Winner: Banco General
Betting big on digital
While Panama’s economy was battered by the pandemic – with GDP slumping by 17.9% in
2020 – the rebound the following year saw one of the highest growth rates in the world, at
15.3%, according to the World Bank. That trend continued at least in the first half of 2022.
For Banco General, which wins the award for Bank of the Year – Panama, such a dramatic
economic turn-around has underscored the need to focus on banking fundamentals while
investing in digitalization to support growth in good times and bad.
In 2020, the bank’s priority was to support its hardest hit clients through the crisis. Banco
General helped more than 40,000 personal account holders and hundreds of companies to
navigate the pandemic lockdowns by making it easier for them to renegotiate their loans.
But as the economic situation improved, so too did the bank’s performance. In the first half of
2022, profits before taxes were 9% better than in the same period of 2021. ROAE reached
17%, and ROAA, 2.29%, both slightly up on the first half of 2021.
NPL ratios closed the first half higher than in June 2021, but that is attributed to the end of
support programmes to struggling debtors implemented during the pandemic.
According to Francisco Ernesto Sierra Fábrega, the bank’s executive vice-president and deputy
general manager, Banco General is working diligently to keep the loan portfolio under control,
and the NPL ratio dropped from 3.37% in December 2021 to 3.17% in June 2022 as a result.
“Delinquency rates have improved significantly, and we have very strong capital reserves in
place,” he says. “Considering where we have come from, our situation is very strong.”
Looking forward, Banco General is placing a hefty bet on the digitalization of the business to
attract more clients. In 2018, when it launched a new mobile banking system, Banco General
had 951,000 clients, of which 43% were digital. By the end of 2022, clients totalled more than
1.5million, of whom 77% have digital capabilities. The company has also invested in the
development of Big Data and analytics technologies to boost its credit portfolio.
“It has become clear that it’s necessary to have access to other sources of information to have a
better knowledge of what’s happening with of our clients, their income and work situation,”
Sierra says. “With-out digitalization and Big Data, it would have been an impossible task.”
Banco General has also developed a payment tool called yappi that had 1,150,000 users by the
end of June, as well as 17,000 retailers registered. The app allows clients to make money
transferences to other users or to pay for products and services provided by registered companies. Yappi recorded a total of 268 million transactions in 2020 and 458 million last year, Sierra says.