Global Bank’s year-on-year rise in capital shows its growing strength among Panamanian financiers.

After only 13 years of operation, Global Bank has established itself as one of the leading financial institutions in Panama

A dollar goes a long way in Panama. A low-tax jurisdiction, it offers a high standard of living well below U.S. or European price levels, as well as attractive immigration incentives from the government. The economy is predominantly services-based, accounting for about 80 percent of economic activity. The canal provides the focal point, with much of the country’s fiscal flux attached to the canal’s infrastructure and to the logistics and financing of international shipping. However, the banking sector is also one of the fundamental pillars bolstering the country’s booming economy.

Panama City is Latin America’s most modern financial center and one of the largest international offshore banking concentrations in the world, after Switzerland. The nation has more than 150 banks from 35 different countries. The U.S. dollar is the legal currency, which almost eliminates any currency exchange risks to foreign companies relocating to the isthmus. Free movement of capital, low inflation rates, a qualified work force, reliable telecommunications infrastructure and modern banking legislation all add to its commercial viability.

JORGE VALLARINO President of Global Bank

President of the Panama Banking Association, Jorge Vallarino, says, “For the last three years, Panama has experienced sustained GDP growth due to several factors, including the economic expansion of the U.S. – our main business partner and principal destination for our exports. Additionally, the growth of Latin American economies due to the demand for raw materials and oil has stimulated areas such as the Colon Free Zone. The transfer of goods through the canal, port movement and the banking sector have all seen increased activity.”

The outlook is highly optimistic. “Nowadays, there are real opportunities. Panama is one of the Latin American countries with the greatest number of simultaneous projects,” adds Vallarino. At the same time as the canal enlargement, there is the enhancement of the mega-port on the Pacific coast, tourism projects, large-scale real estate development, and also the expansion of agriculture and fishing for export, all of which require professional financial services.

“Our banking sector has brought large profits, representing around 9 percent of the Panamanian gross domestic product,” says Vallarino. “For example, there are more than 14,500 well-paid bank employees here and year after year that number increases. Furthermore, long-term loans with very favorable terms enable people to purchase homes, goods and improve their standard of living.”

A point of reference in Panamanian banking is Global Bank. “I founded Global Bank together with a group of associates in 1994, and we have since become the third-largest bank in terms of assets among Panamanian banks, with the third-largest network of branches in the country,” explains Vallarino, who is also Global Bank’s president.

“Originally we were a wholly corporate bank operating in Panama City and the Colon Free Zone,” comments Vallarino. “However, since Panama is a small economy where there is a lot of competition, we realized that in order to grow, we needed to buy or merge with another bank. So, in 1999, we bought 100 percent of a bank with a larger network of branches and which dealt with retail banking – an area that Global did not handle at the time.”

Today, the company is 50 percent retail bank and 50 percent corporate bank, and has shown a high degree of specialization and attention to certain niche areas, such as factoring. It has already started a preparation and planning process in order to serve business and companies linked to the expansion of the canal.

“With such a well balanced portfolio as ours, and considering the expanding areas of the economy, we believe the time has come to strengthen our corporate banking,” says Vallarino. “This means promoting more growth in large and medium-sized companies in the Colon Free Zone. Additionally, we are organizing complementary services, such as investment banking and fiduciary services, which will enable us to evolve from a niche market strategy to a universal bank strategy.”

“What distinguishes us is the personalized care we offer our clients,” the president points out. “Even though Global Bank has reached a billion dollars in assets, we still maintain our mentality of service and personalized attention, where each client is treated according to their own needs.”