PANAMA CITY, March 12, 2026 (PBI) – Panama’s International Banking Center (CBI) concluded 2025 with a landmark expansion in its credit portfolio, surpassing the USD 100 billion threshold despite an increasingly competitive environment characterized by compressed interest spreads and rising funding costs.

According to the year-end report from the Superintendency of Banks of Panama (SBP), the CBI reported a net credit portfolio of USD 100.00 billion, a 5.06% year-on-year increase. This growth was largely propelled by a double-digit surge in offshore lending, which rose 12.18%, signaling Panama’s continued dominance as a regional credit hub for Latin America.

Solid Buffers and Asset Performance

The system remains highly capitalized and liquid, maintaining buffers that are nearly double the regulatory requirements. The Capital Adequacy Ratio reached 16.27% (vs. the 8% legal minimum), while the Legal Liquidity Index stood at 54.87%, far exceeding the 30% floor.

Total net assets for the CBI climbed to USD 163.01 billion, a 4.23% increase compared to 2024. The ratio of loans to deposits remained at a prudent 86%, reflecting a balanced approach to asset-liability management.

Profitability and Revenue Diversification

Net income for the CBI reached USD 3.00 billion, a modest 2.09% increase over the previous year. However, the report highlights a clear moderation in profitability indicators as banks navigate higher interest rates and a squeeze on traditional interest margins.

• ROA (Return on Assets): 1.88%
• ROE (Return on Equity): 16.13%

Crucially, the revenue mix is shifting. Non-financial income—driven by fees, commissions, and services—now accounts for 51.5% of total operating income. This diversification has become a vital cushion against the pressure on interest spreads caused by rising funding costs.

Domestic Trends and Asset Quality

The National Banking System (SBN), which focuses on domestic operations, reported profits of USD 2.68 billion, an 8.6% increase attributed to rigorous cost-control measures.

While the domestic credit portfolio saw a marginal growth of 0.96%, there was a notable divergence between sectors. Credit to the private sector grew by 1.73%, effectively offsetting a sharp 22.98% contraction in public sector lending.

Asset quality remained a strong point for the system. The delinquency rate (morosidad) dropped from 1.51% to 1.39%, while the overdue portfolio (cartera vencida) remained stable at 2.20%, suggesting that borrowers have largely adapted to the current interest rate environment.

Deposit Growth and External Funding

Total deposits reached USD 116.81 billion, up 5.72% year-on-year. The most significant growth came from external funding sources, which jumped 11.07%. Foreign deposits now represent nearly 40% of the system’s total funding base.

The regulator noted an increasing preference for demand deposits (depósitos a la vista), which enhances immediate liquidity but also increases the sensitivity of the bank’s funding to market fluctuations.

“The Panamanian banking system enters 2026 with robust structural foundations,” the SBP report concluded. “However, the focus for the coming year will remain on managing funding costs and maintaining operational efficiency to protect profitability in a high-rate environment.”