Popular, Inc. (BPOP): Business Model Canvas [10-2024 Updated]

Popular, Inc. (BPOP) stands out in the financial landscape with its robust business model that combines traditional banking with modern digital solutions. Through strategic partnerships, a diverse range of customer segments, and a commitment to community engagement, Popular, Inc. effectively caters to both individuals and businesses. Discover how their key activities, resources, and value propositions create a unique banking experience that meets the needs of their customers across Puerto Rico and the U.S. mainland.

Popular, Inc. (BPOP) - Business Model: Key Partnerships

Collaborations with local businesses for community outreach

Popular, Inc. engages in various partnerships with local businesses aimed at enhancing community outreach. These collaborations primarily focus on providing financial education and resources to underserved communities. In 2023, Popular partnered with over 150 local businesses and organizations across Puerto Rico and the mainland U.S. to facilitate community events and workshops, impacting approximately 25,000 participants.

Partnerships with financial institutions for loan syndication

Popular, Inc. has established strategic partnerships with multiple financial institutions to enhance its loan syndication capabilities. As of June 30, 2024, Popular's commercial loan portfolio included approximately $10.5 billion, with about $3.1 billion secured by owner-occupied properties. The company engaged in syndicating loans worth $1.5 billion in 2023, allowing it to share risk and capital with its partners. This approach not only mitigates risk but also broadens the scope of financing options available to its clients.

Technology providers for digital banking solutions

In the rapidly evolving landscape of digital banking, Popular, Inc. collaborates with various technology providers to enhance its digital banking solutions. As of 2024, Popular has invested over $50 million in technology enhancements, focusing on improving customer experience through mobile banking applications and online services. Key partnerships include collaborations with fintech companies that provide advanced analytics and cybersecurity solutions, ensuring the safety and efficiency of transactions for over 2 million active users.

Partnership Focus	Number of Partners	Impact (Participants/Volume)	Investment ($ Millions)
Local Business Collaborations	150+	25,000 Participants	N/A
Financial Institutions for Loan Syndication	10+	$1.5 Billion Syndicated Loans	N/A
Technology Providers for Digital Solutions	5+	2 Million Active Users	$50

Popular, Inc. (BPOP) - Business Model: Key Activities

Offering a range of banking and financial services

Popular, Inc. (BPOP) provides a comprehensive suite of banking and financial services primarily through its BPPR (Banco Popular de Puerto Rico) segment and Popular U.S. segment. As of June 30, 2024, BPOP reported total consolidated revenues of $734.6 million for the quarter, which includes net interest income of $574.6 million and non-interest income of $158.4 million.

The breakdown of revenues by geographic segment for the six months ended June 30, 2024, is as follows:

Geographic Segment	Revenues (in thousands)
Puerto Rico	$1,152,082
United States	$253,752
Other	$43,346
Total	$1,449,180

Managing loan portfolios and credit risk

As of June 30, 2024, Popular, Inc. reported total loans held-in-portfolio of approximately $35.6 billion, with a significant portion allocated to various categories, including:

Loan Category	Amount (in thousands)
Commercial Loans	$7,195,357
Mortgage Loans	$7,883,726
Consumer Loans	$10,448,226
Total Loans	$35,627,309

The provision for credit losses for the first six months of 2024 was recorded at $119.4 million, reflecting BPOP's proactive approach to managing credit risk. The non-performing loans (NPL) ratio stood at 1.0% as of June 30, 2024.

Enhancing digital banking platforms and customer experience

Popular, Inc. has been focusing on enhancing its digital banking capabilities to improve customer experience. As of June 30, 2024, the total number of digital banking users reached approximately 1.5 million. The bank's investment in technology and digital platforms has led to an increase in online transactions, with over 75% of all transactions conducted through digital channels.

In terms of operational efficiency, BPOP has reduced its cost-to-income ratio to 51.7% as of June 30, 2024. The bank's digital initiatives are aimed at streamlining operations and providing enhanced services, including mobile banking, online loan applications, and automated customer service solutions.

Popular, Inc. (BPOP) - Business Model: Key Resources

Strong capital base with $72.8 billion in total assets

As of June 30, 2024, Popular, Inc. reported a total asset base of $72.8 billion, an increase from $70.8 billion at December 31, 2023. This strong capital position provides the foundation for the company's operations and growth strategies.

Extensive branch network across Puerto Rico and mainland U.S.

Popular, Inc. operates an extensive network of branches, primarily through its BPPR segment, which is the largest retail banking franchise in Puerto Rico. The branch network includes:

• Approximately 80 branches in Puerto Rico.
• About 40 branches across the mainland United States.

This extensive network enables the company to serve a diverse customer base effectively and enhances its market presence.

Skilled workforce with expertise in financial services

Popular, Inc. employs a skilled workforce that is critical to its operations in various financial services. The workforce is supported by ongoing training and development programs to enhance their expertise in:

• Commercial and retail banking
• Investment banking
• Insurance services

The company emphasizes the importance of human capital in delivering exceptional service to its clients and maintaining competitive advantages in the financial services sector.

Key Resource	Details
Total Assets	$72.8 billion (as of June 30, 2024)
Branch Network	Approximately 80 branches in Puerto Rico, 40 branches in the U.S.
Workforce	Skilled employees across commercial banking, retail banking, investment, and insurance services

Popular, Inc. (BPOP) - Business Model: Value Propositions

Comprehensive banking services tailored for individuals and businesses

Popular, Inc. (BPOP) offers a diverse range of banking services designed to meet the needs of both individual and commercial customers. As of June 30, 2024, the bank's total assets reached approximately $72.8 billion, with loans held-in-portfolio totaling $35.6 billion.

The bank provides various loan products including:

• Commercial Loans: Totaling $3.0 billion in the BPPR segment.
• Mortgage Loans: Approximately $72.7 million.
• Consumer Loans: Including auto loans amounting to $14.6 million.

Strong community presence and local market knowledge

Popular, Inc. has established a significant presence in Puerto Rico, where it operates the largest retail banking franchise. The bank's deep local market knowledge allows it to tailor products and services effectively for its customer base. The bank generated $60.1 million in revenues from its operations in the mainland United States during the six months ended June 30, 2024.

As of June 30, 2024, the bank reported a net income of $177.8 million, an increase from $151.2 million in the same quarter of the previous year.

Competitive interest rates and personalized customer service

Popular, Inc. maintains competitive interest rates across its loan products. For the second quarter of 2024, the net interest margin was reported at 3.22%, up from 3.14% in the previous year. This improvement was attributed to reinvestment strategies focusing on higher-yielding U.S. Treasury bills and growth in loan balances.

Customer service is a key differentiator for Popular, Inc. The bank emphasizes personalized service, which is reflected in its net interest income of $1.1 billion for the six months ended June 30, 2024.

Product Type	Total Amount ($)	Growth (%)
Commercial Loans	3,000,000,000	4.5
Mortgage Loans	72,700,000	3.1
Consumer Loans	14,600,000	2.8
Net Interest Income	1,119,056,000	5.2
Net Income	177,800,000	17.6

Popular, Inc. (BPOP) - Business Model: Customer Relationships

Focus on long-term relationships through personalized service

Popular, Inc. emphasizes building long-term relationships with its customers by providing personalized services. The bank's approach includes dedicated relationship managers for business clients and tailored financial solutions for individuals. As of June 30, 2024, the total customer deposits reached $65.5 billion, up from $63.6 billion at the end of 2023, indicating strong customer retention and acquisition efforts.

Customer support via multiple channels including digital platforms

Popular, Inc. has invested heavily in enhancing customer support across multiple channels. The bank offers services through its mobile app, online banking, and traditional branches, ensuring that customers can access assistance whenever needed. In 2024, the bank reported a 25% increase in mobile app usage, with over 1.5 million active users. Furthermore, customer service response times improved by 15%, with an average wait time of under two minutes for calls.

Engagement through community events and financial education programs

Engagement with the community is a vital aspect of Popular, Inc.'s customer relationship strategy. The bank organizes various community events and financial education programs aimed at enhancing financial literacy among customers. In 2024, Popular, Inc. hosted over 50 financial education workshops, attended by more than 5,000 participants. These initiatives not only foster community ties but also help in building trust and loyalty among customers.

Customer Relationship Initiative	2024 Metrics	2023 Metrics	Change (%)
Total Customer Deposits	$65.5 billion	$63.6 billion	+2.98%
Active Mobile App Users	1.5 million	1.2 million	+25%
Average Call Wait Time	2 minutes	2.5 minutes	-15%
Financial Education Workshops	50 workshops	40 workshops	+25%
Workshop Attendees	5,000	4,000	+25%

Popular, Inc. (BPOP) - Business Model: Channels

Physical branches across Puerto Rico and the U.S. mainland

Popular, Inc. operates approximately 50 branches in Puerto Rico and 15 branches on the U.S. mainland. The branches serve as critical touchpoints for customer interactions, providing services such as account management, loan applications, and financial advisory.

As of June 30, 2024, the total assets of Popular, Inc. were reported at $72.8 billion, with a significant portion attributed to retail banking operations through these physical locations.

Online banking platform for convenient access

Popular, Inc. offers a comprehensive online banking platform that facilitates various banking operations, including fund transfers, bill payments, and account monitoring. The online platform has reported a user base of over 1.2 million active users as of Q2 2024, reflecting a steady increase in digital engagement.

In the first half of 2024, online banking services generated approximately $30 million in non-interest income.

Mobile app for on-the-go banking services

The mobile banking application of Popular, Inc. provides customers with on-the-go access to their accounts, enabling them to perform transactions, check balances, and receive alerts. The app has been downloaded over 800,000 times and boasts a customer satisfaction rating of 4.7 out of 5.

As of June 30, 2024, the mobile app has contributed to a 25% increase in digital transactions compared to the previous year.

Channel Type	Details	Statistics
Physical Branches	Locations in Puerto Rico and U.S. mainland	50 branches in Puerto Rico and 15 in the U.S.
Online Banking	Access to banking services via web platform	1.2 million active users, $30 million in non-interest income
Mobile App	On-the-go banking services	800,000 downloads, 4.7 customer satisfaction rating

Popular, Inc. (BPOP) - Business Model: Customer Segments

Individuals seeking personal banking solutions

Popular, Inc. (BPOP) serves individual customers through a variety of personal banking products, including checking and savings accounts, personal loans, and credit cards. As of June 30, 2024, the total consumer loan portfolio amounted to approximately $6.97 billion, with personal loans contributing around $1.94 billion of that total.

The bank reported a significant increase in personal loan originations, with a year-to-date total of $431.0 million as of June 30, 2024, reflecting a robust demand for personal financing solutions among individuals.

Product Type	Outstanding Loans (in thousands)	Market Share (%)
Personal Loans	$1,945,247	6.06
Credit Cards	$1,135,747	7.09
Home Equity Lines of Credit	$65,953	3.00

Small to medium-sized enterprises needing business banking services

Popular, Inc. targets small and medium-sized enterprises (SMEs) by offering a suite of business banking services, including commercial loans, lines of credit, and treasury management services. As of June 30, 2024, the commercial loan portfolio was valued at approximately $10.5 billion, with significant contributions from commercial and industrial loans, which totaled around $2.3 billion.

The bank's efforts to support SMEs are reflected in its aggressive loan growth strategy, with commercial loan originations reaching $1.1 billion for the first six months of 2024.

Loan Type	Outstanding Loans (in thousands)	Percentage of Total Commercial Loans (%)
Commercial and Industrial	$2,329,895	22.1
Construction Loans	$789,423	7.5
Commercial Real Estate	$2,082,167	19.8

Commercial clients requiring financing for real estate and construction

For commercial clients, Popular, Inc. offers specialized financing solutions for real estate and construction projects. The bank's commercial real estate financing portfolio stood at $10.5 billion, with $3.1 billion dedicated to owner-occupied properties.

As of June 30, 2024, the non-performing loans (NPLs) ratio for commercial real estate was reported at 0.71%, indicating a strong asset quality within this segment. The overall commercial real estate financing has demonstrated resilience with a diversified exposure across various property types, ensuring a stable revenue stream from this customer segment.

Financing Type	Outstanding Loans (in thousands)	NPL Ratio (%)
CRE Non-owner Occupied	$2,082,167	1.14
CRE Owner Occupied	$1,682,252	0.20
Commercial and Industrial	$2,329,895	0.72

Popular, Inc. (BPOP) - Business Model: Cost Structure

Operating expenses including personnel, technology, and branch maintenance

For the six months ended June 30, 2024, Popular, Inc. reported total operating expenses of $919,911,000. This figure includes:

• Personnel expenses accounted for approximately $480 million.
• Technology and software expenses increased by $9.2 million due to higher network management fees, higher amortization of software costs, and higher IT consulting fees.
• Branch maintenance costs were included in the overall operating expenses but are not separately itemized in the financial statements.

Expense Category	Amount (in thousands)
Total Operating Expenses	$919,911
Personnel Expenses	$480,000
Technology Expenses	$9,200

Interest expenses on deposits and borrowings

Interest expenses for the quarter ended June 30, 2024, were $574,596,000. The breakdown includes:

• Interest expense on deposits increased by $36 million, mainly due to higher interest rates.
• Interest expense on borrowings amounted to $6,284,000.

Interest Expense Category	Amount (in thousands)
Total Interest Expense	$574,596
Interest Expense on Deposits	$36,000
Interest Expense on Borrowings	$6,284

Regulatory compliance and risk management costs

Regulatory compliance and risk management costs for the first half of 2024 amounted to approximately $50 million. Key components include:

• Costs related to compliance with banking regulations and audits.
• Risk management expenses, including operational risk management and credit risk assessment.

Cost Category	Amount (in thousands)
Regulatory Compliance Costs	$50,000
Risk Management Costs	Included in regulatory costs

Popular, Inc. (BPOP) - Business Model: Revenue Streams

Interest income from loans and credit products

For the quarter ended June 30, 2024, Popular, Inc. reported net interest income of $488.7 million from its BPPR segment and $85.9 million from Popular U.S. This reflects an increase from $453.1 million and $87.5 million respectively in the same quarter of the previous year.

The net interest margin for the quarter was 3.40%, up from 3.21% in the previous year, driven by higher yield and volume of earning assets. Total loans held by the corporation amounted to $35.6 billion as of June 30, 2024.

Non-interest income from fees and service charges

Popular, Inc. generated non-interest income of $166.3 million for the quarter ended June 30, 2024, compared to $160.5 million for the same quarter in 2023. The breakdown of non-interest income is as follows:

Source	Q2 2024 (in thousands)	Q2 2023 (in thousands)
Service charges on deposit accounts	$35,055	$35,253
Debit card fees	$16,098	$13,377
Insurance fees	$11,708	$12,152
Credit card fees	$37,003	$38,392
Sale and administration of investment products	$7,850	$6,076
Trust fees	$6,923	$5,000
Total	$114,637	$106,298

These fees and service charges reflect the various services provided to customers across different segments.

Investment income from securities and asset management services

For the six months ended June 30, 2024, Popular, Inc. reported investment income of $1.2 billion, which included net interest income and other gains from securities. The corporation's investment portfolio includes a mix of U.S. Treasury bills and other securities, which have contributed to an increase in income due to rising interest rates.

Additionally, the income from mortgage banking activities for the same period was significant, resulting in higher fair value adjustments of mortgage servicing rights. The total investment income derived from different sources is summarized below:

Source	Income (in thousands)
Investment securities	$112,700
Commercial loans	$92,100
Consumer loans	$25,400
Auto loans	$20,400
Total	$300,600

This diversified income stream highlights the effectiveness of Popular, Inc.'s asset management strategies and its ability to capitalize on favorable market conditions.