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Panamanian private bank lending rises 10.5% through May, but personal loan growth slows

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Panamanian private bank lending rises 10.5% through May, but personal loan growth slows

Panama'sprivate banking sector posted year-over-year loan growth of 10.46% in the firstfive months of 2016, reaching a total portfolio of 46.40 billion Panamanian balboas,according to data from banking regulator SBP.

Consumerloans grew 13.31% to 9.45 billion balboas, representing 20.37% of total loans.

Thisincludes personal loans, which rose 9.25% to 6.13 billion balboas; credit card loans,which jumped 21.97% to 1.80 billion balboas; and car loans, which increased 20.99%to 1.52 billion balboas.

However,personal loan growth slowed from the same period a year ago, and consumers are beingmore conservative, prioritizing expenses on basic needs such as healthcare and food,while also saving more in case of adverse events, Capital Financiero reported, citing local analysts.

Loandemand in Panama tends to be linked to the country's economic performance, whichhas been relatively poor in 2015 and in the first part of 2016, Mario De Diego Jr.,vice president of Panama's banking association, ABP, reportedly said.

However,Panama's GDP growth in 2016 should be the same or slightly higher than the previousyear, he added.

As of July 18, US$1 was equivalentto 1 Panamanian balboa.