Popular Inc., Puerto Rico’s biggest bank, has asked the Federal Reserve for permission to repay a $935 million taxpayer bailout it took during the financial crisis.
The lender’s request to exit the Troubled Asset Relief Program was disclosed today as part of the San Juan-based company’s statement announcing third-quarter results. Chief Executive Officer Richard Carrion said he couldn’t speculate about if or when approval would be granted.
“Robust levels of excess capital, continued credit quality improvements and improved financial performance have paved the way toward our objective of the most shareholder-friendly exit from TARP,” Carrion said in a conference call with analysts.
Carrion, 60, has sought to rid Popular of bad loans after the 2008 bailout, the largest still outstanding under TARP’s bank-rescue program, according to a Sept. 10 Treasury report. Those efforts have been hurt as Puerto Rico’s economy contracted 5 percent this year through July, the most since February 2010, government data show.
Puerto Rico’s bonds are rated one step above junk by the three major ratings firms, and yields have soared amid questions about whether the government can carry more debt.
Popular’s TARP obligation dwarfs the $254.3 million owed by San Juan-based First BanCorp, which has the second-biggest outstanding debt under the program, the report shows.
“While Treasury is an investor in Popular, whether the company can repay their TARP funds is subject to approval from their regulator, the Federal Reserve,” the Treasury Department said in an e-mailed statement.
The bank today reported net income of $229.1 million, or $2.22 a share, compared with $47.2 million, or 45 cents, a year earlier. The results were helped by a $167.8 million gain from the sale of part of its stake in payment-processor Evertec Inc., according to the statement. Adjusted net income was $61.3 million, trailing the $78.7 million estimate of four analysts surveyed by Bloomberg.
Popular fell 0.9 percent to $26.05 in New York. The shares gained 25 percent this year.