Popular Inc. reports $422M in 3Q22 net income, boosted by Evertec deal
Popular Inc., parent company of Banco Popular de Puerto Rico, reported net income of $422.4 million in the third quarter of 2022, boosted by the completion of its deal with Evertec Inc.
Excluding the effects of that transaction, Popular Inc.’s net income for the quarter would have been $195.8 million, compared to net income of $247.7 million for the same quarter in 2021 and $211.4 million in the second quarter of 2022.
“We’re pleased with Popular’s performance in the third quarter, which reflected strong loan growth in both the mainland and Puerto Rico, an expansion of our net interest margin, and positive credit quality metrics,” said Popular Inc. CEO Ignacio Álvarez.
“We’re mindful of the global economic uncertainty and market volatility, but remain optimistic about the future of Puerto Rico, our main market,” he said, noting with local reporters that he believes the island will be largely spared from the effects of a recession in the United States.
He said the high employment levels and the federal funds that Puerto Rico consumers and the government alike are receiving to recover not only from Hurricane María five years ago, but the recent pounding from Hurricane Fiona, will help shield the island.
Álvarez also mentioned as positives the announced 8.3% increase to Social Security benefits starting in January — which will inject some $800 million into the Puerto Rican economy — and the possible benefits of President Biden’s administration proposed student loan forgiveness program, which is now stalled in US courts.
“Consumer activity remains healthy and recovery funds from previous events are expected to provide additional stimulus. With strong fundamentals, prudent management, and diversified sources of revenue, we are well-positioned to address the challenges that may lie ahead,” he said, predicting that Puerto Rico will likely see economic growth in 2023 of between 1.5% and 2%, which while not “fantastic, it’s still growth.”
The panorama is different for the US mainland, which is at risk of recession. Popular Inc. has operations in New York and South Florida, which Álvarez said “are markets that are better prepared to absorb” the blow.
“We’re envisioning lower growth in the US and more in Puerto Rico,” he said.