Popular, Inc. (NASDAQ:BPOP) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 11:00 am ET


Popular, Inc. (NASDAQ:BPOP) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Popular, Inc. Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded.

I would now like to turn the conference over to Paul Cardillo, Investor Relations Officer of Popular, Inc. Please go ahead, sir.

Paul Cardillo

Good morning, and thank you for joining us on today's call. With us today is our CEO, Ignacio Alvarez; our CFO, Carlos Vazquez; and our CRO, Lidio Soriano. They will review our results for the second quarter and then answer your questions. Other members of our management team will also be available during the Q&A session.

Before we start, I would like to remind you that on today's call, we may make forward-looking statements that are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements are set forth within today's earnings press release and are detailed in our SEC filings. You may find today's press release and our SEC filings on our web page at popular.com.

I will now turn the call over to our CEO, Ignacio Alvarez.

Ignacio Alvarez

Good morning, and thank you for joining the call. I hope that you and your loved ones are healthy and staying safe. Before addressing our quarterly results, I'd first like to discuss the current business environment of Puerto Rico as outlined in the first two slides of the presentation.

The pandemic and related economic disruption continues to have a significant impact on the markets we serve, particularly in Puerto Rico. The strict lockdown mandated by the Governor of Puerto Rico on March 15, helped curtail the initial spread of the pandemic. As a result, starting on May 26, many of the restrictions that were in place were gradually loosened and the local economy largely reopened over the past couple of months.

As the economy reopened, we had started to see a revival in business activity, especially in the month of June. However, the recent surge in positive cases and hospitalizations led the Governor on July 16 to announce the rollback of some business and recreational activities and to impose further restrictions on inbound travel. While affecting a much smaller portion of the economy in the original lockdown, these restrictions will undoubtedly have a significant impact on the hotel and restaurant segment, the severity of which will depend on the length of these restrictions.

Employment trends deteriorated rapidly in April and are still down significantly compared to last year, but they had begun to stabilize. The peak in unemployment claims to date in 2020 was during the first week of April. Non-farm employment improved by nearly 5% from April to June.

New auto sales had been severely impacted by the lockdown and were 49% lower in the second quarter as compared to the second quarter of 2019. However, June was the best