Fitch: Negative Sector Outlook for Panamanian Banks in 2016

SAN SALVADOR, El Salvador--(BUSINESS WIRE)-- With risks on the rise, competition pressuring profitability, and limited ability to absorb losses, Panamanian banks face a negative sector outlook according to a new Fitch Ratings report.

"Risks in the Panamanian banking system are on the rise, but the impact on the banks' balance sheets is expected to be gradual due to the still favorable operating environment," said Rolando Martinez, Director, Fitch Ratings.

Past due loans will increase at a slow but steady pace, but due to the wide diversity of banks and the seasoning of consumer loans granted at less stringent standards, some small banks face higher risks.

Banks with low profitability and tight capital continue to see limited loss absorption capacity.

Customer deposits should remain stable with competition to attract deposits increasing costs, pushing banks to seek a greater proportion of wholesale funding.

Liquidity should remain adequate, though some investments might lose value if international interest rates rise.

"The industry has limited upside potential in the short term, with any improvement unlikely until pressure on interest margins, profitability, and asset quality is reduced," said Rene Medrano, Senior Director, Fitch Ratings.

For more information, a special report titled "2016 Outlook: Panamanian Banks" is available on the Fitch Ratings web site at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com' and 'www.fitchcentroamerica.com'.

2016 Outlook: Panamanian Banks (Increasing Perceived Risks; Slowly Deteriorating Fundamentals)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874225

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151210006079/en/

Fitch Ratings
Rolando Martinez, +503 2516 6619
Director
Edificio Plaza Cristal, Tercer Nivel
79 Ave. Sur y Calle Cuscatlan
Col. Escalon San Salvador, El Salvador
or
Mario Hernandez, +503 2516 6614
Associate Director
or
Rene Medrano, +503 2516 6610
Senior Director
or
Media Relations:
Alyssa Castelli, +1-212-908-0540
New York
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Best Meme Coin to Buy While the Rung Holds: $BULLSKI at $0.000015
• Wish You’d Bought ALGO or XRP Earlier? Here’s Why APEING Could Be the Next Big Crypto to Watch
• Bessent’s Treasury Move Puts Apeing’s Upcoming Best Crypto Presale in Focus as PEPE and FLOKI Surge