BRIEFS. finance

Panama banking industry growing

The Panamanian banking system has grown substantially over the past five years, with its total assets doubling to $68 billion.

Banks are reporting that loans portfolios are growing at a rate of 11 percent per year, and was $24 billion at the end of 2007. According to a report by financier Felipe Chapman, mortgages, commerce and consumer debt make up the majority of outstanding loans, and that most of these are being handled by two banks, HSBC and Banco General.

Chapman said he expected the demand for credit to continue, but drew attention to the risks facing the industry by having a high concentration of outstanding loans in only two lenders, one of which is that it discourages new entrants to the market.

Inflation is another concern, especially in light of the falling value of the U.S. dollar and rising oil prices.

The former contralor general de la República, José Chen Barría, said that the impact of rising inflation on the country's economy is not yet known. But he warned it could impact debtors abilities to meet their obligations.