Because of the financial, operational and corporate governance situation of the banking entity, the Superintendence of Banks ordered the entire closure.
This measure was taken after the evaluation deployed in the Interim Administrator's Report, as well as the assessment of this Superintendence of Banks, details an official report.
The Swiss bank, Julius Baer, reported that it will close its representative offices in the Central American country and will concentrate on other larger markets in the region such as Brazil.
The statement of the financial institution was made after Matthias Krull, a former employee of the bank in Panama, pleaded guilty in the U.S. two months ago for money laundering in a case of diversion of funds from the Venezuelan state-owned oil company PDVSA.
As part of a reorganization process at the regional level, the Bank of Swiss origin has decided to close its representative office in Panama City.
Arguing that its exit from the Panamanian market has no relation to the Panama Papers scandal, and required a long planning process, a bank spokesperson told Swiss Info that offices in other Latin American countries will not be affected and will continue to operate normally.
A company spokesman told Swissinfo.ch that"... the closure is due to a reorganization of offices in Latin America, which represents 'a region of significant growth for asset management and private banking'."
Assurance has been given that companies where Continental Group or its shareholders have a minority participation may continue to operate normally.
As outlined in an article on Televicentro.hn , the general coordinator of Government, Jorge Ramon Hernandez Alcerro, stated that "... 'there are over 40 companies' which have with less than 50 percent in shares of Continental Group, whose president is the banker and politician Jaime Rosenthal."
Diagram showing the people and companies identified by actions related to money laundering, according to the U.S. Department of the Treasury´s Office of Foreign Assets Control.
The US Treasury Department has advised that it will not sanction individuals or institutions participating in the liquidation provided that those transactions do not benefit any individual or entity other than those previously identified by the OFAC.
The Office of Foreign Assets Control (OFAC) of the Treasury Department of the United States has issued a statement regarding the decision of the Honduran authorities to liquidate Continental Bank, after identifying the institution and several of its executives as being involved in drug money laundering:
Following the suspension of operations in June, the Banco Universal de Panama entered into an organizational process that culminated with the sale of assets and liabilities of the company.
The invitation to participate in the expressions of interest was issued to all banking institutions with a general license in the Panamanian banking system. The finalists in this auction, as reported Prensa.com, are Canal Bank and Lafise.
It has been announced that deposits up to $9,200 (L200,000) per person will be returned, and then payments to employees, depositors and others, noting that "... there are sufficient resources to address them all."
The cause is the inclusion of the institution in the list of the U.S Office of Foreign Assets Control, and the freezing of its assets abroad.
The group has announced that as part of its long-term strategy it will withdraw from the consumer banking business in Costa Rica, El Salvador, Panama, Guatemala and Nicaragua.
Extract from a statement issued by Citigroup:
Citigroup today announced strategic actions to accelerate the transformation of its Global Consumer Banking (GCB) to focusing on those markets where it has the largest scale and growth potential.
The Superintendency of Banks in Panama has taken over administrative and operational control of the bank due to its potential illiquidity and insolvency.
From a statement issued by the Superintendency of Banks of Panama:
Based on the provisions of Chapter XVI and Articles 131, 132 and related provisions of the Banking Act, by Resolution 097-2014 of 16 July 2014, the Superintendency of Banks of Panama has ordered the takeover of Administrative Control and Operations of ES BANK (PANAMA), SA effective from July 17, 2014 at 12:00.
French bank Societe Generale completely closed its operations in the country, where it maintained a representation office.
The reasons given by the bank is Panama´s inclusion on the list of tax havens in France.
An article in Prensa.com reports, "The Minister of Economy, Alberto Vallarino, said the bank followed a closing schedule which existed prior to Panama negotiating with France a treaty to avoid double taxation, but also said they would return when the country is out of the French listing.”
The French bank announced the sale of its Panamanian operations, arguing political and strategic motives.
In addition to leaving Panama, where it operated for 57 years, the bank will also leave Costa Rica, Argentina and Uruguay.
"An anonymous source from the banking industry reported that BNP Paribas executives announced their staff that OECD's pressure weighed in their decision of selling Panama's operations", reported Prensa.com.