Popular (NASDAQ:BPOP),
the market-leading bank in Puerto Rico, has done a lot of good things
to clean up its operations since the banking meltdown. The shares
haven't really outpaced the sector over the last year, though, and I
believe that has a lot to do with the ongoing struggles of the Puerto
Rican economy.
I believe management's acquisition of assets from the wreckage of Doral
(DRLCQ) was a relatively good move, but the company is likely still
looking at tepid loan growth and comparatively high credit risk in the
short-term. Higher rates would help (as it would for many other banks),
but a better economy in Puerto Rico would help even more. I'm not
bearish on Popular, but the shares only look about 10% or undervalued to
me today and that's not quite enough to get me interested in adding
them to my portfolio.
Read the full article here:
Out Of Recovery, Popular Needs A Healthier Home Market
Showing posts with label Doral. Show all posts
Showing posts with label Doral. Show all posts
Monday, May 11, 2015
Thursday, June 19, 2014
Seeking Alpha: Popular's Credit Is Getting Better Faster Than Its Market's
Six months ago, I thought Puerto Rico's Popular (BPOP)
was one of the better bargains in the banking sector, even if the
company's elevated bad debt, outstanding TARP balance, and dependence
upon the weak PR economy made it a higher-risk pick. Since that piece,
shares have risen about 14% - not bad when the regional bank ETFs (iShares US Regional Banks (IAT) and SPDR S&P Regional Banking (KRE)) are both up less than 10% and fellow PR bank First Bancorp (FBP) has been flat, while Doral (DRL) has been crushed.
In my view, Popular has continued to do what it needs to do to get back in investors' good graces - leverage its leading market share to best effect with loan yields and deposit costs, work down the bad loans, and build up capital to repay the over $900 million in outstanding TARP funds. Popular remains a credit repair story and probably deserves to trade below tangible book value today, but ongoing credit repair could take these shares into the mid-$30s.
Please continue here:
Popular's Credit Is Getting Better Faster Than Its Market's
In my view, Popular has continued to do what it needs to do to get back in investors' good graces - leverage its leading market share to best effect with loan yields and deposit costs, work down the bad loans, and build up capital to repay the over $900 million in outstanding TARP funds. Popular remains a credit repair story and probably deserves to trade below tangible book value today, but ongoing credit repair could take these shares into the mid-$30s.
Please continue here:
Popular's Credit Is Getting Better Faster Than Its Market's
Wednesday, December 11, 2013
Seeking Alpha: Popular Has Survived, But What Happens Next?
Puerto Rico's largest bank, Popular (BPOP), certainly earned its seat at the table with other seriously distressed banks like Doral (DRL), Bank of America (BAC), and Synovus (SNV).
This bank's non-performing loan ratio topped out at over 10% at one
point, with bad construction loans making up almost a third of bad loans
(despite being less than 10% of the loan book).
Like other distressed banks, Popular took advantage of the government's largesse (including TARP) to get its affairs back in order. Bad credit inflows have improved significantly and the bank continues to sport a relatively high net interest margin and a surprisingly competitive efficiency ratio. That has helped the bank join in with those other distressed peers in a fairly solid recovery trade.
The question is, "now what?" Popular has maintained a significant lead on other Puerto Rican banks like First Bancorp (FBP) and Doral, not to mention the PR operations of larger banks like Citi (C), Santander (SAN), and Scotiabank (BNS), and though the company's mainland operations lack scale, the opportunities to grow by targeting the Hispanic community are not trivial. The iffy state of the Puerto Rican economy certainly does not help matters, but it would seem that these shares remain undervalued on the basis of the bank's long-term earnings potential.
Please read more here:
Popular Has Survived, But What Happens Next?
Like other distressed banks, Popular took advantage of the government's largesse (including TARP) to get its affairs back in order. Bad credit inflows have improved significantly and the bank continues to sport a relatively high net interest margin and a surprisingly competitive efficiency ratio. That has helped the bank join in with those other distressed peers in a fairly solid recovery trade.
The question is, "now what?" Popular has maintained a significant lead on other Puerto Rican banks like First Bancorp (FBP) and Doral, not to mention the PR operations of larger banks like Citi (C), Santander (SAN), and Scotiabank (BNS), and though the company's mainland operations lack scale, the opportunities to grow by targeting the Hispanic community are not trivial. The iffy state of the Puerto Rican economy certainly does not help matters, but it would seem that these shares remain undervalued on the basis of the bank's long-term earnings potential.
Please read more here:
Popular Has Survived, But What Happens Next?
Friday, February 24, 2012
Investopedia: Popular An Interesting Risk-Reward Trade
With signs of life in lending and ongoing improvements in credit, a lot of the big discounts in well-known banks have shrunk significantly. There's still a leading banking franchise that trades at a major discount - Puerto Rico's Popular (Nasdaq:BPOP). While this bank still needs to pay off its TARP funds and recent results are hardly extraordinary, the discount to value here looks large enough to be worth a longer look.
Strong at Home
Popular has long been the largest retail bank in Puerto Rico and the credit problems of recent years have only increased that lead. Popular has as many branches open in PR as the next four competitors combined, and holds more than 40% of deposits in Puerto Rico.
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http://stocks.investopedia.
Strong at Home
Popular has long been the largest retail bank in Puerto Rico and the credit problems of recent years have only increased that lead. Popular has as many branches open in PR as the next four competitors combined, and holds more than 40% of deposits in Puerto Rico.
Please follow this link:
http://stocks.investopedia.
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