The bank recorded a decline in net income for the first quarter of 2025. Meanwhile, customers have embraced the addition of Apple Pay.
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Oriental Bank's auto loan portfolio grew by $43.7 million in the first quarter of 2025, an increase that surprised the bank and is due in part to the imposition of tariffs on imported vehicles.
This was among the announcements made by Oriental Bank's chief executive officer (CEO), José Rafael Fernández, during the presentation of the first-quarter results for the year.
"This growth was not what we expected. We really thought we weren't going to grow that much," Fernández said of the increase in auto loans at the institution. According to Oriental's CEO, the bank attributes the rise to many customers "moving up their car purchases ahead of what the tariffs being charged on new vehicles could be."
Specifically, President Donald Trump imposed tariffs (tariffs) of 25% on all imported vehicles, with some exceptions for auto parts from Canada and Mexico. According to Goldman Sachs estimates, this could raise the price of American-made cars by $3,000 and the price of foreign cars by between $5,000 and $15,000.
First-Quarter Results: "Solid Start to the Year"
On another front, Oriental Bank's net income for the first quarter of 2025 was $45.6 million ($1.00 per diluted share), a decline compared with $50.3 million ($1.09) in net income in the fourth quarter of 2024. It also represents an 8.3% decrease compared with the first quarter of 2024, when net income of $49.7 million ($1.05) was recorded.
Total revenue came to $178.3 million, a slight drop from the previous quarter but a 2.3% increase compared with the prior year.
According to Oriental's CEO, this decline is due to the three interest rate cuts made by the Federal Reserve in 2024.
"We have largely mitigated it, but yes, it has an effect and it is one of the components that impacts us," Fernández said. He also pointed out that the first quarter "reflected a solid start to the year with strong overall performance, consistent financial results and excellent operational execution."
Fernández also highlighted growth in loans and deposits, as well as improvement in credit quality.
New loans: The bank recorded $558.9 million in the first quarter of 2025, a decrease compared with $609 million in the previous quarter and an increase compared with $536.6 million in the first quarter of 2024.
Loan portfolio: It totaled $7,784 million, the highest figure since 2011.
Provision for loan losses decreases: It was $25.7 million in the first quarter of 2025, compared with $30.2 million in the fourth quarter of 2024.
Deposits: They increased 3.9%, to $9,923 million in the first quarter of 2025, compared with $9,548.3 million in the same period last year.
Other first-quarter 2025 results:
Interest income declines: $189.2 million in the first quarter of 2025, versus $190.2 million in the fourth quarter of 2024 and $183.4 million in the first quarter of 2024.
Assets: They stood at $11,729.3 million in the first quarter of 2025, $228.5 million more than in the previous quarter, an increase of 2.0%.
Net interest margin: It was 5.42%.
The CET1 capital ratio stood at 14.3%, reflecting financial strength.
Digital banking and the global economic outlook
In addition, Oriental's CEO welcomed the reception that customers have given to the addition of Apple Pay contactless payments, expanding cashless payment options among customers, though he did not provide details on the number of customers who have adopted the platform.
On the economic outlook, Fernández pointed out that Puerto Rico's economy is stable and that the tariffs imposed by the U.S. government could be an opportunity to attract investment to the Island.
This content was translated with the assistance of Artificial Intelligence (AI).
