The consortium formed by Odebrecht and FCC Construction is negotiating with international banks to redefine the funding structure for the project, valued at $2 billion.
Since the start of the revelations of the corruption scandal in which the Brazilian construction company Odebrecht was involved, doubts have arisen about how this could affect financing of the construction project for Line 2 of the Panamanian Metro, whosecontract was awarded in June 2015under the turnkey format.
The Superintendency of Securities may provide access to bank information when investigations because of breaches are carried out in the stock market.
The decree took effect on December 17, 2016, and states that when the Superintendency of Securities (SMV) requires information on bank depositors and liabilities, this will be requested through the Superintendency of Banksof Panama. In addition, the two regulators signed a memorandum of understandingto facilitate exchange of information.
In the interests of greater transparency, the Superintendency of Banks has reported the details of the fines imposed in 2015 and 2016 on nine banks in the Panamanian banking system.
The Banks sanctioned in 2015 and 2016 are the state run Caia de Ahorros and St. George Bank, Banco Azteca (Panama), Austrobank Overseas (Panama), Banesco, Unibank, Banco Universal (now liquidated), Global Bank and Bank Ficohsa.
Fitch foresees returns for Nicaraguan banks, however the result will not be as good for the banking industry in Panama, Guatemala or El Salvador.
From Fitch's report "2017 Outlook: Central American and Dominican Republic Banks"
The 2017 Central American bank rating outlook is stable for 2017, reflecting slight changes in growth and financial performance, according to a new Fitch Ratings report. The evolution of some factors, such as interest rates and private investment, or the emergence of events that could increase reputation risk could alter the banking outlook.Stable Rating Outlook: The ratings of most banks in the region have a stable outlook, reflecting the fact that their credit profile will not undergo significant changes in Fitch's base scenario.Movements in the ratings will be derived mainly from adjustments in ratings of parent banks or sovereign ratings, or of unanticipated events.
Business management is the resource which determines the success or failure of a business, and the quality of that management determines, unfailingly, the market.
EDITORIAL
In Costa Ricaastate run bankand anagricultural cooperativehave once again been rescued from insolvency and the mismanagement of their managers, using, as it would not have been possible any other way, money belonging to taxpayers.
Up to the month of August the balance of the loan portfolio in the banking system amounted to $47.7 million, 9.9% more than in the same month in 2015.
Although the latest official census figures on constructions were not very promising, this sector continues to lead the growth of credit in Panama.Up to August, credit granted by banks to the construction sector recorded its second highest rate of growth, with 16%, preceded only by credit for industrial activities, which grew by almost 20% during the period in question.
The reorganization process and subsequent sale of the Panamanian bank has been extended for 90 days, and eleven local and two foreign banking groups are interested in the process.
From a statement issued by the Superintendency of Banks in Panama:
Through Resolution SBP-0198-2016 of October 27, 2016, the Superintendency of Banks ordered an extension to the Reorganization of Balboa Bank & Trust Corp., which must be completed within a period of ninety (90) days, which may be brought forward or extended, based on a reasoned request by the reorganizer, as provided in paragraph 3 of Article 142 of the Banking Law.This measure is effective from Tuesday the first (1) of November two thousand and sixteen (2016) from 2:30 pm.
In Panama investors to whom the company owes $4.8 million in debt bonds will have to wait for the bank to be sold before recouping their investment.
Balboa Bank and Balboa Securities, which are under intervention of the Superintendency of Securities Market since they were included in the Clinton list, do not have sufficient funds to honor the $4.8 million owed in respect of securities.
Cost analysis, interest rates and annuities for credit cards and other financing cards issued in Panama in August 2016.
Up until this July the balance on credit cards was $1.865 million, 21.6% more than the balance recorded in July 2015, which was $1,533,000.
The lowest rate of average annual interest in the local market is located at 7.50%, while the highest is at 28%, reveals a quarterly study published by the Authority for Consumer Protection and Defense of Competition (Acodeco ).
Between January and June this year new loans for construction activities totaled $1.497 billion, 10% less than in the same period in 2015.
Of the $1.497 billion awarded in construction loans, 17% were financing for commercial premises, almost 5% for housing construction, 8% for infrastructure and 37% for other buildings, according to figures from the Superintendency of Banks of Panama.
Moody's warns of the risks faced by banks in Central America in the context of a rising trend in interest rates and dollarization of their loan portfolios.
From a report by Moody's:
Mexico, September 14, 2016 -- Banks in Central America face rising asset risks as interest rates look set to rise in the region, pushing up debt service costs for borrowers, according to a report from Moody's Investors Service.
On October 12 and 13 representatives from the banking and financial sector will be gathering together in Panama City to discuss issues relating to regulation, business and investment.
The International Finance Summit is an event being organized by the Banking Association of Panama and will be held at the Hotel Trump Ocean Club Convention Center.
Fitch notes a high level of competition in the segment of medium-sized banks, limiting the power of price and putting pressure on margins despite specialization in niche markets.
From the report "Panorama of Mid Sized Panama Banks":
Mid Sized Panamanian Banks: Concentrations and Limited Capacity for Absorption of Losses
The Financial Regulator of New York has fined the Taiwanese company Mega International Commercial Bank $180 million, citing irregular transactions in its operations between Panama and New York.
The Bank of Taiwanese origin, with global assets worth more than $100 billion, operating in Panama since 1974, violated rules of prevention and control of money laundering when performing certain "suspicious" transactions between the bank in New York and branches in Panama City and the Colon Free Zone.
Increased operating costs because of risk controls imposed by the US have led to correspondent banks avoiding working with small banks.
Maintaining small structures at the same time as paying high costs in order to meet the standards required internationally, primarily in the United States, is no longer viable for banks who want to remain profitable.