Panama's International Banking Center continues to attract new foreign players, with 16 banks receiving operating licenses from the Banking Superintendency in 2004 and 2005. While this might seem to be a good thing, boosting development of the country's financial system, Panama's more established foreign banks are starting to complain that the market has become too competitive and margins are dropping.
Fight for Market Share
Panama's International Banking Center has grown, thanks to a burgeoning local economy and incentives. But some banks complain the market is too crowded.
In a market with only 3 million people, the Banking Superintendency reported at the end of 2005 there were 78 financial institutions registered as banks, including 37 with licenses to offer local services and another 34 with licenses to service international clients.
"It's very hard to make money here because it's a very competitive market," explains Terence McCoy, vice president and general manager of Scotiabank Panama. When McCoy first arrived in Panama nine years ago, he says...
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