Popular Inc. profit falls 23 pct, bad loans soar
NEW YORK (Reuters) - Popular Inc (BPOP.O), the parent of Banco Popular and Puerto Rico's largest bank, on Wednesday said second-quarter profit fell 23 percent, hurt by rising loan losses amid a weak Puerto Rican economy and the U.S. housing downturn.
Net income for the San Juan-based company fell to $75 million, or 26 cents per share, from $97.4 million, or 34 cents, a year earlier.
Analysts on average expected a profit of 26 cents per share, according to Reuters Estimates.
Popular said it set aside $115.2 million for loan losses in the quarter, up 72 percent from $67.1 million a year earlier. Net charge-offs, or loans it does not expect to be paid back, rose 78 percent to $92.1 million.
"These are not good results," Chief Executive Richard Carrion said in a statement. "Market conditions have deteriorated, but we continue to make progress and we feel confident about our future."
Popular said charge-offs rose in its Puerto Rican consumer and commercial loan portfolios, and in U.S. consumer and mortgage loans, "especially in the subprime sector."
In the first quarter the company wrote down nearly $70 million of loans and securities amid U.S. subprime deterioration, and incurred $15.1 million of costs related to a unit's decision to quit wholesale subprime mortgage lending.
Second-quarter net interest income rose 2 percent to $371.4 million, as net interest yield rose to 3.39 percent from 3.23 percent. Noninterest income rose 11 percent to $203.4 million. Operating expenses fell 1 percent to $361.1 million.
Popular has more than 300 banking offices in Puerto Rico and more than 140 in the United States. It ended June with $47 billion of assets.
Popular shares closed Tuesday at $16.00 on the Nasdaq. They began the year at $17.95.
(Reporting by Jonathan Stempel)
