced by the past-due loan component. At the end of the third quarter of 2022, the indicator of past due loans over 90 days past due decreased to 2.3%, mainly due to loan write-offs and the expansion of the loan portfolio.

However, the banking entity states that asset quality is expected to be weaker in the coming months, although it should remain manageable.

Similarly and favorably, it argues that reserve coverage on non-performing or past-due loans strengthened during the pandemic, increasing banks’ capacity to absorb losses from future loan impairment.

In doing so, it argues that allowance coverage for credit losses on past due loans, including additional allowance for loan impairment, reached 134.5% coverage.

The modified portfolio as of September 2022 is US$3 billion, which represents a reduction of 76% compared to the same period of the previous year.

In its report, the Superintendency of Banks adds that the highest risk components of this portfolio, i.e., modified doubtful and modified unrecoverable classifications, amount to US$935 million.

It points out that due to the normalization of economic activity in the country, the containment measures have been gradually ceasing, which has impacted this performance.

With information from Bloomberg