Popular Inc. Chief Executive Officer Richard Carrion said today he was “not involved” in approving delinquent or troubled loans made to some board directors.
“They were made with the approval of the board of directors. I was certainly not involved in that approval,” Carrion, who’s also the bank’s chairman, said today on a conference call following the San Juan-based lender’s first-quarter results.
Carrion, 59, who’s been Popular’s CEO for almost two decades and sits on the board of the Federal Reserve Bank of New York, is seeking to help the bank recover from losses on soured home loans and repay $935 million to the U.S. government after a 2008 bailout.
His sister and two of his nephews, one of whom is also a Popular director, have delinquent property loans to the lender, according to a regulatory filing. The bank has also restructured the loans of another director, the board’s head of corporate governance, and classifies his debts as “troubled,” the filing shows.
“In the past few years, things have not worked out exactly as we expected in Puerto Rico,” Carrion said in response to an analyst’s question. “We expect that these loans at this current level will get paid.”
Popular reported first-quarter net income that more than quadrupled to $48.4 million, or 5 cents a share, from last year. It rose 3.9 percent to $1.89 at 4:30 p.m. in New York trading. The shares gained 36 percent this year.
“All related party transactions are subject to internal procedures and banking laws and regulations that require they be made on market terms and conditions,” said Teruca Rullan, a spokeswoman for Popular, in a statement e-mailed earlier this week.
Any transaction involving directors and their “related business interests must be approved in advance by the board of directors, which is overwhelmingly comprised of independent directors,” she said, declining to comment further on behalf of Carrion’s family members and the directors.