OFG reports $41.6M in profits during 3Q21, up 61% YoY
OFG Bancorp, parent company of Oriental Bank, reported $41.6 million in net income available to shareholders during the third quarter ended Sept. 30, a 61% improvement from the $25.8 million on record for the same year-ago quarter.
The financial institution reported diluted earnings per share of $0.81 during the latest quarter, compared to $0.50 in the third quarter of 2020. It also reported total core revenues of $134.7 million compared to $127 million in the third quarter of 2020.
Net interest margin for the third quarter of 2021 stood at 4.12% compared to 4.30% in the same year-ago quarter.
“Results reflect consistently growing recurring net income, our larger scale, our focus on increasing digital utilization and customer service differentiation, and Puerto Rico’s nascent economic and post-pandemic recovery,” said OFG CEO José Rafael Fernández.
During the most recent quarter, Oriental reported an increase in deposits of $154 million to $9.2 billion, “reflecting even greater liquidity on the part of both commercial and consumer clients,” he during a conference call with analysts to discuss the results.
In a call with Puerto Rico-based reporters, Fernández addressed key issues — the debt restructuring proceeding, the inflation, the bottleneck of supplies — affecting the island, the economy, and by association, the banking community.
“The inflation trend is worrisome, and how it could affect consumption as well as the banking sector. Inflation is here and is a global reality, but the question we have to ask ourselves is whether this will be something more permanent and if we’re going to have to live with a significantly higher inflation rate as we have now of between 4% and 5% in the United States,” he said.
“It’s concerning because the costs of everything are increasing, but you also have to give time for the flow of cash and all of the incentives that have arrived related to the COVID-19 pandemic start to translate into sustainable economic development and how inflation will affect that,” he said
Although commodity product costs are rising from increased oil costs is concerning, “it’s too early to say we have rampant inflation that’s stretching upward. I think there’s more evidence that inflation is here to stay in the coming quarters but, eventually it tends to normalize at a new level above what we had before the pandemic,” Fernández said.
As for the supply shortage currently affecting the Puerto Rico market, Fernández predicted that the current bottleneck will not be a long-term situation.
“After the lockdown ended, everything is waking up again and there isn’t enough capacity to address all of the demand for what needs to be transported. That’s happening now, but I don’t think we’ll be talking about this next year. I think it’ll be resolved in the next four or five quarters,” Fernández added.
Regarding the status of the government’s debt restructuring process — which is under consideration at the Legislature — the executive said because “this is in the final innings of the process, it should conclude with a real agreement that [US District Court Judge Laura Taylor Swain] should accept or approve, so that Puerto Rico can exit bankruptcy.”