Customer deposits continue to show an upward trend in the Panamanian banking system, as reflected in the Banking Activity Report for February 2022.
The structure of the deposits of the International Banking Center (IBC) is mainly based on taking individuals and corporate deposits, which are around 85% of total deposits and the remaining 15% are interbank and government positions. Meanwhile, the domestic deposits of the National Banking System (NBS) represent 74% of the system’s total deposits.
Regarding cost-bearing liabilities, fixed-term deposits continue to be the most important savings instrument and, in turn, allow banks to carry out adequate treasury management. As of February 2022, these represent 51.9% of domestic customer time deposits, by amounting to USD 24.41 billion; followed by savings that reached USD 14.1 billion and demand deposits, USD 9.45 billion.
The report, authored by the Superintendency of Banks, mentioned that demand deposits grew by 3.4% and customer savings deposits by 11.7%, while domestic customer fixed-term deposits increased 2.1% and external deposits, 5.7%.
Deposits taken by the banking system totaled USD 98.56 billion, which represented an increase of USD 2.62 billion, versus February 2021. Domestic deposits recorded a 1.6% growth, by totalizing USD 64.59 billion, compared to February 2021. On the other hand, external deposits recorded a 5% rise, reaching USD 33.97 billion.
As for the main financial soundness indicators, the IBC maintains great liquidity and solvency levels, above the regulatory minimums, which means that banks would have the capacity of absorbing macro financial risks resulting from external shocks.
The above is supported by the results of the latest global capital ratio, which grew 15.9%, almost twice the regulatory minimum, and the liquidity of the banking system reached to 63.4%, more than double the regulatory provisions.
This performance was the result of strengthened regulatory parameters, in terms of liquidity, through the application of the Liquidity Coverage Ratio (LCR), while deposits have remained in the growth path for the last months.
As of the end of February, the International Banking enter (IBC) recorded a total of USD 134.94 billion in assets, a year-on-year increase of 3.6% or USD 4.18 billion more versus February 2021, mainly driven by an increase in the net loan portfolio and the securities portfolio.
On the other hand, the domestic loan portfolio recorded USD 55.42 billion, a USD 1.27 billion or 2.3% more compared to February 2021. The report emphasizes that, although the country has started to show economic recovery signs, the increase has been asymmetrical between portfolios, in which it is observed that corporate and consumer loans have been strengthened.
The new loan portfolio recorded USD 3.12 billion, a year-on-year increase of 57%, versus February 2021. This positive performance occurred at a time when a rebound in COVID-19 cases was emerging, driven by a new variant (Omicron), which demonstrated the level of resilience in people due to the vaccination strategy.
Similarly, improvements in the modified loan portfolio were noticed, by recording an important decrease (USD 7.61 billion). This strategy reached its peak in August 2020, when it was near 51.6% of total loan portfolio, and as of February 2022 it represented 13.7%. Households and real estate are the sectors with the highest migration to the regular loan portfolio under Rule 4-2013.
The IBC recorded net profits of USD 325.3 million, a 67% or USD 130.5 million rise versus February 2021.
For further information on the variables that further explain the results of this report, please visit our website www.superbancos.gob.pa / Financial & Statistical node.
