Association of Banks reaffirms commitment to compliance with the regulatory framework

Before the intervention of the Superintendency of Banks from Bancamérica for its dissolution, the Association of Banks from the Dominican Republic (ABA) reported today that the country “has a solvent commercial bank, with strong assets and that occupies leadership positions at the regional level in terms of liquidity, profitability and low delinquency, evidenced in its performance indicators.”

The entity reaffirmed the sector’s commitment to transparency, best prudential and banking practices, as well as compliance with the current regulatory framework.

Yesterday, the Superintendency of Banks reported his intervention to Bancamérica to initiate its dissolution, in accordance with the provisions of the Monetary Board in its Second Resolution of January 28, 2022.

“The measure was due to the fact that the bank failed to comply with legal and regulatory provisions within the framework of a regularization plan,” explained the Superintendence.

With the plan, the authorities tried to get the entity to repatriate deposits held in related entities abroad, increase capital and strengthen its collection methods and internal controls.

“The partial repatriation of the required capital was obtained, but without correcting the causes of the plan,” said the governing body.

Bancamérica it is a small bank with barely 0.13% of the assets of the national financial system. The Superintendency reported that it has 28,485 depositors, which represent 0.34% of the system. Only 15,260 have a balance in their savings accounts or instruments.

The Superintendency of Banks also reported that Bancamérica presents accumulated losses from fiscal years prior to 2021 of RD$851 million and losses of RD$147 million during the last fiscal year (as of November).

In addition, “the entity made business decisions that affected its prudential indicators, specifically its solvency,” he added.

The regulatory body specified that the situation in Bancamerica does not create any level of contagion in the rest of the financial institutions. He noted that it is a bank whose assets represent just 0.13% of the banking system, with minimal interconnection, “so no risk of contagion due to its departure is expected.”

In its statement, the ABA indicates that, “according to the 2020 Financial Stability Report, published by the Central Bank last year, the banks as a whole they have enough strength to overcome any adverse scenario that may arise in the short and medium term”.

He reported that, at the end of 2021, the net worth of multiple banks operating in the country closed with a value of RD$236,140 million, for an annual variation of 17.9%, which in absolute terms is equivalent to an increase of RD$35,804 million. compared to 2020.

The union explained that “this reaffirms the effort of the banks to increase its equity through reserves or capitalization of profits generated, strengthening its level of solvency, which is currently well above what is required by the Monetary and Financial Law 183-02″.