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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.

For the full report, click here.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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