More than 200,000 customers have already added their cards to Apple Wallet, driving the cashless trend and digital transformation in local banking.
More than 170,000 debit card customers and 35,000 credit card customers have added their Banco Popular cards to Apple Pay's digital wallet, Apple Wallet, since the financial institution introduced the contactless payment service in Puerto Rico in mid-March.
That was reported by Jorge García, chief financial officer (CFO) of Popular, Inc., on a call with journalists in which he discussed, along with Javier Ferrer, the institution's president and chief operating officer (COO), who will take over as CEO in July, the financial results for the bank's first quarter of 2025.
Cashless transactions: a growing trend
In response to questions from Platea, García said that in the first quarter of 2025 there was an increase of around 6% in credit and debit card transactions compared with the last quarter of 2024.
While "we did not see a dramatic change" in the volume of digital transactions, according to García, the financial institution does project that cashless transactions are part of "a trend that will continue," Ferrer said, and the bank will keep strengthening its digital channel for customers.
First-quarter 2025 results: "We are very pleased"
Popular's CFO expressed satisfaction with the financial results for the first quarter of 2025, in which the bank posted net interest income of $605.6 million, an increase of $14.8 million from the fourth quarter of 2024.
In the past quarter, the institution also posted net income of $177.5 million, or $2.56 per diluted share, a figure similar to the last quarter of 2024, which had net income of $177.8 million, or $2.51 per diluted share.
"We are very pleased with the results," García said, highlighting growth in the net interest margin to 3.40%, up from 3.35% in the prior quarter.
The results also reflected $65,819 million in deposits, an increase of $935 million from the prior quarter, and loans held in portfolio totaled $37,254 million, an increase of $146 million "primarily in our U.S. operations," García said. Average deposit balances grew by $1,600 million during the quarter.
"Credit results were very good. We saw improvements in customer delinquencies. We saw a reduction in loan charge-offs," García added.
The CFO is referring to the $36.7 million decline in non-performing loans (NPLs), which are loans that customers stop paying, and the $18.3 million decrease in net charge-offs (NCOs), which are loans the bank writes off because it cannot recover them after collection attempts. NCOs had an annualized rate of 0.53%, compared with 0.74% in the prior quarter, indicating that the bank is losing less money to uncollectible loans.
Similarly, the allowance for credit losses (ACL) rose to 2.05% of the portfolio (versus 2.01% in the prior quarter). This increase means the bank is being more cautious and has strengthened its buffer against potential defaults.
Other financial results for the first quarter of 2025 include:
CET1 capital ratio of 16.11%.
Tangible book value per share of $72.02, an increase of $3.86 from the prior quarter.
1.27 million common shares were repurchased for $122.3 million.
Operating expenses rose slightly to $471 million.
Popular prepares for Ignacio Álvarez's retirement as CEO
Although Ignacio Álvarez, the current chief executive officer (CEO) of Popular, was not on the call with reporters, he said he was "satisfied with our solid financial performance in the first quarter," according to a press release.
"We increased net interest income, grew loans and deposits, maintained solid credit metrics and expanded our customer base. I am particularly pleased with the growth of our deposits. In Puerto Rico, excluding public deposits, deposits increased by $434 million, which demonstrates the strength of our unique retail franchise," Álvarez said.
With his retirement on June 30 approaching, Álvarez expressed gratitude to employees during his tenure and wished Ferrer "much success" in the CEO role at Popular, which Ferrer will assume on July 1.
"It has been an honor and a privilege to serve as CEO for the past eight years."
Ignacio Álvarez, CEO of Popular, Inc., in a press release
On the transition, Ferrer said it has been "very deliberate, very smooth, very well-structured," and that "we don't anticipate any problems."
Ferrer indicated that, as CEO, he will continue "delivering results from the company's transformation process, which is already in its third year."
"We are going to be looking at other important areas for the institution, such as payments, and continuing to strengthen the leading financial institution in Puerto Rico, which has been here for over 130 years. We want to continue being the best institution, earning that every day by serving our customers and our communities," added the president and COO of Popular.
Changes to projections amid a "more uncertain and volatile" environment
In the financial results release, Álvarez pointed out that "the operating environment has undoubtedly become more uncertain and volatile, but our solid capital and liquidity levels, together with our diversified business model, position us well to navigate various macroeconomic scenarios."
This "uncertainty" at the local and global level is tied to the imposition of tariffs by President Donald Trump, among other public policies, and the potential economic impact on various countries, including Puerto Rico, García and Ferrer explained.
"This last quarter, the only guidance we adjusted was in the loan growth projection. Our guidance is for growth of 3 to 5%, and while we still think that level of growth is achievable, we did guide that we felt more confident in the 3%, the lower end of that range," García noted about the "only" change they made to their projections.
On changes in customer behavior in light of the global economic outlook, García said they "have not seen anything" significant affecting the bank's portfolio, though they did see customers who paused on potential investments or projects "because they want to make sure they understand the rules of the game before acting, to see what they are going to encounter," García said.
"What we are seeing is our customers paying closer attention, as all of us are, to what is happening in the U.S. economy, its global transitions and how that touches Puerto Rico's economy, but we have not seen any important projects come to a halt. We have not seen people worried to the point of not acting. I think our customers and the people of Puerto Rico, given that we have weathered many challenges in recent years, have built a great deal of resilience, and that helps the mindset of the business community and across all business segments," he added.
This content was translated with the assistance of Artificial Intelligence (AI).
