Panama Banks Loan Growth Rebounds to 4.4% in 2026

The shift matters because credit growth is a direct gauge of economic activity, loan demand and bank earnings power. A slower expansion rate can restrain interest income, but it can also signal a more conservative sector that is avoiding overheating and building resilience as the regional credit cycle matures.

Moody’s said both local and foreign loans in Panama are now growing at similar rates in 2026, reversing the 2023-2025 pattern when foreign lending rose an average 12.1% versus 3.1% for domestic credit. The loan mix has been stable, with mortgages at 33% of local lending, consumer credit at 23% and commerce at 21%.

Asset quality improved moderately. Past-due loans fell to 2.3% of the portfolio in June 2026 from 2.6% previously, while reserve coverage held near 91%. Moody’s noted that the figure is not directly comparable with some regional peers because of IFRS 9 accounting, which bases provisions on expected credit losses rather than only overdue balances.

Deposits also recovered, rising 3.4% from the end of 2025, while the system’s reliance on institutional funding declined. Panama’s loan-to-deposit ratio remained relatively stable versus 2023, and liquid assets made up 33.3% of total banking assets in June, a sign of solid funding and liquidity conditions.

For investors, the message is mixed: slower credit growth caps near-term loan expansion, but stronger deposits, contained delinquency and ample liquidity reduce funding risk for Panamanian banks and support balance-sheet stability. Moody’s expects credit across Central America and the Dominican Republic to keep growing at a moderate pace, with a need to watch portfolios that expanded fastest in recent years as they mature and potentially show higher delinquencies.