Popular Inc. chief approves governor’s efforts to stabilize Puerto Rico

(Rafelli González / CB)

President, CEO Álvarez says Gov. Vázquez ‘doing a good job’ following July crisis

SAN JUAN — The head of Puerto Rico’s largest banking institution said Wednesday that he thinks Gov. Wanda Vázquez Garced is “doing a good job” in bringing stability to the island while repairing its frayed relationship with Washington, D.C., after the public unrest in July that brought down former Gov. Ricardo Rosselló Nevarez and led to her taking office.

“I have to give a lot of credit to [Gov. Vázquez Garced]. She’s done a good job repairing relations with the feds, in regaining that trust,” Popular, Inc. President and CEO Ignacio Álvarez said during a roundtable with business journalists. Popular, Inc. is the holding company of Banco Popular de Puerto Rico, the island’s oldest and largest bank.

Contrary to former Gov. Rosselló Nevarez, who had “very established ideas and was not so open to listening to others,” Gov. Vázquez Garced is “more open” to suggestions and new ideas,” said Álvarez, who added that such an approach is critical to handle the complexity of the commonwealth’s fiscal crisis and allay investor concerns.

“Puerto Rico has received a lot of negative publicity, especially after hurricanes [Irma and Maria],” the bank executive said. “During the events of July, many investors could not make out what was going on here. Investments [only] continue to be made by those familiar with the island, such as those in medical devices and aerospace [industries].”

Álvarez cited, for example, the governor’s willingness to work with the Financial Oversight & Management Board (FOMB) and reconsider changes to Act 80 of 1976, the commonwealth’s unjustified dismissal statute, which the board wants repealed as part of its plans to restructure the island’s economy to make it more enticing to investors.

While the bank executive said he does not necessarily favor repealing Act 80, as Popular “can handle it well,” he believes it can be “improved.” He said the law has “killed off” small and mid-size businesses. 

Álvarez, who took over the helm of Popular fromRichard Carrión in 2017, said that to attract new investors to the island, the commonwealth needs to implement “structural changes” that go beyond austerity measures centered on across-the-board cuts in public employees and services, which he added “have not been done intelligently.”

“We have done very few structural changes. The business climate in Puerto Rico is not comparable to places like Ireland, Singapore and Costa Rica. It’s business as usual. The business climate here is not favorable,” the executive said, noting that the commonwealth still has to improve its permits process and economic planning. “People want things to change, but they don’t want to change the way things are done.”

Álvarez said that the latest local bank consolidations involving its two biggest competitors on the island – FirstBank and Oriental Bank – shows how the local banking market is adjusting to shifting international banking trends and changing island demographics, which includes a reduced population.

First BanCorp, the holding company of FirstBank Puerto Rico, announced last Monday the signing of a stock purchase agreement for the acquisition of Santander Bancorp, the holding company that includes Banco Santander Puerto Rico (BSPR), for about $1.1 billion in an all cash transaction. The transaction is expected to close in the middle of 2020, subject to regulatory approvals.

OFG Bancorp and Canadian financial institution Scotiabank announced in June the signing of a definitive agreement for OFG’s subsidiary, Oriental Bank, to acquire Scotiabank’s Puerto Rico operation for $550 million in cash and Scotiabank’s U.S. Virgin Island (USVI) branch operation for a $10 million deposit premium. The deal is expected to close by the end of this year.

The transactions would solidify FirstBank’s and Oriental Bank’s respective second and third place positions in the local retail banking market.

Álvarez said these consolidations will make these banks more competitive with Popular in the small and middle retail banking market, which he added has also been heavily serviced by credit unions. 

“I have been telling our employees that with these bank consolidations we will have to really knuckle down,” he said.




Face of Puerto Rico’s largest bank steps down from executive role

Richard Carrión (Eva LLoréns/CB)

Banco Popular’s Carrión transitions from executive chairman to non-executive chairman

SAN JUAN — Popular Inc. announced Friday that Richard L. Carrión will transition from his current role of executive chairman to non-executive chairman of the board, effective July 1.

Carrión was named executive chairman July 1, 2017, after serving as chairman since 1993 and CEO of Popular for 26 years, a role in which he was succeeded by Ignacio Álvarez.

Carrión, who joined the company in 1976, said: “Popular has had a special place in my heart since childhood and I have been blessed to serve it in different roles over the past four decades. With the organization stronger than ever, supported by a talented team under Ignacio’s leadership, this is the appropriate time for me to transition to a non-executive role. It is a privilege to continue my service to Popular as Chairman of the Board.”

Under Carrion’s leadership, Popular Inc. ranks among the top 50 U.S. bank holding companies by assets. Banco Popular de Puerto Rico provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. It also offers auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. Stateside, Popular provides retail, mortgage and commercial banking services through its New York-chartered banking subsidiary, Popular Bank, which has branches in New York, New Jersey and Florida.

“I know I speak for everyone in the Popular family in expressing my heartfelt appreciation to Richard for his many years of exemplary service. Richard has been a truly iconic leader and I am grateful for his mentorship and trust during this transition. We are fortunate to have the opportunity to continue to benefit from his guidance as Chairman of the Board,” Álvarez said in the release.

The illustrious banker earned a bachelor’s degree from the Wharton School of Finance and Commerce at the University of Pennsylvania and a master’s degree in Management Information Systems from the Massachusetts Institute of Technology.

Carrión served as president of Popular Inc. from 1990 to January 2009 and again from 2010 to 2014. He served as president of Banco Popular de Puerto Rico, Popular’s principal subsidiary, from 1985 until 2004. He also served as chairman and president of Puerto Rico Investors Tax-Free Fund Inc. I, II, III, IV and V from 1994 to 1998. He served as chairman and president of Puerto Rico Tax-Free Target, according to Bloomberg.

The veteran banker also served as chairman and president of Maturity Fund Inc. from 1996 to 1998 and II from 1997 to 1998. He served as chairman and president of Puerto Rico Investors Flexible Allocation Fund from December 1998 to January 1999.

He has been the chairman of the Board of Trustees at Banco Popular de Puerto Rico Foundation and Fundacion Banco Popular Inc. since 1982, and chairman and Director of Popular Community Bank Foundation Inc. since 2005. He has been a director of Banco Popular Foundation Inc. since 2005.

He also served as chairman of the Vall Banc S.A.U. He serves as a director of Financial Services Roundtable, of After School Matters Inc. and of Fort Dodge Animal Health S.p.A. (Fort Dodge Animal Health, Inc.).

He has been a member of the Board of Managers at EVERTEC Group LLC. He had been an independent director of Verizon Communications Inc. from 1997 to 2019. He serves as a director of American Home Products Corp. and of Verizon New York Inc.

Carrión serves on the board of First Bank Romania (formerly Piraeus Bank Romania), Vall Banc and NIBC Holding N.V. He has been a member of Supervisory Board NIBC Holding NV since 2017. He has been a director of Verizon New England Inc. since 1997.

Carrión served as a director at the Federal Reserve Bank of New York from January 2008 to 2016. He served as a director of NYNEX Corp. from 1995 to 1997; EVERTEC from 2010 to 2013 and Wyeth LLC from 2000 to 2006.

The executive served as director of Equity One Inc.; Popular Finance Inc.; Popular Auto Inc.; Popular Mortgage Inc.; Popular Securities Inc.; Popular Insurance Inc. and GM Group Inc.

He also served as a member of the board of the National Museum of American History, Smithsonian Institution, from 1997 to 1998. Carrión serves as the president of the Board of Trustees of the Puerto Rico Committee for Economic Development and participates in the boards of several other civic organizations.

Carrión has also been a member of the International Olympic Committee (IOC) since 1990 and served on its executive board from 2004 to 2012. In 2010, he was elected to the Central Board of the International Basketball Federation (FIBA).

“On behalf of a grateful Board, I would like to recognize Richard’s contributions, vision and his continued commitment to Popular, as well as Ignacio’s leadership since he assumed the position of CEO. We look forward to continue working with both to ensure Popular remains a strong, growing and vibrant organization,” William J. Teuber Jr., Popular lead independent director, said in the bank holding company’s announcement Friday.




The Banker names Popular ‘Bank of the Year Puerto Rico’

SAN JUAN -Popular Inc. announced Thursday that for the fifth consecutive year, Banco Popular de Puerto Rico (BPPR), its banking subsidiary, was recognized as a leading “Bank of the Year Americas” by The Banker, a financial intelligence magazine published by Financial Times Ltd.

Award judges had to decide which banks, from among 140 countries, deserved to be recognized in the publication’s 19th year of the rankings and awards. The institutions had to have delivered solid financial results while developing new products, services and the employment of new technology.

The Banker named Banco Popular “Bank of the Year Puerto Rico,” acknowledging the bank’s continued expansion and customer base growth, “racking up strong numbers in 2017,” a release reads.

The Banker noted that the bank saw a 17% increase in total deposits and added another 31,000 customers. Total assets reached $34.7 billion and market share in total deposits (net of brokered) and total loans increased to 52% and 43%, respectively. Of note for The Banker, is that the bank had to work under emergency conditions for months in the wake of hurricanes that struck the island in September 2017.

The Banker also shared that Popular became one of the first banks to use biometrics for authentication and was the first bank in Latin America to offer mobile payment and digital wallet service Samsung Pay.

This year, BPPR celebrated its 125th year anniversary.

“We are thrilled to receive this recognition on the heels of disaster recovery. At the heart of our success are our employees, whose steadfast commitment to Popular’s customers and communities have set us apart throughout our 125-year history,” said Ignacio Álvarez, president and CEO of Popular.

Popular Inc. is the leading financial institution in Puerto Rico, by both assets and deposits, and ranks among the top 50 U.S. bank holding companies by assets. Banco Popular provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. It also offers in Puerto Rico auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries.




Popular Declares Dividends on its Preferred Stock

SAN JUAN – Puerto Rico-based Popular Inc., the bank holding company of Banco Popular, announced Friday that it had declared the following monthly cash dividends on its outstanding shares of Non-cumulative Monthly Income Preferred Stock: a monthly cash dividend of $0.1328125 per share of 6.375% Non-cumulative Monthly Income Preferred Stock, 2003 Series A, payable on June 30, 2016, to holders of record as of June 15, 2016; and a monthly cash dividend of $0.171875 per share of 8.25% Non-cumulative Monthly Income Preferred Stock, Series B, payable on June 30, 2016, to holders of record as of June, 15, 2016.

The corporation also announced the following monthly distributions on its outstanding Trust Preferred Securities: a monthly distribution of $0.1395833 per security of 6.7% Cumulative Monthly Income Trust Preferred Securities issued by Popular Capital Trust I, payable on July 1, 2016, to holders of record as of June 15, 2015; and a monthly distribution of $0.127604 per security of 6.125% Cumulative Monthly Income Trust Preferred Securities issued by Popular Capital Trust II, payable on July 1, 2016 to holders of record as of June 15, 2016.

Popular is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. 

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Popular Declares Cash Dividend of $0.15 per Common Share

SAN JUAN – Puerto Rico-based Popular Inc. announced Friday that its board has approved a quarterly cash dividend of $0.15 per share on its outstanding common stock. The dividend will be payable on April 1 to shareholders of record at the close of business on March 11. 

Popular is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. It provides retail, mortgage and commercial banking services through its principal banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. In the mainland United States, Popular has a community-banking franchise with branches in New York, New Jersey and Florida under the name of Popular Community Bank.




Banker Carrión Favors Creation of Fiscal Control Board

Richard Carrión, Popular Inc. CEO

Popular Inc. CEO Richard Carrión

SAN JUAN – The CEO of Popular Inc., Richard Carrión, on Saturday favored the creation of a fiscal control board to find solutions to the crisis caused by the inability to pay the Puerto Rico government’s debt.

“When I testified in the U.S. Senate, I said I was ashamed to be there because we allowed things to reach this point,” Carrión told reporters during the inauguration of the new Club Sparta facilities, in which he invested to provide a locale in where olympic wrestling training will be conducted.

The banking institution’s CEO added, “I think it will take three things, three essential things; it will require some kind of legal framework to restructure the debt, it will require some type of fiscal control board to ensure discipline with the commitments and the budget, and it will require some form of economic stimulus.

“Without economic stimulus, none of these things work. So I think the three things are necessary, none alone is sufficient.”

He also said that “it is shameful that we are at this point, but it is imperative that we move forward and make sure something like this never happens.”

Regarding the control board, he stressed that “it must be an independent board; more than a federal one, it must be an independent board, free of political pressure, because it will not be an easy job.”