Who is borrowing
Panama’s local bank loan book grew $1,348M (2.08%) in the year to August 2026, and the Superintendency of Banks attributes about 65% of that to lending to the public sector. Private credit grew 0.75%. The residential mortgage balance, $20,016M, barely moved (−0.17%), and delinquency held steady at 2.3%. For a buyer or an investor the useful reading is that the mortgage book is stable but not expanding, says Brax Research.
Public-sector lending accounts for about 65% of the $1,348M rise in Panama’s local loan book; mortgages, construction and industry shrank.
Change in local bank credit balance by sector, August 2026 vs August 2025 · US$ millions · National Banking System · Panama
| Sector | Change, US$ M |
|---|---|
| Public sector | +877 |
| Personal consumption | +737 |
| Finance & insurance | +411 |
| Commerce | +164 |
| Other private* | +115 |
| Mortgages (all) | −119 |
| Construction | −320 |
| Industry | −517 |
Source: Superintendencia de Bancos de Panamá, Informe de Actividad Bancaria, August 2026 (Cuadro 3), also summarised by La Estrella de Panamá, 2 October 2026. “Other private” is a Brax sum of agriculture (+17.4), fishing (+31.2), mining (+95.3) and livestock (−28.8). “Mortgages (all)” includes commercial mortgages. Rounded; the bars add up to the +$1,348M total.
Image description: horizontal diverging bars of the change in local bank credit balance, US$ millions. Public sector +877, highlighted; personal consumption +737; finance and insurance +411; commerce +164; other private +115; all mortgages −119; construction −320; industry −517.
What happened
The Superintendency of Banks’ August report puts the local credit portfolio at $66,053M, up $1,348M or 2.08% from August 2025. Credit to the public sector rose $877M (+39.4%), about 65% of the total increase. Private-sector credit rose $471M (+0.75%). Within it, personal consumption added $737M and finance and insurance $411M, while industry (−$517M), construction (−$320M) and mortgages (−$119M) shrank.
Thanks to La Estrella de Panamá for putting the report in plain language, and to nexo.la for the monthly view of new mortgage lending that complements this balance view: new home loans fell 13% in January–August while the balance of existing loans held steady, which is what you would expect when repayments and new lending roughly offset each other.
Inside household credit, auto loans grew 10.4% and cards 6.5%, while the residential mortgage balance stayed flat.
Change in household credit balance by product, August 2026 vs August 2025 · % · National Banking System · Panama
| Sector | Change, % |
|---|---|
| Auto loans | +10.44% |
| Credit cards | +6.45% |
| Personal loans | +3.43% |
| Residential mortgages | −0.17% |
Source: Superintendencia de Bancos de Panamá, Informe de Actividad Bancaria, August 2026 (Cuadro 4). Residential mortgages ($20,016M) exclude commercial mortgages, which is why the figure differs from the “all mortgages” line in the first chart.
Image description: horizontal diverging bars of the change in household credit balance, percent. Auto loans +10.44%; credit cards +6.45%; personal loans +3.43%; residential mortgages −0.17%, highlighted.
Why it matters: a stable mortgage book, not an expanding one
Two things stand out for someone buying or investing. First, credit quality is steady: delinquent loans were about 2.3% of the book and overdue loans fell from 3.3% to 3.1%, so there is no sign of stress in the stock of mortgages. Second, the stock is not growing, so the growth in demand for homes has to come from somewhere other than expanding bank credit: cash buyers, developer financing, and buyers who qualify under the guarantee schemes being discussed. That matters for resale, because a buyer you sell to later will need financing in the same market.
The public-sector figure is a fact about who is borrowing, not a judgement on why; the report does not explain it and neither do we.
What comes next
Scenario, not forecast: if new mortgage lending stays below last year’s pace, the balance will start to shrink; if it recovers toward 2025 levels, the balance should resume slow growth. The triggers to watch are the monthly new-lending figures, the guarantee scheme the Finance Ministry has said it is preparing with the IDB, and the September report due in November.
For the new-lending view, see Panama’s mortgage squeeze; related: Chart of the Week #4.
Common questions
Is Panama’s mortgage market shrinking?
By balance, no: residential mortgages were $20,016M in August 2026, down 0.17% in a year. New mortgage lending, a different measure, fell 13% in January–August.
Who is driving growth in Panama’s bank credit?
About 65% of the 12-month increase in the local loan book to August 2026 came from credit to the public sector, according to the Superintendency of Banks.
Are mortgage defaults rising in Panama?
The August report shows delinquent loans at about 2.3% of the local portfolio, similar to a year earlier, and overdue loans down from 3.3% to 3.1%. It does not break these out for mortgages alone.
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