Saint Doming.- Dominican banks make more money, maintain high levels of solvency, have relatively low arrears and continue to increase their assets. However, for businesses and families, getting funding remains expensive.
At the end of June 2026, the pre-tax profits of financial institutions reached RD$60.710 million, for an annual growth of 17.9 %, while net profits amounted to RD$49.714 million, an increase of 15.8 %, according to the Superintendency of Banks.
The return on assets (ROE) was 18.31 %, while the return on assets (ROA) reached 2.30 %.
At the same time, the assets of the system reached RD$4.47 billion, equivalent to 56.6 % of gross domestic product (GDP), with a growth of 12.6 % in 12 months.
Dominican banking is not only profitable, but also grows and has solvency indicators significantly higher than the regulatory minimum.
However, that good performance does not mean that money is cheap for those who need to borrow it.
Credit above 14 %
In August, the weighted average active interest rate of the multiple banks was 14.08 %, according to the Central Bank.
The rate that entities pay for the resources collected, known as the passive rate, was 7.37 %.
The difference between the two rates was therefore around 6.7 percentage points.
This margin should cover operating costs, provisions, credit risk, regulatory requirements, taxes and other costs associated with the financial business.
Depending on the type of loan and the risk of the applicant, the fees actually charged by the institutions may be significantly higher than the average of the system.
A first explanation of this apparent contradiction is that a bank's level of profit and the price of its loans do not maintain an automatic reverse relationship.
Increasing profits does not necessarily mean that there is an equivalent margin for reducing rates.
Institutions set the price of credit from factors such as the cost of the resources they provide, the risk that the customer will not pay, the time limit for financing, administrative costs, the provisions required and the expected return on the capital used.
On 30 September, the Central Bank raised its monetary policy rate from 5.25 % to 5.50 % in a preventive decision against inflationary pressures.
The measure makes a significant reduction in bank rates in the short term less likely and could keep the costs of recruitment and financing high.
The paradox of low late payment
The system's expired portfolio was located in RD$46.309 million and the late one at just 1.89 % at the end of May.
In addition, the provisions represented the 168 % of the expired portfolio.
The system also showed a solvency index of 18.71 %, well above the minimum regulatory rate of 10 %.
In other words, Dominican banking combines high profitability, good capitalization and controlled levels of late payment.
However, this financial strength has not resulted in more favourable financing conditions for businesses and consumers.
Credit grows, but not the same for everyone
The portfolio reached RD$2.45 billion and increased RD$201.430 million in 12 months.
The private portfolio in national currency recorded real growth of 4.6 %, driven mainly by commercial credit, which increased 9.9 %, and the mortgage, with 4.7 %.
The consumer credit, on the other hand, showed a real contraction of 2.3 %, while the credit cards went from growing 17.4 % in May 2025 to recording a negative variation of 1 % in May of this year.
In view of this scenario, economist Juan del Rosario detailed several factors that he believes explain why interest rates remain high in the Dominican Republic and raised the need to review some mechanisms of the financial system to create conditions that will reduce the cost of financing.
Del Rosario noted that one of the elements that affect the level of the rates is the supply mechanism that financial institutions must meet in order to provide loans.
“For the bank to lend a weight, he has to receive in savings two pesos,” he explained in referring to the support that banks should maintain to place resources.
In his view, this mechanism increases the cost of money for users and limits the possibility of reducing active interest rates, which are those applied to loans.
In that regard, he raised the desirability of reforming the Monetary and Financial Code to review the supply mechanisms of commercial banks and to assess a readjustment of those levels to reduce the rates of loans.
He also noted the relationship between active and passive rates as another element that has an impact on the cost of credit, as the bank's rate of loans must cover the costs associated with the collection and placement of resources.
The economist also considered that interest rates do not respond sufficiently to the behaviour of supply and demand.
“This rate is not in any way responsive to the game of supply and demand,” he said, explaining that a reduction in demand for credit is not necessarily automatically reflected in a decrease in rates.
Del Rosario also stressed the importance of improving the transmission of monetary policy measures to end-users.
He explained that the facilities available to the State may increase the availability of resources, but there is no effective mechanism to ensure that such movement results directly in a reduction in the fees paid by users.
Another aspect that he considered relevant is the fate of the financing. He noted that a significant part of resources is directed towards private consumption, while the productive and commercial sectors face greater procedures for access to credit.
In his view, strengthening funding for productive activities would lead to the targeting of resources to sectors with production capacity, rather than to the focus on final consumption.
For Del Rosario, the review of these mechanisms represents an opportunity to improve the functioning of the financial market and create conditions that will allow monetary policy decisions to have a greater impact on the cost of credit.
The economist considered that a reform of the Monetary and Financial Code, together with a review of the supply mechanisms and a better transmission of monetary policy, could help to create more favourable conditions for reducing interest rates in the country
