Oriental CEO: Political crisis could have future ‘economic consequences’ for P.R.
Upon revealing a 3.3% net revenue increase to $99.2 million from $96 million during the second quarter, Oriental CEO José Rafael Fernández said the events of the past week have not had an economic impact so far but could create them in the long-run.
In a call with analysts to discuss the results, Fernández said it is in the hands of the legislative leadership to address the political crisis Puerto Rico is experiencing following a number of high-profile arrests of government officials on corruption charges, and the unveiling of the 889-page profanity-laced chat headed by Gov. Ricardo Rosselló and his closest collaborators.
“You heard last night, the governor is not running for reelection and resigning to his own party presidency. So right now, it’s too early to tell what the economic impact is. We are not seeing any impact so far,” he said.
“If this situation is not addressed proactively by the leadership of the legislature in Puerto Rico it could have economic consequences on the longer term,” he said.
“I am confident that levelheaded minds will prevail and confident that the legislature will assume their role and make the right decisions to stabilize the situation here in Puerto Rico in terms of political situation and let’s get on with business,” he said.
Oriental reported earnings per diluted share of $0.43 compared to $0.35, a 22.9% increase. Book value per common share grew 4.2% to $18.76. Tangible Book Value per common share expanded 6.7% to $17.03.
“Our strategies are proving highly effective in capturing the positive economic shift taking place in Puerto Rico as OFG builds excellent momentum for growth now and into the future,” he said.
Loans increased 3.7% to $4.47 billion, while core deposits rose 3.1% to $4.56 billion. New loan origination of $326.6 million included the continued success of Oriental Bank’s strategic targeting of small business customers.
“Our levels of small business, auto and consumer loan production; core deposit growth, credit quality, and capital; and number of customers confirm the success of our ‘Live the Difference’ strategy,” he said.
During the call, Fernández said the island’s current situation “provides opportunities going forward to continue to achieve higher levels of governance, higher levels of transparency and focus on what’s really important for the people of Puerto Rico which is economic growth. And I view this — albeit uncertain on the short term.”
During the second quarter, Oriental Bank entered into an agreement with Scotiabank to acquire its Puerto Rico and U.S. Virgin Islands operations, subject to usual closing conditions.
“Looking ahead, Oriental will further consolidate its position as the premier retail bank on the island when the recently announced Scotiabank Puerto Rico and USVI acquisition is closed as we become the second largest in core deposits, branches, automated and interactive teller machines, and mortgage servicing in Puerto Rico, and the third largest bank in USVI,” he said.
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