PR Banking Industry Report Q3 2020

Banks remained profitable during the first nine months of 2020 despite the impact of the Covid-19 pandemic. However, they experienced a moderate reduction in profitability (8.8% Pre-Tax ROE) vs 2018 and 2019 due to lower interest margin and fee income, and higher loan loss provision.

PR Banking Industry Report Q2 2020

Reduction in profitability in the first half of 2020 (7.0% Pre-Tax ROE) vs 2018 and 2019 due to lower interest margin and fee income, and higher loan loss provision, mostly driven by the Covid pandemic and its impact on the local and US economies. Despite the magnitude of the pandemic impact, no bank had negative net income, with Popular reaching the highest pre-tax ROA (0.97%), followed by Oriental (0.68%), Santander (0.58%), and FirstBank (0.40%).

PR Banking Industry Report Q1 2020

The impact of Covid-19 has been partially absorbed by local banks in their Q1 2020 results through a significant increase in loan loss provision. However, the reduction in fees and transactional income was small (last two weeks of March 2020) and will be felt mostly in Q2 2020 and in subsequent quarters depending on the pace of return to normal economic activity. In this Q1 2020 Banking Industry Report we present a brand new format where the user will be able to select particular periods of time and banks to review key metrics trends and make bank comparisons.

PR Banking Industry Report Q4 2019

The local banking industry has gone through a profound and long-lasting consolidation process since 2010, with only three remaining banks surviving, Popular, FirstBank, and Oriental. With this consolidation came a steep decline in assets, deposits, and loans. From 2009 to 2016, total banking assets decreased by 38% or $34.9 billion, deposits by 24% or $14.4 billion, and loan portfolios by 38% or $23.5 billion. However, 2016 seems to be a turning point in the financial condition of local banks with assets increasing by 21%, deposits by 33%, and loans by 8% during the 2016-2019 period. The banks that have survived the latest wave of consolidations exhibited a strong financial performance in 2019, posting a consolidated Pre-Tax ROE of 13.7%. Their productivity, credit quality, and capital position in 2019 were solid and moving in the right direction, posting a cost-to-income ratio of 57.9%, a nonperforming loans ratio of 5.0%, and a Tier 1 Risk-Based Capital Ratio of 21.0%. Looking into the rest of 2020, the banking sector will likely benefit greatly from the imminent inflow of $8.285 billion in Community Development Block Grant Mitigation (CDBG-MIT) funds which have been made available by the Department of Housing and Urban Development (HUD), after months of delay. Additionally, new Current Expected Credit Losses (CECL) regulations will likely have material operational implications as well as financial ones.

Are local banks penalized for operating in Puerto Rico?

The economic uncertainty that Puerto Rico has experienced in recent years has had a negative effect on the market value of banks that have their main operations located in the Island. However, the solid performance of local banks in terms of profitability and capital adequacy has translated into important increases in market capitalization, eliminating or significantly reducing their market risk premium.

Informe de V2A sobre la banca de RD – Enero a Septiembre 2019

El primer semestre del año 2019 se caracterizó por una ralentización de la economía en República Dominicana con un crecimiento del Índice Mensual de Actividad Económica (IMAE) de 4.7% contra el primer semestre de 2018, inferior al 7.0% registrado en el año 2018 contra el 2017. Los meses de septiembre y octubre de 2019 mostraron un aumento interanual del IMAE de 5.2% indicando un nuevo repunte de la actividad económica después de las políticas monetarias expansivas del banco central (reducción de la tasa de intercambio y de la tasa de encaje legal). Estas medidas están a tono con el nivel de inflación acumulada de enero a noviembre que se situó en 3.45% y que se encuentra dentro de la meta de inflación del Banco Central de la República Dominicana. La mejora de la actividad económica vino acompañada de un aumento de 1.7 puntos porcentuales de la rentabilidad de la banca múltiple representada por el TOP 5 en el periodo de enero a septiembre de 2019 con respecto al 2018.

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