BANPONCE CORP, DEF 14A, 1994-03-18

BANPONCE CORP
DEF 14A, 1994-03-18
STATE COMMERCIAL BANKS

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/X/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

BANPONCE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)

Mr. Orlando Berges
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

(4) Proposed maximum aggregate value of transaction:

Set forth the amount on which the filing fee is calculated and state how it
was determined.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

BANPONCE CORPORATION
P.O. BOX 362708
SAN JUAN, PUERTO RICO 00936-2708

------------------------

NOTICE OF MEETING AND PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 22, 1994

------------------------

To the Stockholders of BanPonce Corporation:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of BanPonce
Corporation (the "Meeting") for the year 1994 will be held at 2:00 p.m. on
Friday, April 22, 1994, on the seventh floor of the Popular Center Building,
Hato Rey, Puerto Rico.

NOTICE IS ALSO GIVEN that the Meeting to be held on the date above set
forth will consider and act upon:

(1) The election of six (6) directors to hold office until the 1997
annual meeting of stockholders or until their respective successors shall
have been elected and qualified.

(2) To transact any and all other business as may be properly brought
before the Meeting or any adjournments thereof. Management at present knows
of no other business to be brought before the Meeting.

The Board of Directors has set March 11, 1994, as the record date to
determine the stockholders entitled to notice of, and vote at, the Meeting.

Enclosed is the Form of Proxy and the Proxy Statement.

San Juan, Puerto Rico, March 18, 1994.

SAMUEL T. CESPEDES
Secretary
<PAGE> 3

BANPONCE CORPORATION
P.O. BOX 362708
SAN JUAN, PUERTO RICO 00936-2708
---------------------

PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 22, 1994
---------------------

This Proxy statement is furnished in connection with the solicitation by
the Board of Directors of BanPonce Corporation (the "Corporation") of proxies to
be used at the Annual Meeting of Stockholders (the "Meeting") to be held at 2:00
p.m. on Friday, April 22, 1994, on the seventh floor of the Popular Center
Building, Hato Rey, Puerto Rico, and any adjournments thereof.

Properly executed Proxies received by the Secretary of the Corporation will
be voted at the Meeting in accordance with the instructions which appear therein
and for the purposes indicated on the Notice of Meeting. The Board of Directors
does not intend to present any business at the Meeting other than those included
in the Notice of Meeting. The Board of Directors at this time knows of no other
matters which may come before the Meeting. However, if any new matters requiring
the vote of the Stockholders properly come before the Meeting, Proxies may be
voted with respect thereto in accordance with the best judgement of
Proxyholders, under the discretionary power granted by stockholders to their
Proxies in connection with general matters.

MAILING DATE

Enclosed with this Proxy Statement is the Annual Report covering the
financial results for the year ended December 31, 1993, duly certified by Price
Waterhouse as independent public accountants. This Proxy Statement, the enclosed
Annual Report, the Notice of Annual Meeting of Stockholders and the form of
Proxy are being sent to stockholders on or about March 18, 1994.

SOLICITATION OF PROXIES

The enclosed Proxy is solicited by and on behalf of the Board of Directors
of the Corporation. In addition to solicitation by mail, management may
participate in the solicitation of Proxies by telephone, personal interviews or
otherwise. The Board of Directors has engaged the firm of Georgeson & Company
Inc. to aid in the solicitation of Proxies. The cost of solicitation will be
borne by the Corporation and is estimated at $6,500.00.

REVOCABILITY OF PROXY

Any stockholder giving a proxy has the power to revoke it before the proxy
is exercised. The grantor may revoke the proxy by claiming at the Meeting the
right to vote by himself the shares of stock registered in his name or by notice
of revocation in writing to the President or Secretary of BanPonce Corporation,
P.O. Box 362708, San Juan, Puerto Rico 00936-2708, delivered before the proxy is
exercised.

VOTING SECURITIES

The only outstanding voting securities of the Corporation are its shares of
common stock, each share of which entitles the holder thereof to one vote. Only
common stockholders of record at the close of business on March 11, 1994 (the
"Record Date"), will be entitled to vote at the Annual Meeting and any
adjournments thereof. On Record Date there were 32,756,219 shares of common
stock of BanPonce Corporation
<PAGE> 4

outstanding. The shares covered by any such proxy that are properly executed and
received by management before 2:00 p.m. on the day of the Meeting will be voted.

The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock of the Corporation is necessary to constitute
a quorum at the Meeting. Votes cast by proxy or in person at the Meeting will be
counted by the persons appointed by the corporation as election judges for the
Meeting. As to the election of Directors, the proxy card being provided by the
Board of Directors enables a stockholder to vote for the election of the nominee
proposed by the Board, or to withhold authority to vote for one of the nominees
being proposed. For purposes of determining quorum, the election judges will
treat "broker non-votes" as shares that are present and entitled to vote. A
"broker non-vote" results when a broker or nominee has expressly indicated in
the proxy that it does not have discretionary authority to vote on a particular
matter. Directors will be elected by a majority of the vote. Therefore,
abstentions and broker non-votes will not have an effect on the election of
directors of the Corporation.

PRINCIPAL STOCKHOLDERS

Following is the information, to the extent known by the persons on whose
behalf this solicitation is made, with respect to any person (including any
"group" as that term is used in Section 13(d)(3) of the Securities and Exchange
Act of 1934, as amended) who is known to BanPonce Corporation to be the
beneficial owner of more than five percent of the Corporation's voting
securities.

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ----------------- ------------------------------------- ------------------ ---------
<S> <C> <C> <C>
Common Banco Popular de Puerto Rico (the
"Bank") As Trustee for Banco
Popular de Puerto Rico Retirement
Plan. 1,418,215
As Trustee for the Deferred
Compensation Plan (Profit Sharing)
for the Employees of Banco Popular
de Puerto Rico 1,330,348
------------------
2,748,563(3) 8.3910
Common State Farm Mutual Automobile
Insurance Company 2,355,531(4) 7.1911
</TABLE>

- ---------------

(1) As of February 28, 1994.
(2) Based on 32,756,219 shares outstanding.
(3) The Bank, as Trustee, administers both Plans through their Administrative
Committees, with sole voting and investment power.
(4) On January 28, 1994, State Farm Mutual Automobile Insurance Company ("State
Farm") and affiliated entities filed a joint statement on Schedule 13-G
with the Securities and Exchange Commission. According to said statement,
State Farm and its affiliates might be deemed to constitute a "group"
within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934. State Farm and its affiliates could also be deemed to be the
beneficial owners of 2,355,531 common shares of BanPonce Corporation.
However, State Farm and each such affiliate disclaim beneficial ownership
as to all shares as to which each such person has no right to receive the
proceeds of sale of the shares, and also disclaim that they constitute a
"group".

2
<PAGE> 5

SHARES BENEFICIALLY OWNED BY DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS OF THE CORPORATION

Following is the information, as of February 28, 1994, as to equity
securities of the Corporation beneficially owned by all current directors,
nominees, the five most highly compensated Executive Officers of the Corporation
and the total owned by directors, nominees and all Executive Officers of the
Corporation as a group:

<TABLE>
<CAPTION>
TITLE
OF AMOUNT AND NATURE PERCENT OF
NAME CLASS OF BENEFICIAL OWNERSHIP CLASS(1)
- -------------------------------------- ------- ------------------------ ----------
<S> <C> <C> <C>
Alfonso F. Ballester Common 344,360(2) 1.0513
Juan J. Bermudez Common 22,046(3) .0673
Sila M. Calderon Common 6,008(4) .0183
Francisco J. Carreras Common 1,478 .0045
Richard L. Carrion Common 228,232(5) .6968
Manuel Luis Del Valle Common 48,500 .1481
Waldemar Del Valle Common 14,208(6) .0434
Luis E. Dubon, Jr. Common 435,208(7) 1.3286
Roberto W. Esteves Common 810,761(8) 2.4751
Antonio Luis Ferre Common 576,298(9) 1.7594
Hector R. Gonzalez Common 41,016 .1252
Jorge A. Junquera Common 409(10) .0012
Franklin A. Mathias Common 20,775 .0634
Hugh G. McComas Common 1,019 .0031
Manuel Morales, Jr. Common 180,049(11) .5497
Alberto M. Paracchini Common 39,173(12) .1196
Francisco Perez, Jr. Common 222 .0007
Francisco M. Rexach, Jr. Common 9,900 .0302
Felix J. Serralles, Jr. Common 91,915(13) .2806
Emilio Jose Venegas Common 86,000(14) .2625
Julio E. Vizcarrondo, Jr. Common 262,805(15) .8023
Maria Isabel P. de Burckhart Common 3,961(16) .0121
David H. Chafey, Jr. Common 5,321 .0162
Larry B. Kesler Common 1,398 .0043
All Directors and Executive Officers
of the Corporation as a group Common 3,240,659(17) 9.8933
</TABLE>

- ---------------

(1) Based on 32,756,219 shares outstanding.
(2) Mr. Ballester owns 343,360 shares and has indirect investment power over
1,000 shares owned by his wife. Excludes 300,482 shares owned by his sister
Mrs. Griselda Ballester, as to all of which Mr. Ballester disclaims
indirect voting power. Mr. Ballester filed late one report which disclosed
one transaction required to be filed pursuant to Section 16(a) of the
Securities Exchange Act of 1934 with respect to his beneficial ownership of
shares during the last fiscal year.
(3) Excludes 1,935 shares owned by his wife, to which Mr. Bermudez disclaims
indirect voting power.
(4) Mrs. Calderon filed late one report which disclosed one transaction
required to be filed pursuant to Section 16(a) of the Securities Exchange
Act of 1934 with respect to her beneficial ownership of shares during the
last fiscal year.
(5) Mr. Carrion owns 54,271 shares and also has indirect investment power over
5,776 shares owned by his children. Junior Investment Corporation owns
1,015,000 shares of the Corporation. Mr. Carrion owns 16.57% of the shares
of said corporation.
(6) Excludes 401 shares owned by his daughter, Maria M. Del Valle, to which Mr.
Del Valle disclaims beneficial ownership. Mr. Del Valle filed late one
report which disclosed one transaction required to be filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934 with respect to his
beneficial ownership of shares during the last fiscal year.

3
<PAGE> 6

(7) Mr. Dubon owns 45,441 shares and has a power of attorney over 22,804 shares
owned by Mrs. Myrta A. Dubon, wife, and 17,036 shares held in trust by Mr.
Dubon for his children, Luis E. Dubon, III, Myrta I. Dubon, Jose R. Dubon
and Maria A. Dubon, and over 349,927 shares owned by various corporations
and members of his family in which Mr. Dubon has direct or indirect
ownership. Mr. Dubon filed late one report which disclosed two transactions
required to be filed pursuant to Section 16(a) of the Securities Exchange
Act of 1934 with respect to his beneficial ownership of shares during the
last fiscal year.
(8) Mr. Esteves owns 4,000 shares, and, as guardian of Roberto Esteves, Jr.,
has indirect voting and investment power over 53,861 shares of the
Corporation. Northwestern Realty Corp., of which Mr. Esteves owns 100% of
the shares, owns 752,900 shares of the Corporation.
(9) Mr. Ferre has indirect investment and voting power over 114,300 shares
owned by Alfra Investment Corp. and 720 shares owned by his wife and
children. Mr. Ferre owns 85.12% of Ferre Investment Fund, Inc., which owns
210,300 shares of the Corporation. Mr. Ferre also owns 65.25% of the shares
of El Dia, Inc., and has indirect voting power over Alfra Investment Corp.,
which owns 19.35% of El Dia, Inc., which owns 250,978 shares of the
Corporation. Mr. Ferre claims beneficial ownership over the 576,298 shares.
Mr. Ferre filed late two reports which disclosed two transactions each
required to be filed pursuant to Section 16(a) of the Securities Exchange
Act of 1934 with respect to his beneficial ownership of shares during the
last fiscal year.
(10) Mr. Junquera, Executive Vice President of the Corporation, filed late two
reports which disclosed one and two transactions, respectively, required to
be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
with respect to his beneficial ownership of shares during the last fiscal
year.
(11) Mr. Morales owns 89,272 shares and has voting power over 90,777 shares
owned by his parents.
(12) Excludes 316 shares owned by his wife, to which Mr. Paracchini disclaims
beneficial ownership.
(13) Mr. Serralles owns 54,688 shares, and has indirect voting power over 1,573
shares owned by his wife. Mr. Serralles owns 100% of the shares of each of
Capitanejo, Inc. and Fao Investments, Inc., which own 34,255 and 1,399
shares, respectively, of the Corporation.
(14) Mr. Venegas owns 9,000 shares and also has indirect investment power over
6,000 shares owned by his wife. Mr. Venegas also has indirect voting and
investment power over the 40,000 shares of the Corporation owned by Venegas
Construction Corporation, of which he is stockholder and secretary, and
over the 31,000 shares of the Corporation owned by Sanson Corporation, of
which he is President and stockholder. Mr. Venegas filed late one report
which disclosed four transactions required to be filed pursuant to Section
16(a) of the Securities Exchange Act of 1934 with respect to his beneficial
ownership of shares during the last fiscal year.
(15) Mr. Vizcarrondo owns 47,766 shares and has indirect voting power over
44,113 shares owned by his wife and children. Mr. Vizcarrondo's wife owns
16.84% of the shares of Junior Investment Corporation, which owns 1,015,000
shares of the Corporation. Excludes 29,100 shares owned by Mr. Vizcarrondo
as trustee and member of the Investment Committee of the DMI Pension Trust,
which owns said shares of the Corporation, of which he disclaims beneficial
ownership. Excluded also are 5,000 shares owned by Mr. Vizcarrondo as
trustee of the Suarez Toro Trust, which owns said shares of the
Corporation, of which he disclaims beneficial ownership.
(16) Mrs. Burckhart, Executive Vice President of the Corporation, filed late one
report which disclosed three transactions required to be filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934 with respect to her
beneficial ownership of shares during the last fiscal year.
(17) Mr. Emilio E. Pinero, Executive Vice President of the Corporation, filed
late one report which disclosed one transaction required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 with
respect to his beneficial ownership of shares during the last fiscal year.

4
<PAGE> 7

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors of the Corporation met on a monthly basis during
1993. All directors, except Mr. Antonio Luis Ferre and Mr. Franklin A. Mathias,
attended 75% or more of the meetings of the Board of Directors and the
committees of the Board of Directors on which each such director served. The
following table indicates the business experience of the current Board of
Directors of the Corporation and nominees:

Juan J. Bermudez 56 Electrical Engineer. Partner of Bermudez and Longo, 1990
S.E., Ornamental Poles, S.E., Decemcor, S.E.,
Unifirst S.E., Unisouth, S.E., Uniestates, S.E.,
Unicourts, S.E., Unieast, S.E. and PCME
Commercial, S.E. Principal Stockholder and
Director of Power Poles, Inc. Director of the
Bank since 1985.

Sila M. Calderon 51 Secretary of the Governorship from 1986 to 1989. 1990
Secretary of State of the Commonwealth of Puerto
Rico from 1988 to 1989. Director of Pueblo Xtra
International, Inc. since 1990. Chairman of the
Board of Directors of the Puerto Rico Public
Broadcasting Corporation from 1991 to 1992.
President of Commonwealth Investment Company,
Inc. and member of the Board of Trustees of
Fundacion Banco Popular, Inc. since 1990.
Chairman of the board of Directors of Proyecto
Peninsula de Cantera since 1992. Director of the
Bank since 1990.

Francisco J. Carreras 61 Professor of the University of Puerto Rico. Member 1990
of the Board of Trustees of Fundacion Banco
Popular, Inc. Executive Director of Fundacion
Angel Ramos, Inc. Director of the Bank since
1979.

Richard L. Carrion 41 Chairman of the Board, President and Chief 1990
Executive Officer ("CEO") of the Corporation and
the Bank. Chairman of the Boards of Popular
International Bank, Inc., BanPonce Financial
Corp., Vehicle Equipment Leasing Company, Inc.,
Spring Financial Services, Inc., Popular Leasing
& Rental, Inc. and Popular Consumer Services,
Inc. Chairman of the Board of Trustees of
Fundacion Banco Popular, Inc. Member of the Latin
America Regional Board of Directors of Visa
International. Member of the Board of Trustees of
the American Management Association. President of
Puerto Rico's Commission for the 2004 Olympiad.
Member of the International Olympic Committee.
Member of the Board of Directors and Compensation
Committee of Pueblo Xtra International, Inc.
Director of the Bank since 1982.
</TABLE>

5
<PAGE> 8

<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION AND BUSINESS THE CORPORATION
NAME AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
- ----------------------- --- --------------------------------------------------- ---------------
<S> <C> <C> <C>
Manuel Luis Del Valle 69 Vice Chairman of the Board of Directors of the 1990
Corporation and the Bank. Chairman of the Board
and Director of Manuel Del Valle, Inc.
(manufacturer and wholesaler of chemical
products). Chairman of the Board and Director of
Bacardi Corporation. Director of Bacardi Limited.
Member of the Board of Trustees of Fundacion
Banco Popular, Inc. Member of the Board of
Trustees of Fundacion Angel Ramos. Member of the
Board of Directors of the Committee for the
Economic Development of Puerto Rico. Director of
Popular International Bank, Inc., Spring
Financial Services, Inc. and of BanPonce
Financial Corp. Director of the Bank since 1968.

Waldemar Del Valle 67 Attorney at Law at the law firm Parra, Del Valle, 1984
Frau & Limeres. Director of Damas Foundation,
Inc. Director of Banco de Ponce from 1975 to
1990.

Luis E. Dubon, Jr. 59 Attorney at Law and Investor. Partner of the law 1984
firm Dubon & Dubon. Director, American Investment
Corp., Fundacion Gogui, Inc. and San Jose
Development, Inc. Director of the Bank since
1973.

Roberto W. Esteves 69 President of Travel Network Travel Agencies. 1991
President of Star Tours International, tour
wholesalers. President of Caribe Theaters Corp.,
theater operators. President of Northwestern
Realty Corp., investments in Real Estate.
Director of the Bank since 1991.

Antonio Luis Ferre 60 Vice Chairman of the Board of Directors of the 1984
Corporation and the Bank. Vice Chairman of the
Board of Puerto Rican Cement Co., Inc.
(registered public company), manufacturers of
cement and allied products. President and Editor
of El Nuevo Dia, Inc. Director of AMR Corp.
(registered public company). Director, of
Metropolitan Life Insurance Company (registered
company under the Investment Company Act of
1940). Director of Pueblo Xtra International,
Inc. Director of the Bank since 1959.

Hector R. Gonzalez 60 President and Chief Executive Officer of TPC 1984
Communications of PR, Inc. and Teleponce Cable
TV, Inc., owners and operators of cable
television systems. Director, Damas Foundation,
Inc. Director of Popular Consumer Services, Inc.
Director of the Bank since 1973.

Franklin A. Mathias 68 Investor. Chairman of the Board of Directors of 1990
Molinos de Puerto Rico, Inc. until January, 1988.
Director of the Bank since 1988.

Hugh G. McComas 70 President and Chief Executive Officer of MCO 1990
Industries, Inc. Director of the Bank since 1980.

Manuel Morales, Jr. 48 Principal Stockholder of Selarom Capital Group, 1990
Inc. President of Parkview Realty, Inc. Trustee
of Universidad Sagrado Corazon and
Caribbean/Latin America Action. Member of the
Board of Trustees of Fundacion Banco Popular,
Inc. Director of the Bank since 1978.
</TABLE>

6
<PAGE> 9

<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION AND BUSINESS THE CORPORATION
NAME AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
- ----------------------- --- --------------------------------------------------- ---------------
<S> <C> <C> <C>
Alberto M. Paracchini 61 Former Chairman of the Board of Directors of the 1984
Corporation and the Bank. Former Chairman of the
Board of Vehicle Equipment Leasing Company, Inc.,
BanPonce Financial Corp., Spring Financial
Services, Inc., Popular Leasing & Rental, Inc.
and Popular Consumer Services, Inc. Member of the
Board of Trustees of Fundacion Banco Popular. He
served in several executive positions in the Bank
since he commenced working in the Bank in 1956.
Director of Puerto Rican Cement Co., Inc. (regis-
tered public company). Director of HDA Management
Corp. since 1993. Director of the Bank since
1969.

Francisco Perez, Jr. 57 Chairman of the Board and President of Sucrs. Jose 1984
Lema and Co., Inc. (La Favorita), shoe store
chain. President of 201 Realty Corporation,
engaged in the real estate business. Director of
Banco de Ponce from 1976 to 1990.

Francisco M. Rexach, Jr. 56 President of Ready Mix Concrete, Inc. President of 1990
Puerto Rico Oil Company, Inc. Director of Vehicle
Equipment Leasing Company, Inc. and Popular
Leasing & Rental, Inc. Director of the Bank since
1983.

Felix J. Serralles, Jr. 59 President and Chief Executive Officer of Empresas 1984
Serralles, Inc. and of its subsidiary Destileria
Serralles, Inc., manufacturers and distributors
of distilled spirits, and of its affiliate
Mercedita Leasing, Inc. Director of the Bank
since 1966.

Emilio Jose Venegas 66 President of Sanson Corporation. Secretary of 1984
Venegas Construction Corp. Director of Puerto
Rican Cement Co., Inc. (registered public
company). Director of Damas Foundation, Inc.
Director of Banco de Ponce from 1973 to 1990.

Julio E. Vizcarrondo 59 Civil Engineer. President/Partner and Chief 1990
Executive Officer of Desarrollos Metropolitanos,
S. E., VMW Enterprises Corp. and Resort Builders
S.E., corporations engaged in the development and
construction of residential, commercial and
institutional projects in Puerto Rico. Director
of the Bank since 1984.
</TABLE>

The Corporation's Board of Directors has a standing Audit Committee. The
Board of Directors of the Bank, the principal subsidiary of the Corporation, has
a standing Human Resources Committee that may review compensation matters for
the Corporation. There is no standing Nominating Committee. Information
regarding the Audit and Human Resources Committees follows:

AUDIT COMMITTEE

The functions of the Audit Committee include reviewing the accounting
principles and practices employed by the Corporation, and its compliance with
the laws and regulations. The committee meets with the Corporation's independent
external auditors to review their audit procedures, the report on their
examination of the Corporation's financial statements, and their comments on the
system of internal controls. Also, the Committee oversees the internal audit
function and reviews the reports prepared by the Auditing Division for their
examinations of the operating and business units and for any other special
examinations that may be required. The Committee held four meetings during the
fiscal year ended December 31, 1993.

7
<PAGE> 10

The committee members during 1993 were: Manuel Luis Del Valle, Luis E.
Dubon, Jr., Franklin A. Mathias, Manuel Morales, Jr. and Felix J. Serralles, Jr.

HUMAN RESOURCES COMMITTEE

The functions of the Human Resources Committee include reviewing the
compensation and benefits of management and employees, reviewing the policies
related to the performance and compensation of management and employees, and
reviewing the long-range planning for executive development and succession. The
Committee held two meetings during the fiscal year ended December 31, 1993.

The Committee members during 1993 were: Salustiano Alvarez Mendez, Juan J.
Bermudez, Francisco J. Carreras, Manuel Luis Del Valle and Julio E. Vizcarrondo,
Jr. Messrs. Bermudez, Carreras, Del Valle and Vizcarrondo, Jr. are also
directors of the Corporation. None of the members of the Committee are officers
or employees of the Corporation or any of its subsidiaries.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Corporation and its subsidiaries
were entitled to be reimbursed for certain expenses up to $8,000.00 annually.
Commencing in May 1994 directors will be entitled to be reimbursed for certain
expenses up to $10,000.00. In addition, during 1993 and up to April 1994
directors received $300.00 for attending each directors' and committee meeting.
Commencing in May 1994 directors will receive $500.00 for attending each
directors' and committee meeting. Directors who are employees do not receive
fees for attending directors' and committee meetings.

ELECTION OF DIRECTORS

The Certificate of Incorporation and the By-laws of the Corporation
establish a classified Board of Directors pursuant to which the Board of
Directors is divided into three classes as nearly equal in number as possible,
with each class having at least three members and with the term of office of one
class expiring each year. Each director serves for a term ending on the date of
the third annual meeting of stockholders following the annual meeting at which
such director was elected.

The policy of the Board of Directors, as set forth in a resolution adopted
on January 8, 1991, provides that no person shall be nominated for election or
reelection as director of the Board if at the date of the Annual Meeting of
Stockholders or during the term to be served such person attains seventy two
(72) years of age. Mr. Roberto W. Esteves and Mr. Hugh G. McComas would attain
seventy two (72) years of age during the term to be served. In accordance with
Board policy neither will be nominated for reelection as director.

Mr. Luis Rodriguez-Delgado resigned as director of the Corporation
effective January 31, 1994. Mr. Rodriguez-Delgado's resignation is not due to a
disagreement with the Corporation or with any matter relating to the
Corporation's operation. The number of directors in "Class 1" and "Class 2" has
been reduced by the Board of Directors to six directors each, since only one of
the two vacancies in "Class 1" will be filled and the vacancy in "Class 2"
resulting from Mr. Rodriguez-Delgado's resignation will not be filled, thus
reducing the total number of directors to nineteen (19), which is in accordance
with Article Eighth of the Corporation's Certificate of Incorporation.

At the Meeting, six directors assigned to "Class 1" are to be elected until
the 1997 Annual Meeting of Stockholders or until their respective successors
shall have been elected and qualified. The remaining 13 directors of the
Corporation will serve as directors, as follows: until the 1995 Annual Meeting
of Stockholders of the Corporation, in the case of those six directors assigned
to "Class 2", and until the 1996 Annual Meeting of Stockholders, in the case of
those seven directors assigned to "Class 3", or in each case until their
successors are duly elected and qualified.

The persons named as proxies in the accompanying Form of Proxy have advised
the Corporation that, unless otherwise instructed, they intend to vote at the
meeting the shares covered by the proxies FOR the election of the six nominees
named in the following table, and that if any one or more of such nominees
should

8
<PAGE> 11

become unavailable for election they intend to vote such shares FOR the election
of such substitute nominees as management may propose. The Corporation has no
knowledge that any nominee will become unavailable for election.

NOMINEES FOR ELECTION AS DIRECTORS

The following table sets forth the name of the persons nominated by the
Board of Directors of the Corporation for election as a director, including
their age, principal occupation and business experience during the past five (5)
years (including positions held with the Corporation or the Bank), and the
period during which each nominee has served as a director of the Corporation.
All directors nominated will serve for three (3) years until the 1997 Annual
Meeting of Stockholders or until their respective successors shall have been
elected and qualified.

<TABLE>
<CAPTION>
PRINCIPLE OCCUPATION AND BUSINESS DIRECTOR OF THE
EXPERIENCE DURING THE PAST FIVE CORPORATION
NAME AGE YEARS SINCE
- --------------------- --- ---------------------------------- ----------------
<S> <C> <C> <C>
Alfonso F. Ballester 64 See under "Board of Directors" 1990
Sila M. Calderon 51 See under "Board of Directors" 1990
Waldemar Del Valle 67 See under "Board of Directors" 1984
Jorge A. Junquera 45 See under "Executive Officers" --
Francisco Perez, Jr. 50 See under "Board of Directors" 1984
Emilio Jose Venegas 66 See under "Board of Directors" 1984
</TABLE>

EXECUTIVE OFFICERS

The following table sets forth the names of the executive officers ("the
Executive Officers") of the Corporation including their age, business experience
during the past five (5) years and the period during which each such person has
served as Executive Officer of the Corporation or the Bank.

Jorge A. Junquera Executive Vice 45 Supervisor of the Bank's Retail 1990
President Banking Group. Director of the Bank
since 1990. Director of Popular
International Bank, Inc. Executive
Vice President and Director of
BanPonce Financial Corp., Director
of Spring Financial Services, Inc.,
Vehicle Equipment Leasing Company,
Inc., Popular Leasing & Rental,
Inc. and Popular Consumer Services,
Inc. Chairman of the Board of
Puerto Rico Tourism Company since
1993. Executive Vice President of
the Bank since 1980.
</TABLE>

9
<PAGE> 12

<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
OF THE
PRINCIPAL OCCUPATION AND BUSINESS CORPORATION
NAME TITLE AGE EXPERIENCE DURING THE PAST FIVE YEARS SINCE
- --------------------- -------------------- --- ------------------------------------- ------------
<S> <C> <C> <C> <C>
Maria Isabel P. Executive Vice 45 Supervisor of the Administration 1990
de Burckhart President Group. Executive Vice President of
the Bank since January, 1990.
Senior Vice President of the Bank
from August, 1986 to January, 1990.
Executive Vice President of
BanPonce Financial Corp. Member of
the Board of Trustees of Fundacion
Banco Popular, Inc. Member of the
Board of Directors of Fundacion Ana
G. Mendez since 1992. Member of the
Board of Directors of Puerto Rico
Community Foundation since 1993.
Member of the Board of Directors of
Puerto Rico Convention Bureau since
1993.

David H. Chafey, Jr. Executive Vice 40 Supervisor of the Finance Group and 1990
President U.S. Operations. Executive Vice
President of the Bank since
January, 1990. Executive Vice
President and Director of Popular
International Bank, Inc., and
BanPonce Financial Corp. Director
of Vehicle Equipment Leasing Co.,
Inc., of Spring Financial Services,
Inc., of Popular Leasing & Rental,
Inc., and of Popular Consumer
Services,Inc. Chairman of the Board
of Puerto Rico Telephone Authority
since 1993.

Larry B. Kesler Executive Vice 56 Supervisor of Individual Credit and 1990
President Virgin Islands Operations.
Executive Vice President of the
Bank since January, 1990. Senior
Vice President of the Bank from
August, 1986 to January, 1990.
Executive Vice President and
Director of BanPonce Financial
Corp. Director of Spring Financial
Services, Inc. and of Popular Con-
sumer Services, Inc.

Humberto Martin Executive Vice 48 Supervisor of the Operations Group. 1986
President Executive Vice President of the
Bank since November, 1986.
Executive Vice President of
BanPonce Financial Corp.

Emilio E. Pinero Executive Vice 45 Supervisor of the Commercial Banking 1990
President Group. Executive Vice President of
the Bank since January, 1990.
Director of Vehicle Equipment
Leasing Company, Inc. and Popular
Leasing and Rental, Inc. Executive
Vice President of BanPonce
Financial Corp.
</TABLE>

10
<PAGE> 13

Samuel T. Cespedes Secretary of the 57 Attorney at Law. Proprietary partner 1991
Board of Direc- of the law firm McConnell, Valdes.
tors Secretary of the Board of Directors
of the Bank since 1991. Secretary
of the Board of Directors of
Vehicle Equipment Leasing Company,
Inc., BanPonce Financial Corp.,
Spring Financial Services, Inc.,
Popular Leasing & Rental, Inc. and
Popular Consumer Services, Inc.
</TABLE>

FAMILY RELATIONSHIPS

Mr. Richard L. Carrion, Chairman of the Board, President and CEO of the
Corporation and the Bank, is brother-in-law of Mr. Julio E. Vizcarrondo, Jr.,
Director. Mr. Alfonso F. Ballester, Director, is brother-in-law of Mr. Hector R.
Gonzalez, Director.

OTHER RELATIONSHIPS AND TRANSACTIONS

Director Waldemar Del Valle is an attorney at the law firm Parra, Del
Valle, Frau & Limeres, retained by the Bank to perform general legal services,
for which $38,803 were paid during 1993.

Director Luis E. Dubon, Jr. is a partner of the law firm Dubon & Dubon,
retained by the Bank to perform general legal services, for which $44,472 were
paid during 1993.

Mr. Samuel T. Cespedes, Secretary of the Board of Directors, is a
proprietary partner of the law firm McConnell, Valdes, retained by the bank to
perform general legal services, for which $694,343 were paid during 1993.

The Bank has had loan transactions with BanPonce directors and officers,
and with their associates, and proposes to continue such transactions in the
ordinary course of its business, on substantially the same terms as those
prevailing for comparable loan transactions with other persons and subject to
the provisions of the Banking Act of the Commonwealth of Puerto Rico and the
applicable federal laws and regulations. The extensions of credit have not
involved nor presently involve more than normal risks of collectibility or other
unfavorable features.

EXECUTIVE COMPENSATION PROGRAM

REPORT OF THE BANK'S HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION

OVERVIEW

The Compensation Program for Executive Officers is established and
administered by Mr. Richard L. Carrion, Chairman of the Board, President and CEO
for each of the Corporation and the Bank. This compensation program, in turn, is
reviewed by the Bank's Human Resources Committee and approved every year by the
Board of Directors. The compensation of Mr. Carrion is revised periodically by
the Board of Directors.

11
<PAGE> 14

The Bank's Compensation Program for Executive Officers follows the same
philosophy and principles used for all Bank employees and includes the following
components:

-- Base salary and fringe benefits
-- Individual incentives
-- Deferred Compensation Plan (Profit Sharing)

One of the objectives of this Program is to achieve a ratio of salary
levels where the highest level is not greater than 25 times the lowest level in
the salary structure of the Bank. In addition, as a component of total
compensation, the variable portion of compensation, which includes individual
incentives and Profit Sharing Plan, should gradually increase over time as a
percentage of total compensation.

All cash compensation paid to Mr. Carrion and to the Executive Officers is
paid by the Bank. The Corporation does not currently pay cash compensation to
Executive Officers.

The Executive Compensation Program for the Corporation's non-banking
subsidiaries is set according to the industry and geographical area in which
they operate and is approved by the Board of Directors of each such entity.

EXECUTIVE OFFICERS

The group of executive officers is composed of six Executive Vice
Presidents, all of whom participate in an annual salary and incentive bonus
program recommended by Mr. Carrion and approved by the Board of Directors of the
Bank.

In 1993, salary increases were based 50% on individual performance in
accordance with established parameters and 50% on team performance. Such
individual and team performance are evaluated by Mr. Carrion. The percentage of
salary increases for each pool was established according to the Bank's
performance, measured by net income after tax.

Incentive bonuses for 1993 were also established based on the Bank's income
after tax. A bonus of 10% of the Executive Officers' base salary was set for
achieving a target which is established at the beginning of each year, and could
reach 20% if results exceeded the target. Under the Incentive Bonus Program, the
bonuses for 1993 amounted to $149,264, representing 13.78% of each participant's
base salary.

Salaries are increased annually and incentive bonuses are paid in one
yearly lump sum payment. Both compensation components are distributed in cash
only.

Beginning in 1994, salary increases and incentive bonuses will be measured
by the Corporation's performance, measured on an after-tax basis, instead of the
Bank's performance.

CHAIRMAN OF THE BOARD, PRESIDENT AND CEO

The compensation for the Corporation's and the Bank's Chairman of the
Board, President and CEO, Mr. Richard L. Carrion, has remained the same since
February 1989. No incentive bonus was awarded for 1993.

Currently, the Human Resources Committee is in the process of revising Mr.
Carrion's compensation for 1994 to bring it to a competitive level with
comparable institutions. Among other matters the Human Resources Committee is
considering the possible adoption of a long-term incentive program for Mr.
Carrion and the Executive Officers.

HUMAN RESOURCES COMMITTEE

<TABLE>
<S> <C>
Salustiano Alvarez Mendez
Juan J. Bermudez Manuel Luis Del Valle
Francisco J. Carreras Julio E. Vizcarrondo, Jr.
</TABLE>

12
<PAGE> 15

EMPLOYMENT CONTRACT OF MR. ALBERTO M. PARACCHINI

Mr. Paracchini served as Chairman of the Board of the Corporation and the
Bank until April 29, 1993. Pursuant to the terms of an employment agreement
dated October 19, 1989 between the Corporation and Mr. Paracchini (the
"Employment Agreement"), Mr. Paracchini was employed by the Corporation for a
two year period commencing on December 31, 1990 and ending on December 31, 1992
( the "Employment Term"). The Employment Term was extended until April 29, 1993.
The employment Agreement provided that unless Mr. Paracchini otherwise notified
the Corporation prior to the end of the Employment Term, Mr. Paracchini would
become a consultant to the Corporation and the Bank for a 36-month period,
during which he would have been entitled to receive an annual retainer of not
less than sixty percent of his total compensation received during the last year
of the Employment Term (the "Retainer").

The Employment Agreement was terminated as of July 31, 1993, and in lieu of
the Retainer to be received by Mr. Paracchini throughout the three-year period
in which he was going to serve as a consultant, Mr. Paracchini received a
lump-sum payment of $730,355 on August 16, 1993.

EXECUTIVE COMPENSATION

The following table sets forth all cash compensation paid by the
Corporation or its subsidiaries to the eight highest paid Executive Officers of
the Corporation and the principal officers of the Corporation's or the Bank's
subsidiaries for 1993.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
FISCAL -------------------- ALL OTHER
YEAR SALARY(A) BONUS(B) COMPENSATION(C) TOTAL
------ --------- -------- --------------- --------
<S> <C> <C> <C> <C> <C>
Richard L. Carrion 1993 $230,000 $36,814 $ 26,343(d) $293,157
Chairman of the Board, 1992 230,000 83,191 24,086(d) 337,277
President and CEO 1991 260,077 22,246 18,882(d) 301,205

Jorge A. Junquera 1993 210,582 63,667 24,119(d) 298,368
Executive Vice President of the Corporation 1992 183,640 58,843 19,231(d) 261,714
1991 171,695 14,736 12,464(d) 198,895

David H. Chafey, Jr. 1993 205,044 61,950 23,485(d) 290,479
Executive Vice President of the Corporation 1992 176,347 57,081 18,467(d) 251,895
1991 148,241 12,881 10,924(d) 172,046

Larry B. Kesler 1993 167,500 50,638 19,185(d) 237,323
Executive Vice President of the Corporation 1992 145,129 46,412 15,198(d) 206,739
1991 134,326 11,667 9,915(d) 155,908

Maria Isabel P. de Burckhart 1993 165,000 49,789 18,898(d) 233,687
Executive Vice President of the Corporation 1992 145,226 46,424 15,208(d) 206,858
1991 132,922 11,728 9,963(d) 154,613

Humberto Martin 1993 158,290 47,687 18,130(d) 224,107
Executive Vice President of the Corporation 1992 143,333 45,054 15,010(d) 203,397
1991 140,523 13,014 11,083(d) 164,620

Emilio E. Pinero Ferrer 1993 157,080 47,379 17,983(d) 222,442
Executive Vice President of the Corporation 1992 141,151 45,006 14,782(d) 200,939
1991 136,057 11,856 10,008(d) 157,921

Alberto M. Paracchini 1993 122,482 -0- 730,355(e) 852,837
Director and former Chairman of the Board of Directors of 1992 319,297 188,706 31,845(d) 539,848
the Corporation 1991 344,874 12,671 24,964(d) 382,509

Thomas J. Fitzpatrick(f) 1993 236,250 141,750 13,491(d) 391,491
President of Spring Financial Services, Inc. (a 1992 236,250 141,750 8,728(d) 386,728
wholly-owned subsidiary of BanPonce Financial Corp.)

Andres F. Morrell(f) 1993 120,000 38,640 -0- 158,640
President of Vehicle Equipment Leasing Company, Inc. (a 1992 108,460 32,400 -0- 140,860
wholly-owned Subsidiary of the Corporation)
</TABLE>

13
<PAGE> 16

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
FISCAL -------------------- ALL OTHER
YEAR SALARY(A) BONUS(B) COMPENSATION(C) TOTAL
------ --------- -------- --------------- --------
<S> <C> <C> <C> <C> <C>
Edgardo Novoa(f) 1993 90,924 11,458 -0- 102,382
President of Popular Consumer Services, Inc. (a
wholly-owned subsidiary of the Bank)

Carlos Mangual(f) 1993 90,004 33,065 10,309(d) 133,378
President of Popular Leasing and Rental, Inc. (a 1992 74,756 22,899 7,829(d) 105,484
wholly-owned subsidiary of the Bank)
</TABLE>

- ---------------

(a) Salaries before deductions. For 1991 includes the cash value of unused
vacations paid which is not a recurring payment.
(b) Includes Christmas bonus, a special bonus for the Bank's 100th Anniversary,
the Incentive Compensation Plan and the cash portion under the Profit
Sharing Plan of the Bank which are described on this page.
(c) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such benefits does not exceed the lesser of
$50,000 or 10% of total amount of annual salary and bonus of any named
individual.
(d) Deferred portion under the Profit Sharing Plan which is described on this
page. For Mr. Thomas Fitzpatrick, these amounts represents the contribution
of Spring Financial Services, Inc., during 1993 and 1992 pursuant to
Section 401(k) of the Internal Revenue Code.
(e) Please refer to Section entitled "Employment Contract of Mr. Alberto M.
Paracchini" on page 13.
(f) Information presented for 1993 and 1992 except for Mr. Edgardo Novoa which
was appointed President of Popular Consumer Services, Inc. during 1993. No
disclosure is required with respect to these officers.

OTHER INCENTIVE COMPENSATION PLANS

The Bank has an Annual Management Incentive Plan for different management
levels. Under this Plan, incentive bonuses are based on individual performance
as well as Bank's performance, measured by net income after tax. The weight
assigned to each component varies according to the level of management. These
bonuses can reach 20% of salaries if results exceed the target amount.

The Bank also has an Excellence in Performance Incentive Program covering
all employees not included in the other incentive plans. This program rewards
employees for extraordinary personal contributions that are non-recurring in
nature, typically not recognizable through merit or promotional salary action,
and clearly recognized as such by management and peers alike.

In addition, the Bank has several functional incentive programs which
reward employees' productivity in specific areas.

DEFERRED COMPENSATION PLAN (PROFIT SHARING) OF THE BANK

All officers and regular employees who were in the service of the Bank as
of January 1, 1976, or hired after that date, are active participants in the
Bank's operating earnings under the yearly Profit Sharing Plan, as of the first
day of the calendar month following completion of one year of service.

The Bank's contribution for each year is computed in accordance with a
formula based on the return on average assets or the return on average equity,
whichever results in a higher contribution. The amount allocated to each officer
or employee is based on his or her basic compensation for the year.

The total amount contributed for the year 1993 was $20,593,840, of which
40% was distributed in cash among the Plan's participants, as approved by the
Bank's Board of Directors in the month of January, 1994.

PENSION PLAN

The Bank has a noncontributory, defined benefit pension plan (the "Pension
Plan") covering substantially all employees. Full time employees are eligible to
participate in the Pension Plan following the

14
<PAGE> 17

completion of three months of service. Pension costs are funded in accordance
with the minimum funding standards under the Employee Retirement Income Security
Act ("ERISA").

Benefits are paid on the basis of a straight life annuity plus supplemental
death benefits and are not reduced for social security or other payments
received by participants. Benefits are paid to participants upon normal
retirement, which is 65 years of age, or early retirement, which requires 50
years of age and 25 years of service. Benefits are reduced for early retirement.

The following table sets forth the estimated annual benefits that would
become payable under the Plan based upon certain assumptions as to covered
compensation levels and years of service. The amounts set forth in this table
are not necessarily representative of amounts which are or may actually become
payable under the Plan. The amounts represent the benefit payable upon
retirement on December 31, 1993, of a participant at age 65:

<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS
YEARS OF SERVICE(2)
COVERED --------------------------------------------------------------------
COMPENSATION(1) 15 20 25 30 35
- --------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 400,000 $120,000 $160,000 $200,000 $220,000 $240,000
300,000 90,000 120,000 150,000 165,000 180,000
200,000 60,000 80,000 100,000 110,000 120,000
100,000 30,000 40,000 50,000 55,000 60,000
</TABLE>

- ---------------

(1) Covered compensation includes only the participant's base salary. Benefits
exclude adjustments for IRS maximum benefit limitations.
(2) 1993 covered compensation and estimated years of service at age 65 are as
follows for the five highest paid key policy making executive officers:

<TABLE>
<CAPTION>
1993 ESTIMATED YEARS
COVERED OF SERVICE AT
COMPENSATION AGE 65
------------ ---------------
<S> <C> <C>
Richard L. Carrion........................ $230,000 41.5
Jorge A. Junquera......................... 211,000 42.3
David H. Chafey, Jr....................... 205,000 38.5
Larry B. Kesler........................... 168,000 16.5
Maria Isabel P. de Burckhart.............. 165,000 35.3
</TABLE>

15
<PAGE> 18

BANPONCE CORPORATION

PERFORMANCE GRAPH

The following Performance Graph compares the cumulative total shareholder
return during the measurement period with the cumulative total return, assuming
reinvestment of dividends, of the S & P 500 Index and the S & P Bank Composite
Index. The cumulative total shareholder return was obtained by dividing (i) the
cumulative amount of dividends per share, assuming dividend reinvestment, since
the measurement point, December 31, 1988 plus (ii) the change in the per share
price since the measurement point, by the share price at the measurement point.

COMPARISON OF FIVE YEAR CUMULATIVE RETURN
TOTAL RETURN AS OF DECEMBER 31
(DECEMBER 31, 1988 = 100)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500 IN- BANKS COMPOS-
(FISCAL YEAR COVERED) BANPONCE DEX ITE
<S> <C> <C> <C>
1988 100 100 100
1989 126 132 123
1990 98 128 87
1991 123 166 142
1992 200 179 188
1993 211 197 207
</TABLE>

INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors intends to retain the services of Price Waterhouse
as the independent auditors of the Corporation for the year 1994. This firm of
international public accountants has served as independent auditors of the Bank
since 1971 and of the Corporation since May 1991, when it was appointed by the
Board of Directors.

Representatives of Price Waterhouse will attend the Stockholders Meeting
and will be available to answer any questions that may arise; they will also
have the opportunity to make a statement if they so desire.

NOMINATIONS OTHER THAN BY THE BOARD OF DIRECTORS

Nominations for Directors, other than those made by or on behalf of the
existing Board of Directors of the Corporation, shall be made in writing and
shall be delivered or mailed to the President or the Secretary of the
Corporation not less than fifteen (15) days prior to April 22, 1994. The notice
of such nominations shall contain the following information to the extent known
to the notifying stockholder: (a) name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of common stock of the Corporation that will be voted for each proposed
nominee; (d) the name and residence address of the notifying stockholder; and
(e) the number of shares of common stock of the Corporation owned by the
notifying stockholder. Nominations not made in accordance with the above may, in
his discretion, be disregarded by the Chairman of the Meeting and, upon his
instructions, the judges of the election may disregard all votes cast for each
such nominee.

16
<PAGE> 19

PROPOSALS OF SECURITY HOLDERS TO BE PRESENTED AT THE 1995
ANNUAL MEETING OF STOCKHOLDERS

Stockholders' proposals intended to be presented at the 1995 Annual Meeting
of Stockholders must be received by the Corporate Secretary, at its principal
executive offices, Popular Center Building, San Juan, Puerto Rico, 00918, not
later than December 30, 1994, for inclusion in the Bank's Proxy Statement and
Form of Proxy relating to the 1995 Annual Meeting of Stockholders.

OTHER MATTERS

Management does not know of any other matters to be brought before the
Meeting other than those described previously. Proxies in the accompanying form
will confer discretionary authority to Management with respect to any such other
matters presented at the meeting.

To avoid delays in ballot taking and counting, and in order to assure that
your Proxy is voted in accordance with your wishes, compliance with the
following instructions is respectfully requested: upon signing a Proxy as
attorney, executor, administrator, trustee, guardian, authorized officer of a
corporation, or on behalf of a minor, please give full title. If shares are in
the name of more than one recordholder, all should sign.

Whether or not you plan to attend the Meeting, it is very important that
your shares be represented and voted in the Meeting. Accordingly, you are urged
to properly complete, sign, date and return your Proxy Card in the enclosed
self-addressed envelope which needs no postage.

San Juan, Puerto Rico, March 18, 1994.

<TABLE>
<S> <C>
RICHARD L. CARRION SAMUEL T. CESPEDES
Chairman of the Board, President and Chief Secretary
Executive Officer
</TABLE>

ANNUAL REPORT -- U.S. SECURITIES AND EXCHANGE COMMISSION, FORM 10-K

Management will provide without charge, upon written request, a copy of the
U.S. Securities and Exchange Commission's Form 10-K filed by the Corporation for
1993, including the financial statements and the schedules thereto required to
be filed under the Regulations of the Securities and Exchange Act of 1934.

Each written request must set forth a good faith representation that, as of
the record date for the 1994 annual meeting of the stockholders of BanPonce
Corporation, the person making the request was a beneficial owner of securities
entitled to vote at such meeting.

Such written request may be directed to:

Mr. Orlando Berges
Senior Vice President and Comptroller
Banco Popular de Puerto Rico
P.O. Box 362708
San Juan, Puerto Rico 00936-2708

17
<PAGE> 20

<TABLE>
<S> <C>
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
BANPONCE CORPORATION
THE UNDERSIGNED HEREBY APPOINTS RICHARD L. CARRION, JORGE A. JUNQUERA AND
P.O. BOX 362708 ERNESTO N. MAYORAL AS PROXIES, EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE,
SAN JUAN, PUERTO RICO AND HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE AS DESIGNATED BELOW ALL
00936-2708 THE SHARES OF COMMON STOCK OF BANPONCE CORPORATION HELD ON RECORD BY THE
UNDERSIGNED ON MARCH 11, 1994 AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD AT POPULAR CENTER BUILDING, SEVENTH FLOOR, SAN JUAN, PUERTO RICO, ON
APRIL 22, 1994 AT 2:00 P.M. OR AT ANY ADJOURNMENTS THEREOF, AS FOLLOWS:

1. ELECTION OF DIRECTORS
Nominees:

Alfonso F. Ballester Waldemar Del Valle Francisco Perez, Jr.
Sila M. Calderon Jorge A. Junquera Emilio Jose Venegas
</TABLE>

<TABLE>
<S> <C>
/ / VOTE GRANTED FOR all nominees / / VOTE WITHHELD FOR all nominees

/ / Vote granted, except for the following nominee(s) (insert the names of
those nominees for whom you do not wish to vote in the space provided
below)

2. IN THEIR DISCRETION, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ITEM 1.

</TABLE>

<TABLE>
<S> <C> <C> <C>
Please sign exactly as name appears below. When
shares are held by joint tenants or by tenants in
---------------- ------------------- ------------------ common, each holder should sign. When signing as
Proxy Number Account Number Shares attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer and the
position of such authorized officer should appear
below the signature. If a partnership, please sign
in partnership name by authorized person.

DATED , 1994
-------------------------------------

-------------------------------------------------
Signature

-------------------------------------------------
Signature
</TABLE>

(VEA AL DORSO TEXTO EN ESPANOL)

PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
No Postage is required if mailed in the United States, Puerto Rico or the U.S.
Virgin Islands.