The costs of the restructuring will be reflected in the balance of 2021, but it will be clean to start like this with its sale next year.
Receiving the Banco del Pacífico and making it profitable to sell it is the mission of the Spanish Roberto González, its president since last July. The institution is no stranger to him, he was its vice president until February 2008, when then-president Rafael Correa harshly criticized the salaries of the Spanish team at the head of the bank. The current task has meant an arduous restructuring whose costs will influence this year’s balance sheet and the obligation to increase provisions due to the quality of the portfolio. It handles almost $ 5.3 trillion in deposits from more than 2.5 million clients, of which 92% are private. Its only shareholder is the National Finance Corporation, but it is not a state bank. González continues to believe in Ecuador and with a banker’s eye he points out that the future lies in propping up credits for the agro-export, tuna and tourism sectors.
During the correato, Banco del Pacífico was considered state-owned and that is why you were fired because you earned too much. Now that you have returned, can you tell us what happened between 2008 and 2020?
Although I entered in 2021 designated by President Guillermo Lasso, it is better to speak until 2019, which is the year before the pandemic. There are eleven years, between 2008 and 2019, in which the bank grew too much in number of people, we went from just under 1,500 to 3,700, with the opening of offices that had no justification, the operational expense increased from $ 45 million to $ 236 millions.
The country has also grown.
Yes, but this is not justified. The bank’s operating efficiency ratio, which is the ratio of its financial margin to its operating expense, fell. In 2008 it was the first of the six largest banks in the country, now we are the sixth. We decreased in efficiency, profitability and provision coverage. In 2008 we had a 400% loan portfolio provision, as of September 30 that coverage is 170%. I want to return those indicators to the bank, that is my mission.
Branches and unjustified expenses, like which ones?
A branch in the Middle of the World, for example; installation of ATMs in places where there was no profitability, but only to cover a number of unit purchases, to justify a contract.
Was this excess of employees from managerial positions?
To give you an idea, the group of bosses, assistant managers and managers went from 130 to 431 in those eleven years. What was so much boss doing? Nobody knows. With this change of government, no one resigned. The number of employees with whom the bank must operate has been calculated and we are in that restructuring. The cost of any exit is in accordance with the law and must be borne by the bank, and that will be reflected in this year’s balance sheet. What is the point of wanting to be the most advanced bank and in parallel the most loaded with personnel?
With how many personnel will you close in 2021?
We are at just under 2,600 and will probably close at 2,400. It is a streamlining process that seeks to once again be the pioneers in technology. Next April the bank will turn 50 years old.
What happened to the portfolio?
The portfolio has a group of operations that are clearly induced by the previous government. The bank acquired the entire portfolio of ICTH, which was the Instituto de Crédito Educativo.
That is not called acquiring, it was a transfer.
Today this portfolio has about $ 320 million, a part with collateral and another at clean risk. I have social housing programs, some with a 4.88% rate. Reactívate o Emprendedor programs, in which in theory all banking was going to enter, but in which only Banco del Pacífico entered, with ultra-low rates. These loans are complex to manage, they have to be refinanced, restructured, and therefore it is necessary to reserve additional provisions. I must have the highest forecast coverage for the sales process.
The pandemic has had its effect as well.
Indeed, and the bank has also been generous in refinancing, within the law, some of the loans. I am anticipating an ‘acid scenario’ to use the savings for provisions. In the end, when you want to sell something, it must be in the best possible situation, clean and transparent.
How much will the portfolio weigh in the bank’s valuation?
The valuation will be done by a third party, neither us nor the government, and it will be an international investment bank. Not only the portfolio is taken into account, but also the market share, equity and what is the ability to generate profits.
What other portfolio did the bank take on?
They passed him a few loans from Banco Capital, Banco Ecuatoriano de la Vivienda, Cofiec. Some have been paid, others have been punished and we still have a few others. Miraculously, they did not pass him the portfolio of the National Development Bank.
That portfolio should have been auctioned.
Exactly. They are procedures that must be performed with light and stenographers because it is a worldwide banking practice. My concern is why, with the depositors’ money, they began to give microcredit loans when it was not a line from the bank. I respond to the interests of my depositors because it is a private bank.
Was the expense also given in promotions and sponsorships?
In the last five years alone, from 2015 to 2020, the bank allocated more than 20 million to sponsorships. What has been the return?
What is the future projection?
The bank is solvent, we have the highest level of technical equity in banking, above 16%. It is a sign of the solvency and power of the institution despite the fact that in the last 20 years there have been several changes of shareholders. We have a high level of liquidity. Once these adjustments have been made, the bank will once again be the first bank in the country in terms of efficiency, profitability and coverage.
When would the sales process start?
It depends on the shareholder, but we will be ready from January 2022 because I can present attractive results. Afterwards, the hiring of the international investment bank that will accompany us in the process will have to be put out to tender. There is interest, the idea is to sell it to a foreign group and if it starts in January, the process could be completed by the second semester. (I)
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
