Profitability and Credit Risk Indicators show Improvement

Tuesday, 13 December 2022

The International Banking Center’s (IBC) loan portfolio show signs of improvement in terms of profitability and risk indicators, according to the statistics of the Banking Activity Report of October 2022, issued by the Superintendency of Banks of Panama (SBP).

The National Banking System’s (NBS) domestic portfolio recorded an increase that reached USD 58.72 billion, growing 7% or USD 3.86 billion compared to October 2021, which is related to higher qualified demand for credit. The largest contribution of this performance is thanks to the private sector portfolio, particularly the commercial and mortgage components.

On the other hand, the new loan portfolio also recorded a 69.1% increase, higher than that of the same period a year ago and higher than pre-pandemic levels, both in a month-to-month flow and the accumulated throughout the year (until October 2022).

IBC assets totaled USD 137.43 billion, which represented a US 6.10 billion growth versus October 2021, a year-on-year rise of 4.6%. The greater improvement of assets was recorded due to loan portfolio performance.

IBC banks profitability continues to improve, proof of this is that they totaled USD 1.50 billion, a 37% increase versus October 2021, thanks to margin improvement, controlled efficiency, underpinned by portfolio growth, lower credit costs.

IBC bank deposits recorded USD 96.92 billion, a USD 188 million (+0.2%) increase, which is partially attributed to the need to increase current household spending and commercial requirements.

It is noteworthy that, as of October 2022, the modified [loan] portfolio totaled USD 2.62 billion, which represented a 78% decrease compared to the same period a year earlier; the higher-risk components are the modified doubtful and the modified loss categories that together amount to USD 862 million.

These results demonstrate that the Panamanian financial system continues to show resilience and an overall sound position. However, the banking regulator will continue to closely monitor the effects of the financial juncture on the market liquidity and solvency performances, to maintain the stability of the system under the current situation.

For further information on the variables that explain the results of this report, please visit our website: / Financial and Statistical Node.

Rentabilidad e indicadores de riesgo del crédito reflejan dinamismo