Popular Inc Barclays 24th Annual Global Financial Services Conference

Sure. I think the first thing investors should know is that Popular is not about any one single leader. It's about a great organization that's led by many different people, whether that's leaders in our branches, in our call centers, in our offices. So in terms of the momentum and all the great trends that we're seeing, they're really driven by a much larger organization. We'll continue to focus on our strategic objectives, which are be the number one bank for our clients, be simple and efficient, and be a top-performing bank. When we talk about top performing, we're talking about not only ROCE, but also being able to attract and retain top talent in Puerto Rico and in the markets we serve. That's not changing. We want to have a little bit of continuity.

We just launched this focus last year, and certainly the management team and the core team, including myself, were important parts of developing that focus. So that's not really changing. We've emphasized that to our teams, and we've emphasized the continued sense of urgency and the progress that we made. We have good momentum. We're in a good spot, and let's keep moving forward on that.

Like I said, great momentum. It is not often that you see a CEO change in such a great moment in time. There are not challenges ahead of us, but there is great momentum. There is a sense of urgency in the team, a competitive spirit. I think Javier did a great job in kind of awakening that giant and our focus on servicing our client, adding value in those interactions, and really a focus on being active participants in the growth and the improvement of Popular. Being focused on key performance indicators, this focus on ROCE that may seem like a simple thing, but we used to kind of have a broad-based target of double-digit returns. Being able to narrow it down to a specific number and being able to guide people towards that goal and educating people has really helped kind of have our team focused.

We are very much focused on those deposit relationships. We have done a great job, I think, since the end of 2024, where we saw a decrease in our deposits kind of awaken that focus. All of our transformation efforts have geared towards improving our loan origination, and we have continued to do that. At the same time, being able to continue to emphasize to our people that that trust with our client, that relationship with our client starts with that deposit relationship. As I look through, I am excited about our position in Puerto Rico. I am excited about the progress we are seeing in our U.S. business. I am excited that people are focused and have the level of urgency to make sure that we continue on the trends. As we said in our second quarter call, we have not peaked. We have more opportunities to come.

Yeah. We continue to see stable environment. You just kind of talked to some of the metrics that we focus on. Unemployment is still in the low historic levels. We have more people working today, so the participation rate is higher. Even though we have about 10% fewer population, we actually have more people working than we did 10 years ago. We have seen wage increases over the last few years that has helped mitigate some of the inflationary impacts that we are seeing in the economy. So we see the stability. If you looked at our second quarter results, the net charges on our consumer loan portfolio were very strong, low. The reality is that there is good momentum in Puerto Rico, a lot of people betting on Puerto Rico. We are cautious. I mean, certainly seeing oil prices where they continue to be very high.

The increase that we've seen the last couple of days, that is something that the longer that persists, it will put pressure on the local economy. We import a lot of things, so oil prices impact all of our commerce. On top of that, you have the tariffs that we are subject to all the U.S. tariff rules. We are within the tariff wall of the U.S. So that also makes daily life more expensive for our clients. So that is something that we are paying attention to. So far, we haven't seen any significant impact of that. We were talking earlier today, just Puerto Rico sees a little bit of that same K-shaped economy. It's no different than the U.S. But it is something that we're vigilant, but so far there's nothing that's alerting us or worrying us.

I think it's the diversity of where we're seeing investment in Puerto Rico. Currently on the construction side, from whether those are funded through federal monies, seeing disbursement, still recuperation funds from the hurricanes or private investment. We're seeing just a diversity. Areas of growth continue to be in construction, leisure, so tourism, and— I'm sorry. Construction, leisure and tourism, and warehouse and logistics. So that diversity helps quite a bit. In terms of tourism, we are seeing a lot of opportunities for people through the investments in Airbnb and the ability for an ecosystem that is driven by self-employment, where we see the Puerto Rican spirit of trying to be self-employed and be able to diversify sources of income for people, whether it is through creating tourism activities or in managing these Airbnbs, et cetera. So it's just the diversity.