SANTO DOMINGO.- As of March 2025, loans to productive sectors registered an interest rate of 13.56%, 95 basis points lower than the 14.51% they had in November of last year, the Central Bank of the Dominican Republic reported yesterday.
The governing body indicated that for the same time period, consumer loans were placed at an average interest rate of 20.45%, 106 points lower than the level recorded at 21.51% for the aforementioned month of November.
“This evolution of bank assets reflects the measures adopted by the Monetary Board and the Central Bank in the last quarter of 2024 and the beginning of 2025, through which liquidity was provided to the financial system by redeeming Central Bank bills and notes at maturity for some RD$173 billion.”.
The Central Bank further stated that the Monetary Board also approved the release of RD$35.355 billion from the legal reserve requirement (1.75% of liabilities subject to the legal reserve requirement) for the acquisition of low-cost housing solutions and for interim loans intended for their construction, as well as for the acquisition of homes in general up to RD$15 million and, in addition, for the provision of financing to micro, small, and medium-sized enterprises (MSMEs) through specialized microfinance entities. “Of this latter legal reserve measure, to date some RD$16 billion has been disbursed, 45.2% of the approved amount, reaching 2,901 beneficiaries,” the Central Bank stated in an article titled “Strength and Resilience of the Dominican Financial System in a Complex, Turbulent, and Uncertain International Environment.”.
The document indicates that at the close of March 2025, the net assets of the financial system reached the sum of RD$3.9 trillion, for an absolute year-on-year growth of RD$371,331 million compared to March 2024, for an expansion rate of 10.5%, converging with the nominal growth of the Dominican economy.
“The fastest-growing asset categories were the loan portfolio and liquid assets, which saw year-on-year increases of RD$209,799 million (10.8%) and RD$112,370 million (21.3%), respectively. Meanwhile, the proportion of assets held by multiple banks abroad represented just 3.0% of total assets, approximately RD$105 billion.” The
report adds that by the end of the first quarter of 2025, the combination of these measures and the cumulative reduction of the monetary policy rate by 125 basis points since September 2024 have contributed to lower interest rates for multiple banks, as the monetary policy pass-through mechanism has operated.
“Indeed, as of the end of March 2025, loans granted by this subsector registered a weighted average interest rate of 14.77%, a reduction of approximately 132 basis points compared to November 2024, when the interest rate reached 16.09%,” the publication states.
It adds that the lower interest rates and the sustained dynamism of lending have contributed to maintaining healthy financial indicators of credit quality, profitability, and solvency as of the end of March 2025. “For that month, the financial system registered a delinquency rate of 1.6%, that is, RD$1.60 of overdue loans for every RD$100 of outstanding loans. In turn, the financial system maintained reserves to cover these overdue loans at 185.4%, that is, RD$1.85 of provisions for every RD$1.00 of overdue loans.”
Regarding profitability, the financial system maintained a return on equity (ROE) of 22.2% for the month of March 2025, while the return on assets (ROA) was verified at 2.7% for the same date, the Central Bank article highlights.
“These levels of return have allowed the financial system to generate sufficient profits to maintain ample room for prudential liquidity and capital requirements. In this regard, according to data from the Superintendency of Banks, the regulatory solvency ratio of the financial system was 17.57% as of February 2025, higher than the 10% minimum required by Monetary and Financial Law No. 183-02, which means that the financial system has capital surpluses of RD$191,269 million.”
The report underscores that the strength of the financial system has been reflected in the sustained growth of public deposits and equity, emphasizing that as of the end of March 2025, public deposits, representing deposits held by businesses, households, and individuals in the financial system, grew by RD$317,473 million compared to March 2024, for a year-on-year increase of 10.2%, totaling RD$3.4 trillion, which demonstrates savers' confidence in the Dominican financial system. “This increase occurred in contrast to the reduction in the weighted average passive interest rate of multiple banks, which fell from 10.21% in November 2024 to 8.91% in March 2025, a reduction of 130 basis points.”
In turn, paid-in capital and equity reserves, which represent the equity of financial intermediation entities for absorbing losses and protecting depositors' savings, increased by RD$41,253 million in the period March 2024-2025, equivalent to a year-on-year expansion rate of 13.0%. With this growth, these equity resources of the financial system ended March 2025 with an amount of RD$358 billion, reflecting its robustness and resilience, consistent with the aforementioned levels of regulatory solvency buffer.
“These results confirm that the financial system continues to exhibit sustained strength and dynamism in adapting to a turbulent and uncertain external environment in global financial markets. The aforementioned factors, combined with the gradual process of regulatory and prudential strengthening toward international best practices, will allow financial intermediation entities to further consolidate their status as a key economic sector and a comparative advantage for the Dominican economy, enabling it to navigate transitory scenarios of high volatility and complexity arising from the evolution of the global economy.”
