Profits fell in the last year because $60 million in uncollectible loans and operating expenses that were not disclosed before had to be covered.
Roberto González, executive president of the Bank of Pacific, during an interview on the radio program ‘Un café con JJ’, clarified the situation current of that institution.
In the first place, he denied that a search for a sale At whatever price; and assured that the decrease in profit during the last year is a consequence of assuming expenses of $60 million to cover Past due portfolio and of poor quality; Y operational losses that were not transparent in other periods.
In addition, he stressed that that sale will only be to an international bank and not for less than the equity value that has been recovered to $820 million.
16 key facts about Banco del Pacífico
1.- Until 2008, the Bank of Pacific it was the most profitable in the country both in profit over equity and over assets.
2.- From 2008 to 2020, the operational expense increased by more than 30%. This included payroll, sponsorships and others.
3. In the last 14 years, credits wrongly, without technical criteria and for political purposes.
4. Those credits of poor quality have had to be covered with increasing expenses for provisions. This has been one of the factors of the reduction in profits.
5.- Within the loans that cannot be recovered, and that are now a burden for the institution, there are resources given to political campaigns and people with political connections, but who did not meet the minimum requirements.
6.- Most of this political financing has not been paid, and the current authorities of the bank project that it will not be possible to recover it. If they are not provisioned, the sale price would be substantially reduced by the presence of poor quality assets.
7.- The rate of delinquency (Past due portfolio, past due and uncollectible) is 3% ($60 million), while competing banks in the Ecuadorian market do not exceed 1.5%.
8. The Bank of Pacific assumed the entire portfolio of educational credits of the former IECE; but most of that portfolio came with delinquency problems.
9. During the last 14 years, programs such as loans for ventures were launched, which were poorly focused and directed. They did not generate substantial income, but more expenses.
10. The Bank of Pacific He also dedicated himself, especially in the correista decade, to financing public goods and projects; but did not receive the expected returns or the invested capital.
11. According to González, at least $500 million was misused in operations in recent years.
12. With the new operational scheme that is being implemented, savings of $70 million are expected to be generated.
13. Overstaffing exceeded 35%. The payroll was increased to 3,760 people, but has now been reduced to 2,600 (1,100 fewer officials)
14. 18 offices or branches have been closed that were not profitable, and represented $2 million in losses each year.
15. El Pacífico will be sold only to a foreign financial institution; and with a price set by a specialized entity (investment banking) that will also be international.
16. The book value recovered in the last year, due to actions to cover operating losses and uncollectible loans. The value is currently $820 million.
DATA.- Last year, Banco del Pacífico’s profits totaled a little more than $5 million, but it fell from the position
