Popular Bank Reclassifies Accounts to Cut Fees
The bank is transitioning one million retail accounts to fee-free products as it scales back its loan growth outlook.
Updated on Oct. 30, 2026 in Investing
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Popular reported $266 million in net income for the third quarter of 2026 as it reclassified over one million retail accounts to eliminate fees. The bank also adjusted its annual growth outlook, projecting approximately 2% loan growth for the full year.
Why it matters
The bank is prioritizing customer retention and long-term deposit growth by cutting fees, while simultaneously tempering its loan growth expectations amid weaker auto financing demand. This strategic shift aims to secure a more stable base of low-cost deposits.
Popular invested $1.4 billion in securities during the quarter at an average yield of 4.3%, capturing a 206 basis point pickup over maturing notes. The bank also saw fee income decrease by $2 million as it transitioned one million accounts to fee-free products.
The players
Popular
A major financial institution that serves the Puerto Rico market and provides retail banking, commercial lending, and investment products.
The details
To manage its portfolio, the bank is rolling maturing lower-yielding Treasury notes into new, higher-yielding securities with an average duration of 2.7 years. Simultaneously, management reclassified over one million retail accounts to eliminate fees for active customers, betting that this will bolster low-cost deposit balances. The reduced fee income was balanced by stricter commercial lending discipline, contributing to an annual return on average tangible common equity target of 14% to 17%.
Timeline
Popular recorded $266 million in net income during Q3 2026.
The bank held its third-quarter earnings call on October 22, 2026.
Money Landscape
Popular is recalibrating its growth strategy as it faces a more cautious environment for auto and commercial lending. This transition reflects a broader banking trend of prioritizing stable, low-cost core deposits over aggressive loan expansion.
If you are a customer of this institution, the reclassification of your account could mean you no longer pay certain retail fees. Before making changes to your personal banking or investment strategy, review your current account terms and consult a qualified financial professional.
The takeaway
The bank is repositioning its balance sheet to favor long-term customer retention over short-term fee income. Customers should verify their current account fee structures and discuss any necessary adjustments to their personal savings strategy with a qualified financial professional.
Further reading
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Source note: This article includes information reported by The Motley Fool.
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