Panamanianbanking regulator SBP said July 1 that it ordered the reorganization ofBalboa Bank & TrustCorp. to better protect the interests of depositors and creditors.

Thereorganization, which takes effect July 4, is designed to minimize any lossesfaced by the bank's clients and reduce any adverse impact on the bankingsystem, the regulator said.

Theregulator has appointed Ariel Antonio Sanmartín Méndez to come up with a planfor the bank's reorganization, which could include selling the bank to a newoperator.

Theregulator took administrative control of the bank in May after the company wassanctioned by the U.S. Treasury Department for alleged links to an extensivePanama-based money laundering network.

Atthe time, the SBP said the development did not pose any contagion risks forPanama's banking sector.