Banking Profits grow 40%

According to the report of the Superintendence of Banks of Panama, during January 2018 the profits of the International Banking Center (IBC) registered an increase of 40% compared to the same period of the previous year.   This increase occurs as a result of increases in non-recurring financial income, such as the purchase and sale of securities and transactions in derivative instruments. Likewise, the decrease in the provision expense, as a result of the entry into force of IFRS 9, has allowed banks to make an adjustment against retained earnings, which has favored the performance of the first month of the year.

The report also indicates that the IBC maintains its indicators of financial soundness, mainly in terms of liquidity and solvency, at almost twice the minimum required by the regulation. The above and together with a strengthened regulatory framework, offer the necessary conditions to guarantee the solvency and financial stability of the IBC.

On April 9th, The Republic of Panama entered in the international markets through the issuance of a new Global Bond with maturity in 2050 for an amount of US $1,200 million and a coupon of 4.50%. The transaction closed with a margin over the US Treasury (30 years) of 150 basis points.

This issue attracted the interest of investors from regions such as North America, Europe, Asia, Australia, the Middle East and Latin America, receiving offers of up to 4,500 million dollars, three times more than the indicated amount. With this issue, the external yield curve of Panama's public debt is improved, obtaining a tighter margin over the US Treasury debt instruments, which results in lower financing costs for Panama.

Patton, Moreno & Asvat