Latin Finance - September/October 2010 - 22

stanley motta

Panama’s Slim
by Sean Mattson

hen the last decade’s wave of foreign bank acquisitions swept through Panama, Stanley Motta, then-chairman of the local Banco Continental de Panama faced two options for his family-led financial institution: sell or merge. He met with directors of local rival Banco General and reached a decision. “The two groups got together and said, ‘Do we want to be threatened by a sellout or do we want to get together and have a domestic bank?’,” Motta tells LatinFinance. The move helped cement one of Panama’s leading business family’s reputations as an able competitor in an increasingly globalized economy. “We obviously answered that question with a merger,” Motta affirms. Now one of Central America’s largest, the General that sprung from the 2007 merger is poised for more organic growth, says Motta, even as foreign interest in scooping up regional banks remains strong. The trend is underscored by the July sale of Panama-based BAC-Credomatic for $1.9 billion to Colombia’s Grupo Aval. “[Banco General] came through the crisis, zero problems,” says Motta, whose group got a 39% stake in the merger with General. It now boasts 60 branches, $8 billion in assets and achieved expansion to Costa Rica last year. “We’re not subject to international winds that blow,” says Motta. In an exclusive interview, the hardto-pin-down Motta shares insight on his family’s business interests, as well as investment opportunity in Central America. The affable and straight-shooting 65 year old talks from a meeting room in his marble and wood-finished top-floor office that overlooks a four-tower complex filled with Motta family businesses and high-profile tenants like Maersk. Motta sees potential for Panama to grow in logistics, shipping, infrastructure

In a rare interview, Panamanian mogul Stanley Motta weighs his country’s potential for growth in infrastructure and capital markets. He does not rule out M&A for Copa.
by opening branches in 2009 is the latest high profile move in the Motta family’s broad portfolio of investments. The family has a controlling stake in Copa Holdings – which claims to be one of the world’s most profitable commercial airlines by operating margin – as well as stakes in key parts of Panama’s solid economy. These include free-zone import-export, real estate, cattle ranching, retail, television and telecommunications. Just two decades removed from a military dictatorship, Panama was one of LatAm’s fastest-growing economies over the last decade. It avoided recession – GDP expanded by 2.4% in 2009 – and is poised for accelerated growth in coming years as the diverse, service-based economy grows amid a $5.25 billion expansion in the Panama Canal. “We’re about to start our stimulus package,” says Motta, referring to the canal expansion which is only just beginning to inject cash into the economy. Construction is accelerating towards the project’s 2014 completion date. With no lender of last resort, Panama’s banks weathered the global financial crisis by restricting credit while amassing deposits from foreign savers fleeing unstable political regimes in the region, or troubled banks in the US. But the banking sector’s belt is loosening and Motta says it is only the lack of viable projects to invest in that retards capital flow. “The banking system is very solid. It didn’t have any of the toxic paper. It got a little bit squeezed by some of the international banks lowering their

Panama’s banking system is solid, says Motta investment and capital markets. The latter he sees being bolstered by ample local liquidity and government funding needs, including $200 million in debt it plans to issue this year to help cover the purchase of Panama City’s two toll expressways. The government’s local debt issues this year have been oversubscribed as investors and banks lap up the investmentgrade paper, a trend Motta expects to see continue. “There are going to be a couple of bond issues coming out in the next three or four months that we’re involved in [as bankers] and I’m sure they’re going to be oversubscribed by a big amount,” says Motta.

No Toxic Paper

Banco General’s expansion to Costa Rica

22 LatinFinance

September/October 2010

Latin Finance - September/October 2010

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