Local banks managed to absorb part of the increase in interest rates

“Banks have been able to absorb much of the rise in interest rates,” he commented Carlos Alfredo Berguido, Executive President of the Association of Banks of Panama (ABP) during the preparation of the quarterly balance sheet on the operations of the international banking center.

The competitive environment of the banking system is an element that helps prevent this increase from having an impact on customers, but Berguido is aware that “It would be delusional to think it won’t affect us.”

Eye, Otto Wolfschoon, President of the Board of Directors of ABP, he reported that additional increases are expected in the rest of the year, but at more intervals.

Wolfschoon explained that it was commercial loans are the first to adjust to interest rate increasesHowever, there is no particular segment that is more limited than others, he explained.

Raising rates assumes that there should be a fall in inflationwhich also means a drop in production.

However, according to the opinion of economists, the country does not need a brakethrough increasing rates.

On the other hand, he does not think that this situation will produce a recession in Panamabut it is an element that will slightly reduce the strength of economic growth in the future.’

Assets increased by 3.2%, totaling more than 122 billion dollars for the month of February, while loans increased by 11.3%.

Figures for the banking center continue to grow in the first months of the year, with a slight drop in deposits, compared to the same period in 2022.

The sectors with the best results are still mortgage loans, followed by personal consumption, commercial and construction.

Of the new loans, those approved for trade, which includes the service sector, as well as those for personal consumption and mortgages stand out.

The The country’s economy grew by 10.8% in 2022with high inflation compared to previous years of 2.9% and an unemployment rate close to 9%.

The last hike he did United States Federal Reserve it was published on March 22 and amounted to a quarter of a percentage point.

On the other hand, Wolfschoon stressed that the country With its monetary and banking system, it presents many advantagessuch as competition between banks who, when competing, tend to keep their margins low, trying to compensate by being more efficient.

Typically, when these interest rate adjustments occur, They arrive in Panama somewhat late.

The transmission mechanism is diverse, explained the director of ABP, who illustrated it part of the financing of almost all domestic banks comes from the United States and those rates adjust quickly.

On the other hand, there are longer financings with interest rates that change to six months, and in addition there are depositorsmany of which maintain fixed-term funds, so interest increases slowly.

banking center

The The figures of the banking center continue to grow in the first months of the yearwith a slight drop in deposits, compared to the same period in 2022.

The assets rose 3.2%, totaling more than $122 billion in Februarywhile loans grew by 11.3%.

The sectors with the best results are still mortgage loansand then those of personal consumption, commercial and construction.

As for new loans, those approved the marketwhich includes the service sector as well as personal consumption and mortgages.