Popular (BPOP) Barclays 24th Annual Global Financial Services Conference summary

Strategic priorities and returns

• CEO Jorge García said strategic priorities remain client leadership, simplicity and efficiency, and top performance, including ROCE and attracting and retaining talent; execution continues with urgency.

• A 14%-17% long-term ROCE target is supported by deposit growth, expense control, diversified fee income, investment portfolio repricing, U.S. profitability improvement, and capital optimization.

• About $100 million less CET1 capital equates to ~20 bps of ROCE improvement; management views capital as a lever while balancing a conservative buffer.

• Expense reductions are on track at about $50 million for this year, with cumulative savings expected to reach about $70 million next year through procurement, technology, and data efficiencies.

Puerto Rico economy and lending

• Puerto Rico's economy remains stable, with historically low unemployment, more people working than 10 years ago despite ~10% lower population, and wage gains helping offset inflation.

• Growth is spread across construction, leisure and tourism, warehousing and logistics; about $3 billion in pharma investment announcements from Eli Lilly, Amgen, and others add to manufacturing activity.

• Pharma facility expansions are expected to support construction first and employment later; projects are capital-intensive, so job creation may be limited relative to investment.

• Loan growth guidance remains at the low end of 3%-4%; U.S. construction payoffs and slower replacement, Puerto Rico auto lending declines, and higher vehicle costs are headwinds, while mortgages continue growing.

• Puerto Rico deposits are expected to grow 1%-2% with the economy or inflation; management is focused on gaining share, retaining balances, and deepening relationships as customers increasingly use multiple banks.

Deposits and technology

• Deposit relationships are a renewed priority; healthcare-focused services span retail, commercial, insurance, and brokerage, with traction in deposit growth and an emphasis on value beyond deposit pricing.

• U.S. deposit gathering remains a challenge; new U.S. leadership and revised compensation are intended to strengthen low-cost deposit acquisition.

• Commercial treasury and cash management rollout in Puerto Rico is nearing completion; corporate credit cards launched near the end of Q1 gained uptake in Q2 and benefited non-interest income, with further contribution expected.

• AI efforts are in early stages, with governance and controls established; cybersecurity and software development are current priorities, while cost and productivity benefits will take time to materialize.