As hurricane season approaches, it is vital to review and, if necessary, refresh your organization’s business continuity and resiliency plans. Banco Popular President and CEO Ignacio Alvarez recently shared his organization’s experience and thoughts on resiliency in the aftermath of Hurricane Maria.

Banco Popular (Off-site), established in 1893, is headquartered in San Juan, Puerto Rico with 165 branches across the island and nine branches in the Virgin Islands. In some of the more rural areas of Puerto Rico, it is the sole commercial bank in the community.

The challenges

“Hurricane Maria was a devastating storm,” Alvarez recounted. When the storm hit on September 20, 2017, electricity and telecommunications were completely knocked out. Homes were without water. Driving conditions were treacherous; uprooted street lights, electric poles and trees blocked many roadways.

Banco Popular performs periodic contingency tests in addition to having contingency facilities located in the United States. The destruction caused by Hurricane Maria was unprecedented in several ways, though. Unlike many past storms that came through Puerto Rico, this hurricane’s wreckage spanned the entire island. Additionally, the bank was previously not as dependent on telecommunications in past hurricanes.

Recovery and resiliency

Banco Popular has over 7,100 employees living throughout the island, so a first priority was reaching out to make sure everyone was safe. “It was a big sacrifice for many people, but our employees showed up for work bravely,” Alvarez noted. “They were without water and electricity at home. Some had to stop and clear tree branches from roads during their commute. For people who couldn’t come to work or didn’t have a place to work, we continued paying them.” Banco Popular also started a fund for employees who suffered damage, set up childcare centers and offered food packages for staff.

Wreckage from Hurricane Maria

“Before Hurricane Maria hit, we had a scare with Hurricane Irma and implemented satellite phones,” Alvarez said. “After Maria, we equipped portable ATMs, which we put in the back of a truck and took to different rural communities.” Within one week, 31 percent of the bank’s branches were operating and 24 percent of its ATMs were functioning. By April, 98 percent of its branches and 93 percent of its ATMs were operating. As with all telecommunications on the island, the call centers were down initially. Within five days, they reopened with limited hours, and within five weeks, they were back to providing 24-hour service.

Staff of all levels learned new roles and filled nontraditional positions to help maintain Banco Popular’s resiliency. Until telecommunications were restored to all branches, some had to revert back to manual processes. Staff quickly became adept at paper-and-pen processes. A few staff members, who internally earned the nickname “Jedi,” volunteered to manually deliver reports to some of the more remote branches. Many staff members were temporarily relocated to branch locations with diesel generators until their branches reopened.

We had branch managers who delivered gas or diesel to branches that had generators and vice presidents who were pumping gas. There was an employee who was living in a shelter but still coming into work. Everybody chipped in and did what they had to do.
Ignacio Alvarez President and CEO
Banco Popular

Having a sister bank in the U.S. proved helpful to Banco Popular as well. Before the hurricanes, the bank was able to send additional staff to perform operations out of the U.S.

Staying involved in the community

Outside of getting their branches and ATMs up and running, Banco Popular stayed involved in the community too. “Our customers were in the same situation as us,” Alvarez said. “No one had electricity, so we were able to open up seven hubs with internet access as work stations for customers throughout the island. At our branches, we were able to offer customers information on insurance and FEMA.”

Banco Popular also started a fundraising campaign, Embracing Puerto Rico, to help communities as they begin to rebuild. So far, they have partnered with 20 nonprofit organizations and have raised over $6 million.

We helped people remain calm. Our deposits have grown since the storm, which shows the confidence they have in us. We weathered a devastating event, but there was never a financial panic.
Ignacio Alvarez President and CEO
Banco Popular

Lessons learned

With the long duration that the branches with diesel generators were operating, they occasionally needed repairs. Since Hurricane Maria, Banco Popular has enhanced its resiliency planning to include training more people on generator repair and stocking a larger supply of spare parts.

Additionally, Banco Popular is looking to add more “bunker branches” — or locations specially fortified with satellite communications and generators — in order to have an operating branch available in most major areas.

Federal Reserve Bank resources at the ready

Banco Popular was in touch with its account executive, Nedelka Bell, before, during and after the storm. “Our relationship with Nedelka is excellent,” Alvarez said. “She was in contact with us the whole time and was always able to provide guidance. It’s a great asset to have a person who’s available to help.”

Note

The Federal Reserve Banks do not sponsor or endorse any of the non-Federal Reserve Bank-related products, parties or entities discussed in this publication.