Panama is still a desirable location for international investors, Javier Carrizo, general manager at Banco Nacional de Panamá, and Otto Wolfschoon, president of the Banking Association, said on the sidelines of the Panama Day UK event on May 18.
Seven years after the Panama Papers, the data leak revealing the secretive offshore companies used to hide wealth, were made public, the country has seen a significant drop in the registration in the country of anonymous and offshore corporations, according to a press report.
“In order to incorporate a company in Panama there are nowadays much more requirements compared to the past few years. It has been a long term trend. For the banks it is not a big issue. Our clients are either in full compliance or close to full compliance,” Mr Wolfschoon explained.
The country is, however, still included on the Financial Action Task Force of Latin America’s (Gafilat) grey list for shortcomings in combatting money laundering, as reported previously. Panama expects to be removed from the list this year.
“The advantages Panama has to offer are quite considerable. Geography is destiny. We have a fully dollarised economy with no exchange controls. Compared with the rest of the region, it’s an extremely stable country in terms of politics and security. It’s just a matter of being able to present the case of the country in a consistent and continuous way so that people will continue to invest,” Mr Wolfschoon said.
Mr Carrizo added: “Panama has a great future in the logistics sector. Banco Nacional, for example, is going to contribute to the financing of a new port in the country.”
The Waked case
Banco Nacional de Panamá has issued assurances that the bank’s overall financial health is not in question following a legal case that put the national lender in the dock.
On April 21, the Supreme Court of Justice heard the $1.2bn damage claim from Panamanian businessman Abdul Waked against Banco Nacional de Panamá.
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The lawsuit originates from the fact that the state-owned bank acted as trustee in two trusts in which Mr Waked transferred part of his businesses after the the US Department of the Treasury included the businessman and his companies on the US government’s list of companies suspected of money laundering.
Mr Waked’s case does not have legal basis, according to Mr Carrizo. “I am not worried at all. I am confident that once the court analyses the case, it will discharge it,” he told The Banker. “Banco Nacional de Panamá only acted as a trustee and followed the trust agreement’s instructions.”
Mr Waked questions the manner and mechanisms used by the state, through the lender, which he claims deprived him of all his assets.
“The Supreme Court heard the case and we would expect the court to analyse that and come up with some sort of verdict. We are confident regarding the matter. The very existence of Banco Nacional is not in question,” said Mr Wolfschoon.
A resilient banking sector
With regards to the banking sector more specifically, “the margins have remained pretty stable. When you compare them with the pre-pandemic period, banks have concentrated more into increasing efficiency, also through digitisation initiatives,” Mr Wolfschoon said.
“Panama has been fortunate, because it has never been subject to a credit crunch. There is always financing for good projects and good initiatives.”
During the 2008 crisis, Canada, Chile and Panama were considered the best places to deposit funds and capital, according to Mr Carrizo. “Deposits within the banking sector keep growing,” he added.
