Saturday, February 28, 2009

Banking in Puerto Rico

Unlike many of the banks in the mainland U.S, like Citibank and Bank of America, most of the local banks in Puerto Rico have not solicited the help of the federal government. The two exceptions are Banco Popular, which received $935 million, and Firstbank with more than $400 million. Banco Popular, which is the largest local bank on the island, recently announced it will be cutting back on salaries for its high-level executives, among other cost-cutting measures. It has also seen its stock price dramatically plummet over the past year.

One of the reasons why the banks in Puerto Rico have not been affected as badly is because they have not been heavily involved in the sub-prime mortgage disaster. In fact, the major U.S banks do not have a presence here in Puerto Rico. Besides Banco Popular, Westernbank, Doral Bank, FirstBank, RG Premier Bank, Banco Santander, Scotiabank and BBVA are the other major banking institutions on the island. Citibank used to be on the island, before it sold its retail banking division to Banco Popular in 2007. I do wish there was a major U.S bank here on the island, because it would make life much easier whenever I go visit the mainland. FYI: deposits made in the major banks on the island are also FDIC insured, just as they are on the mainland.

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