A rebound by Puerto Rico’s individual and business consumers is fueling growth at Oriental, which reported net income available to shareholders of $19.6 million or $0.42 per fully diluted share during the third quarter of this year, which ended in September.
The current numbers compare to the $16.2 million, or $0.35 per fully diluted share reported during the second quarter of this year, and breakeven results in the year-ago third quarter due to a special hurricanes related loan loss provision, he said.
“The third quarter’s EPS is up more than 20 percent sequentially and significantly better year over year. All financial metrics continued to build strong momentum going forward,” said Oriental CEO José Rafael Fernández.
“EPS growth reflects another quarter of strong, consistent core growth based on the success of our strategy of differentiation – providing superior customer service, convenience and technology – coupled with Puerto Rico’s continued rebound following hurricanes that struck in September 2017,” he said.
“Until now, economic activity has been driven primarily by businesses and consumers rebuilding. We believe businesses are starting to gain new confidence to invest and expand going forward. We are excited about our prospects for continued growth,” he said.
“We’re seeing the consumer first as they are rebuilding. You see in the small business and businesses in general, kind of picking up the pieces after the hurricane and the next stage is now evaluating their businesses and looking at if there is money to invest to gain opportunities and there is going to be some consolidation in several industries that would also play into the growth,” he said during a conference calls with analysts to discuss the recent results.
“But in general, I think it’s — we’re in the latter stages of the first stage and we’re going to start moving into now the other one which is more of an investment stage,” he said.
To maintain the momentum, Oriental is continuing to develop new commercial relationships in Puerto Rico and on the U.S. mainland, Fernández said.
“To service customers better and faster, we have an aggressive effort to optimize internal processes and implement new technology,” he said, referring to recently launched automated and interactive teller machines, and online and mobile channels.
“Since María, economic activity has been driven primarily by businesses and consumers rebuilding. We now believe businesses are again ready to invest and expand going forward. We’re excited about the prospects for continued growth in the fourth quarter and next year,” he said.
Still, he told analysts that some things still need to happen in Puerto Rico to achieve sustainable growth. First, he said the Commonwealth needs to find a lasting solution to the Puerto Rico Electric Power Authority’s problems.
“However, I have to say we’re encouraged with the pending legislation that would privatize, depoliticize, regulate and diversify electric power on the island. Long-term, this could be a real game changer,” he said.
Puerto Rico must also permanently resolve its fiscal problems and “we need to reduce regulation and taxes to free small business to become the engine of economic growth going forward.”
“But all of that is not stopping us at OFG and Oriental. We’re increasingly optimistic about our ability to differentiate ourselves, to provide credit and financial services and grow business and continue to contribute to Puerto Rico’s economic revival,” Fernández said.