Popular (BPOP) investor relations material

Economic and business environment

• Puerto Rico's economy remains strong, with robust activity, increased tourism, and significant federal funding supporting growth.

• The island benefits from a resilient population, ongoing infrastructure investment, and a strong manufacturing base, especially in pharmaceuticals.

• Recent military interest and potential increased spending could further stimulate infrastructure and economic development.

• Foreign and local investments are rising, with several new projects and expansions underway.

• The relationship between Puerto Rico and the federal government is productive, with substantial obligated funds for reconstruction and development.

Strategic priorities and transformation

• The current transformation program is in its third year, focusing on customer primacy, simplicity, efficiency, and top performance.

• Strategic objectives include being the number one bank for customers, operating simply and efficiently, and achieving top profitability.

• The bank targets a 12% ROTCE by year-end, with aspirations for 14%, emphasizing profitability and employee experience.

• Digital experience, data analytics, and payments are key areas of ongoing investment.

• Early wins from transformation include strong performance in loan products and small business segments.

Loan growth and capital management

• Loan growth guidance for the year is 3% to 5%, driven by commercial activity and supported by consumer lending in both Puerto Rico and the U.S.

• Some headwinds are expected in the U.S. due to construction portfolio paydowns, but strong pipelines remain.

• The bank is open to expanding its U.S. presence, especially in profitable niche businesses.

• Active share repurchase programs are ongoing, with management viewing the share price as attractive.

• Capital levels are strong, with a conservative approach due to geographic concentration, but plans are in place to gradually reduce capital ratios over time.