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'."
The International Banking Center reported $118 billion in assets in 2015, $10 billion more than was recorded in 2014.
In 2015 the International Banking Center in Panama reported total assets in the order of $118,477 million, 9.2% more than the amount reached in 2014, when the figure reached $108,419 million, according to figures from the Superintendency of Banks in Panama.
Fitch is warning that the risks faced by banks are increasing and loan impairment in some segments could trigger a substantial deterioration in the financial performance of banks.
From a report by Fitch Ratings Central America:
Negative Outlook for Banking Industry: Fitch Ratings believes that the risks faced by banks are increasing, although its effect on balance sheets is slow because the environment is still favorable. However, the margin for maneuver is reduced and, therefore, the deterioration of loans in some segments could trigger a substantial deterioration in the financial performance of banks. This would be reflected in lower returns, adjusted capitalization and increased delinquency levels.
The criticism attracted by the latest "commercial" venture by the State Bank of Costa Rica should not stick to just the surface of the fairytale castle and pink marketing campaign, but should go to the heart of the concept of state banks, which today have degenerated into simple banking institutions with commercial privileges.
This is precisely what Sebastian Hernandez does in his lucid analysis of the launch of the new brand Banca Kristal in new branches of Banco de Costa Rica, an exclusive service for women, and one which is painted pink.
Six new institutions want to join the 94 that make up the banking center which operates in the country, whose assets grew by 35% in the last three years.
Data from the Superintendency of Banks indicates that "... the banking center currently has 94 entities: 2 official banks, 18 Panamanian banks with a general license; 29 foreign banks with a general license, 29 internationally licensed and 16 representative offices.
Growth in income and increased foreign investment explain part of the increase from the $49,730 million worth in deposits in August 2010 to $73,302 million in the same month this year.
The Superintendency of Banks of Panama (SBP) reported that deposits which grew the most in the period in question are internal deposits in the International Banking Center (IBC) with a balance of $44.6 million, followed by individual deposits, with $34.1 million and finally government deposits with $6.4 million.
The agreement for Panama not to feature in Colombia's gray list establishes a deadline of one year for the signing of an agreement on double taxation and exchange of financial information, and is a sign that sooner rather than later, the Panamanian corporate and financial center will lose their comparative advantages.
Analysis by Fitch Ratings projects that banks in the region will maintain strong balance sheets and have stable profitability in 2014.
Excerpted from Fitch Ratings:
Differential Growth and Opportunities: Low financial depth, in most systems, continues to provide significant opportunities for expansion of bank balance sheets; although this is limited by low average income levels. In 2014, assets in the region could increase about 10%, mainly driven by higher portfolios. Central American banking portfolio growth will reach double digits, except for the systems in El Salvador and Panama, which will grow at a slower pace.
In the first half of the year profits in the banking system amounted to $900 million, a variation of -6.2% compared to the profits generated in the same period in 2013.
The Superintendency of Banks of Panama reported that this reduction is due to the loss of up to 14% in other income. In the case of Panamanian banks, the situation is more favorable, as they increased their profits in comparison to the same period of 2013 by 10.5%.
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