Traditionally the Panama Banking System is very conservative as a whole, which has allowed it to weather the current international crisis with healthy liquidity. Thus on the other hand this conservative and traditional approach limits banking product offers. Very few new products are introduced in Panama which is why Credicorp Bank’s recent introduction of its Gold Bullion product garnered it a prominent spot in the local news.
As in other countries where there is a plethora of offerings from every type of repackaging of mortgages, ETT’s, shorting stocks or commodes by hedging your bet, to the Carry Trade in Japan, and now being done to the US dollar due to low interest rates. (This is a strategy – an investor sells a certain currency with a relatively low interest rate, uses the funds to purchase a different currency yielding a higher interest rate and uses the spread to leverage the buying of other financial products).
Panama for the most part has steered clear from this type of instrument, that can fly like an eagle or drop like a stone, but bullion re-enters the picture again as it has from the dawn of time.
Bullion are precious metals in bulk form which may be cast into ingots or minted into coins. Bullion when minted into coins is valued more by its mass and purity rather than by the face value declared on the coin. Many bullion coins are in gold and silver which are used to hedge against economic downturns and inflation. Credicorp Bank is offering its clients gold and silver coins and ingots certified by the Swiss refinery Argor – Heraesus, one of the largest and most sophisticated in the world.
Credicorp Bank is the first bank in Panama to offer this product which they indicated was requested by their clients as an investment alternative. They will offer their clients a fast, easy and secure to purchase bullion. They plan to offer internationally recognized coins such as the South African Krugerrands, the Canadian Maple Leaf, the Chinese Panda, the American Eagle and Morgan Dollars. In terms of ingots they will have offers tailored for both the big and the small investor with weights of 1/10 oz, 1/4 oz, 1/2 oz, 50 grams, 100 grams, 500 grams up to 1,000 grams.
Credicorp bank is a Panamanian bank which started operations in 1993 and currently has 23 branches and more than 20,000 commercial and individual clients. It is also planning to open two representation offices in South America in addition to the one it currently maintains in Bogota, Colombia.
The addition of gold bullion to investment portfolio has been shown to improve performance of portfolios both in stable economic climates as well as in turbulent times so this new product is a welcome addition to the Panama Banking System product portfolio.
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