Banking in Panama by Foreign Countries is Growing

As an expat living in Panama, why would you leave your money in your home country when the banking system in Panama is world class and ever growing?  Deposits from foreign countries totaled over $40 million by the end 2023.  For a small country of under 5 million people, the banks are are doing very well.  Nearby Costa Rica contributed 2.34 million, Venezuela with 2.377 million and Colombia led the way with 8.735 million dollars in bank deposits to Panama.  Why isn’t there more North American or European money arriving from those foreigners retiring here?  

The financial outlook in Panama is driven by a 12.8% increase in foreign deposits, with Colombia remaining the market leader.  At the end of last year, the International Banking Center (CBI) registered a total of $40,320 million in external deposits, of which 72% were time deposits with $29,146 million, which reflects that international clients select this financial center as a hub of savings and investment to protect your resources.  17% of the deposits were demand deposits that totaled $6,699 million and 11% were savings for $4,475 million.  In proportion, external deposits represented 38.4% of the total of $105,117 million of CBI resource collections, while local deposits reached the figure of $64,798 million in 2023 and represented 61.6% of the deposit portfolio. 

The dynamism of external credit was due to the better economic performance in Panama since many capitals seek to protect their money in markets with a stable currency like the dollar, in the middle of a region like Latin America and the Caribbean, with high exchange rate volatility and devaluation of currencies.  According to the report from the Superintendency of Banks of Panama, Colombia has stood out as the main country of origin of these deposits, followed by Venezuela, Costa Rica, the Dominican Republic and Ecuador.  “The variation in the geographical distribution of these deposits reflects the differences in the economic performance and financial policies of each country, but more importantly, it shows the trust placed by international clients in the banking entities established in the local market,” Superintendent Amauri Castillo highlighted.