Popular Inc. reports $136M in net income for third quarter
Popular Inc., the parent company of Banco Popular de Puerto Rico, reported a net income of $136.6 million in the third quarter ended Sept. 30, down from $422 million for the same year-ago period and compared to the $151.2 million for the second quarter of 2023.
The quarter-to-quarter difference is attributed to an after-tax goodwill impairment charge of $16.4 million in its U.S.-based equipment leasing subsidiary. The year-to-year difference is due to a one-time gain of some $226 million from Banco Popular’s sale of its participation in Evertec, and generally lower credit provision expenses, Popular Inc. CEO Ignacio Álvarez said in a call with reporters.
“We’re pleased to report another strong quarter. Net income totaled $137 million, which includes a $16 million after-tax goodwill impairment in our U.S. based equipment leasing subsidiary,” Álvarez said. “Excluding this impact, net income would have been $153 million, $2 million higher than the previous quarter.”
Net interest income was $534 million for the recent quarter, an increase of $2.4 million compared to the second quarter and $579 million for the same period in 2022. For the nine months ended Sept. 30, the bank reported $1.6 billion in net interest income.
Operating expenses for the third quarter were $466 million, a $5.7 million increase compared to the previous period, which included a non-cash goodwill impairment of $23 million. The most recent result was down from the $476 million reported for the third quarter in 2022.
“Our positive results were driven by higher revenues and lower operating expenses, excluding the non-cash goodwill impairment, partially offset by a higher provision for loan losses. We grew our loan portfolio by $1 billion, which contributed to an increase in net interest income despite higher deposit costs,” Álvarez said.
“Approximately $600 million of the increase took place in Puerto Rico, reflecting strong economic activity. During the quarter, we crossed a significant milestone, reaching more than 2 million unique customers in Puerto Rico,” Álvarez added.
In the third quarter of 2023, the bank’s loans increased by $998.4 million, and the average quarterly balances grew by $764.4 million from the previous quarter.
As for Banco Popular de Puerto Rico, the institution reported net interest income of $453.9 million for the third quarter, flat when compared to $453.1 million in the second quarter.
The net interest margin for Banco Popular de Puerto Rico decreased by 7 basis points to 3.14% due to a higher average volume of deposits, primarily higher-cost Puerto Rico government deposits, the bank stated.
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