What were the reasons for acquiring Spanish banking group BBVA?
The acquisition of BBVA complemented our offerings. Although BBVA was small in credit cards loans, it was well developed in auto loans and there was therefore synergy with our operations that allowed us to achieve approximately 23% of the market share. Similarly, they had a construction loan department, which we did not. Corporate and commercial loans were also important. In terms of personal loans and mortgages, BBVA had a great portfolio that complimented ours, although in mortgages we are a little more conservative than the main banks here in Panama. We finance 80% of the purchase of the sale price or the value of the property—whichever is lower. Other banks commonly finance as high as 90-95%. We want to grow our business, but sustainably; our strategy is to grow in every segment every year.
How does the banking sector encourage home ownership in Panama?
There are many opportunities to buy a house here in Panama because of the offers from the large number of banks operating here. There is a system called Preferential Interest in which the government subsidizes the interest for houses below $120,000 for the first 15 years, providing much-needed support to encourage home ownership. The banks that are involved have a reference rate in function of the top five to 10 average mortgage rates.
What types of innovation is the bank introducing?
We are the first bank here to provide a mobile application. People are using more electronic channels every day and we pay attention to this. We have to make lives simpler for our clients. Currently in Panama we have 40 full branches and two electronic branches that used to be banks but are now multifunctional self-service ATMs where customers can receive money, pay credit card bills, check their accounts online, and access our call center. We have 225 ATMs, which is a large number for Panama, and 35 multi-functional ATMs that can accept cash deposits. Multi-functional ATMs have been widely accepted here. Customers are getting older every day, but our new customers are younger and moving forward is the only way we will succeed. The reality is that the future will be electronic.
How does the role of the Panama Banking Association differ from the ministry and superintendency?
The Panama Banking Association was founded 53 years ago and represents 70 of the 91 banks established in Panama. The Panama Banking Association is a private, apolitical non-profit association and one of our main roles is to provide our associates with the necessary support to ensure compliance with laws and regulations, including anti-money laundering legislation. The Panama Banking Association also has an educational arm—the International Banking Institute—that offers courses to local and foreign banking employees and non-banking employees, and it is currently in the process of being converted into a university.
Panama will join the list of OECD countries that share tax information as of 2018. What impact will this have?
In his address to the UN in September 2015, President Varela said Panama is ready to do so, but in a bilateral way. It is willing to exchange information without pressures, and these matters have to be addressed at the UN and not by a group of countries, deciding that the UN was a forum made to discuss such matters. So Panama's position is to handle the issue on a bilateral basis depending on the geopolitical situation at a certain point, and follow the steps of our main commercial partners so that we can emulate what they are doing. The world is more transparent, but it is important that information is exchanged properly and is not misused. We have to be clear whom we give that information to and how that other party will use and save that information.