Major Banks' Ratings
Unaffected By Upgrade On
Panama
Standard & Poor's
Ratings Services said
Panama's upgrade to
'BB+' from 'BB' will not
affect the ratings on
Banco General SA, BBVA
Panama SA y Subsidiarias
, Primer Banco del Istmo
SA (Banistmo).
While Panama's overall
economic situation has
improved, major banks
face several structural
challenges, including
their important exposure
to domestic real estate,
relatively low potential
for retail loan growth,
and high loan-to-deposit
ratios.
The current ratings on
Panama's major banks
reflect their adequate
profitability, asset
quality, and capital
measures that are
comparable to other
banks rated 'BBB-', S&P
said.
Major banks in Panama
have loan-to-deposit
ratios of more than
100%, which is a
challenge in terms of
funding and price
flexibility, S&P noted.
Concerns over the banks'
exposure to the
fast-growing real estate
because the sector,
making the country's
financial system
vulnerable to a downturn
in the real estate
market.
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