Analyzing the Factors Behind the Record Earnings of Puerto Rico’s Big Three Banks in 2022
The big three commercial banks in Puerto Rico, Banco Popular, FirstBank, and Oriental, earned an unprecedented $1.24 billion in 2022, surpassing the previous record set in 2021 by $30.6 million (2.5%). The earnings were the result of a 10.2% increase in net interest income and a 16.0% increase in non-interest income.
Despite the record earnings, loss provision expenses increased to $122 million in 2022, compared to a net benefit of $201 million in provision for loan losses in 2021. However, net charge-offs decreased by 7.5%, from $120 million in 2021 to $111 million in 2022. Loans also grew by 6.6%, up to $40,770 million, and the delinquency rate fell from 3.71% in 2021 to 2.69% in 2022.
Banco Popular earned $769.0 million in 2022, which was 1.8% less than the previous year. FirstBank, on the other hand, made $308.9 million in profit, an increase of 9.3%. Oriental reported a net income of $162.2 million, which was a 12.6% increase from the previous year.
The banking industry plays a crucial role in Puerto Rico’s economy, providing essential financial services to individuals and businesses. With the unprecedented earnings in 2022, the banks are poised to continue their positive impact on the island’s economic growth.
Q: What factors contributed to the record earnings of Puerto Rico’s big three commercial banks in 2022?
The record earnings were due to a 10.2% increase in net interest income and a 16.0% increase in non-interest income.
Q: How did the delinquency rate change from 2021 to 2022?
The delinquency rate fell from 3.71% in 2021 to 2.69% in 2022, indicating that borrowers were more able to repay their loans on time. However, early delinquency (loans past due between 30 and 89 days) increased 11 basis points, to 1.02%.
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