Popular Inc. Reports Strong Earnings Despite Auto Loan Dip
San Juan, Puerto Rico – Popular, Inc. (Nasdaq: BPOP) revealed a robust financial performance for the third quarter of 2025, posting a net income of $211.3 million, a meaningful jump from the $155.3 million reported during the same period last year. The positive results were tempered by emerging challenges in the auto loan sector, linked to increased vehicle costs due to newly imposed tariffs.
Tariffs Impacting Auto Loan Market
Jorge J. García, Chief Financial Officer of Popular, Inc., stated that the recent imposition of tariffs by the United States has directly raised the price of automobiles within Puerto Rico. This increase is already influencing the approval rates for auto loans, causing a projected decline of approximately 13% in auto loan volume during the third quarter of 2025 compared to the prior year. The average price of a new vehicle now stands at $45,000.
“ItS Definitely an area we’re seeing impacted by tariffs,” García emphasized. “We anticipated a reduction even without the tariffs, given trends following the pandemic and the conclusion of federal aid programs.”
Financial Highlights: A Mixed Picture
despite the headwinds in the auto loan market, Popular’s overall financial performance remained strong. As of September,the company’s auto loan portfolio totaled $3.85 billion, a slight decrease of 0.28% from the second quarter of 2025, but a modest increase of 0.85% year-over-year.
| Metric | Q3 2024 | Q3 2025 | Change |
|---|---|---|---|
| Net Income | $155.3 million | $211.3 million | +36% |
| Earnings Per Share (Diluted) | $2.16 | $3.14 | +98 cents |
| Total Loans | $36,194 million | $38,687 million | +$2,493 million |
| Net Interest Margin | 3.24% | 3.51% | +27 basis points |
Javier D. Ferrer, President and chief Executive Officer of Popular, expressed satisfaction with the company’s performance. “We are very pleased with our solid third quarter results, driven by higher revenues, the continued expansion of our net interest margin, and discipline in expense management,” Ferrer stated.
Federal Government Shutdown & Economic Impact
Popular is also closely monitoring the ongoing federal government shutdown, which began on October 1. The bank has proactively prepared to support clients who are federal employees experiencing financial disruption.
Ferrer noted that calls from affected federal employees have been limited thus far. “We do not expect any immediate impact on federal government employees in Puerto Rico,” he affirmed. “We are prepared to assist with mortgages and loans, utilizing the same approach as in prior emergencies.”
“bad Bunny Effect” Boosts Economic Sentiment
Notably, Ferrer highlighted the positive economic impact of Bad Bunny’s recent artist residency in Puerto Rico. The event generated global exposure, attracting visitors and boosting economic activity. During the concert series held at the José Miguel Agrelot Coliseum, bank card transactions increased between 6% and 7%.A surge in buisness also occurred within the small and medium-sized enterprise (SME) sector,even though specific data was not promptly available.
Total assets for Popular reached $75.065 billion in the third quarter of 2025, and the company repurchased 1,000,862 common shares for $119.4 million.
Understanding Net Interest Margin (NIM)
The Net Interest Margin (NIM) is a crucial metric for banks, representing the difference between the interest income generated from loans and the interest paid out to depositors, expressed as a percentage of earning assets. A higher NIM generally indicates greater profitability. According to the Federal reserve, the average NIM for all commercial banks in the United States was 3.38% in Q2 2024 [Federal Reserve Economic Data] . Popular’s NIM of 3.51% suggests strong performance in this area.
Frequently Asked Questions About Popular, Inc.
- What is Popular, Inc.’s primary business?
- Popular, Inc. is a financial holding company that provides retail, commercial, and investment banking services primarily in Puerto Rico.
- How do tariffs impact auto loans?
- Tariffs increase the cost of imported vehicles, leading to higher prices and potentially reduced demand, resulting in fewer auto loan applications.
- What is a net interest margin and why is it vital?
- Net interest margin measures the profitability of a bank’s lending activities, and is a key indicator of its financial health.
- What is Popular, Inc.’s outlook for loan growth?
- The institution projects a loan increase of around 4% or 5% by the end of 2025.
- How is Popular, inc. preparing for the federal government shutdown?
- The bank is prepared to assist federal employees who might potentially be experiencing financial hardship due to the shutdown.
What are your thoughts on the impact of tariffs on the Puerto Rican economy? Share your comments below!
