Panama’s international banking center has exceeded $100 billion in deposits for the first time in its history, according to the latest report from the Superintendency of Banks of Panama (SBP). As of March 2023, bank deposits totaled $100.38 billion, up $1.95 billion or 2% compared to the figure recorded a year ago.

The Superintendent of Banks of Panama highlighted “the level of confidence that the Panamanian banking center continues to generate, both in the domestic market of local deposits and in external deposits, particularly from Latin America.” The balance of external deposits was $37.44 billion in March, an 8.2% increase compared to the previous year.

According to the classification by countries in the SBP report, Colombia leads the portfolio of external deposits with a 21.7% share, followed by Venezuela (5.8%), Peru (5.7%), and the United States (5.6%). One of the factors that favors the attraction of external deposits is the fact that Panama uses the US dollar, which is a strong currency compared to the currencies of the Latin American region. Additionally, Panama is perceived as a banking refuge in the face of the instability of the depositors’ home countries.

At the end of the first quarter of 2023, local credit portfolios reached a balance of $58.48 billion, an increase of 4.9% or $2.71 billion compared to March 2022. The growth is marked by the performance of the mortgage portfolio, the largest in the system with $20.02 billion, driven by preferential mortgage loans, which grew at a rate of 12.2%. In the business sector, important portfolios such as trade ($11.66 billion, up 6.6%) and industry ($3.28 billion, up 6.3%) also grew, while the construction portfolio fell 4.3%, to $4.99 billion.

The growth of loans comes amid an external environment with pressures from rising interest rates and uncertainty about the condition of banks in other regions. Despite this, Panama “continues to have a qualified demand for credit,” according to the Superintendent. The banks that make up the international banking center obtained accumulated profits of $695 million, up 37.1% compared to the first quarter of 2022. Meanwhile, the banks that operate locally recorded a profit of $473.7 million, up 42.9%, benefiting from increased credit activity and reduced provisions.

Overall, Panama’s banking center has shown resilience in the face of global challenges, and its position as a banking refuge continues to attract external deposits.