Popular, Inc. · NASDAQ:BPOP
Popular — Citi Financial Services Conference 2009
15 slides from Popular's conference presentation, Jan 27, 2009
Slide 1: Citi Financial Services Conference Investor Presentation
Citi Financial Services Conference Investor Presentation January 27, 2009
Slide 2: Forward Looking Statements
Forward Looking Statements Statements contained in this Presentation that are not based on current or historical fact are forward-looking in nature. Such forward-looking statements are based on current plans, estimates and expectations and are made pursuant to the Private Securities Litigation Refor
Slide 3: Fourth Quarter Results
Fourth Quarter Results 1 On a taxable equivalent basis. $ in millions (except per share data) 2008 2008 2008 2008 2008 2008 2007 2007 2007 2007 Q4 08 Q3 08 Q3 08 Q2 08 Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Net Interest Income $289 $324 $324 $330 $330 $336 $337 $332 $324 $313 Provision for Loan Losses
Slide 4: Q4 Significant Events
Q4 Significant Events Loan Loss Provision: The loan loss provision for Q4 was $389 million, an increase of $137 million or 54% vs. Q3. The ratio of provision to NCOs in Q4 was 174%. The main drivers were increased charge-offs in the commercial and constructions loans in the P.R. business. Valuation
Slide 5: P.R. Business
P.R. Business The challenging P.R. economy is pressuring credit quality and profitability at the segment. The ongoing recession and deteriorating credit quality trends in the commercial and construction loan portfolios have led to an increase in credit costs. The loan loss provision in Q4 was up 169
Slide 6: U.S. Business
U.S. Business The U.S. business has been significantly impacted by liquidity-driven asset sales and the economy: Sales of PFH assets to boost cash and exit subprime assets Rising credit costs at U.S. bank, reflecting weaker U.S. economy Changes in market conditions have led to a number of restructur
Slide 7: Processing Strategy-EVERTEC
11 Processing Strategy-EVERTEC Leveraging existing product offering and processing infrastructure to service other financial institutions and enter new markets Continuous improvement of quality levels Enhance competitiveness of ATH Network Invest significantly in new technology developments Main ini
Slide 8: Briefing - P.R. Economy
Briefing - P.R. Economy % Bottom line: weak economy expected for 2009 Indicators to watch: Oil prices Housing sector U.S. stimulus package Fiscal budget 2009 Structural deficit estimated at $3B GDB measures will seek payment of $750MM owed to local suppliers Policy-making is now controlled by one pa
Slide 9: Commercial and Construction Loan Exposure
Commercial and Construction Loan Exposure Growth in commercial and construction loans was flat in 2008... But credit quality deteriorated, particularly in the construction portfolios Significant measures have been implemented to control credit costs in a weak economic environment. Anticipating a dif
Slide 10: Mortgage Loan Exposure
Mortgage Loan Exposure Legacy subprime loans from PFH have been substantially sold BPNA mortgage loans are targeted to Hispanic borrowers, are fixed-rate, or 7/1's; in Q4'08 charge-offs were 4.99%. Loss experience in P.R. (BPPR) is very low; Q4'08 YTD charge-offs were ..10%. Subprime mortgage loans:
Slide 11: Liquidity
Liquidity Banking subsidiary liquidity is strong: Short-term unsecured borrowings as of Q4'08 amounted to $100 million vs. $388 million in Q3'08, and $538 million in Q4'07. There were $6.6 billion in strong sources of liquidity available: Fed Discount Window: $3.5 billion Unpledged securities: $1.9
Slide 12: Deferred Tax Assets & Goodwill
Deferred Tax Assets & Goodwill Remaining net DTAs at Popular as of 12-31 amounted to $357 million, all related to the P.R. business. A valuation allowance of $501 million was recognized in Q4, following $360 million in Q3, to completely write down the U.S. DTA Goodwill on the books as of 12-31 was $
Slide 13: Capital Management
Capital Management Capital has remained at adequate levels throughout market turmoil. Quarter-end capital ratios continue to exceed "well-capitalized" levels, although they are not at the levels we have historically maintained. $ in billions 2008 2008 2008 2008 2008 2008 2007 2007 2007 2007 2007 Q4
Slide 14: Closing Thoughts
Closing Thoughts Liquidity at the BHCs has been normalized. Exited the subprime exposure at PFH. Capital, while at "well capitalized" levels, has declined from the levels we have historically maintained. The U.S business is undergoing structural changes to improve its core profitability; it now has
Slide 15: Citi Financial Services Conference
Citi Financial Services Conference Investor Presentation January 27, 2009