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Este informe no está disponible en español. CARIBBEAN BUSINESSLocal IRA Market Reaches $1.84 BillionWesternbank posts 406% growth in IRA portfolio for 2Q 2001By LIDA ESTELA RUAÑOAugust 30, 2001 The Individual Retirement Account (IRA) war may never be over, but this year’s battle was clearly won by Westernbank. The Mayaguez-based financial institution increased its IRA portfolio from $17 million during first quarter (1Q) 2001 to $86 million in 2Q, which ended June 30–a whopping 405.88% increase. Westernbank President, Chairman, and CEO Frank C. Stipes said rollovers– IRA account transfers from other institutions–continue and he anticipates that by yearend, Westerbank will exceed $100 million in IRA accounts. A costly advertising war, with very attractive IRA offers, was waged during this past tax season, which also marked Westernbank's aggressive entry into the field. Westernbank clearly outsold the competition in new accounts, a portfolio further engrossed by the number of established accounts that were also transferred to the institution. As of Dec. 31, 2000, Westernbank had $13.4 million in IRA accounts. Final figures obtained from the Office of the Commissioner of Financial Institutions reveal that as of June 30, IRAs reached $1.84 billion locally vs. $1.79 billion as of March 30, 2001, an increase of $51.3 million. As of Dec. 31, 2000, total IRA accounts were $1.73 billion. Commercial banks hold the lion's share of the IRA market, at $1.6 billion. Insurance companies and cooperatives hold $87 million, while securities firms and the Commonwealth Employee’s Association (Aeela by its Spanish acronym) have $118.6 million. Puerto Rico's No. 1 bank, Banco Popular de Puerto Rico, has the most IRA accounts, $718.3 million in 2Q 2001, up from $690.1 million the previous quarter. As of Dec. 31, 2000, Popular had $661 million in its IRA portfolio. The second largest IRA account portfolio is held by Oriental Bank & Trust, which pioneered the IRA market on the island. It had $607.3 in 2Q 2001, down from $616.3 million in 1Q. As of Dec. 31, 2000, Oriental had $606.4 million in IRA accounts. Citibank had $58.4 million in 1Q 2001 and increased it to $62.1 million in 2Q 2001, while FirstBank also increased its IRA portfolio from $22.5 million to $23.9 million in that period. Among the institutions that saw a decrease in their IRA portfolios from 1Q to 2Q of this year were Banco Santander, from $54.8 million $51.9 million; Banco Bilbao Vizcaya Argentaria, from $37.1 million to $36.9 million; R&G Premier Bank, from $33.5 million to $32.9 million; Scotiabank, from $9.7 million to $9.3 million, and Eurobank, from $5.5 million to $5.4 million. Other banks, such as Doral Bank & Trust Co., had not yet submitted their final numbers to the commissioner’s office. Among insurance companies, Cosvi had lower figures, from $87.9 million in 1Q 2001 to $86 million in 2Q 2001, while Triple-S' numbers were not yet in. The cooperatives all saw a rise in IRA accounts from 1Q to 2Q 2001, Coop. Camuy rose from $416 million to $423 million, Coop. Aguada went from $132 million to $152 million, and Coop. Manuel Zeno Gandia up from $188 million to $301 million. Coop. Isabela numbers were not available. Other institutions selling IRAs were Aeela, which dropped from $27.4 million in 1Q to $25 million in 2Q, PaineWebber UBS rose from $57.4 million in 1Q to $61.8 million in 2Q, and Salomon Smith Barney down from $34.7 million in 1Q to $31.7 million in 2Q. The Commissioner’s numbers confirm earlier CARIBBEAN BUSINESS reports that this year total new IRA market would barely reach $90 million, a drop from the average $120 million that comes in every year. Another important consideration that highlights the decrease in IRA portfolios for some institutions is that, hefty, established IRA accounts, not counting the new money that comes in, produce good interest revenue. Experts say this is the case of Banco Popular, where a large portion of its IRA account money is invested in fixed income products. Oriental, which has a large portion of its portfolio tied to the market, could have been affected given the market’s unstable performance this year. This Caribbean Business article appears courtesy of Casiano Communications.
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