As of the end of September 2021, the domestic loan portfolio totaled USD 54.73 billion, a USD 586 million or 1.08% increase, according to the monthly Banking Activity Report (IAB, for its acronym in Spanish) issued by the Superintendency of Banks of Panama.
The report states that said growth in balances would indicate that the accounting effect of the availability of credit lines, at the onset of the pandemic, has not only dissipated but there is also certain reactivation of the demand for bankrolling in some portfolios.
Of the total domestic portfolio registered in the National Banking System, which as of September 2021 reached to USD 54.73 billion, USD 41.89 billion or 77% belong to the unmodified portfolio, which is still under conventional regulatory parameters (Rule 4-2013), while the remaining 23%, i.e. USD 12.85 [billion], represents the segment of loans under financial relief and banking flexibility regulations for debtors.
As for the risk level of the domestic portfolio, most of the portfolio (without reliefs), recorded 3% under the higher-risk categories (doubtful plus loss), which represents USD 1.35 billion.
It should be noted that the modified portfolio, although classified with similar names, is governed by regulatory parameters other than Rule 4-2013. This means, they are treated differently, and their classification is contained in Board of Directors’ General Resolution SBP-GJD-0003-2021. Therefore, under these parameters, the portfolio classified as doubtful and loss reached to USD 3.24 billion or 25% of the modified portfolio.
Regarding credit risk mitigation tools, increased by the effect of the pandemic, it led to a rise in provisions to face possible deterioration, and this is proven when we see the provisions registered in February 2020, when it was reported a total of USD 1.40 billion in the NBS (General License [banks only]), a figure that as of September 2021 amounted to USD 2.35 billion, which represents a growth of USD 955 million or 69% more than that registered in February 2020.
The report indicates that the latest global capital ratio reached to 16.43%, which is twice the minimum required by law (8%). This endurance is based on capital buffers and provisions, which have been strengthened as a result of the current regulation and which have been increasing since the outbreak of the pandemic due to the provisioning and the greater capitalization of profits, which would allow absorbing the most of the potential losses. In terms of liquidity, the Banking System reached to 63.6%, also more than double established by regulation.
Currently, all banks in operations satisfactorily comply with the bank capital and liquidity regulatory standards.
For September 2021, the assets of the International Banking Center (IBC) amounted to USD 131.2 billion, an USD 833 million increase versus September 2020, which shows a year-on-year increase of 0.6%.
The net profits of the International Banking Center, accumulated as of September 2021, reached to USD 967.2 million, 4.7% more than that of September 2020.
For further information on these variables and the results of this report, please visit our website www.superbancos.gob.pa/Financial & Statistical.
