Panama’s banking sector demonstrated robust health at the close of November 2025, driven by strong consumer, commercial, and mortgage lending. The nation’s International Banking Center held $115.132 billion in deposits, according to the latest official data. This performance underscores a financial system prioritizing dynamic domestic demand sectors while navigating a shifting economic landscape.
The monthly activity report from Panama’s banking regulator detailed a 5.9 percent annual growth in the net loan portfolio, which reached $100.579 billion. New loan disbursements from January through November 2025 totaled $24.025 billion, marking a 5.1 percent increase over the same period in 2024. External deposits surged by 13.2 percent, significantly outpacing the 3.6 percent growth in domestic deposits.
Internal Credit Growth Concentrated in Key Sectors
Growth within the local market was not uniform. It focused sharply on private sector lending, particularly in commerce, personal consumption, and mortgages. Together these three segments now constitute 77.8 percent of the entire domestic loan portfolio. The commerce sector’s credit balance grew 4.3 percent to $14.104 billion. Personal consumption loans stood out with a balance of $14.985 billion, a 5.3 percent increase.
“This behavior, combined with greater pressure on the intermediation margin, suggests that the expansion of domestic credit in 2025 has been prudent,” stated the report from the Superintendency of Banks of Panama. [Translated from Spanish] “The system maintains growth, but favors sectors with more dynamic domestic demand and gradually reduces exposure to segments with greater sensitivity to the cycle.”
This strategic focus allowed banks to offset contractions in other areas. Credit to the public sector fell sharply by 21.8 percent. Lending for construction projects also retreated by 12.2 percent, reflecting a more cautious environment for long-term investment.
Mortgage Portfolio Shows Selective Expansion
The total mortgage loan portfolio reached $21.458 billion by November, a modest 1.8 percent annual increase. Within the housing segment specifically, the balance grew 2.1 percent to $18.984 billion. This growth was led by loans under Panama’s preferential interest rate law, which expanded 2.9 percent to $9.566 billion. Preferential mortgages now represent 50.4 percent of all housing credit.
A closer look reveals a more nuanced picture. Despite the rising total balance, the flow of new mortgage originations actually fell 8.5 percent year-over-year. This indicates banks are adopting a more selective and prudent approach to expansion in the housing market. The regulator explicitly flagged this sector for close monitoring due to new regulations set for January 2026.
Changes to eligibility criteria and subsidized rate brackets for residential mortgage loans could significantly alter future demand and lending standards. The upcoming rules represent a pivotal shift that banks are already anticipating in their underwriting.
Asset quality metrics remained largely contained. The past-due loan ratio improved to 2.17 percent, while the non-performing loan ratio fell to 1.56 percent. Analysts note one area of watchfulness. The coverage ratio for past-due credits decreased from 101.49 percent to 95.99 percent, a point the Superintendency identified for ongoing follow-up.
New Loan Disbursements Highlight Shifting Priorities
The $24.025 billion in new internal loans disbursed during the first eleven months of 2025 tells a story of sectoral reallocation. The commerce and services sector captured nearly 48 percent of this new flow, receiving $11.415 billion for a strong 15.8 percent annual increase. Personal consumption and livestock lending also saw gains of 3.1 and 5.3 percent respectively.
Several sectors experienced declines in new lending. Alongside the noted drop in new mortgages, construction saw a 17.4 percent decrease in new disbursements. Agriculture and industrial lending also contracted by 17.4 and 7.0 percent respectively. The data paints a clear picture of a banking sector actively steering credit toward current consumption and trade while pulling back from more cyclical and capital-intensive industries.
Panama’s financial system enters 2026 from a position of solidity, with high levels of liquidity and solvency. The strategic tilt in lending toward resilient domestic demand sectors suggests institutions are preparing for potential economic headwinds. All eyes now turn to the implementation of the new mortgage regulations and their immediate impact on one of the market’s largest credit segments.