SBP measures the state of the economy and future defaults on loans
The Superintendency of Banks of Panama (SBP) projects that the local economy will fall 6.3% at the end of this year, due to its paralysis and the uncertainty in which the various productive activities of the country are as a result of the Covid-19 pandemic.
The Ministry of Economy and Finance (MEF) projects a decrease between 8% and 9% for this year.
This morning, the Superintendent of Banks, Amauri Castillo, together with his technical team, gave a report on Financial Stability, for the first half of 2020, where they talked about the variables they use to measure the state of the economy, and about the Risks that have been accentuated in the financial sector as a result of the pandemic, such as consumer over-indebtedness and late payment, the clearest view of which will be taken at the end of the year and in early 2021, when the economy is expected to grow 4.1%, from according to the SBP studies.
The projections they make, however, could be adjusted to the extent that the observed risks prevail, such as the deterioration of the macroeconomic variables and the probability of default on loan payments to the financial sector.
The suspension of labor contracts, unemployment and the possible closure of companies is a matter of concern for the regulator, credit institutions and people. We are all in a complicated situation that we must manage with the best of care, Castillo said.
Until the month of July, the banks of the Panamanian plaza had modified more than a million loans with balances above $ 27 billion.
Castillo said that they observe as a positive symptom the fact that banks have spontaneously increased their reserves to cover loans that fall into the category of past due next year.
Despite the difficulties posed by the current situation, the SBP has stated the foundations of the banking system as a whole show the strength to face the economic consequences of the pandemic.
This morning, the Superintendent of Banks, Amauri Castillo, together with his technical team, gave a report on Financial Stability, for the first half of 2020, where they talked about the variables they use to measure the state of the economy, and about the Risks that have been accentuated in the financial sector as a result of the pandemic, such as consumer over-indebtedness and late payment, the clearest view of which will be taken at the end of the year and in early 2021, when the economy is expected to grow 4.1%, from according to the SBP studies.
The projections they make, however, could be adjusted to the extent that the observed risks prevail, such as the deterioration of the macroeconomic variables and the probability of default on loan payments to the financial sector.
The suspension of labor contracts, unemployment and the possible closure of companies is a matter of concern for the regulator, credit institutions and people. We are all in a complicated situation that we must manage with the best of care, Castillo said.
Until the month of July, the banks of the Panamanian plaza had modified more than a million loans with balances above $ 27 billion.
Castillo said that they observe as a positive symptom the fact that banks have spontaneously increased their reserves to cover loans that fall into the category of past due next year.
Despite the difficulties posed by the current situation, the SBP has stated the foundations of the banking system as a whole show the strength to face the economic consequences of the pandemic.