A successful dynasty

Doral Financial Corporation is eager to expand its U.S. interests.

Doral Financial Corporation (DFC) is one of Puerto Rico’s star performers. The company has risen rapidly to become one of the island’s most successful diversified financial holding institutions, with a firm footing stateside where it sees plenty more growth potential.

Headquartered in San Juan, DFC is today the island’s largest mortgage and commercial banking operation. It has been consistently profitable with growth at rates of 20% or more since its inception in 1972. Most recently, it reported record results for the second quarter ended June 30, 2003, the 22nd consecutive quarter it achieved record earnings. Net income for the period amounted to $75 million, compared with $52 million for the second quarter of 2002, an increase of 44 %.

DFC’s senior management team are optimistic about the company’s future prospects. Founder, Chairman and CEO, Salomón Levis, says the group has once again surpassed historical records in loan production, new housing financing, mortgage servicing portfolio, deposits both in Puerto Rico and New York, earnings, capital and run-on in key financial ratios.

SALOMÓN LEVIS Chairman & CEO of Doral Financial Corporation

One of the most respected men in American banking, he remains fairly modest about this success. “You have to give the best you can but without assuming everything will be realized – aim for the best but be prepared for the worst.”

DFC’s success is rooted in its family ties. With its family history – the institution was founded over 30 years ago by the current Chairman and CEO, his brother David, and sister Zoila, – it represents a successful dynasty in the making. Today, it is a publicly-traded company achieving consistent results despite the uncertain market. Mr. Levis still holds a small interest in the group but admits that it is open to all like any public company. “You don’t have to be a Levis to get ahead in this company, and to make big money.”

At the beginning of 2003, DFC’s common stock began trading on the New York Stock Exchange, after moving from the Nasdaq National Market, a gesture of the group’s commitment to the global market. The move is expected to increase the visibility of the company among the investment community, expanding the potential investor base, and improve liquidity.

In Puerto Rico, and now in New York, the name Doral is synonymous with the very highest caliber of consumer banking services. In 2002, Doral’s 30th anniversary year, the company was ranked number one among the top 100 U.S. banks by U.S. Banker magazine. The view from independent analysts is equally positive, given the impressive results. Doral Bank, Puerto Rico, which is Puerto Rico’s fastest growing bank, finished the first half of 2003 with $6.2 billion in assets, and $2.4 billion in deposits, an increase of 41% and 26% respectively compared to June 30, 2002.

According to Mr. Levis, the outlook for 2003 and beyond remains upbeat with demand for new housing in Puerto Rico still very strong. “The residential real estate market in Puerto Rico has been one of the best worldwide in the last 40 years because of the continued appreciation in value of property.” The level of home ownership in Puerto Rico is traditionally higher than in America. The island’s rise in population, the limited land availability, reverse immigration from America, and the arrival of more U.S. citizens, are the main drivers in the demand for property.
Outside the traditional mortgage market, DFC’s income has diversified considerably in recent years, creating a stable platform for growth. Commercial banking, insurance agencies and securities brokerage contributed 54% of the total income in the second quarter of this year; four years ago the figure was just 11%.

DFC is especially eager to expand its U.S. interests, currently centered on New York. Doral Bank, New York, mirrors the group’s overall performance. As of June 30, 2003, it had assets of $474.3 million and deposits of $305.5 million, an increase of 61% and 29%, compared to the same period in 2002.

With a population that is three times bigger than the entire Puerto Rico market, and more savings oriented, there is plenty of growth potential. Mr. Levis believes the bank has a special role to play in serving not only the resident Puerto Rican population, but also the city’s wider pool of immigrants. “We understand the mentality of immigrants and minorities. I think that we can address their financial needs in a better way than most of the established institutions.”