Suspension of contracts, uncertainty about the economic future and reduction of salaries, are some of the factors that have affected the banks in Panama to place fewer loans in this context of health crisis.
The amount of new loans granted by Panamanian banks was $589 million during May this year, a 26% reduction compared to what was reported in April 2020.
After President Cortizo partially banned the moratorium bill, the National Assembly discussed the initiative in a second debate, which was unnecessary for the Superintendent of Banks, who said that the banks had already implemented the necessary measures.
Despite the fact that on May 4 President Laurentino Cortizo and the representative of the Panamanian Banking Association, Aimee de Grimaldo, signed an agreement to extend the moratorium until December 31, 2020 due to the economic crisis caused by covid-19, the deputies declared themselves in permanent session to discuss the moratorium project (already banned by the president) in second debate in extraordinary sessions from June 15 to 18.
Panamanian authorities announced that the Industrial and Commercial Bank of China Ltd. was approved for a general license to operate in the local system.
The information was confirmed by the head of the Superintendency of Banks, Amauri Castillo, who explained that the Asian banking institution will be able to operate in Panama's financial center and do business in and from the national territory.
In Panama, the Superintendence of Banks states that as a result of the changes made to comply with FATF requirements, 93 bank correspondents have been recovered.
Since the authorities in Panama began to make the changes required by the Financial Action Task Force (FATF) in the regulatory processes, the results have begun to be seen, as several foreign banks have expressed interest in returning to the Panamanian financial center.
In Panama, a group of businessmen from the Colon Free Zone have expressed concern about the bank's intervention, because although it was under investigation, it was allowed to engage with several companies.
As of September 9, local authorities took over the operational and administrative control of AllBank, Corp, arguing that the group of "shareholders did not respond in a timely manner to the requirements of the corrective actions" that were instructed. In October the Superintendence informed that the institution will continue to be taken, in this case until November 8.
Until November 8, 2019, the operational and administrative control of AllBank, Corp. was extended, an entity that was intervened because its " shareholders did not attend in time and opportunity the requirements of the corrective actions."
From May 2019, foreign customers will have to declare to local system banks that their funds meet their country's tax requirements.
The Superintendence of Banks of Panama (SBP) approved Agreement 02-2019, which implements the recommendations of the Financial Action Task Force, which consists of expanding the required due diligence measures of banks with their customers.
Almost a year after the liquidation of the bank was ordered, depositors have not yet received their funds, and in order to complete the settlement, the parent company will have to turn over $60 million.
Of the $100 million that Banca Privada de Andorra had registered as deposits in Panama, $60 million is abroad and the rest in Panama, reports Prensa.com.
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.
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.
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.
The Superintendency has reiterated that the decision taken to seize administrative and operational control of Balboa Bank & Trust is an isolated case, separate from the rest of the banking system.
From a statement issued by the Superintendency of Competition:
The Superintendency of Banks in Panama recommends to the community to only pay attention to official communications issued by the institution and to ignore unfounded and malicious rumors that are circulating or being published on social networks and other unauthorized media. We reiterate that such unfounded stories, could incur the commission of offenses, as provided in Section 260 of the Penal Code.
In response to rumors of more interventions into financial institutions, the Superintendency of Banks in Panama says that they are unfounded, highlighting the strength of the banking system.
From a statement issued by the Superintendency of Banks of Panama:
The Superintendency of Banks in Panama made public knowledge, that as a result of taking operational and administrative control of Balboa Bank & Trust and its subsidiaries a number of comments and news stories have arisen which do not have any foundation regarding future actions that may be taken by this institution on other banks, or conditions of vulnerability of some institutions in our banking system.
The Superintendency of Banks has reported on the accession of ten new correspondent banks from February 2016 to date.
Getting off the GAFI 's gray list is the reason why several foreign banks have decided to register new banking correspondents offices in the country, despite the consequences of the scandal referred to as the Panama Papers.
An agreement is in effect which requires banks to immediately register all customer transactions made through online banking services or at ATMs.
From April 1 all banking transactions made by the ACH system in Panama may be compensated and be made available to customers on the same day of the transaction. Agreement 001-2016 with the Superintendency of Banks requires banks to immediately register all transactions that customers make through online banking services or ATMs.