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%."
Slow growth is projected in El Salvador, very good performance in Nicaragua, stability in Panama, more competition in Guatemala and moderate growth in Costa Rica.
From a report by Fitch Ratings entitled "2015 Perspectives: Central American Banks":
Fitch Ratings has revised the outlook for the sector from positive to stable, because the agency does not anticipate substantial improvements in respect to the previous year. The system's profitability will remain low, with less than 1.0% ROAA. The results are limited because of the high dependence on net interest margin (NIM) and additional expenses in provisions for loan losses, due to regulatory changes that established gradual constitutions of general provisions for the best qualified loans. In addition, Fitch does not anticipate improvements in revenue diversification and also foresees a significant revenue exchange rate differential. This last factor has a significant influence on the results of the banks in Costa Rica.
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.
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.
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.
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