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CEO and president of Banesco USA, Calixto Garcia-Velez
Banesco USA Reports 24% Increase in Total Assets
Banesco USA, a regional American bank with six branches across South Florida and Puerto Rico, has reached $3.71 billion in total assets in the third quarter of this year, marking a 24% increase year-to-date.
In an interview with The Banker, CEO and President Calixto García-Vélez discussed the business outlook for South Florida and how the bank is executing its strategic plan despite rising interest rates and market volatility.
The state-chartered bank, founded in 2006, is an independent financial institution that is part of the Banesco brand. Its main shareholder leads a privately-owned multinational banking group with around $80 billion in assets in the banking space, including Abanca in Spain and Portugal, and several banks in Latin America.
Market Outlook and Growth Plans
Q: How do you view the banking market at this time?
A: It is a rather complex time to be in the banking business given market volatility and the high cost of funding. Many of our fixed-rate loan rates from the past five years are relatively low. There is definitely compression in our net interest margin. However, we are optimistic about the markets in which we operate.
After the pandemic, we have seen a significant increase in the number of people moving to Florida from other states in search of quality of life and favorable tax conditions – capital is flowing into the region from the Northeast, Europe, and Latin America. Puerto Rico is experiencing a major economic boom as a result of federal funding, and the gross domestic product is growing for the first time in many years.
This year, we expect to increase our loan portfolio by approximately 25% with a similar expansion planned for 2024.
Emergency Capital Investment Program
Q: Banesco is currently deploying capital from the US Department of the Treasury’s Emergency Capital Investment Program (ECIP). What is the objective of this initiative?
A: Banesco received $250 million in capital from the ECIP and was the only bank in Florida and Puerto Rico selected to participate in this program. The goal of the program is to accelerate lending to minority communities in the United States. As a Hispanic-owned bank, this initiative makes a lot of sense for us. We have submitted a very extensive business plan to the US Treasury on how we are going to use that money and help minority communities.
Our bank primarily focuses on South Florida and Puerto Rico, where there is a huge population of minorities. Under the ECIP, Banesco USA has originated over $850 million in qualified ECIP loans as of September 2023, translating to over 220 loans.
Commercial Real Estate and Regulatory Priorities
Q: Banes