Panama has emerged as one of Latin America’s strongest banking performers, according to the Global Banking Annual Review 2025 by McKinsey & Company. Despite global economic uncertainty and narrowing margins, Panama’s financial institutions reported a tangible return on equity (RoTE) of 17.1%, far surpassing the global average of 10% and outperforming countries like Mexico at 15.7%.
In 2024, Latin American banks collectively generated $36 billion in net profits, maintaining higher structural margins even with smaller balance sheets relative to their GDP. McKinsey attributes this resilience to Panama’s stable regulatory framework, robust capital and liquidity levels, and its position as a regional financial hub connecting North and South America.
A Strong, Resilient Financial System
The Panamanian banking sector continues to demonstrate exceptional solvency and liquidity, consistently operating above regulatory minimums. This performance reinforces Panama’s reputation as one of the region’s most reliable and internationally trusted financial systems. Its stability and openness to global markets have helped attract foreign investment and institutional partnerships, strengthening the country’s long-term competitiveness.
Looking Ahead: Digital Transformation and AI
According to the report, the next growth wave for Latin American banking will be powered by digitalization and artificial intelligence (AI). McKinsey forecasts a 10% increase in regional banking revenues by 2028, driven by the adoption of emerging technologies such as agentive AI—tools capable of automating decision-making, risk management, and personalized client services.
This shift could redefine customer engagement, streamline operations, and enhance efficiency across Panama’s major financial institutions. The country’s digital-friendly environment and expanding fintech ecosystem position it well to benefit from these innovations.
Global Confidence in Latin American Banks
While global banks posted record profits of $1.2 trillion in 2024, investor confidence remained uneven worldwide. However, the gap between market value and financial performance was significantly narrower in Latin America, highlighting stronger investor trust—particularly in Panama’s financial sector.
The report concludes that Panama’s combination of structural solidity, innovation, and strategic vision places it among the most competitive financial centers in the Western Hemisphere. For sustained success, McKinsey emphasizes the importance of deepening client relationships, diversifying digital offerings, and expanding through strategic alliances.
Broader Economic Impact
A thriving banking industry underpins confidence across Panama’s broader economy, from its logistics operations to consumer and corporate lending. This resilience indirectly supports business environments in key growth regions such as Panama City and Boquete, which continue to attract both local entrepreneurs and international capital.
Article written on November 2, 2025
