CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three-months period ended March 31, 2024 and 2023

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

As of March 31, 2024 and December 31, 2023

(Stated in millions of Colombian pesos)

	Note	March 31, 2024 (unaudited)	December 31, 2023
ASSETS
Cash and cash equivalents	4	26,686,447	39,799,609
Financial assets investments	5.1	28,403,482	25,674,195
Derivative financial instruments	5.2	4,380,648	6,252,270
Financial assets investments and derivative financial instruments		32,784,130	31,926,465
Loans and advances to customers		260,307,575	253,951,647
Allowance for loans, advances and lease losses		(16,202,229)	(16,223,103)
Loans and advances to customers, net	6	244,105,346	237,728,544
Assets held for sale and inventories, net		1,019,827	906,753
Investment in associates and joint ventures		3,085,317	2,997,603
Investment properties		4,712,762	4,709,911
Premises and equipment, net	8	6,096,009	6,522,534
Right-of-use assets, lease		1,614,679	1,634,045
Goodwill and intangible assets, net	7	8,526,951	8,489,697
Deferred tax, net	9	686,104	685,612
Other assets, net		7,638,857	7,528,036
TOTAL ASSETS		336,956,429	342,928,809
LIABILITIES AND EQUITY
LIABILITIES
Deposits by customers	10	244,809,882	247,941,180
Interbank deposits and repurchase agreements and other similar secured borrowing	11	1,593,502	1,076,436
Derivative financial instruments	5.2	5,047,208	6,710,364
Borrowings from other financial institutions	12	14,112,000	15,648,606
Debt instruments in issue	13	14,454,604	14,663,576
Lease liabilities		1,761,026	1,773,610
Preferred shares		541,340	584,204
Current tax		694,914	164,339
Deferred tax, net	9	1,844,141	1,785,230
Employee benefit plans		910,844	882,954
Other liabilities	14	13,736,404	12,648,581
TOTAL LIABILITIES		299,505,865	303,879,080
EQUITY
Share capital		480,914	480,914
Additional paid-in-capital		4,857,454	4,857,454
Appropriated reserves	16	22,657,865	20,044,769
Retained earnings		2,680,622	2,515,278
Net income attributable to equity holders of the Parent Company		1,663,472	6,116,936
Accumulated other comprehensive income, net of tax		4,145,214	4,074,161
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT COMPANY		36,485,541	38,089,512
Non-controlling interest		965,023	960,217
TOTAL EQUITY		37,450,564	39,049,729
TOTAL LIABILITIES AND EQUITY		336,956,429	342,928,809

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the three-months period ended March 31, 2024 and 2023 (unaudited)

(Stated in millions of Colombian pesos, except earning per share stated in units of pesos)

	Note	2024	2023
Interest on loans and financial leases
Commercial		4,198,007	4,202,839
Consumer		2,152,163	2,592,765
Small business loans		53,704	45,483
Mortgage		1,013,052	1,116,119
Financial leases		954,825	928,546
Total interest income on loans and financial leases		8,371,751	8,885,752
Interest on debt instruments using the effective interest method	17.1	257,774	250,371
Total interest on financial instruments using the effective interest method		8,629,525	9,136,123
Interest income on overnight and market funds		61,823	55,191
Interest and valuation on financial instruments	17.1	406,046	191,807
Total interest and valuation on financial instruments		9,097,394	9,383,121
Interest expenses	17.2	(3,939,079)	(4,025,263)
Net interest margin and valuation on financial instruments before impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments		5,158,315	5,357,858
Credit impairment charges on loans, advances and financial leases, net	6	(1,334,863)	(2,044,649)
Credit recovery (impairment) for other financial instruments		19,883	(995)
Total credit impairment charges, net		(1,314,980)	(2,045,644)
Net interest margin and valuation on financial instruments after impairment on loans and financial leases and off balance sheet credit instruments and other financial instruments		3,843,335	3,312,214
Commissions income	17.3	1,751,892	1,683,984
Commissions expenses	17.3	(750,933)	(682,388)
Total commissions income, net		1,000,959	1,001,596
Other operating income	17.4	629,329	989,880
Dividends and net income on equity investments	17.5	84,807	116,636
Total operating income, net		5,558,430	5,420,326
Operating expenses
Salaries and employee benefits	18.1	(1,334,951)	(1,322,793)
Other administrative and general expenses	18.2	(1,177,752)	(1,140,878)
Taxes other than income tax	18.2	(390,894)	(347,895)
Impairment, depreciation and amortization	18.3	(274,942)	(260,096)
Total operating expenses		(3,178,539)	(3,071,662)
Profit before income tax		2,379,891	2,348,664
Income tax	9	(694,880)	(586,371)
Net income		1,685,011	1,762,293
Net income attributable to equity holders of the Parent Company		1,663,472	1,716,777
Non-controlling interest		21,539	45,516
Basic and diluted earnings per share to common shareholders, stated in units of pesos	19	1,745	1,800

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the three-months period ended March 31, 2024 and 2023 (unaudited)

(Stated in millions of Colombian pesos)

	Note			2024 2023
Net income			1,685,011		1,762,293
Other comprehensive income/(loss) that will not be reclassified to net income
Remeasurement loss related to defined benefit liability			-		(71)
Income tax	9		7		106
Net of tax amount			7		35
Investments in equity instruments measured at fair value through other comprehensive income (FVTOCI)
Unrealized gain			6,460		9,105
Income tax	9		(541)		(624)
Net of tax amount			5,919		8,481
Total other comprehensive income that will not be reclassified to net income, net of tax			5,926		8,516
Other comprehensive income/(loss) that may be reclassified to net income
Investments in debt instruments measured at fair value through other comprehensive income (FVTOCI)
Loss on investments recycled to profit or loss upon disposal			(5,808)		(1,113)
Unrealized gain			716		62,180
Changes in loss allowance for credit losses			(1,128)		(454)
Income tax	9		2,192		(8,791)
Net of tax amount			(4,028)		51,822
Foreign currency translation adjustments:
Exchange differences arising on translating the foreign operations			97,043		(806,528)
(Loss)/ Gain on net investment hedge in foreign operations	5.2		(38,075)		338,087
Income tax	9		16,784		(130,722)
Net of tax amount(2)			75,752		(599,163)
Unrealized (loss)/gain on investments in associates and joint ventures using equity method			(6,347)		2,895
Income tax	9		908		(388)
Net of tax amount			(5,439)		2,507
Total other comprehensive income that may be reclassified to net income, net of tax			66,285		(544,834)
Other comprehensive income, attributable to the owners of the Parent Company, net of tax			72,211		(536,318)
Other comprehensive income, attributable to the Non-controlling interest			547		(1,249)
Total comprehensive income attributable to:		1,757,769				1,224,726
Equity holders of the Parent Company		1,735,683				1,180,459
Non-controlling interest		22,086				44,267

(1) As of March 31, 2024, there was a revaluation of the Colombian peso against the U.S. dollar by 17.30%, compared to the first quarter of the previous year .

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the three-months period ended March 31, 2024 and 2023 (unaudited)

(Stated in millions of Colombian pesos, except per share amounts stated in units of pesos)

	Attributable to owners of Parent Company
				Accumulated other comprehensive income
						Debt						Attributable
	Share	Additional	Appropiated		Equity	instruments						to owners	Non-
	Capital	Paid in	Reserves	Translation	Securities	at fair value	Revaluation	Associates	Employee	Retained	Net	of Parent	Controlling	Total
		capital	(Note 16)	adjustment	through OCI	through OCI	of assets		Benefits	earnings	Income	Company	interest	equity
Balance as of January 1, 2024	480,914	4,857,454	20,044,769	3,974,379	193,906	(67,306)	2,137	11,520	(40,475)	2,515,278	6,116,936	38,089,512	960,217	39,049,729
Transfer to profit from previous years	-	-	-	-	-	-	-	-	-	6,116,936	(6,116,936)	-	-	-
Dividend payment corresponding to 509,704,584 common shares and 452,122,416 preferred shares without voting rights, subscribed and paid as of December 31, 2023, at a rate of COP 3,536 per share.	-	-	-	-	-	-	-	-	-	(3,343,319)	-	(3,343,319)	-	(3,343,319)
Other reserves	-	-	2,613,096	-	-	-	-	-	-	(2,612,966)	-	130	-	130
Realization of retained earnings(1)	-	-	-	-	(1,158)	-	-	-	-	1,158	-	-	-	-
Others	-	-	-	-	-	-	-	-	-	3,535	-	3,535	-	3,535
Non-controlling interest	-	-	-	-	-	-	-	-	-	-	-	-	-17,280	(17,280)
Net Income	-	-	-	-	-	-	-	-	-	-	1,663,472	1,663,472	21,539	1,685,011
Other comprehensive income	-	-	-	75,752	5,919	(4,028)	-	(5,439)	7	-	-	72,211	547	72,758
Balance as of March 31, 2024	480,914	4,857,454	22,657,865	4,050,131	198,667	(71,334)	2,137	6,081	(40,468)	2,680,622	1,663,472	36,485,541	965,023	37,450,564

(1) Mainly corresponds to partial payments of asset-backed securities investments.

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the three-months period ended March 31, 2024 and 2023 (unaudited)

(Stated in millions of Colombian pesos, except per share amounts stated in units of pesos)

	Attributable to owners of Parent Company
				Accumulated other comprehensive income
						Debt						Attributable
	Share	Additional	Appropiated		Equity	instruments						to owners	Non-
	Capital	Paid in	Reserves	Translation	Securities	at fair value	Revaluation		Employee	Retained	Net	of Parent	Controlling	Total
		capital	(Note 16)	adjustment	through OCI	through OCI	of assets	Associates	Benefits	earnings	Income	Company	interest	equity
Balance as of January 1, 2023	480,914	4,857,454	15,930,665	7,762,214	152,028	(160,570)	2,137	11,522	(9,115)	3,278,164	6,783,490	39,088,903	908,648	39,997,551
Transfer to profit from previous years	-	-	-	-	-	-	-	-	-	6,783,490	(6,783,490)	-	-	-
Dividend payment corresponding to 509,704,584 common shares and 452,122,416 preferred shares without voting rights, subscribed and paid as of December 31, 2022, at a rate of COP 3,120 per share.	-	-	-	-	-	-	-	-	-	(3,343,319)	-	(3,343,319)	-	(3,343,319)
Other reserves	-	-	4,067,205	-	-	-	-	-	-	(4,067,063)	-	142	-	142
Realization of retained earnings(1)	-	-	-	-	4,857	-	-	-	-	(4,857)	-	-	-	-
Others	-	-	-	-	-	-	-	-	-	(8,622)	-	(8,622)	-	(8,622)
Non-controlling interest	-	-	-	-	-	-	-	-	-	-	-	-	(16,618)	(16,618)
Net Income	-	-	-	-	-	-	-	-	-	-	1,716,777	1,716,777	45,516	1,762,293
Other comprehensive income	-	-	-	(599,163)	8,481	51,822	-	2,507	35	-	-	(536,318)	(1,249)	(537,567)
Balance as of March 31, 2023	480,914	4,857,454	19,997,870	7,163,051	165,366	(108,748)	2,137	14,029	(9,080)	2,637,793	1,716,777	36,917,563	936,297	37,853,860

⁽¹⁾Mainly corresponds to partial payments of asset-backed securities investments.

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the three-months period ended March 31, 2024 and 2023 (unaudited)

(Stated in millions of Colombian pesos)

	NOTE	2024	2023
Net income		1,685,011	1,762,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	18.3	263,423	249,021
Other assets impairment	18.3	11,519	11,075
Equity method	17.5	(77,289)	(92,283)
Credit impairment charges on loans and advances and financial leases	6	1,334,863	2,044,649
(Recovery) / Credit impairment charges on off balance sheet credit and other financial instruments(1)		(19,883)	995
Gain on sales of assets	17.4	(17,905)	(47,563)
Valuation gain on investment securities		(553,565)	(566,127)
Valuation gain on derivative financial instruments		92,978	(26,849)
Income tax	9.3	694,880	586,371
Bonuses and short-term benefits		153,373	286,723
Dividends	17.5	(10,000)	(23,880)
Investment property valuation	17.4	(7,819)	(85,487)
Effect of exchange rate changes		(143,003)	(90,065)
Other non-cash items		6,710	64,174
Net interest		(4,432,672)	(4,860,489)
Change in operating assets and liabilities:
Decrease / (Increase) in derivative financial instruments		114,857	(255,946)
Increasein accounts receivable		(274,929)	(517,232)
Increase in loans and advances to customers		(7,344,965)	(1,361,489)
Decrease in other assets		208,459	124,319
Decrease in accounts payable		(707,776)	(2,360,777)
Decrease in other liabilities		(689,328)	(422,850)
(Decrease) / Increase in deposits by customers		(3,545,453)	3,200,791
Decreasein estimated liabilities and provisions		(21,591)	(68,748)
Net changes in investment securities recognized at fair value through profit or loss		(2,533,698)	(3,225,970)
Proceeds from sales of assets held for sale and inventories		331,384	199,527
Recovery of charged-off loans	6	169,097	130,769
Income tax paid		(268,834)	(621,965)
Dividend received		6,452	15,847
Interest received		8,124,659	8,358,643
Interest paid		(3,940,913)	(3,586,545)
Net cash used by operating activities		(11,391,958)	(1,179,068)
Cash flows provided / (used) from investment activities:
Purchases of debt instruments at amortized cost		(1,428,246)	(699,068)
Proceeds from maturities of debt instruments at amortized cost		1,179,456	884,325
Purchases of debt instruments at fair value through OCI		(1,137)	(2,803,585)
Proceeds from debt instruments at fair value through OCI		667,653	2,767,058
Purchases of equity instruments at fair value through OCI and interests in associates and joint ventures		(55,693)	(9,916)
Proceeds from equity instruments at fair value through OCI and interests in associates and joint ventures		3,179	403
Purchases of premises and equipment and investment properties		(248,809)	(733,490)
Proceeds from sales of premises and equipment and investment properties		110,366	43,277
Purchase of other long-term assets		(43,061)	(44,675)
Net cash provided / (used) in investing activities		183,708	(595,671)
Cash flows provided / (used) from financing activities:
Decrease in repurchase agreements and other similar secured borrowing		550,673	264,219
Proceeds from borrowings from other financial institutions		2,860,166	3,853,452
Repayment of borrowings from other financial institutions		(4,445,065)	(4,040,468)
Payment of lease liability		(40,158)	(44,140)
Placement of debt instruments in issue		34,724	666,576
Payment of debt instruments in issue		(315,833)	(720,886)
Dividends paid		(849,322)	(749,485)
Transactions with non-controlling interests		(17,279)	(16,618)
Net cash used in financing activities(2)		(2,222,094)	(787,350)
Effect of exchange rate changes on cash and cash equivalents		317,182	(747,771)
Decrease in cash and cash equivalents		(13,430,344)	(2,562,089)
Cash and cash equivalents at beginning of year	4	39,799,609	31,645,291
Cash and cash equivalents at end of year	4	26,686,447	28,335,431

(1) The decrease is mainly due to the financial guarantees and loan commitments and investments.

(2) For further information about the reconciliation of the balances of liabilities from financing activities, see Note 21 Liabilities from financing activities.

As of March 31, 2024 and 2023, the Bank entered into non-cash operating and investing activities related to restructured loans and returned properties that were transferred to assets held for sale and inventories amounting to COP 445,866 and COP 277,333, respectively. Which are not reflected in the consolidated statement of cash flows.

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

NOTE 1. REPORTING ENTITY

Bancolombia S.A., hereinafter the Parent Company, is a credit establishment, listed on the Colombia Stock Exchange (BVC) as well as on the New York Stock Exchange (NYSE), since 1981 and 1995, respectively. The Parent Company's main location is in Medellin (Colombia), main address Carrera 48 # 26-85, Avenida Los Industriales, and was originally constituted under the name Banco Industrial Colombiano (BIC) according to public deed number 388, date January 24, 1945, from the First Notary's Office of Medellin, authorized by the Superintendence of Finance of Colombia (“SFC”). On April 3, 1998, by means of public deed No. 633, BIC merged with Bank of Colombia S.A., and the resulting organization of that merger was named Bancolombia S.A.

At the General Shareholders' Meeting held on March 15, 2024, a bylaws amendment was approved, which is in the process of being formalized in a public deed and registered with the Chamber of Commerce. In this reform, the duration of the company was extended until December 8, 2144. The company may be dissolved or extended before said term. The operating license was authorized definitively by the SFC according to Resolution number 3140 on September 24, 1993.

Bancolombia S.A.’s business purpose is to carry out all operations, transactions, acts and services inherent to the banking business. The Parent Company may, by itself or through its subsidiaries, own interests in other corporations, wherever authorized by law, according to all terms and requirements, limits or conditions established therein.

The Parent Company and its subsidiaries include the following operating segments: United States, Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment banking, Brokerage, International Banking and Others. The activities carried out by each operating segment of the Bank are described in Note 3. Operating segments.

The Parent Company, through its subsidiaries, has banking operations and an international presence in United States, Puerto Rico, Panama, Guatemala, and El Salvador.

The assets and liabilities of operations in Barbados through Mercom Bank were transferred to other companies, leaving the balances of the credit portfolio and deposit portfolio at zero. As of March 31, 2024, the company is in the process of dissolution and liquidation.

Operations in the Cayman Islands through Bancolombia Cayman have been canceled or transferred. On November 22, 2023, the Cayman Islands Monetary Authority approved the delivery of the banking license in accordance with Section 20(1)(a) of the Banking and Trust Companies Act (2021 Revision) (the “BTCA”). Therefore, the banking license has been canceled as of that date. As of March 31, 2024, the company is in the process of dissolution and liquidation.

The operations of Transportempo S.A.S. are in the process of dissolution and gradual dismantling since May 2023.

On December 14, 2021, the Parent Company´s Board of Directors authorized the legal separation of the Nequi business, the digital platform of the Bank. The Financial Superintendence of Colombia (Superintendencia Financiera de Colombia) through Resolution 0843 of July 6, 2022, later modified by the Resolution 0955 of July 27, 2022, authorized the establishment of Nequi S.A. Compañía de Financiamiento. The legal separation resulted in the creation and commercial registration of a new corporation through which Nequi will operate as a 100% digital credit establishment. Nequi must obtain an authorization certificate or operating permit, accredited by the Financial Superintendence of Colombia in order to operate. As of March 31, 2024, activities for this process are in progress. In September 2022, the company NEQUI S.A. was created with a capitalization of COP 150,000 distributed mainly in Banca de Inversión Bancolombia S.A. Corporación Financiera with a participation percentage of 94.99% and Inversiones CFNS S.A.S. of 5.01%.

As of March 31, 2024, the Bank has 34,279 employees, 34,483 banking correspondents, 6,086 ATMs and operates through 856 offices.

NOTE 2. MATERIAL ACCOUNTING POLICIES

A. Basis for preparation of condensed consolidated interim financial statements

The condensed consolidated interim financial statements for the cumulative three months ended on March 31, 2024 have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting (“IAS 34”), issued by the International Accounting Standards Board (hereinafter, IASB). They do not include all the information and disclosures required for full annual financial statements and should be read in conjunction with the Bancolombia S.A. and its subsidiaries consolidated financial statements for the year ended on December 31, 2023 which complied with International Financial Reporting Standards (hereinafter, IFRS) issued by the IASB, as well as the interpretations issued by the International Financial Reporting Interpretations Committee (hereinafter, IFRS-IC).

Preparation of the condensed consolidated interim financial statements under going concern basis

Management has assessed the Bank’s ability to continue as a going concern and confirms that the Bank has adequate liquidity and solvency to continue operating the business for the foreseeable future, which is at least, but is not limited to, 12 months from the end of the reporting period. Based on the Bank's liquidity position at the date of authorization of the condensed consolidated interim financial statements, Management maintains a reasonable expectation that it has adequate liquidity and solvency to continue in operation for at least the next 12 months and that the going concern basis of accounting remains appropriate.

The condensed consolidated interim financial statements were prepared on a going concern basis and do not include any adjustments to the reported carrying amounts and classification of assets, liabilities and expenses that might otherwise be required if the going concern basis were not correct.

In the Management opinion, these condensed consolidated interim financial statements reflect all material adjustments considered necessary in the circumstances and based on the best information available as of March 31, 2024 and the date of their promulgation and issuance, for a fair representation of financial results for the interim periods presented.

The results of operations for the cumulative three months ended on March 31, 2024 and 2023 are not necessarily indicative of the results for the full year. The Bank believes that the disclosures are sufficient to make the information presented not misleading or biased. For this reason, the condensed consolidated interim financial statements include selected explanatory notes to explain events and transactions that are important to the financial statements users or represent significant materiality in understanding the changes in the Bank’s financial position and performance since the last annual audited financial statements.

Assets and liabilities are measured at cost or amortized cost, except for some financial assets and liabilities and investment properties that are measured at fair value. Financial assets and liabilities measured at fair value comprise those classified as assets and liabilities at fair value through profit or loss, debt instruments and equity securities measured at fair value through other comprehensive income (“OCI”) and derivative instruments. Likewise, the carrying value of assets and liabilities recognized as a fair value hedge are adjusted for changes in fair value attributable to the hedged risk. Almost, investments in associates and joint ventures are measured using the equity method.

The condensed consolidated interim financial statements are stated in Colombian pesos (“COP”) and figures are stated in millions or billions (when indicated), except earnings per share, diluted earnings per share, dividends per share and the exchange rate, which are stated in units of Colombian pesos, while other currencies (dollars, euro, pounds, etc.) are stated in thousands.

The Parent Company’s financial statements, which have been prepared in accordance with “Normas de Contabilidad e Información Financiera” (“NCIF”) applicable to separate financial statements, are those that serve as the basis for the regulatory compliance, distribution of dividends and other appropriations by the shareholders.

The separate financial statements are those presented by the Parent Company in which the entity recognizes and measures the impairment of credit risk through allowances for loans losses, the classification and measurement of certain financial instruments (such as debt securities and equity instruments) and the recognition of provisions for foreclosed assets, in accordance with the accounting required by the “Superintendencia Financiera de Colombia” (“SFC”), which differ in certain accounting principles from IFRS that are used in the condensed consolidated interim financial statements.

B. Use of estimates and judgments

The preparation of condensed consolidated interim financial statements requires that the Bank's Management makes judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

For the period ended on March 31, 2024 there were no changes in the significant estimates and judgments made by Management in applying the Bank's accounting, as compared to those applied in the consolidated financial statements at the year ended on December 31, 2023.

C. Material accounting policies and recently issued accounting pronouncements

The same accounting policies and methods of calculation applied in the consolidated financial statements for the year ended on December 31, 2023 continue to be applied in these condensed consolidated interim financial statements, except for the adoption of new standards, improvements and interpretations effective from January 1, 2024, as shown below:

Amendments to IAS 1 Presentation of Financial Statements: On January 23, 2020, the IASB issued amendments to IAS 1 to clarify the requirements for classifying liabilities as current or non-current. More specifically:

- The amendments specify that the conditions which exist at the end of the reporting period of an obligation are those which will be used to determine if a right to defer settlement of a liability exists.

- Management expectations about events after the balance sheet date, for example on whether a covenant will be breached, or whether early settlement will take place, are not relevant.

- The amendments clarify the situations that are considered settlement of a liability.

Additionally, on October 30, 2022, the IASB issued an amendment to IAS 1 to improve the disclosures an entity provides when its right to defer settlement of a liability for at least twelve months is subject to compliance with covenants, and how this impacts the classification of that liability as current or non-current.

The amendments to IAS 1 are required to be applied for annual periods beginning on or after January 1, 2024, which is consistent with the application period in Colombia, in accordance with Decreto 938 of August 2021, which includes the update of January 23, 2020. The amendments must be applied retrospectively, in accordance with IAS 8. Early application is permitted.

Management concluded that this amendment has no impact on the preparation of the consolidated financial statements, because the Bank presents the consolidated statement of financial position ordered by liquidity, according to the business nature.

a) Recently accounting pronouncements issued by IASB pending to incorporate in NCIF framework accepted in Colombia

Amendments to IFRS 16 Leases- Lease liability in a sale and leaseback: In September 2022, the Board amended IFRS 16 to add subsequent measurement requirements for sale and leaseback transactions that meet the requirements of IFRS 15 to be accounted as a sale. The amendments require a seller-lessee to subsequently measure lease liabilities arising from a subsequent lease such that it does not recognize any amount of gain or loss that relates to the right-of-use that it retains.

This amendment is effective for annual periods beginning on or after January 1, 2024, and early application is permitted.

This amendment has been assessed by Management with no evidence of an impact on the Bank's consolidated financial statements and disclosures, due the new requirements are in line with what the Bank has applied and disclosed.

NOTE 3. OPERATING SEGMENTS

Operating segments are defined as components of an entity about which separate financial information is available and that is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and assessing performance; the CODM is comprised of the Bank’s President (CEO) and Financial Vicepresident (CFO). The segment information has been prepared following the Bank’s accounting policies and has been presented consistently with the internal reports provided to the CODM.

The chief operating decision maker (CODM) uses a variety of information and key financial data on a segment basis to assess the performance and make decisions regarding the investment and allocation of resources, such as:

● Net interest margin (Net margin on financial instruments divided by average interest-earning assets).

● Return on average total assets (Net income divided by average total assets).

● Return on average stockholders’ equity.

● Efficiency ratio (Operating expenses as a percentage of interest, fees, services and other operating income).

● Asset quality and loan coverage ratios.

The Bank has the following segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, International Banking and All other segments. The factors used to identify the Bank’s reportable segments are the nature of the products and services provided by the subsidiaries and the geographical locations where the subsidiaries are domiciled, in line with the CODM’s operating decisions related to the results of each segment.

The Bank’s operating segments are comprised as follows:

•Banking Colombia

This segment provides retail and corporate banking products and services to individuals, companies and national and local governments in Colombia. The Bank’s strategy in Colombia is to grow with these clients based on value added and long-term relationships. In order to offer specialized services to individuals toguarantee quality service and promote business growth and country development.

In order to offer specialized services to individuals, small and medium-sized enterprises (SMEs) and large companies, the individual sales force classifies its target customers as: Personal, Plus and Corporate. The Bank´s corporate and government sales force targets and specializes in companies with more than COP 100,000in revenue in twelve economic sectors: agribusiness, commerce, manufacturing of supplies and materials, consumer goods, financial services, health, education, construction, government, infrastructure, real estate, and natural resources.

On December 14, 2021, the Parent Company´s Board of Directors authorized the legal separation of the Nequi business, the digital platform of the Bank. The Financial Superintendence of Colombia (Superintendencia Financiera de Colombia) through Resolution 0843 of July 6, 2022, later modified by the Resolution 0955 of July 27, 2022, authorized the establishment of Nequi S.A. Compañía de Financiamiento. The legal separation resulted in the creation and commercial registration of a new corporation through which Nequi will operate as a 100% digital credit establishment. Nequi must obtain an authorization certificate or operating permit, accredited by the Financial Superintendence of Colombia in order to operate. As of March 31, 2024, activities for this process are in progress. In September 2022, the company NEQUI S.A. was created with a capitalization of COP 150,000 distributed mainly in Banca de Inversión Bancolombia S.A. Corporación Financiera with a participation percentage of 94.99% and Inversiones CFNS S.A.S. of 5.01%. For further information, see Note 1. Reporting Entity.

This segment is responsible for managing the Bank operations with its own portfolio, liquidity and distribution of treasury products and services to its customers in Colombia.

•Banking Panama

This segment provides retail and commercial banking products and services to individuals and companies in Panama and includes all the operations of Banistmo S.A. and its subsidiaries, which are managed and monitored by the CODM on a consolidated basis. Banking Panama also includes operations of the following operational stage subsidiaries: Banistmo Investment Corporation S.A., Leasing Banistmo S.A. y Valores Banistmo S.A.; and of the following non-operational subsidiaries: Banistmo Panamá Fondo de Inversión S.A., Banistmo Capital Markets Group Inc., Anavi Investment Corporation S.A., Desarrollo de Oriente S.A., Steens Enterprises S.A. and Ordway Holdings S.A.

This segment is also responsible for the management of Banistmo’s proprietary trading activities, liquidity and distribution of treasury products and services to its client base in Panama.

•Banking El Salvador

This segment provides retail and commercial banking products and services to individuals, companies and national and local governments in El Salvador through Banco Agrícola S.A. Banking El Salvador also includes operations of the following subsidiaries: Banagrícola S.A, Inversiones Financieras Banco Agrícola S.A. IFBA, Bagrícola Costa Rica S.A., Gestora de Fondos de Inversión Banagricola, S.A, Valores Banagrícola S.A. de C.V., Credibac S.A. de C.V. and Arrendadora Financiera S.A. Arfinsa.

This segment is also responsible for the management of Banco Agrícola’s proprietary trading activities, liquidity and distribution of treasury products and services to its client base in El Salvador.

•Banking Guatemala

This segment provides retail and commercial banking and insurance products and services to individuals, companies and national and local governments in Guatemala through Banco Agromercantil de Guatemala S.A., Banking Guatemala also includes operations of the following subsidiaries: Seguros Agromercantil S.A., Financiera Agromercantil S.A., Agrovalores S.A., Arrendadora Agromercantil S.A., Asistencia y Ajustes S.A., Serproba S.A., Servicios de Formalización S.A., Conserjería, Mantenimiento y Mensajería S.A.(company in liquidation), New Alma Enterprises LTD. On June 29, 2023, Agencia de Seguros y Fianzas Agromercantil S.A.S. was wound up. The assets and liabilities of operations in Barbados through Mercom Bank were transferred to other companies, leaving the balances of the credit portfolio and deposit portfolio at zero as of January 31, 2023. As of March 31, 2024, the company is in the process of dissolution and liquidation, for further information, see Note 1. Reporting Entity.

This segment is also responsible for the management of Banco Agromercantil’s proprietary trading activities, liquidity and distribution of treasury products and services to its client base in Guatemala.

•Trust

This segment provides trust and asset management services to clients in Colombia through Fiduciaria Bancolombia S.A. Sociedad Fiduciaria.

The main products offered by this segment include money market accounts, mutual and pension funds, private equity funds, payment trust, custody services and corporate trust.

•Investment banking

This segment provides corporate and project financial advisory services, underwriting, capital markets services and private equity management through Banca de Inversión Bancolombia S.A. Corporación Financiera. Its customers include private and publicly-held corporations as well as government institutions.

•Brokerage

This segment provides brokerage, investment advisory and private banking services to individuals and institutions through Valores Bancolombia S.A. Comisionista de Bolsa. It sells and distributes equities, futures, foreign currencies, fixed income securities, mutual funds and structured products.

This segments also includes the operations of Bancolombia Capital Holdings USA LLC, Bancolombia Capital LLC and Bancolombia Capital Advisers LLC, to provide broker-dealer and investment advisor services in the United States.

•International Banking

This segment provides a complete line of international banking services to Colombian and foreign customers through Bancolombia Panamá S.A. and Bancolombia Puerto Rico International, Inc. It offers loans to private sector companies, trade financing, leases financing and financing for industrial projects, as well as a complete portfolio of cash management products, such as checking accounts, international collections and payments. Through these subsidiaries, the Bank also offers investment opportunities in U.S. dollars, savings and checking accounts, time deposits, and investment funds to its high net worth clients and private banking customers.

Operations in the Cayman Islands through Bancolombia Cayman have been canceled or transferred. On November 22, 2023, the Cayman Islands Monetary Authority approved the delivery of the banking license in accordance with Section 20(1)(a) of the Banking and Trust Companies Act (2021 Revision) (the “BTCA”). Therefore, the banking license has been canceled as of that date. As of March 31, 2024, the company is in the process of dissolution and liquidation. For further information, see Note 1. Reporting entity.

•All other segments

This segment provides financial and operating lease activities, including leasing services to clients in Colombia. Bancolombia offers these services mainly through the following Subsidiaries: Renting Colombia S.A.S. and Transportempo S.A.S. (company in liquidation). Additionally, through the FCP Fondo Inmobiliario Colombia, P.A. FAI CALLE 77, P.A. Nomad Salitre, P.A. Mercurio, P.A. Nomad Central, P.A. Calle 84 (2) and P.A. Calle 84 (3), the Bank provides real estate service.

This segment also includes results from the operations of investment vehicles of the Bank: Valores Simesa S.A., Negocios Digitales Colombia S.A.S., Inversiones CFNS S.A.S., Sistema de Inversiones y Negocios S.A. Sinesa and the technology services company Wompi S.A.S.. In addition, it includes Wenia LTD, a corporate vehicle for the creation and implementation of operating systems and software applications and it includes Wenia S.A.S. and Wenia P.A.

In accordance with IFRS 8, the figures reported in "all other segments" combine the information on operating segments that did not meet the quantitative thresholds defined by this same standard, i.e., the absolute individual amount of their reported results is, in absolute terms, less than 10 percent of the combined results of all segments and their assets represent less than 10 percent of the combined assets of all operating segments of the Bank.

Financial performance by operating segment:

The CODM reviews the performance of the Bank using the following financial information by operating segment:

	Three months ended March 31, 2024
	Banking	Banking	Banking El	Banking		Investment		International	All other	Total
	Colombia	Panama	Salvador	Guatemala	Trust	banking	Brokerage	Banking	segments	segments
In millions of COP
Total interest and valuation on financial instruments	7,207,598	649,861	427,277	437,030	21	1	8,879	295,807	70,920	9,097,394
Interest income on loans and financial leases	6,731,307	555,292	376,100	406,406	21	-	1,533	230,172	70,920	8,371,751
Total debt investments	366,412	69,265	50,827	29,008	-	1	7,364	33,170	-	556,047
Derivatives, net	7,118	776	271	-	-	-	(1,851)	-	-	6,314
Total liquidity operations, net	102,761	24,528	79	1,616	-	-	1,833	32,465	-	163,282
Interest expenses	(3,134,771)	(313,404)	(105,121)	(181,799)	(34)	-	(42)	(162,409)	(41,499)	(3,939,079)
Net interest margin and valuation on financial instruments before impairment on loans and financial leases, off balance sheet credit	4,072,827	336,457	322,156	255,231	(13)	1	8,837	133,398	29,421	5,158,315

instruments and other financial instruments
Total credit impairment charges, net	(1,062,994)	(61,858)	(66,630)	(99,441)	(440)	821	7	(1,421)	(23,024)	(1,314,980)
Net interest margin and valuation on financial instruments after impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments	3,009,833	274,599	255,526	155,790	(453)	822	8,844	131,977	6,397	3,843,335
(Expenses) Incomefrom transactions the operating segments of the Bank	(31,808)	(9,151)	(8,590)	(17,200)	(12,253)	3,219	19,337	92,106	(35,660)	-
Fees and commissions income(1)	1,302,709	121,356	113,645	48,860	108,800	8,140	27,145	14,143	7,094	1,751,892
Fees and commissions expenses	(608,864)	(56,096)	(49,280)	(18,444)	(865)	(30)	(2,296)	(2,538)	(12,520)	(750,933)
Total fees and commissions, net	693,845	65,260	64,365	30,416	107,935	8,110	24,849	11,605	(5,426)	1,000,959
Other operating income	91,591	11,312	11,756	35,782	2,200	379	1,041	2,555	472,713	629,329
Dividends and net income on equity investments	(3,594)	6,492	1,451	7	8,034	10,281	1,323	7	60,806	84,807
Total operating income, net	3,759,867	348,512	324,508	204,795	105,463	22,811	55,394	238,250	498,830	5,558,430
Operating expenses(2)	(2,007,474)	(193,312)	(159,586)	(143,618)	(38,034)	(11,377)	(47,580)	(19,481)	(283,135)	(2,903,597)
Impairment, depreciation and amortization	(189,411)	(26,276)	(33,352)	(11,936)	(655)	(27)	(676)	(590)	(12,019)	(274,942)
Total operating expenses	(2,196,885)	(219,588)	(192,938)	(155,554)	(38,689)	(11,404)	(48,256)	(20,071)	(295,154)	(3,178,539)
Profit before income tax	1,562,982	128,924	131,570	49,241	66,774	11,407	7,138	218,179	203,676	2,379,891

(1) For further information about income from contracts with customers, see Note 17.3. Fees and commissions.

(2) Includes salaries and employee benefits, other administration and general expenses and taxes other than income tax.

	Three months ended March 31, 2023
	Banking	Banking	Banking El	Banking		Investment		International	All other	Total
	Colombia	Panama	Salvador	Guatemala	Trust	banking	Brokerage	Banking	segments	segments
In millions of COP
Total interest and valuation on financial instruments	7,283,687	760,730	458,390	537,050	9	4	11,583	274,473	57,195	9,383,121
Interest income on loans and financial leases	7,041,194	645,669	396,863	508,119	9	-	1,253	235,900	56,745	8,885,752
Total debt investments	366,181	79,845	60,275	27,277	-	4	11,228	20,412	432	565,654
Derivatives, net	(98,594)	(227)	1,073	-	-	-	(143)	-	-	(97,891)
Total liquidity operations, net	(25,094)	35,443	179	1,654	-	-	(755)	18,161	18	29,606
Interest expenses	(3,237,940)	(308,770)	(113,010)	(182,013)	(33)	(1)	(71)	(141,756)	(41,669)	(4,025,263)
Net interest margin and valuation on financial instruments before impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments	4,045,747	451,960	345,380	355,037	(24)	3	11,512	132,717	15,526	5,357,858
Total credit impairment charges, net	(1,789,189)	(61,304)	(48,420)	(137,534)	(336)	609	90	(860)	(8,700)	(2,045,644)
Net interest margin and valuation on financial instruments after impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments	2,256,558	390,656	296,960	217,503	(360)	612	11,602	131,857	6,826	3,312,214
(Expenses) Incomefrom transactions the operating segments of the Bank	(45,265)	(4,532)	(3,912)	(19,364)	(1,544)	3,383	15,939	95,984	(40,689)	-
Fees and commissions income(1)	1,240,866	127,641	123,008	59,458	86,828	667	26,911	11,981	6,624	1,683,984
Fees and commissions expenses	(541,057)	(63,686)	(45,183)	(25,864)	(946)	(58)	(2,349)	(2,692)	(553)	(682,388)
Total fees and commissions, net	699,809	63,955	77,825	33,594	85,882	609	24,562	9,289	6,071	1,001,596
Other operating income (Expenses)	349,500	9,565	3,596	37,479	3,350	(76)	3,027	3,091	580,348	989,880
Dividends and net income on equity investments	3,245	(19)	(1)	24	10,508	7,201	651	4	95,023	116,636
Total operating income, net	3,263,847	459,625	374,468	269,236	97,836	11,729	55,781	240,225	647,579	5,420,326
Operating expenses(2)	(1,864,586)	(218,218)	(164,302)	(168,461)	(41,238)	(12,294)	(45,351)	(22,017)	(275,099)	(2,811,566)
Impairment, depreciation and amortization	(169,768)	(31,420)	(24,087)	(13,778)	(457)	(56)	(770)	(698)	(19,062)	(260,096)
Total operating expenses	(2,034,354)	(249,638)	(188,389)	(182,239)	(41,695)	(12,350)	(46,121)	(22,715)	(294,161)	(3,071,662)
Profit before income tax	1,229,493	209,987	186,079	86,997	56,141	(621)	9,660	217,510	353,418	2,348,664

(1) For further information about income from contracts with customers, see Note 17.3. Fees and commissions.

(2) Includes salaries and employee benefits, other administration and general expenses and taxes other than income tax.

NOTE 4. CASH AND CASH EQUIVALENTS

For purposes of the Condensed Consolidated Interim Statement of cash flow and the Condensed Consolidated Interim Statement of Financial Position, the following assets are considered as cash and cash equivalents:

	March 31, 2024	December 31, 2023
In millions of COP
Cash and balances at central bank
Cash	9,077,554	8,830,305
Due from central banks(1)(2)	4,852,561	11,248,230
Due from other private financial entities	5,243,923	7,607,921
Checks on hold	58,310	214,004
Remittances of domestic negotiated checks in transit	49,951	74,524
Total cash and due from banks	19,282,299	27,974,984
Money market transactions
Interbank borrowings	3,573,910	3,983,699
Reverse repurchase agreements and other similar secured loans(3)	3,830,238	7,840,926
Total money market transactions	7,404,148	11,824,625
Total cash and cash equivalents	26,686,447	39,799,609

(1) According to External Resolution No. 20 of 2020 of Banco de la República, which amends External Resolution No. 5 of 2008 issued by the Colombian Central Bank, the Parent Company must maintain, the equivalent of 8% of the deposits mentioned in Article 1, paragraph (a), and the equivalent of 3.5% of its customer’s deposits with a maturity of less than 18 months (paragraph b), as ordinary reserve, represented in deposits at the Central Bank or as cash in hand. In addition, according to Resolution Number 177 of 2002 issued by the Guatemala Monetary Board, Grupo Agromercantil Holding through its subsidiary Banco Agromercantil de Guatemala must maintain the equivalent of 14.60% of its customer’s deposits daily balances as a legal banking reserve, represented in unrestricted deposits at the Bank of Guatemala. Additionally, circular SBP-DR-0011-2024 dated January 30, 2024, communicates the decision of the Superintendency of Banks of Panama to maintain the percentage established in the General Resolution of the Board of Directors SBP-GJD-0003-2014 dated January 28, 2014, which sets at 30.00% the minimum legal liquidity rate that Panamanian banks must maintain. Finally, in accordance with temporary rule NPBT-12, which is effective from  March 27, 2024, to September 24, 2024, Banco Agrícola must maintain an equivalent average daily amount of its deposits and debt instruments in issue as a liquidity reserve between 1.00% and 16.00% represented in unrestricted deposits or debt instruments in issue by El Salvador Central Bank. Once the complete term established, the bank continues with the Technical Norm (NRP-28), issued by the Central Bank, where the Bank must maintain an equivalent amount between 1.00% and 18.00%, which has been in effect since 23 June 2021.

(2) The variation corresponds mainly to effect of the usual transactionality of the operation of Bancolombia and the cancellation of interest-bearing deposits of COP 3.5 billion opened in December 2023 and cancelled in January 2024.

(3) In January 2024, the total settlement of the reverse repurchase agreements and other similar secured loans  for COP 7.8 Billion that were open at the end of December 2023, mainly with Camara de Riesgo Central de Contraparte, was presented and as of March 31,2024, new operations for COP 3.4 Billion were agreed with the same entity.

As of March 31, 2024 and December 31, 2023, there is restricted cash amounting to COP 856,604 and COP 1,082,611, respectively, included in other assets on the Condensed Consolidated Interim Statement of Financial Position, which represents margin deposits pledged as collateral for derivative contracts traded through clearing houses.

NOTE 5. FINANCIAL ASSETS INVESTMENTS AND DERIVATIVES

5.1   Financial assets investments

The Bank’s securities portfolios at fair value through profit or loss, other comprehensive income and at amortized cost are listed below, as of March 31, 2024 and December 31, 2023:

As of March 31, 2024

	Measurement methodology
Financial assets investments	Fair value through	Fair value through other	Amortized	Total carrying
	profit or loss	comprehensive income, net	cost, net	value, net
In millions of COP
Securities issued by foreign governments(1)	7,235,403	1,890,319	435,414	9,561,136
Securities issued by the Colombian Government(2)	6,482,623	2,794,536	176,739	9,453,898
Corporate bonds	204,304	627,170	2,605,644	3,437,118
Securities issued by government entities	144,876	-	3,450,206	3,595,082
Securities issued by other financial institutions(3)(4)	782,009	315,265	585,961	1,683,235
Total debt instruments	14,849,215	5,627,290	7,253,964	27,730,469
Total equity securities	196,571	437,976		634,547
Total other instruments financial(5)	38,466			38,466
Total financial assets investments				28,403,482

(1) The increase in securities measured at fair value through profit or loss is mostly in Bancolombia Panamá S.A. to Bonds issued by the United States and the decrease in securities measured at fair value through OCI corresponds mainly in Banistmo S.A. y Filiales and Grupo Agromercantil Holding S.A. to maturity of Bonds issued by the United States.

(2) The increase in securities measured at fair value through profit or loss corresponds mainly to Treasury securities (TES) in Bancolombia S.A.

(3) Includes mortgage-backed securities (TIPS) measured at fair value through profit or loss amounting to COP 90,096. For further information on TIPS’ fair value measurement see Note 22. Fair value of assets and liabilities.

(4) At March 31, the Bank has recognized in the Condensed Consolidated Interim Statement of Comprehensive Income COP (4,028) related to debt instruments at fair value through OCI.

(5) Corresponds to convertible notes or agreements for the future purchase of shares, Simple Agreement for Future Equity “SAFE”, by Inversiones CFNS S.A.S., Sistema de Inversiones y Negocios, S.A. and Banagrícola S.A

As of December 31, 2023

	Measurement methodology
Financial assets investments	Fair value through	Fair value through other	Amortized	Total carrying
	profit or loss	comprehensive income, net	cost, net	value, net
In millions of COP
Securities issued by foreign governments	6,274,400	2,437,996	537,831	9,250,227
Securities issued by the Colombian Government	4,725,605	2,725,722	68,624	7,519,951
Corporate bonds	237,234	611,153	2,559,336	3,407,723
Securities issued by government entities	84,990	-	3,129,501	3,214,491
Securities issued by other financial institutions(1)(2)	774,178	373,306	552,790	1,700,274
Total debt instruments	12,096,407	6,148,177	6,848,082	25,092,666
Total equity securities	98,853	444,357		543,210
Total other instruments financial(3)	38,319			38,319
Total financial assets investments				25,674,195

(1) Includes mortgage-backed securities (TIPS) measured at fair value through profit or loss amounting to COP 84,301. For further information on TIPS’ fair value measurement see Note 22. Fair value of assets and liabilities.

(2) At December 31, the Bank has recognized in the Consolidated Statement of Comprehensive Income COP 93,264 related to debt instruments at fair value through OCI.

(3) Corresponds to convertible notes or agreements for the future purchase of shares, Simple Agreement for Future Equity “SAFE”, by Inversiones CFNS S.A.S., Sistema de Inversiones y Negocios, S.A. and Banagrícola S.A

The following table shows the breakdown of the changes in the gross carrying amount of the debt securities at fair value through other comprehensive income and amortized cost, in order to explain their significance to the changes in the loss allowance for the same portfolio as discussed above:

As of March 31, 2024

Debt instruments portfolio measure at fair value through OCI and amortized cost	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Gross carrying amount as at 1 January 2024	12,760,342	205,133	30,784	12,996,259
Transfer from stage 1 to stage 2(1)	(62,039)	62,039	-	-
Sales and maturities	(1,471,943)	(171,505)	-	(1,643,448)
Purchases	1,417,603	-	-	1,417,603
Valuation and payments	79,636	(352)	3,134	82,418
Foreign Exchange	28,137	185	100	28,422
Gross carrying amount as at 31 March 2024	12,751,736	95,500	34,018	12,881,254

⁽¹⁾Stage transfer in corporate bonds by Banistmo S.A. y Filiales.

As of December 31, 2023

Debt instruments portfolio measure at fair value through OCI and amortized cost	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Gross carrying amount as at 1 January 2023	15,973,144	340,891	-	16,314,035
Transfer from stage 1 to stage 3(1)	(30,784)	-	30,784	-
Transfer from stage 2 to stage 1(1)	6,627	(6,627)	-	-
Sales and maturities	(9,792,950)	-	-	(9,792,950)
Purchases	7,701,763	-	-	7,701,763
Valuation and payments	84,609	(66,959)	-	17,650
Foreign Exchange	(1,182,067)	(62,172)	-	(1,244,239)
Gross carrying amount as at 31 December 2023	12,760,342	205,133	30,784	12,996,259

⁽¹⁾Stage transfer in corporate bonds by Banistmo S.A. y Filiales.

The following shows provisions detail for the debt instruments portfolio using the expected credit losses model:

As of March 31, 2024

Concept	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Securities at amortized cost	7,186,485	33,461	34,018	7,253,964
Carrying amount	7,214,839	39,514	45,221	7,299,574
Loss allowance	(28,354)	(6,053)	(11,203)	(45,610)
Securities at fair value through other comprehensive income(1)	5,565,251	62,039	-	5,627,290
Total debt instruments portfolio measure at fair value through OCI and amortized cost	12,751,736	95,500	34,018	12,881,254

(1) Loss allowance of investments at fair value through OCI corresponds to COP (4,469) classified mostly in stage 1. Transfer of 19 securities in Banistmo S.A. y Filiales from stage 1 to stage 2 related to Bonds for COP (142). The decrease in relation to 2023 is due to net provisions recognised during the period for COP 1,077.

As of December 31, 2023

Concept	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Securities at amortized cost	6,612,165	205,133	30,784	6,848,082
Carrying amount	6,642,104	217,046	44,735	6,903,885
Loss allowance	(29,939)	(11,913)	(13,951)	(55,803)
Securities at fair value through other comprehensive income(1)	6,148,177	-	-	6,148,177
Total debt instruments portfolio measure at fair value through OCI and amortized cost	12,760,342	205,133	30,784	12,996,259

(1) Loss allowance of investments at fair value through OCI corresponds to COP (5,562) classified in stage 1. The increase in relation to 2022 is due to the acquisition of instruments for COP 3,760.

The following table sets forth the changes in the allowance for debt instruments measured at amortized cost:

As of March 31, 2024

Concept	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Loss allowance of January 1, 2024	29,939	11,913	13,951	55,803
Sales and maturities	(1,783)	(5,895)	-	(7,678)
New debt instruments purchased(1)	4,835	-	-	4,835
Net provisions recognised during the period	(4,760)	3	(2,880)	(7,637)
Foreign Exchange	123	32	132	287
Loss allowance of March 31, 2024	28,354	6,053	11,203	45,610

⁽¹⁾Impairment is mainly in securities issued by government entities and corporate bonds by Bancolombia S.A. and Banistmo S.A. y Filiales.

As of December 31, 2023

Concept	Stage 1	Stage 2	Stage 3	Total
In millions of COP
Loss allowance of January 1, 2023	29,881	35,020	-	64,901
Transfer from stage 1 to stage 3(1)	(13,951)	-	13,951	-
Transfer from stage 2 to stage 1(1)	129	(129)	-	-
Sales and maturities	(9,459)	-	-	(9,459)
New debt instruments purchased(2)	10,497	-	-	10,497
Net provisions recognised during the period(3)	19,030	(17,882)	-	1,148
Foreign Exchange(4)	(6,188)	(5,096)	-	(11,284)
Loss allowance of December 31, 2023	29,939	11,913	13,951	55,803

⁽¹⁾Stage transfer in corporate bonds by Banistmo S.A. y Filiales.

⁽²⁾Impairment is mainly in securities issued by government entities and corporate bonds by Bancolombia S.A. and Banistmo S.A. y Filiales.

⁽³⁾The increase in stage 1 is mostly due to a higher value of impairment loss in corporate bonds by Banistmo S.A. y Filiales and provision recovery in stage 2 is mostly in securities issued by foreign governments by Banagrícola S.A. y Filiales.

⁽⁴⁾The decrease is due to the variation in the market representative rate during the year 2023.

The Bank has recognized in the Condensed Consolidated Interim Statement of Comprehensive Income related to equity securities and trust funds at fair value through OCI as of March 31, 2024, and 2023, COP 5,919 and COP 8,481, respectively.  See Condensed Consolidated Interim Statement of Comprehensive Income.

Equity securities that are measured at fair value through OCI are considered strategic for the Bank and, thus, there is no intention to sell them in the foreseeable future and that is the main reason for using this presentation alternative.

The following table details the equity instruments designated at fair value through OCI analyzed by listing status:

	Carrying amount
Equity securities	March 31, 2024	December 31, 2023
In millions of COP
Securities at fair value through OCI:
Equity securities listed in Colombia(1)	2	2
Equity securities listed in foreign countries(1)	73,992	78,787
Equity securities unlisted:
Telered S.A.	165,854	164,981
Asociación Gremial de Instituciones Financieras Credibanco S.A.	110,785	110,786
Transacciones y Transferencias, S. A.	17,444	17,346
Compañía de Procesamiento de Medios de Pago Guatemala (Bahamas), S. A.	16,447	16,333
Cámara de Riesgo Central de Contraparte de Colombia S.A.	14,997	14,998
Derecho Fiduciario Inmobiliaria Cadenalco	4,449	4,449
Others	34,006	36,675
Total equity securities at fair value through OCI	437,976	444,357

⁽¹⁾In November 2023, the integration of the stock exchanges of Colombia, Chile, and Peru was perfected, resulting in the creation of the Regional Stock Holding. As a result of this integration, 5,992,160 shares of the Bolsa de Valores de Colombia S.A. were delisted for COP 56,146, and 3,606,223 shares were recognized in the Regional Stock Holding for COP 78,139, this transaction generated an income in results of COP 21,993, see Note 17.5. Dividends and net income on equity investments. The Bank retains 134 shares that were not included in this transaction, valued at COP 2.

During the first quarter of 2024 and 2023 no impairment loss was recognized on equity securities. Dividends received from equity investments at fair value through OCI held as of March 31, 2024 and 2023 amounted to COP 9,005 and COP 7,808, respectively. See Note 17.5. Dividends and net income on equity investments.

5.2   Derivative financial instruments

The Bank derivative activities do not give rise to significant open positions in portfolios of derivatives. The Bank enters into derivative transactions to facilitate customer business, for hedging purposes and arbitrage activities, such as forwards, options or swaps where the underlying are exchange rates, interest rates and securities.

A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. Financial futures and forward settlement contracts are agreements to buy or sell a quantity of a financial instrument (including another derivative financial instrument), index, currency or commodity at a predetermined rate or price during a period or at a date in the future. Futures and option contracts are standardized agreements for future delivery, traded on exchanges that typically act as a platform.

For further information related to the objectives, policies and processes for managing the Bank’s risk, please see Risk Management.

The following table sets forth the carrying values of the Bank’s derivatives by type of risk as of March 31, 2024 and December 31, 2023:

Derivatives	March 31, 2024	December 31, 2023
In millions of COP
Forwards
Assets
Foreign exchange contracts	2,696,555	4,381,906
Equity contracts	1,535	3,015
Subtotal assets	2,698,090	4,384,921
Liabilities
Foreign exchange contracts	2,933,849	4,526,353
Equity contracts	562	10,481
Subtotal liabilities	2,934,411	4,536,834
Total forwards	(236,321)	(151,913)
Swaps
Assets
Foreign exchange contracts	1,246,515	1,304,337
Interest rate contracts	302,232	352,424
Subtotal assets	1,548,747	1,656,761
Liabilities
Foreign exchange contracts	1,571,768	1,491,086
Interest rate contracts	379,519	449,857
Subtotal liabilities	1,951,287	1,940,943
Total swaps	(402,540)	(284,182)
Options
Assets
Foreign exchange contracts	133,811	210,588
Subtotal assets	133,811	210,588
Liabilities
Foreign exchange contracts	161,510	232,587
Subtotal liabilities	161,510	232,587
Total options	(27,699)	(21,999)
Derivative assets	4,380,648	6,252,270
Derivative liabilities	5,047,208	6,710,364

Hedges of a net asset in a foreign operation

The Bank has designated debt instruments in issue and financing with correspondent banks (only applies to year 2023) for USD 1,392,034 as of March 31, 2024 and USD 1,592,034 as of December 31, 2023 as hedge accounting for an equivalent amount of the net assets of its investment in Banistmo. The purpose of this operation is to protect the Bank from the foreign exchange rate risk (USD/COP) of a portion of the net assets in the subsidiary Banistmo S.A., a company domiciled in Panama, which has a different functional currency from that of the Group.

The following is the detail of the hedging instruments of the net foreign investment:

As of March 31, 2024

Debt securities issued designated as a hedging instrument(1)
In thousands of USD
					Designated capital as
Opening date	Expiration date	Rate		Principal balance	a hedged instrument
18/10/2017	18/10/2027	7.03	%	750,000	360,000
18/12/2019	18/12/2029	4.68	%	436,516	436,516
18/12/2019	18/12/2029	4.68	%	85,710	85,710
18/12/2019	18/12/2029	4.68	%	27,774	27,774
29/01/2020	29/01/2025	3.02	%	482,034	482,034
Total debt securities issued				1,782,034	1,392,034

⁽¹⁾ In March 2024, the Bank discontinued USD 200,000 from the hedging relationship due to the prepayment of the total financing with Correspondent Banks designated as a hedging instrument.

As of December 31, 2023

Debt securities issued designated as a hedging instrument
In thousands of USD
					Designated capital as
Opening date	Expiration date	Rate		Principal balance	a hedged instrument
18/10/2017	18/10/2027	7.03	%	750,000	360,000
18/12/2019	18/12/2029	4.68	%	436,516	436,516
18/12/2019	18/12/2029	4.68	%	85,710	85,710
18/12/2019	18/12/2029	4.68	%	27,774	27,774
29/01/2020	29/01/2025	3.02	%	482,034	482,034
Total debt securities issued				1,782,034	1,392,034
Financing with Correspondent Banks designated as a hedging instrument
31/03/2022	17/03/2025	6.06	%	150,000	150,000
7/09/2022	5/09/2025	6.36	%	50,000	50,000
Total financing with Correspondent Banks				200,000	200,000
Total				1,982,034	1,592,034

Measurement of effectiveness and ineffectiveness

A hedge is considered effective if, at the beginning of the period and subsequent periods, changes in fair value or cash flows attributable to the hedge risk during the period for which the hedge has been designated.

The Bank has documented the effectiveness tests of the hedge.The hedge is considered effective, since the critical terms and risks of the obligations that serve as a hedging instrument are identical to those of the primary hedged position. Hedged effectiveness is measured on a before income tax.

Gains or losses on the conversion of Banistmo’s financial statements are recognized in Condensed Consolidated Interim Statements of Comprehensive Income. Consequently, the exchange difference related to the conversion of debt securities issued and financing with Correspondent banks is recognized directly in OCI, as a result of the variation of the peso against the dollar, the adjustment recognized in Condensed Consolidated Interim Statements of Comprehensive Income amounted to COP (38,075), COP 338,087, for the three months period ended March 31, 2024 and 2023, respectively.

For further information see note 12. Borrowings from other financial institusions, note 13. Debt instruments in issue and Condensend Consolidated Interim Statement of Comprehensive Income.

NOTE 6. LOANS AND ADVANCES TO CUSTOMERS, NET

Loans and financial leasing operating portfolio

The following is the composition of the loans and financial leasing operations portfolio, net as of March 31, 2024 and December 31, 2023:

Composition	March 31, 2024	December 31, 2023
In millions of COP
Commercial	141,231,154	134,687,396
Consumer	53,985,214	54,591,769
Mortgage	36,936,035	36,250,408
Financial Leases	27,060,004	27,277,057
Small Business Loans	1,095,168	1,145,017
Total gross loans and advances to customers(1)	260,307,575	253,951,647
Total allowance	(16,202,229)	(16,223,103)
Total Net loans and advances to customers	244,105,346	237,728,544

⁽¹⁾ The operations in Colombia and Banistmo in Panama contributed to the portfolio increase. In addition, in March 31, 2024 the Colombian peso devaluation against the US dollar by 0.53% compared to December 2023.

Allowance for loans losses

The following table sets forth the changes in the allowance for loans and advances and lease losses as of March 31, 2024 and 2023:

As of March 31, 2024

					Small
Concept	Commercial	Consumer	Mortgage	Financial	business	Total
				Leases	loans
In millions of COP
Balance at beginning of period January 1, 2024	6,290,266	7,717,038	1,023,206	1,024,575	168,018	16,223,103
Recovery of charged - off loans(1)	9,741	125,356	16,247	16,093	1,660	169,097
Credit impairment charges on loans, advances and financial leases, net	37,031	1,195,019	89,489	18,441	(5,117)	1,334,863
Adjusted stage 3(2)	89,948	147,908	8,790	17,897	2,746	267,289
Charges-off(1)	(181,297)	(1,548,159)	(15,273)	(36,789)	(25,066)	(1,806,584)
Translation adjustment	13,150	(1,739)	769	2,419	(138)	14,461
Balance at March 31, 2024	6,258,839	7,635,423	1,123,228	1,042,636	142,103	16,202,229

(1) This amount is still subject to enforcement activity.

(2) Recognized as a reduction to Interest Income on loans and financial leases in Condensed Consolidated Interim Statement of Income, in accordance with IFRS 9.

As of March 31, 2023

					Small
Concept	Commercial	Consumer	Mortgage	Financial	business	Total
				Leases	loans
In millions of COP
Balance at beginning of period January 1, 2023	7,270,305	6,047,135	1,024,091	1,013,074	125,035	15,479,640
Recovery of charged - off loans(1)	9,277	94,932	8,536	18,034	(10)	130,769
Credit impairment charges on loans, advances and financial leases, net	367,529	1,579,200	67,265	8,470	22,185	2,044,649
Adjusted stage 3(2)	114,033	98,986	6,284	15,176	2,451	236,930
Charges-off(1)	(137,804)	(951,401)	(17,600)	(113,837)	(14,878)	(1,235,520)
Translation adjustment	(76,672)	(53,774)	(10,527)	(1,308)	(1,249)	(143,530)
Balance at March 31, 2023	7,546,668	6,815,078	1,078,049	939,609	133,534	16,512,938

(1) The charges-off still subject to enforcement activity.

(2) Recognized as a reduction to Interest Income on loans and financial leases in Condensed Consolidated Interim Statement of Income, in accordance with IFRS 9.

The following table presents information about the nature and effects of changes in the contractual cash flows of the loan portfolio that did not result in derecognition and the effect of these changes on the measurement of expected credit losses.

Changes in the contractual cash flows of the loan portfolio that did not result in derecognition
In millions of COP
	March 31, 2024	December 31, 2023
Loan portfolio modified during the period
Amortized cost before modification	3,269,125	7,566,692
Net gain or loss on changes	(285,931)	(182,023)
Loan portfolio modified since initial recognition
Gross carrying value of the previously modified loan portfolio for which the allowance for losses has been changed from the asset's life to the expected credit losses for 12 months.	226,241	393,789

Impact of movements in the value of the portfolio and loss allowance by Stage

Variation March 2024 vs December 2023

Stage 1 (12-month expected credit losses)

Stage 1 exposure increased by COP 5,990,828 and the loss allowance decreased by COP 281,125. The growth of the portfolio at this stage is mainly due to better disbursement dynamic in the corporate portfolio compared to the previous period. The decrease in the provision is due to the macroeconomic impact on the PD (probability of default) models, with a more favorable economic outlook, where a downward trend in interest rates is observed, which positively affects individual portfolios.

Stage 2 (Lifetime expected credit losses)

The exposure in Stage 2 increased by COP 266,240 and the loss allowance also increased by COP 146,146. The increase in exposure is primarily a result of an increased number of customers transitioning out of default (Stage 3) and staying in Stage 2 for a year. The increase of loss allowance is in accordance with the increase in exposure reflecting the arrival of these customers.

Stage 3 (Lifetime expected credit losses)

The exposure in Stage 3 increased by COP 98,860, and the loss allowance increased by COP 114,105. The variation in exposure and loss allowance in this Stage is mainly due to clients of the consumer portfolio reaching a delinquency height over 90 days and an increase in provision for customers who already belonged to this stage.

Variation December 2023 vs December 2022

Stage 1 (12-month expected credit losses)

Stage 1 exposure decreased by COP 14,397,167 and the loss allowance increased by COP 820,111. The decrease in the portfolio at this stage is mainly due to the restatement of the dollar loans into colombian pesos due to a lower in the market representative rate and a slow disbursement dynamic of the consumer portfolio compared to the previous period. The increase in the loss allowance is due to the impact of a less favorable economic outlook, where there is lower economic growth and a high trend of interest rates throughout the year.

Stage 2 (Lifetime expected credit losses)

The exposure in Stage 2 decreased by COP 2,613,778 and the loss allowance decreased by COP 608,427. The decrease in exposure is due to the migration of loans with delinquency over 90 days to Stage 3, and the level of new overdue portfolio being lower than the previous period. The decrease of loss allowance is in accordance with the decrease in exposure.

Stage 3 (Lifetime expected credit losses)

The exposure in Stage 3 increased by COP 1,038,853, and the loss allowance increased by COP 531,779. The variation in exposure and loss allowance in this Stage is mainly due to clients of the consumer portfolio reaching a delinquency height over 90 days and the impairment of significant clients from the construction sector.

The following explains the significant changes in the loans and the allowance for loan losses by category during the periods ended on March 31, 2024 and December 31, 2023 as a result of applying the expected credit loss model according to IFRS 9:

As of March 31, 2024

Maximum exposure to credit risk
In millions of COP
	Stage 1	Stage 2	Stage 3	Total
Commercial	127,599,453	5,034,398	8,597,303	141,231,154
Consumer	45,306,348	4,655,259	4,023,607	53,985,214
Mortgage	32,481,633	2,996,374	1,458,028	36,936,035
Financial Leases	22,242,503	3,366,012	1,451,489	27,060,004
Small Business Loans	733,780	256,858	104,530	1,095,168
Total gross loans and advances to customers	228,363,717	16,308,901	15,634,957	260,307,575
Total allowance	(3,414,778)	(2,682,548)	(10,104,903)	(16,202,229)
Total Net loans and advances to customers	224,948,939	13,626,353	5,530,054	244,105,346

As of December 31, 2023

Maximum exposure to credit risk
In millions of COP
	Stage 1	Stage 2	Stage 3	Total
Commercial	120,773,927	5,453,537	8,459,932	134,687,396
Consumer	46,060,615	4,407,067	4,124,087	54,591,769
Mortgage	32,210,648	2,628,654	1,411,106	36,250,408
Financial Leases	22,553,128	3,293,100	1,430,829	27,277,057
Small Business Loans	774,571	260,303	110,143	1,145,017
Total gross loans and advances to customers	222,372,889	16,042,661	15,536,097	253,951,647
Total allowance	(3,695,903)	(2,536,402)	(9,990,798)	(16,223,103)
Total Net loans and advances to customers	218,676,986	13,506,259	5,545,299	237,728,544

NOTE 7. GOODWILL AND INTANGIBLE ASSETS, NET

Intangibles assets and goodwill net are as follows:

	March 31, 2024	December 31, 2023
In millions of COP
Goodwill(1)	7,859,491	7,818,125
Intangible assets	667,460	671,572
Total intangible assets and goodwill, net	8,526,951	8,489,697

⁽¹⁾ The increase is due to the variation in the exchange rate.

The detail of intangible assets as of December 31, 2023 is included in the annual report of the 2023 Consolidated Financial Statements; in the three-months period ended March 31, 2024 there have been no relevant changes in the composition of the Bank intangible assets.

NOTE 8. PREMISES AND EQUIPMENT, NET

As of March 31, 2024, and March 31, 2023, the premises and equipment, net consisted of the following:

As of March 31, 2024

Premises and equipment total	Balance at January 1, 2024	Roll - forward					Balance at March 31, 2024
		Additions	Expenses depreciation and impairment(1)	Disposals	Assets classified as held for sale and other assets	Effect of changes in foreign exchange rate
In millions of COP
Premises and equipment for own use
Cost	4,044,231	24,914	-	(23,642)	(2,676)	8,366	4,051,193
Accumulated depreciation	(1,518,977)	-	(47,920)	22,831	173	(3,822)	(1,547,715)
Accumulated impairment	-	-	(165)	165	-	-	-
Premises and equipment in operating leases(2)
Cost	5,017,897	107,431	-	(29,723)	(490,565)	-	4,605,040
Accumulated depreciation	(1,020,617)	-	(117,000)	7,062	118,046	-	(1,012,509)
Total premises and equipment - cost	9,062,128	132,345	-	(53,365)	(493,241)	8,366	8,656,233
Total premises and equipment - accumulated depreciation	(2,539,594)	-	(164,920)	29,893	118,219	(3,822)	(2,560,224)
Total premises and equipment - accumulated impairment	-	-	(165)	165	-	-	-
Total premises and equipment - net	6,522,534	132,345	(165,085)	(23,307)	(375,022)	4,544	6,096,009

⁽¹⁾ See Note 18.3. Impairment, depreciation and amortization.

⁽²⁾ The decrease is mainly due to cancellations and transfers to inventories of vehicles leased.

As of March 31, 2023

Premises and equipment total	Balance at January 1, 2023	Roll - forward					Balance at March 31, 2023
		Additions	Expenses depreciation and impairment(1)	Disposals	Assets classified as held for sale and other assets	Effect of changes in foreign exchange rate
In millions of COP
Premises and equipment for own use
Cost	4,294,739	28,368	-	(36,072)	(4,900)	(53,967)	4,228,168
Accumulated depreciation	(1,584,666)	-	(52,819)	24,421	(139)	26,675	(1,586,528)
Accumulated impairment	-	-	(362)	362	-	-	-
Premises and equipment in operating leases
Cost	4,871,465	529,911	-	(17,111)	(252,694)	-	5,131,571
Accumulated depreciation	(854,472)	-	(88,567)	3,018	63,961	-	(876,060)
Accumulated impairment	-	-	(1,219)	1,219	-	-	-
Total premises and equipment - cost	9,166,204	558,279	-	(53,183)	(257,594)	(53,967)	9,359,739
Total premises and equipment - accumulated depreciation	(2,439,138)	-	(141,386)	27,439	63,822	26,675	(2,462,588)
Total premises and equipment - accumulated impairment	-	-	(1,581)	1,581	-	-	-
Total premises and equipment - net	6,727,066	558,279	(142,967)	(24,163)	(193,772)	(27,292)	6,897,151

⁽¹⁾ See Note 18.3. Impairment, depreciation and amortization.

As of March 31, 2024, and March 31, 2023, there were contractual commitments for the purchase of premises and equipment of COP 17,661 and COP 2,625, respectively. As of March 2024, these commitments are mainly for projects in branches, ATMs and the collaborative zone of the Granada administrative headquarters in Cali.

As of March 31, 2024, and 2023, there was no premises and equipment related with subsidiaries classified as held for sale, pledged as collateral, or with ownership restrictions. Additionally, the assessment made by the Bank indicates there is no evidence of impairment of its premises and equipment.

As of March 31, 2024, and 2023, the amount of fully depreciated premises and equipment that is still in use is COP 668,886 and COP 697,419, respectively, mainly comprised of computer equipment, furniture and fixtures, office equipment and vehicles. As of March 31, 2024, and 2023, the temporarily idle premises and equipment amounted to COP 76,055 and COP 94,395, respectively.

NOTE 9. INCOME TAX

The income tax is recognized in each of the countries where the Bancolombia Group has operations, in accordance with the tax regulations in force in each of the jurisdictions.

9.1 Components recognized in the Condensed Consolidated Interim Statement of income:

		March 31, 2024	March 31, 2023
	In millions of Colombian pesos
Current tax (1)
Fiscal term		(658,424)	(441,179)
Prior fiscal terms		69,840	341
Total current tax		(588,584)	(440,838)
Deferred tax
Fiscal term		(97,228)	(133,070)
Adjustments for consolidation purposes		(9,068)	(12,463)
Total deferred tax		(106,296)	(145,533)
Total income tax (2)		(694,880)	(586,371)

(1) The nominal income tax rate used in Colombia for the year 2024 and 2023 is of 35%. Additionally, the Colombian financial institutions of the Group liquidated some additional points in the income tax of 5%.

(2) See table 9.2 Reconciliation of the effective tax rate.

9.2 Reconciliation of the effective tax rate

The reconciliation between total income tax expenses calculated at the current nominal tax rate and the tax expense recognized in the income statement for the quarterly periods ended March 31, 2024 and 2023 is detailed below:

Reconciliation of the tax rate		March 31, 2024	March 31, 2023
	In millions of Colombian pesos
Accounting profit		2,379,891	2,348,664
Applicable tax with nominal rate (1)		(951,956)	(939,466)
Non-deductible expenses to determine taxable profit (loss)		(48,841)	(128,720)
Accounting and non-tax (expense) income to determine taxable profit (loss)		182,313	321,934
Differences in accounting bases (2)		65,439	(218,929)
Fiscal and non-accounting (expense) income to determine taxable profit (loss)		(57,945)	(32,645)
Ordinary activities income exempt from taxation		194,208	210,985
Ordinary activities income not constituting income or occasional tax gain		60,364	60,396
Tax deductions		31,673	51,101
Goodwill Depreciation		115	115
Tax depreciation surplus		54,489	53,317
Untaxed recoveries		(17,498)	(20,686)
Tax rate effect in other countries		(77,091)	(86,864)
Prior fiscal terms		69,840	341
Other effects of the tax rate by reconciliation between accounting profit and tax (expense) income		(199,990)	142,750
Total income tax		(694,880)	(586,371)

(1) The nominal income tax rate used in Colombia for the year 2024 and 2023 is of 35%. Additionally, the Colombian financial institutions of the Group liquidated some additional points in the income tax of 5%.

(2) Difference between the technical accounting frameworks in force in Colombia and the full International Financial Reporting Standards (IFRS).

9.3 Components recognized in Other Comprehensive Income (OCI)

See Condensed Consolidated Interim Statement of Comprehensive Income

March 31, 2024
In millions of Colombian pesos
	Amounts before taxes	Deferred tax	Net taxes
Remeasurement income related to defined benefit liability	-	7	7
Unrealized gain Investments in equity instruments measured at fair value through other comprehensive income (FVTOCI)	6,460	(541)	5,919
Unrealized loss Investments in debt instruments measured at fair value through other comprehensive income (FVTOCI)	(6,220)	2,192	(4,028)
Loss on net investment hedge in foreign operations	(38,075)	16,784	(21,291)
Exchange differences arising on translating the foreign operations	97,043	-	97,043
Unrealized loss on investments in associates and joint ventures using equity method	(6,347)	908	(5,439)
Net	52,861	19,350	72,211

March 31, 2023
In millions of Colombian pesos
	Amounts before taxes	Deferred tax	Net taxes
Remeasurement income related to defined benefit liability	(71)	106	35
Unrealized gain Investments in equity instruments measured at fair value through other comprehensive income (FVTOCI)	9,105	(624)	8,481
Unrealized gain Investments in debt instruments measured at fair value through other comprehensive income (FVTOCI)	60,613	(8,791)	51,822
Gain on net investment hedge in foreign operations	338,087	(130,722)	207,365
Exchange differences arising on translating the foreign operations	(806,528)	-	(806,528)
Unrealized gain on investments in associates and joint ventures using equity method	2,895	(388)	2,507
Net	(395,899)	(140,419)	(536,318)

9.4 Deferred tax

In accordance with its financial projections, the companies from the Bancolombia Group's expects in the future to generate enough liquid income to offset the items recorded as deductible deferred tax. These estimates start from the financial projections that were prepared considering information from the Bancolombia Group's economic research records, the expected economic environment for the next five years. The main indicators on which the models are based are GDP growth, loans growth and interest rates. In addition to these elements, the long-term Group's strategy is taken into account.

The deferred tax asset and liability for each of the concepts that generated taxable or deductible temporary differences for the period ending March 31, 2024 are detailed below:

	December 31, 2023	Effect on Income Statement	Effect on OCI	Effect on Equity (1)	Tax Made (2)	Foreign Exchange	Adjustments for consolidation purposes	March 31, 2024
Asset Deferred Tax:
Property and equipment	5,982	(161)	-	-	-	(3,839)	(496)	1,486
Employee Benefits	259,406	9,255	7	-	-	152	-	268,820
Deterioration assessment	416,452	22,058	-	-	-	(9,086)	115,882	545,306
Investments evaluation	5,061	(4,365)	10	-	-	-	-	706
Derivatives Valuation	235,067	100,080	-	-	-	-	1,189	336,336
Tax credits settlement	34,940	14,382	-	-	-	2,587	-	51,909
Insurance Operations	13,319	(733)	-	-	-	71	-	12,657
Net investment coverage in operations abroad	528,438	(31,748)	16,784	-	37,396	-	-	550,870
Other deductions	241,635	(58,328)	-	-	-	731	-	184,038
implementation adjustment	376,216	(67)	-	-	-	4,606	-	380,755
Total Asset Deferred Tax (3)	2,116,516	50,373	16,801	-	37,396	(4,778)	116,575	2,332,883
Liability Deferred Tax:
Property and equipment	(144,988)	22,589	-	-	-	(109)	8,488	(114,020)
Deterioration assessment	(113,391)	(171,289)	-	-	-	(2,702)	(136,947)	(424,329)
Participatory titles evaluation	(369,809)	(7,593)	1,641	-	-	1,817	1,505	(372,439)
Derivatives evaluation	(10,045)	(80)	-	-	-	(41)	1,311	(8,855)
Lease restatement	(215,411)	(19,520)	-	-	-	-	-	(234,931)

	December 31, 2023	Effect on Income Statement	Effect on OCI	Effect on Equity (1)	Tax Made (2)	Foreign Exchange	Adjustments for consolidation purposes	March 31, 2024
Investments in associates Adjustment for equity method	(79,584)	(1,079)	908	(814)	-	(2,059)	-	(82,628)
Financial Obligations	(179,947)	42,884	-	-	-	(4)	-	(137,067)
Goodwill	(1,573,966)	162	-	-	-	(36)	-	(1,573,840)
Insurance Operations	(13,949)	(3,766)	-	-	-	(74)	-	(17,789)
Properties received in payment	(148,462)	13,126	-	-	-	(69)	-	(135,405)
Other deductions	(366,557)	(23,035)	-	-	-	-	-	(389,592)
implementation adjustment	(25)	-	-	-	-	-	-	(25)
Total Liability Deferred Tax (3)	(3,216,134)	(147,601)	2,549	(814)	-	(3,277)	(125,643)	(3,490,920)
Net Deferred Tax	(1,099,618)	(97,228)	19,350	(814)	37,396	(8,055)	(9,068)	(1,158,037)

(1)Recognition of the valuation of the investment in Protection by Fiduciaria Bancolombia S.A. and Banca de Inversion Bancolombia S.A.

(2)Current tax that arose from the exchange difference for payment of debt to which it was associated as a hedging instrument.

(3)The values revealed in the Consolidated Statement of Financial Position correspond to the sum of the net deferred tax per company

9.5 Amount of temporary differences in subsidiaries, branches, associates over which deferred tax was not recognized is:

In accordance with IAS 12, no deferred tax credit was recorded, because management can control the future moment in which such differences are reversed and this is not expected to occur in the foreseeable future.

	March 31, 2024	December 31, 2023
In millions of Colombian pesos
Temporary differences
Local Subsidiaries	(1,216,766)	(1,378,775)
Foreign Subsidiaries	(18,268,636)	(17,696,145)

9.6 Tax credits

For the first quarter of 2024, a deferred tax asset was recognized since the Group companies will have future taxable profits in which they can charge this temporary difference.

The following is the detail of the fiscal losses and presumptive income excesses over net income in the Group's entities, which have not been used, as of March 31, 2024.

Company	Base	Deferred tax recognized asset
	In millions of Colombian pesos
Renting Colombia	44,297	14,618
Nequi S.A., Compañía de Financiamiento	98,859	34,601
Wompi S.A.S	7,685	2,690
Total	150,841	51,909

9.7 Dividends

9.7.1 Dividend Payment

If the parent company or any of its subsidiaries were to distribute dividends, they would be subject to the tax regulations of each of the countries in which they are decreed and distributed. In the case of Colombian companies, dividends will be subject to the application of Articles 48 and 49 of the Tax Statute and consequently will be subject to withholding at source at the established rates, in accordance with the tax characteristics of each shareholder.

9.7.2 Dividends received from Subsidiary Companies

Considering the historical tax status of the dividends received by the Bank from its affiliates and national subsidiaries, it is expected that in the future dividends will be received on the basis of non-income tax. They will not be subject to withholding tax, taking into account that the Bank, its affiliates and national subsidiaries belong to the same business group.

9.8 Tax contingent liabilities and assets

In the determination of the effective current and deferred taxes subject to review by the tax authority, the relevant regulations have been applied in accordance with the interpretations made by the Bancolombia Group.

In Colombia due to the complexity of the tax system, ongoing amendments to the tax regulations, accounting changes with implications on tax bases and in general the legal instability of the country, the tax authority may at any time have different criteria than that of the Bancolombia Group. Consequently, a dispute or inspection by the tax authority on a tax treatment may affect the Bancolombia Group accounting of assets or liabilities for deferred or current taxes, in accordance with the requirements of IAS 12. However, based on the criteria established in the interpretation of IFRIC 23, the Bancolombia Group did not recognize uncertain tax positions in its financial statements.

NOTE 10. DEPOSITS BY CUSTOMERS

The detail of the deposits as of March 31, 2024 and December 31, 2023 is as follows:

Deposits	March 31, 2024	December 31, 2023
In millions of COP
Saving accounts(1)	106,589,807	108,971,334
Time deposits	100,199,998	98,686,516
Checking accounts	33,886,389	34,993,066
Other deposits(1)	4,133,688	5,290,264
Total deposits by customers	244,809,882	247,941,180

⁽¹⁾ Includes Nequi Deposits by COP 2,572,456and COP 2,924,906, respectively.

NOTE 11. INTERBANK DEPOSITS AND REPURCHASE AGREEMENTS AND OTHER SIMILAR SECURED BORROWING

The following table sets forth information regarding the money market operations recognized as liabilities in Condensed Consolidated Interim Statement of Financial Position:

Interbank and repurchase agreements and other similar secured borrowing	March 31, 2024	December 31, 2023
In millions of COP
Interbank deposits
Interbank liabilities	571,278	606,141
Total interbank	571,278	606,141
Repurchase agreements and other similar secured borrowing
Short selling operations	250,544	273,791
Temporary transfer of securities(1)	648,296	44,888
Repurchase agreements	123,384	151,616
Total repurchase agreements and other similar secured borrowing	1,022,224	470,295
Total money market transactions	1,593,502	1,076,436

⁽¹⁾ Increase generated in Bancolombia S.A.

NOTE 12. BORROWINGS FROM OTHER FINANCIAL INSTITUTIONS

As of March 31, 2024 and December 31, 2023,  the composition of the borrowings from other financial institutions measured at amortized cost is the following:

Borrowings from other financial institutions	March 31, 2024	December 31, 2023
In millions of COP
Obligations granted by foreign banks(1)	7,724,968	9,139,834
Obligations granted by domestic banks	6,387,032	6,508,772
Total borrowings from other financial institutions	14,112,000	15,648,606

⁽¹⁾The variation is due to cancellation of obligations for advance payments and maturities.

Obligations granted by foreign banks

As of March 31, 2024

Financial entity	Rate Minimum		Rate Maximum		March 31, 2024
In millions of COP
Financing with Correspondent Banks and Multilateral Entities(1)	1.25	%	10.06	%	7,149,419
Banco Interamericano de Desarrollo (BID)	9.50	%	10.59	%	537,035
Banco Latinoamericano de Comercio Exterior (Bladex)	7.08	%	7.08	%	38,514
Total					7,724,968

⁽¹⁾ In March 2024, the Bank discontinued USD 200 millon from the hedging relationship due to the prepayment of the total financing with Correspondent Banks designated as a hedging instrument.See Note 5.2. Derivative financial instruments – Hedging of net assets in a foreign operation.

As of December 31, 2023

Financial entity	Rate Minimum		Rate Maximum		December 31, 2023
In millions of COP
Financing with Correspondent Banks and Multilateral Entities(1)	1.21	%	10.06	%	8,566,580
Banco Interamericano de Desarrollo (BID)	9.50	%	10.64	%	532,899
Banco Latinoamericano de Comercio Exterior (Bladex)	6.91	%	6.91	%	40,355
Total					9,139,834

⁽¹⁾At Bancolombia S.A. USD 200 million were designated as coverage of net investment abroad. See Note 5.2Derivative financial instruments- Hedges of a net asset in a foreign operation.

The maturities of the financial obligations with foreign entities as of March 31, 2024 and December 31, 2023, are the following:

Foreign	March 31, 2024	December 31, 2023
In millions of COP
Amount expected to be settled:
No more than twelve months after the reporting period	2,445,029	3,813,504
More than twelve months after the reporting period	5,279,939	5,326,330
Total	7,724,968	9,139,834

Obligations granted by domestic banks

As of March 31, 2024

	Rate		Rate
Financial entity	Minimum		Maximum		March 31, 2024
In millions of COP
Financiera de desarrollo territorial (Findeter)	6.45	%	20.16	%	2,678,854
Fondo para el financiamiento del sector agropecuario (Finagro)	7.38	%	15.03	%	1,434,988
Banco de comercio exterior de Colombia (Bancoldex)	2.17	%	20.76	%	1,209,183
Other private financial entities	10.05	%	15.32	%	1,064,007
Total					6,387,032

As of December 31, 2023

	Rate		Rate
Financial entity	Minimum		Maximum		December 31, 2023
In millions of COP
Financiera de desarrollo territorial (Findeter)	8.15	%	20.85	%	2,530,570
Fondo para el financiamiento del sector agropecuario (Finagro)	8.37	%	15.88	%	1,509,594
Banco de comercio exterior de Colombia (Bancoldex)	2.17	%	21.46	%	1,404,873
Other private financial entities	12.88	%	16.67	%	1,063,735
Total					6,508,772

The maturities of financial obligations with domestic banks as of March 31, 2024 and December 31, 2023, are as follows:

Domestic	March 31, 2024	December 31, 2023
In millions of COP
Amount expected to be settled:
No more than twelve months after the reporting period	419,400	767,470
More than twelve months after the reporting period	5,967,632	5,741,302
Total	6,387,032	6,508,772

As of March 31, 2024 and December 31, 2023, there were some financial covenants, mainly regarding capital adequacy ratios, past due loans and allowances, linked to some of the aforementioned outstanding credit facilities. None of these covenants had been breached nor were the related obligations past due.

NOTE 13. DEBT INSTRUMENTS IN ISSUE

Duly authorized by the authority in each country bonds have been issued as follows:

As of March 31, 2024

Issuer	Currency		Face value(1)	Balance COP	Rate Range
Bancolombia S.A.(2)	Local	COP	3,820,882	3,848,671	10.40%-15.34%
Bancolombia S.A.(3)	Foreign	USD	1,816,034	6,906,905	3.02%-7.03%
Banistmo S.A.	Foreign	USD	678,063	2,612,295	3.00%-6.25%
Banco Agrícola S.A.	Foreign	USD	168,700	650,284	5.60%-7.66%
Bancolombia Puerto Rico Internacional Inc.	Foreign	USD	67,815	272,873	5.05%-5.50%
Bancolombia Panamá S.A.	Foreign	USD	40,667	161,428	5.00%-6.10%
Grupo Agromercantil Holding S.A.	Foreign	USD	559	2,148	0.25%-7.25%
Total debt instruments in issue				14,454,604

⁽¹⁾Face value is in US dollar for foreign currency bonds.

⁽²⁾The interest rate is related to the Consumer Price Index (IPC). The IPC as of March 2024 is 7.36% and as of December 2023 is 9.28%.

⁽³⁾USD 1,392,034 was designated as hedge of net asset in a foreign operation. See Note 5.2.Derivative financial instruments- Hedges of a net asset in a foreign operation.

As of December 31, 2023

Issuer	Currency		Face value(1)	Balance COP	Rate Range
Bancolombia S.A.	Local	COP	4,029,882	4,097,727	12.87%-21.06%
Bancolombia S.A.(2)	Foreign	USD	1,832,534	6,861,098	3.02%-7.03%
Banistmo S.A.(3)	Foreign	USD	679,395	2,626,235	3.00%-6.25%
Banco Agrícola S.A.(4)	Foreign	USD	162,700	623,568	5.58%-7.57%
Bancolombia Puerto Rico Internacional Inc.	Foreign	USD	69,648	276,451	5.05%-5.50%
Bancolombia Panamá S.A.	Foreign	USD	44,924	176,376	4.70%-6.10%
Grupo Agromercantil Holding S.A.	Foreign	USD	555	2,121	0.25%-7.25%
Total debt instruments in issue				14,663,576

⁽¹⁾ Face value is in US dollar for foreign currency bonds.

⁽²⁾USD 1,392,034 was designated as hedge of net asset in a foreign operation. See Note 5.2.Derivative financial instruments- Hedges of a net asset in a foreign operation.

⁽³⁾ See Note 13.1. Issue of Banistmo S.A. ordinary bonds.

⁽⁴⁾ See Note 13.2. Issue of Banco Agrícola S.A. ordinary bonds.

13.1. Issue of Banistmo S.A. ordinary bonds.

Banistmo S.A., a subsidiary of the Bank issued in 2023 bonds under the Revolving Bond Program, totaling USD 58,062 with a term of 1 year each and rates between 6% and 6.25%.

13.2. Issue of Banco Agrícola S.A. ordinary bonds.

Banco Agrícola a subsidiary of the Bank issued ordinary bonds in 2023 for USD 77,700 with rates from 6.68% to 7.25% and terms from 1.5 years to 8 years.

For information related to the disclosures of fair value of the debt securities in issue, see Note 22 Fair value of assets and liabilities.

As of March 31, 2024 and 2023, there were no financial covenants linked to the aforementioned securities in issue, except for some financial covenants related to the Banistmo S.A. social gender private placement bond. None of these covenants had been breached nor were the related obligations past due.

NOTE 14. OTHER LIABILITIES

Other liabilities consist of the following:

Other liabilities	March 31, 2024	December 31, 2023
In millions of COP
Payables	4,489,261	4,746,323
Dividends(1)	3,424,200	870,846
Suppliers	1,385,721	1,653,424
Advances to obligations	1,319,094	1,199,509
Security contributions	574,346	524,741
Salaries and other labor obligations	493,421	396,734
Deposits delivered as security(2)	477,697	795,628
Collection services(3)	406,648	820,393
Provisions	393788	401111
Bonuses and short-term benefits(4)	241,987	734,916
Advances in leasing operations and loans	225,135	186,547
Deferred income	206,636	217,507
Liabilities from contracts with customers	61,930	60,128
Other	36,540	40,774
Total	13,736,404	12,648,581

⁽¹⁾Dividends payable corresponding to the distribution of profits for the year 2023, declared in March 2024. See Condensed Consolidated Interim Statement of Changes in Equity, distribution of dividends.

⁽²⁾Guarantees related to derivative transactions. See Note 5.2 Derivative financial instruments.

⁽³⁾The decrease is related to collection periods.

⁽⁴⁾ The variation is mainly due to the payment to bonuses for employees in accordance with the variable compensation model of the Bank.

NOTE 15. PROVISIONS AND CONTINGENT LIABILITIES

Contingencies due to judicial or administrative proceedings/litigations in which Bancolombia and the entities with which financial statements are consolidated as of March 31, 2024, are listed as follow, and that represents a contingency superior to USD 6,585.

Some of the proceedings in which the claims are inferior and that were revelated in prior periods will be kept to provide information about its evolution.

BANCOLOMBIA S.A.

Neos Group S.A.S. (in reorganization) and Inversiones Davanic S.A.S.

On November 3, 2022, Bancolombia was informed of a lawsuit in which the plaintiff contends that a loan agreement is in place between the parties, rather than a lease. The plaintiff also requested that the purchase and sale agreement be rescinded on the basis that the price of the property was lower than its fair price.

The plaintiff seeks COP 65,000. The likelihood of recovering this amount is considered to be remote because the parties always intended to celebrate a lease and not a different type of contract. On December 7, 2022, Bancolombia issued an answer to the lawsuit. As of March 31, 2024, the scheduling of the initial hearing date is pendingt. Bancolombia has not recorded a provision for this matter.

Public Interest Class Action – Carlos Julio Aguilar and other

In this proceeding, a constitutional public interest action was filed, in which the plaintiffs allege that due to the restructuring of Departamento del Valle´s financial obligations and its Performance Plan, the collective rights of the public administration and the public funds of the Departamento del Valle were breached. According to the Bank's defense arguments, the agreement was made in accordance with the law.

As of March 31, 2024, the procedure is pending a first instance judgment. The contingency is deemed to be possible. Bancolombia has not recorded a provision for this matter.

Contraloría Departamental de Cundinamarca v. GEHS, Bancolombia and other natural persons

The development of the Water Treatment Plant PTAR Chía I Delicias Sur from Municipio de Chía, Colombia, was outlined in a lease agreement signed on September 28, 2015. The price agreed was COP 19,000. The object of the agreement was the financing of the Project, as well as the optimization, design, and construction of the Water Treatment Plant PTAR Chía I Delicias Sur.

As of December 31, 2018, Bancolombia had anticipated certain payments to the Supplier of the Project. The Municipio de Chía´s Mayor Office, has claimed that irregularities have been found during the execution of the Project. Due to these allegations, the Contraloría de Cundinamarca began a proceeding of Fiscal Responsibility against GEHS Global Environment and Health Solutions de Colombia (Supplier), Guillermo Varela Romero, Rafael Antonio Ballesteros Gómez, Luís Alejandro Prieto González (Municipio de Chía´s former Mayor and employees of the municipal administration), and Bancolombia S.A., based on the alleged loss.

Bancolombia has alleged in its defense, among other arguments, that the Bank fully complied with its contractual obligations and that it is not responsible for the loss of the Municipality's resources.

The Contraloría de Cundinamarca at first instance and the apellate court held responsible five individuals, including Bancolombia, for a total amount of COP 7,650.

As of March 31, 2024, the proceeding at the Contraloría de Cundinamarca has ended due to the total payment of the awarded amount. Despite the judgment, Bancolombia at the Administrative Jurisdiction is going to file a lawsuit seeking the reversal of the judgment and the reimbursement of the awarded amount paid.  

Remediation Plan for Santa Elena´s property

In 1987, Bancolombia (formerly Bank of Colombia) received a property located in Municipio de Cartagena, Colombia from the National Federation of Algodoneros. After the settlement was signed, soil contamination from pesticides and herbicides was found on the property. Bancolombia initiated a civil responsibility judicial procedure against the Federation alleging environmental contamination. On November 13, 2015, the final judgment was issued, and it was decided that the National Federation of Algodoneros was liable for environmental damages and that Bancolombia was not.

Despite not being liable for environmental damages, Bancolombia is subject to decontamination requirements with respect to the property. Bancolombia has carried out over the years various activities aimed at containing the environmental impact, as well as the social management of the communities neighboring the lot. These activities include, among others, the confinement of contaminating material, installation of monitoring wells, and execution of plans to reduce contamination levels.

Currently, these plans have the approval of the Autoridad Nacional de Licencias Ambientales de Colombia (ANLA) and their execution is divided into 3 stages: Stage 1, Stage 2 and Stage 3. Bancolombia appealed the administrative act issued by the ANLA based on technical issues for the execution of Stage 3, and it is pending resolution.

As of March 31, 2024, Bancolombia is progressing in the activities outlined in the plans to reduce contamination levels approved by ANLA, which include the monitoring of soils and waters in the area (Stage 1), monitoring of floors and walls in the warehouses (Stage 2), social management plan with the communities in the influence area of the remediation plan, emergency plan, hazardous waste management plan and biotic environment protection plan.

The execution of the plan is expected to be completed within 36 months, this timeframe may be adjusted based on new analyses or requirements from the authorities. As of March 31, 2024, Bancolombia has established a provision of COP 78,555 for the accomplishment of the remaining activities.

Fredy Alberto Lara Borja

On December 13, 2023, Bancolombia was notified of a lawsuit filed by a former employee of the liquidated company Aluminio Reynolds Santo Domingo S.A, seeking the absolute nullity of the purchase agreement between Leasing Bancolombia and Bancolombia S.A. for two properties signed in 2011. Leasing Bancolombia acquired those properties through a purchase agreement with the company Armarcas E.U, which had received them as a payment from Sociedad Aluminio Reynolds Santo Domingo S.A. The plaintiff requested that the properties be returned to Aluminios Reynolds Santo Domingo´s assets so they can be used as payment of the company´s labor liabilities. The value of the claim is COP 103,944.

Bancolombia filed an appeal against the court´s order admitting the lawsuit arguing, among other reasons, non-compliance of legal requirements and lack of jurisdiction. As of March 31, 2024, it is pending resolution. The contingency is deemed to be remote. Bancolombia has not recorded a provision for this matter.

FIDUCIARIA BANCOLOMBIA

Quinta Sur S.A.S.

In March 2022, Fiduciaria Bancolombia was notified of a lawsuit filed by Quinta Sur S.A.S. (in liquidation). According to the lawsuit, Quinta Sur seeks to be indemnified for damages as a result of the failure to transfer the resources to the plaintiff for the beginning of a housing construction project, under the terms agreed in the trust agreement.Fiduciaria Bancolombia alleges that it has complied with the law and the contract, arguing that the property on which the housing project was to be constructed did not fulfill the contractual requirements. The plaintiff seeks COP 128,000.

On August 24, 2023, a favorable judgment was issued for Fiduciaria Bancolombia. As of March 31, 2024, the proceeding is pending the resolution of the appeal filed by the plaintiff. The contingency is deemed to be possible. Fiduciaria Bancolombia has not recorded provision for this matter.

BANISTMO

Constructora Tymsa S.A.

In October 2021, Banistmo and Banistmo Investment were notified of a lawsuit in which the plaintiff alleged fraudulent acts involving the sale of the plaintiff´s property. Constructora Tymsa alleges that the signatures and fingerprints in the public instrument of purchase, sale and in the mortgage in favor of Banistmo are false.

The plaintiff seeks USD 10,000, in addition to interests, costs and expenses. Banistmo and Banistmo Investment allege they are not liable for any intentional or negligent conduct in relation to the alleged fraudulent sale of the property. As of March 31, 2024, the proceeding is pending resolution of three incidents, including the lack of jurisdiction incident filed by the bank. The contingency is deemed to be possible. Banistmo has not recorded a provision for this matter.

Five Star Production Inc., Global Men Health Foundation, Ingrid Perscky and Others

In April 2022, Banistmo was notified of a lawsuit filed by Five Star Production Inc., Global Men Health Foundation, Ingrid Perscky and others for USD 5,000.

The lawsuit was filed based on a dispute between Ingrid Perscky and Jose Barbero (who used to be husband and wife) for the distribution of their assets. In 2017, Ms. Perscky, who had an authorized signature, ordered the cancelation of a fixed term deposit from Five Star and instructed that those funds be transferred to 3 accounts that belonged to persons related to her (for example, her children). Mr. Barbero contacted Banistmo and tried to reverse the instructions, however as it was not possible, Mr. Barbero filed criminal complaints against Ms. Perscky.

Banistmo has complied with banking law and has handled the information´s confidentiality according to the law and the contract. The plaintiffs seeked compensation for material and moral damages, alleging that Banistmo breached confidentiality and banking secret in detriment of the plaintiffs.

As of March 31, 2024, due to the settlement agreement made by the parties the disputes are pending a final decision from the Court.

Deniss Rafael Pérez Perozo, Carlos Pérez Leal and others

Promotora Terramar (client of Banistmo, formerly HSBC Panamá) was paid USD 299, through Visa gift cards issued by a foreign bank. This payment was received as a partial payment of 2 apartments located in Panamá City.

The Credit Card Securities and Fraud Prevention department of the HSBC bank detected an irregular activity by Promotora Terramar on June 3, 2008, when a monitoring alert was activated due to the high number of cards with the same BIN and bank. Therefore, pursuant to the Business Establishments Affiliate Agreement, HSBC held funds from Promotora Terramar´s accounts. Nevertheless, after further investigations the money was refunded.

On October 2013, the plaintiffs filed a claim for compensation of the material and moral damages caused, which according to their valuation, amounts to USD 5,252,000. Banistmo alleges it has complied with the contractual terms outlined in the Affiliate Agreement and the statute of limitations deadline has lapsed, among other defenses.

As of March 31, 2024, the proceeding is pending the plaintiffs to arrange for defendants to be served and commencement of the evidentiary stage. The contingency is deemed to be remote. Banistmo has not recorded a provision for this matter.

DD&C, Carlos Pérez Leal and Others

In October 2022, Banistmo received a communication announcing the filing of a legal action in the Tribunal of First Instance of Kaloum in the Republic of Guinea. This action was initiated by Inversiones DD&C, Carlos Perez Leal and other natural persons against the Central Bank of the Republic of Guinea (“BCRG”) and five international banks, including Banistmo.  The action seeks compensatory damages derived from alleged fraud involving six international transfers for a total USD 1,900 that Inversiones DD&C, who was a client of Banistmo at the time, ordered to be made to a bank account at the BCRG.  

The parties who initiated the action are seeking USD 28,100 in “dommages matériels” (which are damages for alleged economic loss), as well as additional amounts in “dommages moraux” (which are damages for alleged non-economic loss, including alleged psychological suffering and moral anguish).

On May 22, 2023, a favorable first instance judgment was issued for Banistmo. The plaintiff filed an appeal against the decision. As of March 31, 2024, the proceeding is pending the scheduling of a date to conclude the appeal hearing.

The contingency is deemed to be remote. Banistmo has not recorded a provision for this matter.

Interfast Panamá & Pacific Point 96624

In February 2024, Banistmo and Banistmo Investment were served of a lawsuit filed against them, 2020 Debt Investors Corp and José Talgham Cohen. The plaintiffs seek compensation for damages originated from the assignment of credit agreement made by Banistmo as the assignor in benefit of the assignee 2020 Debt Investors Corp., of a credit operation managed by Inverfast Panamá for a value of USD 2,000. The loan was secured with a trust in guarantee and administration of real state set up on Banistmo Investment.

The plaintiffs alleges that the credit assignment agreement presented irregularities and deviations from Banistmo and breach of fiduciary duties from Banistmo Investment. The value of the claim is USD 15,000.

As of April 30, 2024, the proceeding is pending resolution of a clarification motion of the plaintiff´s complaint. The contingency is deemed to be remote. Banistmo has not recorded a provision for this matter.

BANCO AGRÍCOLA

Dirección General de Impuestos Internos El Salvador

The authority on taxes of El Salvador (DGII), in accordance with the resolution of October 2018, determined that Banco Agrícola failed to pay and declare income taxes related to fiscal year 2014 for a total of USD 11,116 and related penalties.

In 2021, the appeal presented by Banco Agrícola was decided. The Tribunal de Apelaciones de los Impuestos Internos y Aduanas (TAII) modified the Resolution issued by DGII, adjusted the rental tax to USD 6,341 and revoked the sanction.

Banco Agrícola filed a lawsuit before the Contentious Administrative Tribunal seeking to overrule DGII´s and TAII´s previous decisions in relation to the tax’s payment. As of March 31, 2024, the initial hearing is pending.

The contingency is deemed to be remote. Banco Agrícola has not recorded a provision for this matter.

ARRENDADORA FINANCIERA S.A.

Cordal

Cordal filed a lawsuit against Arrendadora Financiera, seeking compensation for USD 6,454. According to the lawsuit, Cordal was the owner of a current account in Arrendadora Financiera (formerly Banco Capital S.A.) and it alleged that it´s funds were irregularly transferred to third parties. Arrendadora Financiera alleges Cordal´s account was liquidated before the acquisition of Banco Capital S.A. and, therefore, no funds were transferred.

As of March 31, 2024, the proceeding is at the evidentiary stage. The contingency is deemed to be remote. Arrendadora Financiera has not recorded a provision for this matter. A former employee of the plaintiff was convicted of aggravated theft in connection with the facts of this lawsuit.

BANCO AGROMERCANTIL

Bapa Holdings Corp.

On September 20, 2022, a lawsuit against Banco Agromercantil was filed by Bapa Holdings Corp. The plaintiff alleges it invested USD 7,000, through a participation agreement with North Shore Development Company (NDSC) for the development of a housing project that was going to be built in a property, which was security for a loan given by Banco Agromercantil to NDSC, located in Roatan Island, Honduras. Bapa claims BAM caused damages due to its failure to provide information about NDSC´s financial situation and going through with the sale of the credit.

On October 24, 2022, BAM responded to the claim and filed exceptions alleging that it has no commercial relationship with Bapa, and the statute of limitations deadline expired. As of March 31, 2024, the court is pending a ruling on the exceptions to the lawsuit.

The contingency is deemed to be remote. Banco Agromercantil has not recorded a provision for this matter.

Superintendencia de Administración Tributaria (SAT)

The Superintendencia de Administración Tributaria (SAT) de Guatemala ordered a tax adjustment in the fiscal year 2014 of Banco Agromercantil´s rental tax declaration, duly paid by BAM, for a value of USD 13,583 (including tax and sanction). BAMinitiated legal proceedings against the decision adopted by the SAT, pleading the inadmissibility of the adjustment by applying the legal rule in an analogous way, the admissibility of the expenses deductions of the revenue tax for being necessary to generate lien revenue and the non-withhold of the revenue tax in the interests paid to exempt people , arguing that they were appropriate according to the law. The proceeding is pending the final decision from the Court. The contingency is deemed to be remote. Banco Agromercantil has not recorded a provision for this matter.

NOTE 16. APPROPRIATED RESERVES

As of March 31, 2024 and December 31, 2023, the appropriated retained earnings consist of the following:

Appropriated reserves	March 31, 2024	December 31, 2023
In millions of COP
Appropriation of net income(1)(2)	12,742,104	12,794,057
Others(3)	9,915,761	7,250,712
Total Appropiated reserves	22,657,865	20,044,769

⁽¹⁾The legal reserve fulfills two objectives: to increase and maintain the company's capital and to absorb economic losses. Based on the aforementioned, this amount shall not be distributed in dividends to the stockholders.

⁽²⁾As of March 31, 2024 and December 31, 2023 includes reclassification of unclaimed dividends under Article 85 of the Bancolombia S.A Bylaws for COP 130 and COP 557, respectively.

⁽³⁾Reserves for equity strengthening, future growth and donations to social benefit projects available to the Board of Directors, which was approved at the General Shareholders Meeting.

NOTE 17. OPERATING INCOME

17.1. Interest and valuation on financial instruments

The following table sets forth the detail of interest and valuation on financial asset instruments for the three-month periods ended March 31, 2024 and 2023:

Interest and valuation on financial instruments	2024	2023
In millions of COP
Interest on debt instruments using the effective interest method	257,774	250,371
Interest and valuation on financial instruments
Debt investments	298,273	315,283
Repos(1)	108,392	(35,090)
Derivatives(2)	6,314	(97,891)
Spot transactions	(6,933)	9,505

Interest and valuation on financial instruments	2024	2023
In millions of COP
Total valuation on financial instruments	406,046	191,807
Total Interest and valuation on financial instruments	663,820	442,178

⁽¹⁾The increase is mainly due to the entry into temporary transfer of securities.

⁽²⁾The increase is mainly in forwards operations.

17.2.       Interest expenses

The following table sets forth the detail of interest on financial liability instruments for the three-month periods ended March 31, 2024 and 2023:

Interest expenses	2024	2023
In millions of COP
Deposits	3,187,874	3,190,069
Borrowing costs	401,573	389,483
Debt instruments in issue(1)	285,171	385,168
Lease liabilities	33,214	25,319
Preferred shares	14,837	14,837
Overnight funds	4,553	7,832
Other interest (expense)	11,857	12,555
Total interest expenses	3,939,079	4,025,263

⁽¹⁾In 2024, the decrease occurs mainly due to maturities of debt securities in legal currency.

Net interest income is defined as interest on loan portfolio and financial leasing operations, interest on debt instruments measured by the effective interest method and interest expense amounts to COP 4,690,446 and COP 5,110,860 as of March 31, 2024 and 2023, respectively.

17.3.        Fees and commissions

The Bank has elected to present the income from contracts with customers as an element in a line named “Fees and commissions income” in the Condensed Intermediate Statement of Consolidated Results separated from the other income sources.

The information contained in this section about the fees and commission’s income presents information on the nature, amount, timing and uncertainty of the income from ordinary activities which arise from a contract with a customer under the regulatory framework of IFRS 15 Revenue from Ordinary Activities from Contracts with Customers.

In the following table, the description of the main activities through which the Bank generates revenue from contracts with customers is presented:

Fees and Commissions

Description

Banking services

Banking Services are related to commissions from the use of digital physical channels or once the customer makes a transaction. The performance obligation is fulfilled once the payment is delivered to its beneficiary and the proof of receipt of the payment is sent, in that moment, the collection of the commission charged to the customer is generated, which is a fixed amount. The commitment is satisfied during the entire validity of the contract with the customer. The Bank acts as principal.

Credit and debit card fees	In debit card product contracts, it is identified that the price assigned to the services promised by the Bank to the customers is fixed. Given that no financing component exists, it is established on the basis of the national and international interbank rate. Additionally, the product charges to the customers commissions for handling fees, at a determined time and with a fixed rate. For Credit Cards, the commissions are the handling fees and depend on the card franchise. The commitment is satisfied in so far that the customer has capacity available on the card. Other revenue received by the (issuer) credit card product, is advance commission; this revenue is the charge generated each time the customer makes a national or international advance, at owned or non-owned ATMs, or through a physical branch. The exchange bank fee is a revenue for the Issuing Bank of the credit card for the services provided to the business for the transaction effected at the point of sale. The commission is accrued and collected immediately at the establishment and has a fixed amount. In the credit cards product there is a customer loyalty program, in which points are awarded for each transaction made by the customer in a retail establishment. The program is administrated by a third party who assumes the inventory and claims risks, for which it acts as agent. The Bank, recognized it as a lower value of the revenue from the exchange bank fee. The rights and obligations of each party in respect of the goods and services for transfer are clearly identified, the payment terms are explicit, and it is probable, that is, it takes into consideration the capacity of the customer and the intention of having to pay the consideration at termination to those entitled to change the transferred goods or services. The revenue is recognized at a point in time: the Bank satisfies the performance obligation when the “control” of the goods or services was transferred to the customers.
Deposits	Deposits are related to the services generated from the offices network of the Bank once a customer makes a transaction. The Bank generally commits to maintain active channels for the products that the customer has with the Bank, with the purpose of making payments and transfers, sending statements and making transactions in general. The commissions are deducted from the deposit account, and they are incurred at a point in time. The Bank acts as principal.
Electronic services and ATMs	Revenue received from electronic services and ATMs arises through the provision of services so that the customers may make required transactions, and which are enabled by the Bank. These include online and real-time payments by the customers of the Bank holding a checking or savings accounts, with a debit or credit card for the products and services that the customer offers. Each transaction has a single price, for a single service. The provision of collection services or other different services provided by the Bank, through electronic equipment, generates consideration chargeable to the customer established contractually by the Bank as a fee. The Bank acts as principal and the revenue is recognized at a point in time.
Brokerage	Brokerage is a group of services for the negotiation and administration of operations for purchasing fixed revenue securities, equities and operations with derivatives in its own name, but on the account of others. The performance obligations are fulfilled at a point in time when the commission agent in making its best effort can execute the business entrusted by the customer in the best conditions. The performance obligations are considered satisfied once the service stipulated in the contract is fulfilled, as consideration fixed, or variable payments are agreed, depending on the service. The Bank acts generally as principal and in some special cases as agent.
Remittance	Revenue for remittance is received as consideration for the commitment established by the Bank to pay remittances sent by the remitting companies to the beneficiaries of the same. The commitment is satisfied at a point in time to the extent that the remittance is paid to the beneficiary. The price is fixed, but may vary in accordance to the transferred amount, due to the operation being dependent on the volume of operations generated and the transaction type. There is no component of financing, nor the right to receive consideration dependent on the occurrence or not of a future event.
Acceptances, Guarantees and Standby Letters of Credit	Banking Service from acceptances, guarantees and standby letters of credit which are not part of the portfolio of the Bank. There exist different performance obligations; the satisfaction of performance obligations occurs when the service is given to the customer. The consideration in these types of contracts may include fixed amounts, variable amounts, or both, and the Bank acts as principal. The revenue is recognized at a point in time.

Trust	Revenue related to Trust are received from the administration of the customer resources in the business of investment trusts, property trusts, management trusts, guarantee trusts, for the resources of the general social security system, Collective portfolios and Private Equity Funds (PEF). The commitments are established in contracts independently and in an explicit manner, and the services provided by the Bank are not inter-related between the contracts. The performance obligation corresponds to performing the best management in terms of the services to be provided in relation to trust characteristics, thus fixed and variable prices are established depending on the complexity of the business, similarly, revenues are recognized throughout or at a determined time. In all the established businesses it acts as principal.
Placement of Securities	Valores Bancolombia makes available its commercial strength for the deposit, reinvestment of resources through financial instruments to the issuing company. It receives a payment for deposits made. The commitment of the contract is satisfied to the extent that the resources requested by the issuer are obtained through the distribution desks of Valores Bancolombia. The collection is made monthly. It is established that Valores Bancolombia may undertake collection of these commissions at the end of the month through a collection account charged to the issuer, acting as principal.
Bancassurance	The Bank receives a commission for collecting insurance premiums at a given time and for allowing the use of its network to sell insurance from different insurance companies over time. The Bank in these bancassurance contracts acts as agent (intermediary between the customer and the insurance company), since it is the insurance company which assumes the risks, and which handles the complaints and claims of the customers inherent in each insurance. Therefore, the insurance company acts as principal before the customer. The prices agreed in bancassurance are defined as a percentage on the value of the policy premiums. The payment shall be tied to the premiums collected, sold or taken for the case of employees’ insurance. The aforementioned then means that the price is variable, since, the revenue will depend on the quantity of policies or calculations made by the insurance companies.
Collections	The Bank acting as principal, commits to collect outstanding invoices receivable by the collecting customers through the different channels offered by the bank, send the information of the collections made and credit the money to the savings or checking account defined by the collecting customer. The commitment is satisfied at a point in time to the extent that the money is collected by the different channels, the information of the said collections is delivered appropriately, and the resources are credited in real-time to the account agreed with the customer. For the service, the Bank receives a fixed payment, which is received for each transaction once the contract is in effect.
Services	These are the maintenance services performed on the fleet owned by the customers, these services are performed on demand, and the value of the service cost is invoiced plus an intermediation margin. The collection is made by the amount of expense invoiced by the provider plus an intermediation percentage, which ranges between 5% and 10% depending on the customer. The contract is written, is based on a framework contract which is held between the customers which contains the general terms of negotiation and the payment terms are generally 30 days after generating the invoice. The revenue is recognized when the service is provided. There is no financing nor sanctions for early cancellations. To view the details of the balance, refer to line ‘Logistics services’ in Note 17.4 Other operational Income.
Gains on sale of assets	These are the revenue from the sale of assets, where the sale value is higher than the book value recorded in the accounts, the difference representing the gains. The recognition of the revenue is at a point in time once the sale is realized. The Bank acts as principal in this type of transaction and the transaction price is determined by the market value of the asset being sold. To view the details of the balance, refer to line ‘Gain on sale of assets’ in Note 17.4 Other operational Income.

Investment Banking Investment Banking offers to customer’s financial advisory services in the structuring of businesses in accordance with the needs of each one of them. The advisory services consist in realizing a financial structuring of a credit or bond in which the Investment Bank offers the elements so that the company decides the best option for structuring the instrument. In the financial advisory contract, a best efforts clause is included. The promises given to the customers are established in the contracts independently and explicitly. The services provided by the Invesment Bank are not interrelated between the contracts, correspond to the independent advice agreed and do not include additional services in the commission agreed with the customer. The advisory services offered in each one of the contracts are identifiable separately from the other performance commitments that the Investment Bank may have with the customers. The Investment Bank does not have a standard contract for the provision of advisory services, given than each contract is tailored to the customer’s needs. The transaction price is defined at the start of the contract and is assigned to each service provided independently. The price contains a fixed and a variable portion which is provided in the contracts. The variation depends on the placement amount for the case of a financial structuring contract and coordination of the issuance and conditions of the same. In these operations Banca de Inversion Bancolombia provides advice to the customers and the price shall depend at times on the success and amount of the operation. In the contracts subject to evaluation there are no incremental costs associated with the satisfaction of the commitments of the Bank with the customers provided for. In the contracts signed with the customers, a penalty clause is established in case of a customer withdrawing from continuing with the provision of the services established in the commercial offer. The penalty shall be recognized in the financial statements once the Investment Bank is notified on the withdrawal under the concept of charges for early termination of the contract.

The Bank presents the information on revenue from contracts with customers in accordance with its operating segments defined earlier in Note 3. Operating Segments for each of the principal services offered.

The following table shows the balances categorized by nature and by segment of revenue from ordinary activities from contracts with customers, for further information about composition of Bank’ segments see Note 3. Operating segments:

As of March 31, 2024

	Banking Colombia	Banking Panama	Banking El Salvador	Banking Guatemala	Trust	Investment Banking	Brokerage	International Banking	All Other Segments	Total
In millions of COP
Revenue from contracts with customers
Fees and Commissions
Credit and debit card fees and commercial estabilshments	648,825	60,576	55,329	19,854	-	-	-	438	-	785,022
Banking services	149,857	25,853	38,419	15,574	-	-	-	12,223	6,908	248,834
Payment and collections	237,092	2,725	-	-	-	-	-	-	-	239,817
Bancassurance	192,503	15,796	13	-	-	-	-	-	-	208,312
Fiduciary Activities and Securities	-	4,904	1,480	232	108,800	-	20,839	12	-	136,267
Acceptances, Guarantees and Standby Letters of Credit	17,940	7,188	1,293	812	-	-	-	157	-	27,390
Investment banking	-	391	467	-	-	8,140	2,096	-	-	11,094
Brokerage	-	3,867	-	-	-	-	3,084	-	-	6,951
Others	56,492	56	16,644	12,388	-	-	1,126	1,313	186	88,205
Total revenue of contracts with customers	1,302,709	121,356	113,645	48,860	108,800	8,140	27,145	14,143	7,094	1,751,892

As of March 31, 2023

	Banking Colombia	Banking Panama	Banking El Salvador	Banking Guatemala	Trust	Investment Banking	Brokerage	International Banking	All Other Segments	Total
In millions of COP
Revenue from contracts with customers
Fees and Commissions
Credit and debit card fees and commercial estabilshments	594,796	65,648	58,796	24,662	-	-	-	564	-	744,466
Banking services	150,016	25,412	40,901	17,326	-	-	-	9,422	4,814	247,891
Payment and collections	224,498	2,558	-	-	-	-	-	-	-	227,056
Bancassurance	194,617	18,508	24	-	-	-	-	-	-	213,149
Fiduciary Activities and Securities	-	4,585	1,777	211	86,828	-	19,136	15	-	112,552
Acceptances, Guarantees and Standby Letters of Credit	18,563	6,852	1,409	1,178	-	-	-	207	-	28,209
Investment banking	-	267	421	-	-	667	2,698	-	-	4,053
Brokerage	-	3,708	-	-	-	-	3,135	-	-	6,843
Others	58,376	103	19,680	16,081	-	-	1,942	1,773	1,810	99,765
Total revenue of contracts with customers	1,240,866	127,641	123,008	59,458	86,828	667	26,911	11,981	6,624	1,683,984

For the determination of the transaction price, the Bank assigns to each one of the services the amount which represents the value expected to be received as consideration for each independent commitment, which is based on the relative price of independent sale. The price that the Bank determines for each performance obligation is done by defining the cost of each service, related tax and associated risks to the operation and inherent to the transaction plus the margin expected to be received in each one of the services, taking as references the market prices and conditions, as well as the segmentation of the customer.

In the transactions evaluated in the contracts, changes in the price of the transaction are not identified.

Contract assets with customers

The Bank receives payments from customers based on the provision of the service, in accordance to that established in the contracts. When the Bank incurs costs for providing the service prior to the invoicing, and if these are directly related with a contract, they improve the resources of the entity and are expected to recuperate, these costs correspond to a contract asset. Currently, the Group does not have assets related to contracts with customers.

As a practical expedient, the Bank recognizes the incremental costs of obtaining a contract as an expense when the amortization period of the asset is one year or less.

Contract liabilities with customers

The contract liabilities constitute the obligation of the Bank to transfer the services to a customer, for which the Group has received a payment on the part of the final customer or if the amount is due before the execution of the contract. They also include deferred income related to services that shall be delivered or provided in the future, which will be invoiced to the customer in advance, but which are still not due.

Fees and Commissions Expenses

The following table sets forth the detail of fees and commissions expenses for the three-month periods ended March 31, 2024 and 2023:

Fees and Commissions Expenses	2024	2023
In millions of COP
Banking services	372,922	348,936
Sales, collections and other services	206,496	192,264
Correspondent banking	107,462	85,397
Payments and collections	8,927	7,617
Others	55,126	48,174
Total expenses for commissions	750,933	682,388

17.4.        Other operating income

The following table sets forth the detail of other operating income net for the three-month periods ended March 31, 2024 and 2023:

Other operating income	2024	2023
In millions of COP
Leases and related services	460,096	417,700
Insurance(1)	26,862	26,817
Net foreign exchange and Derivatives Foreign exchange contracts(2)	19,514	283,799

Other operating income	2024	2023
In millions of COP
Other reversals	18,864	9,672
Gains on sale of assets	17,905	47,563
Logistics services	11,915	43,527
Investment property valuation(3)	7,819	85,487
Penalties for failure to contracts	2,682	3,290
Others	63,672	72,025
Total Other operating income	629,329	989,880

⁽¹⁾Corresponds to income from insurance operations of Seguros Agromercantil S.A., subsidiary domiciled in Guatemala.

⁽²⁾ Corresponds to the management of assets and liabilities in foreign currencies and the volatility of the U.S. dollar.

⁽³⁾In 2024, the decrease occurs due to the indexation of properties to the UVR and due to updating the appraisals of investment properties.

17.5. Dividends and net income on equity investments

The following table sets forth the detail of dividends received, and share of profits of equity method investees for the three-months period ended on March 31, 2024 and 2023:

Dividends and net income on equity investments	2024	2023
In millions of COP
Equity method(1)	77,289	92,283
Dividends(2)	10,000	23,880
Equity investments and other financial instruments(3)	(2,482)	473
Total dividends and net income on equity investments	84,807	116,636

⁽¹⁾ As of March 31, 2024 and 2023, corresponds to income from equity method of investments in associates for COP 94,834 and COP 105,906 (includes valuation of investments in associates at fair value), respectively, and joint ventures for COP (17,545) and COP (13,623), respectively.

⁽²⁾ As of March 31, 2024 and 2023, includes dividends received from equity investments at fair value through profit or loss for COP 994 and COP 491 and investments derecognised for COP 1 as of March 31, 2024 and dividends from equity investments at fair value through OCI for COP 9,005 and COP 7,808, respectively. Aditionally, as of March 31, 2023 includes returns received of the associate at fair value P.A. Viva Malls for COP 15,581.

⁽³⁾ For 2024, the decrease is mainly explained by the investment of Inversiones CFNS in Enka and Ruta del Sol.

NOTE 18. OPERATING EXPENSES

18.1.       Salaries and employee benefit

The detail for salaries and employee benefits for the three-months period ended March 31, 2024 and 2023 is as follows:

Salaries and employee benefit	2024	2023
In millions of COP
Salaries(1)	609,584	578,229
Private premium	163,675	147,000
Social security contributions	159,871	143,105
Bonuses(2)	153,373	234,004
Indemnization payment	45,934	33,428
Other benefits(3)	202,514	187,027
Total Salaries and employee benefit	1,334,951	1,322,793

(1) This is mainly explained by salary increases indexed to inflation.

(2) Corresponds mainly to bonuses for employees in accordance with the variable compensation model of the Bank.

(3) Includes vacations, severance and interest on severance, pension and employee benefits, mainly policy benefits, training and recreation.

18.2.       Other administrative and general expenses

The detail for administrative and general expenses for the three-months period ended March 31, 2024 and 2023 is as follows:

Other administrative and general expenses	2024	2023
In millions of COP
Maintenance and repairs	218,002	208,748
Fees (1)	188,480	207,111
Insurance	183,020	184,198
Data processing	114,466	107,649
Frauds and claims (2)	92,027	61,097
Transport	57,989	57,268
Cleaning and security services	32,200	31,667
Public services	30,057	29,264
Contributions and affiliations	30,003	31,944
Advertising	26,234	27,596
Useful and stationery	20,932	12,701
Communications	18,956	19,569
Disputes, fines and sanctions (3)	16,639	8,992
Properties improvements and installation	10,067	10,458
Real estate management	9,157	8,365
Travel expenses	5,874	6,807
Publications and subscriptions	5,791	5,306
Others	117,858	122,138
Total other administrative and general expenses	1,177,752	1,140,878
Taxes other than income tax(4)	390,894	347,895

(1) The decrease is mainly explained by lower digital transformation fees.

(2) The increase is generated mainly in virtual transactions and card frauds.

(3) The increase is mainly due to commercial litigation.

(4) The increase mainly generates in industry and commerce taxes and value added tax (IVA).

18.3.       Impairment, depreciation and amortization

The detail for Impairment, depreciation and amortization for the three-months period ended March 31, 2024 and 2023 is as follows:

Impairment, depreciation and amortization	2024	2023
In millions of COP
Depreciation of premises and equipment(1)	164,920	141,386
Depreciation of right-of-use assets	49,697	61,955
Amortization of intangible assets	48,806	45,680
Impairment of other assets, net	11,519	11,075
Total impairment, depreciation and amortization	274,942	260,096

⁽¹⁾See Note 8 Premises and equipment, net.

⁽²⁾Includes impairment of property and equipment for COP 165 in 2024 and COP 1,581 in 2023.

NOTE 19. EARNING PER SHARE (‘EPS’)

Basic EPS is calculated by reducing the income from continuing operations by the amount of dividends declared in the current period for each class of stock and by the contractual amount of dividends that must be paid for the current period.

The remaining income is allocated according to the participation of each class of stock as if all the earnings for the period had been distributed. EPS is determined by dividing the total earnings allocated to each security by the weighted average number of common shares outstanding.

Diluted EPS is calculated by adjusting the average number of common and preferred shares outstanding to simulate the conversion of all dilutive potential common shares. The Bank had no dilutive potential common shares as of March 31, 2024 and 2023.

The following table summarizes information related to the computation of basic EPS for the three-month periods ended March 31, 2024 and 2023 (in millions of pesos, except per share data):

	March 31, 2024	March 31, 2023
Income from continuing operations before attribution of non-controlling interests	1,685,011	1,762,293
Less: Non-controlling interests from continuing operations	21,539	45,516
Net income from controlling interest	1,663,472	1,716,777
Less: Preferred dividends declared	384,839	384,839
Less: Allocation of undistributed earnings to preferred stockholders	389,240	414,297
Net income allocated to common shareholders for basic and diluted EPS	889,393	917,641
Weighted average number of common shares outstanding used in basic EPS calculation (In millions)	510	510
Basic and diluted earnings per share to common shareholders	1,745	1,800
Basic and diluted earnings per share from continuing operations	1,745	1,800

NOTE 20. RELATED PARTY TRANSACTIONS

The parent company is Bancolombia S.A. and transactions between companies included in the consolidation process and the Parent company meet the definition of related party transactions and were eliminated from the Condensed Consolidated Interim Financial Statements.

The Bank offers banking and financial services to its related parties in order to meet their transactional needs for investment and liquidity in the ordinary course of business. These transactions are carried out in terms similar to those of transactions with third parties. In the case of treasury operations, Bancolombia operates between its own position and its related parties through transactional channels or systems established for this purpose and under the conditions established by current regulations.

The details of transactions with related parties as of December 31, 2023, are included in the annual report of the consolidated financial statements of 2023, in the three-month period ended March 31, 2024, there were no transactions with related parties that materially affected the financial position or results of the Bancolombia Group.

NOTE 21. LIABILITIES FROM FINANCING ACTIVITIES

The following table presents the reconciliation of the balances of liabilities from financing activities as of March 31, 2024 and 2023:

	Balance as of January 1, 2024	Cash flows	Non-cash changes			Balance as of March 31, 2024
			Foreign currency translation adjustment	Interests accrued	Other movements
	In millions of COP
Liabilities from financing activities
Repurchase agreements and other similar secured borrowing	470,295	550,673	1,256	-	-	1,022,224
Borrowings from other financial institutions (1)	15,648,606	(2,020,568)	82,072	401,573	317	14,112,000
Debt securities in issue (1)	14,663,576	(549,032)	54,889	285,171	-	14,454,604
Preferred shares (2)	584,204	(57,701)	-	14,837	-	541,340
Total liabilities from financing activities	31,366,681	(2,076,628)	138,217	701,581	317	30,130,168

(1) The cash flows disclosed in this table related with Borrowings from other financial institutions and Debt securities in issue include the interests paid during the year amounting to COP 435,669 and COP 267,923, respectively, which are classified as cash flows from operating activities in the Condensed Consolidated Interim Statement of Cash Flow.

(2) The cash flow amounting to COP 57,701 corresponds to the fixed minimum dividend paid to the preferred shares' holders and is included in the line "dividends paid" of the Condensed Consolidated Interim Statement of Cash Flow, which includes the dividends paid during the year to both preferred and common shares holders.

	Balance as of January 1, 2023	Cash flows	Non-cash changes			Balance as of March 31, 2023
			Foreign currency translation adjustment	Interests accrued	Other movements
	In millions of COP
Liabilities from financing activities
Repurchase agreements and other similar secured borrowing	189,052	264,219	(3,324)	-	-	449,947
Borrowings from other financial institutions (1)	19,692,638	(500,592)	(673,237)	389,483	84	18,908,376
Debt securities in issue (1)	19,575,988	(405,199)	(494,005)	385,168	-	19,061,952
Preferred shares (2)	584,204	(57,701)	-	14,837	-	541,340
Total liabilities from financing activities	40,041,882	(699,273)	(1,170,566)	789,488	84	38,961,615

(1) The cash flows disclosed in this table related with Borrowings from other financial institutions and Debt securities in issue include the interests paid during the year amounting to COP 313,576 and COP 350,889, respectively, which are classified as cash flows from operating activities in the Condensed Consolidated Interim Statement of Cash Flow.

(2) The cash flow amounting to COP 57,701 corresponds to the fixed minimum dividend paid to the preferred shares' holders and is included in the line "dividends paid" of the Condensed Consolidated Interim Statement of Cash Flow, which includes the dividends paid during the year to both preferred and common shares holders.

NOTE 22. FAIR VALUE OF ASSETS AND LIABILITIES

The following table presents the carrying amount and the fair value of the assets and liabilities as of March 31, 2024 and December 31, 2023:

	March 31, 2024		December 31, 2023
	Carrying	Fair	Carrying	Fair
	amount	Value	amount	Value
In millions of COP
Assets
Debt instruments at fair value through profit or loss	14,849,215	14,849,215	12,096,407	12,096,407
Debt instruments at fair value through OCI	5,627,290	5,627,290	6,148,177	6,148,177
Debt instruments at amortized cost	7,253,964	7,242,435	6,848,082	6,840,867
Derivative financial instruments	4,380,648	4,380,648	6,252,270	6,252,270
Equity securities at fair value	634,547	634,547	543,210	543,210
Other financial instruments(1)	38,466	38,466	38,319	38,319
Loans and advances to customers at amortized cost, net	244,105,346	246,228,344	237,728,544	238,771,724
Investment property	4,712,762	4,712,762	4,709,911	4,709,911
Investments in associates(2)	1,745,772	1,745,772	1,670,782	1,670,782
Total	283,348,010	285,459,479	276,035,702	277,071,667
Liabilities
Deposits by customers	244,809,882	245,811,612	247,941,180	249,340,519
Interbank deposits	571,278	571,278	606,141	606,141
Repurchase agreements and other similar secured borrowing	1,022,224	1,022,224	470,295	470,295
Derivative financial instruments	5,047,208	5,047,208	6,710,364	6,710,364
Borrowings from other financial institutions	14,112,000	14,112,000	15,648,606	15,648,606
Preferred shares	541,340	407,775	584,204	394,550
Debt instruments in issue	14,454,604	14,411,582	14,663,576	14,468,650
Total	280,558,536	281,383,679	286,624,366	287,639,125

(1) For futher information see Note 5.1. Financial assets investments.

(2) It corresponds to investments in associates P.A. Viva Malls and Distrito Vera.

Fair value hierarchy

IFRS 13 establishes a fair value hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable, that reflects the significance of inputs adopted in the measurement process. In accordance with IFRS the financial instruments are classified as follows:

Level 1: Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market is a market in which transactions for the asset or liability being measured take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 2 generally includes: (i) quoted prices for similar assets or liabilities in active markets; (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain retained residual interests in securitizations, asset-backed securities (ABS) and highly structured or long-term derivative contracts where independent pricing information was not able to be obtained for a significant portion of the underlying assets.

Valuation process for fair value measurements

The valuation to fair value prices is performed using prices, methodologies and inputs provided by the official pricing services provider (Precia) to the Bank.

All methodologies and procedures developed by the pricing services provider are supervised by the Financial Superintendence of Colombia, which has not objected to them.

On a daily basis, the back-office Service Valuation Officer (SVO) verifies the valuation of investments, and the Credit and Financial Risk Manager area reports the results of the portfolio’s valuation.

Fair value measurement

Assets and liabilities

a. Debt instruments

The Bank assigns prices to those debt investments, using the prices provided by the official pricing services provider (Precia) and assigns the appropriate level according to the procedure described above. For securities not traded or over-the-counter such as certain bonds issued by other financial institutions, the Bank generally determines fair value utilizing internal valuation and standard techniques. These techniques include determination of expected future cash flows which are discounted using curves of the applicable currencies and the Colombian consumer price index (interest rate in this case), modified by the credit risk and liquidity risk. The interest rate is generally computed using observable market data and reference yield curves derived from quoted interest in appropriate time bandings, which match the timings of the cash flows and maturities of the instruments.

b. Equity securities and other financial instruments

The Bank performs the market price valuation of its investments in variable income using the prices provided by the official pricing services provider (Precia) and classifies those investments according to the procedure described above (Hierarchy of fair value section). Likewise, the fair value of unlisted equity securities and other financial instruments is based on an assessment of each individual investment using methodologies that include publicly-traded comparables derived by multiplying a key performance metric (e.g., earnings before interest, taxes, depreciation and amortization) of the portfolio company by the relevant valuation multiple observed for comparable companies, acquisition comparables, and if necessary considered, are subject to appropriate discounts for lack of liquidity or marketability. Interests in

investment funds, trusts and collective portfolios are valued using the investment unit value determined by the fund management company. For investment funds where the underlying assets are investment properties, the investment unit value depends on the investment properties value, determined as described below in “i. Investment property”.

c. Derivative financial instruments

The Bank holds positions in standardized derivatives, such as futures over local stocks, and over the market representative rate. These instruments are evaluated according to the information provided by Precia, which perfectly matches the information provided by the Central Counterparty Clearing House – CCP.

Additionally, the Bank holds positions in Over The Counter (OTC) derivatives, which in the absence of prices, are valued using the inputs and methodologies provided by the pricing services provider, which have the no objection of the SFC.

The key inputs depend upon the type of derivative and the nature of the underlying instrument and include interest rate yield curves, foreign exchange rates, the spot price of the underlying volatility, credit curves and correlation of such inputs.

d. Credit valuation adjustment

The Bank measures the effects of the credit risk of its counterparties and its own creditworthiness in determining fair value of the swap, option and forward derivatives.

Counterparty credit-risk adjustments are applied to derivatives when the Bank’s position is a derivative asset and the Bank’s credit risk is incorporated when the position is a derivative liability. The Bank attempts to mitigate credit risk to third parties which are international banks by entering into master netting agreements. The agreements allow to offset or bring net amounts that are liabilities, derivates from transactions carried out by the different agreements. Master netting agreements take different forms and may allow payments to be made under a variety of other master agreements or other negotiation agreements between the same parties; some may have a monthly basis and others only apply at the time the agreements are terminated.

When assessing the impact of credit exposure, only the net counterparty exposure is considered at risk, due to the offsetting of certain same-counterparty positions and the application of cash and other collateral.

The Bank generally calculates the asset’s credit risk adjustment for derivatives transacted with international financial institutions by incorporating indicative credit related pricing that is generally observable in the market (Credit Default Swaps, “CDS”). The credit-risk adjustment for derivatives transacted with non-public counterparties is calculated by incorporating unobservable credit data derived from internal credit qualifications to the financial institutions and corporate companies located in Colombia. The Bank also considers its own creditworthiness when determining the fair value of an instrument, including OTC derivative instruments if the Bank believes market participants would take that into account when transacting the respective instrument. The approach to measuring the impact of the Bank’s credit risk on an instrument transacted with international financial institutions is done using the asset swap curve calculated for subordinated bonds issued by the Bank in foreign currency. For derivatives transacted with local financial institutions, the Bank calculates the credit risk adjustment by incorporating credit risk data provided by rating agencies and released in the Colombian financial market.

e. Impaired loans measured at fair value

The Bank measured certain impaired loans based on the fair value of the associated collateral less costs to sell. The fair values were determined as follows using external and internal valuation techniques or third party experts, depending on the type of underlying asset.

For vehicles under leasing arrangements, the Bank uses an internal valuation model based on price curves for each type of vehicle. Such curves show the expected price of the vehicle at different points in time based on the initial price and projection of economic variables such as inflation, devaluation and customs. The prices modelled in the curves are compared every six months with market information for the same or similar vehicles and in the case of significant deviation; the curve is adjusted to reflect the market conditions.

Other vehicles are measured using matrix pricing from a third party. This matrix is used by most of the market participants and is updated monthly. The matrix is developed from values provided by several price providers for identical or similar vehicles and considers brand, characteristics of the vehicles, and manufacturing date among other variables to determine the prices.

For real estate assets, a third-party qualified appraiser is used. The methodologies vary depending on the date of the last appraisal available for the property (the appraisal is estimated based on either of three approaches: cost, sales comparison and income approach, and is required every three years). When the property has been valued in the last 12 months and the market conditions have not shown significant changes, the most recent valuation is considered the fair value of the property.

For all other cases (for example, appraisals older than 12 months) the value of the property is updated by adjusting the value in the last appraisal for weighted factors such as location, type and characteristics of the property, size, structural conditions and the expected sales prices, among others. The factors are determined based on current market information gathered from several external real estate specialists.For all other cases (for example, appraisals older than 12 months) the value of the property is updated by adjusting the value in the last appraisal for weighted factors such as location, type and characteristics of the property, size, structural conditions and the expected sales prices, among others. The factors are determined based on current market information gathered from several external real estate specialists.

f. Assets held for sale measured at fair value less cost of sale

The Bank measures certain impaired foreclosed assets and premises and equipment held for sale based on fair value less costs to sell. The fair values were determined using external and internal valuation techniques, depending on the type of underlying asset. Those assets are comprised mainly of real estate properties for which the appraisal is conducted by experts considering factors such as the location, type and characteristics of the property, size, physical conditions and expected selling costs, among others. Likewise, in some cases the fair value is estimated considering comparable prices or promises of sale and offering prices from auctions process.

g. Mortgage-backed securities (“TIPS”) and Asset-Backed securities

The Bank invests in asset-backed securities for which underlying assets are mortgages and earnings under contracts issued by financial institutions and corporations, respectively. The Bank does not have a significant exposure to sub-prime securities. The asset-backed securities are denominated in local market TIPS and are classified as fair value through profit or loss. These asset-backed securities have different maturities and are generally classified by credit ratings.

TIPS are part of the Bank portfolio and its fair value is measured with published price by the official pricing services provider. These securities are leveled by margin and are assigned level 2 or 3 based on the Precia information.

Residual TIPS have their fair value measured using the discounted flow method, taking into account the amortization tables of the Titularizadora Colombiana, the betas in COP and UVR of Precia (used to construct the curves) and the margins; when they are residual TIPS of subordinated issues, a liquidity premium is applied. These securities are assigned level 3.

h. Investments in associates measured at fair value

The Bank recognizes its investments in P.A Viva Malls and P.A Distrito Vera as an associate at fair value. The estimated amount is provided by the fund manager as the variation of the units according to the units owned by the FCP Fondo Inmobiliario Colombia. The associate’s assets are comprised of investment properties which are measured using the following techniques: comparable prices, discounted cash flows, replacement cost and direct capitalization. For further information about techniques methodologies and inputs used by the external party see “Quantitative Information about Level 3 Fair Value Measurements”.

i. Investment property

The Bank’s investment property is valued by external experts, who use valuation techniques based on comparable prices, direct capitalization, discounted cash flows and replacement costs.

Assets and liabilities measured at fair value on a recurring basis

The following table presents for each of the fair-value hierarchy levels the Bank’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023:

Financial Assets
	March 31, 2024				December 31, 2023
Type of instrument	Fair value hierarchy			Total fair	Fair value hierarchy			Total fair
	Level 1	Level 2	Level 3	value	Level 1	Level 2	Level 3	value
In millions of COP
Investment securities
Debt instruments at fair value through profit or loss
Securities issued by the Colombian Government	5,546,272	936,351	-	6,482,623	4,363,135	362,470	-	4,725,605
Securities issued or secured by government entities	17,737	127,139	-	144,876	-	84,990	-	84,990
Securities issued by other financial institutions	92,566	621,639	67,804	782,009	41,003	654,446	78,729	774,178
Securities issued by foreign governments	4,393,614	2,841,789	-	7,235,403	3,621,960	2,652,440	-	6,274,400
Corporate bonds	109,794	80,554	13,956	204,304	125,010	97,940	14,284	237,234
Total debt instruments at fair value through profit or loss	10,159,983	4,607,472	81,760	14,849,215	8,151,108	3,852,286	93,013	12,096,407
Debt instruments at fair value through OCI
Securities issued by the Colombian Government	61,001	-	2,733,535	2,794,536	61,427	-	2,664,295	2,725,722
Securities issued by other financial institutions	191,785	123,480	-	315,265	224,049	149,257	-	373,306
Securities issued by foreign governments	810,720	1,079,599	-	1,890,319	1,675,193	762,803	-	2,437,996
Corporate bonds	62,039	565,131	-	627,170	63,475	547,678	-	611,153
Total debt instruments at fair value through OCI	1,125,545	1,768,210	2,733,535	5,627,290	2,024,144	1,459,738	2,664,295	6,148,177
Total debt instruments	11,285,528	6,375,682	2,815,295	20,476,505	10,175,252	5,312,024	2,757,308	18,244,584
Equity securities
Equity securities	105,810	139,543	389,194	634,547	89,128	69,400	384,682	543,210
Total equity securities	105,810	139,543	389,194	634,547	89,128	69,400	384,682	543,210
Other financial assets
Other financial assets	-	-	38,466	38,466	-	-	38,319	38,319
Total other financial assets	-	-	38,466	38,466	-	-	38,319	38,319
Derivative financial instruments
Forwards
Foreign exchange contracts	-	1,965,458	731,097	2,696,555	-	3,308,258	1,073,648	4,381,906
Equity contracts	-	427	1,108	1,535	-	152	2,863	3,015
Total forwards	-	1,965,885	732,205	2,698,090	-	3,308,410	1,076,511	4,384,921
Swaps
Foreign exchange contracts	-	1,041,047	205,468	1,246,515	-	1,066,915	237,422	1,304,337
Interest rate contracts	112,997	177,547	11,688	302,232	130,792	206,011	15,621	352,424
Total swaps	112,997	1,218,594	217,156	1,548,747	130,792	1,272,926	253,043	1,656,761
Options
Foreign exchange contracts	82	105,850	27,879	133,811	6	136,979	73,603	210,588
Total options	82	105,850	27,879	133,811	6	136,979	73,603	210,588
Total derivative financial instruments	113,079	3,290,329	977,240	4,380,648	130,798	4,718,315	1,403,157	6,252,270
Investment properties
Lands	-	-	368,723	368,723	-	-	325,394	325,394
Buildings	-	-	4,344,039	4,344,039	-	-	4,384,517	4,384,517
Total investment properties	-	-	4,712,762	4,712,762	-	-	4,709,911	4,709,911
Investment in associates at fair value
Investment in associates at fair value	-	-	1,745,772	1,745,772	-	-	1,670,782	1,670,782
Total investment in associates at fair value	-	-	1,745,772	1,745,772	-	-	1,670,782	1,670,782
Total	11,504,417	9,805,554	10,678,729	31,988,700	10,395,178	10,099,739	10,964,159	31,459,076

Financial liabilities
	March 31, 2024				December 31, 2023
Type of instrument	Fair value hierarchy			Total fair	Fair value hierarchy			Total fair
	Level 1	Level 2	Level 3	value	Level 1	Level 2	Level 3	value
In millions of COP
Derivative financial instruments
Forwards
Foreign exchange contracts	-	2,879,477	54,372	2,933,849	-	4,458,528	67,825	4,526,353
Equity contracts	-	422	140	562	-	8,629	1,852	10,481
Total forwards	-	2,879,899	54,512	2,934,411	-	4,467,157	69,677	4,536,834
Swaps
Foreign exchange contracts	-	1,465,644	106,124	1,571,768	-	1,388,113	102,973	1,491,086
Interest rate contracts	108,752	266,854	3,913	379,519	126,728	312,051	11,078	449,857
Total swaps	108,752	1,732,498	110,037	1,951,287	126,728	1,700,164	114,051	1,940,943
Options
Foreign exchange contracts	259	161,251	-	161,510	19	232,568	-	232,587
Total options	259	161,251	-	161,510	19	232,568	-	232,587
Total derivative financial instruments	109,011	4,773,648	164,549	5,047,208	126,747	6,399,889	183,728	6,710,364
Total	109,011	4,773,648	164,549	5,047,208	126,747	6,399,889	183,728	6,710,364

Fair value of assets and liabilities that are not measured at fair value in the Statement of Financial Position

The following table presents for each of the fair-value hierarchy levels the Bank’s assets and liabilities that are not measured at fair value in the Statement of Financial Position, but for which the fair value is disclosed at March 31, 2024 and December 31, 2023:

Assets
	March 31, 2024				December 31, 2023
Type of instrument	Fair value hierarchy			Total fair	Fair value hierarchy			Total fair
	Level 1	Level 2	Level 3	value	Level 1	Level 2	Level 3	value
In millions of COP
Debt instruments
Securities issued by the Colombian Government	175,441	-	-	175,441	67,514	-	-	67,514
Securities issued or secured by government entities	-	48,697	3,399,147	3,447,844	-	49,980	3,075,936	3,125,916
Securities issued by other financial institutions	270,278	251,051	55,058	576,387	209,178	280,662	55,112	544,952
Securities issued by foreign governments	246,426	174,654	-	421,080	150,695	377,560	-	528,255
Corporate bonds	902,557	12,349	1,706,777	2,621,683	774,624	12,620	1,786,986	2,574,230
Total – Debt instruments	1,594,702	486,751	5,160,982	7,242,435	1,202,011	720,822	4,918,034	6,840,867
Loans and advances to customers, net	-	-	246,228,344	246,228,344	-	-	238,771,724	238,771,724
Total	1,594,702	486,751	251,389,326	253,470,779	1,202,011	720,822	243,689,758	245,612,591

Liabilities
	March 31, 2024				December 31, 2023
Type of instruments	Fair value hierarchy			Total fair	Fair value hierarchy			Total fair
	Level 1	Level 2	Level 3	value	Level 1	Level 2	Level 3	value
In millions of COP
Deposits by customers	-	59,945,947	185,865,665	245,811,612	-	60,236,355	189,104,164	249,340,519
Interbank deposits	-	-	571,278	571,278	-	-	606,141	606,141
Repurchase agreements and other similar secured borrowing	-	-	1,022,224	1,022,224	-	-	470,295	470,295
Borrowings from other financial institutions	-	-	14,112,000	14,112,000	-	-	15,648,606	15,648,606
Debt instruments in issue	8,286,446	4,044,237	2,080,899	14,411,582	8,021,700	4,025,322	2,421,628	14,468,650
Preferred shares	-	-	407,775	407,775	-	-	394,550	394,550
Total	8,286,446	63,990,184	204,059,841	276,336,471	8,021,700	64,261,677	208,645,384	280,928,761

IFRS requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized in the statement of financial position, for which it is practicable to estimate fair value. Certain categories of assets and liabilities, however, are not eligible for fair value accounting. The financial instruments below are not measured at fair value on a recurring and nonrecurring basis:

Short-term financial instruments

Short-term financial instruments are valued at their carrying amounts included in the consolidated statement of financial position, which are reasonable estimates of fair value due to the relatively short period to maturity of the instruments. This approach was used for cash and cash equivalents, accrued interest receivable, customers’ acceptances, accounts receivable, accounts payable, accrued interest payable and bank acceptances outstanding.

Deposits from customers

The fair value of time deposits was estimated based on the discounted value of cash flows using the appropriate discount rate for the applicable maturity. Fair value of deposits with no contractual maturities represents the amount payable on demand as of the statement of financial position date.

Interbank deposits and repurchase agreements and other similar secured borrowings

Short-term interbank borrowings and repurchase agreements have been valued at their carrying amounts because of their relatively short-term nature. Long-term and domestic development bank borrowings have also been valued at their carrying amount because they bear interest at variable rates.

Borrowings from other financial institutions

The fair value of borrowings from other financial institutions were determined using discounted cash flow models. The cash flows projection of capital and interest was made according to the contractual terms, considering capital amortization and interest bearing. Subsequently, the cash flows were discounted using reference curves formed by the weighted average of the Bank’s deposit rates.

Debt instruments in issue

The fair value of debt instruments in issue, comprised of bonds issued by Bancolombia S.A. and its subsidiaries, was estimated substantially based on quoted market prices. The fair value of certain bonds which do not have a public trading market, were determined based on the discounted value of cash flows using the rates currently offered for bonds of similar remaining maturities and the Bank’s creditworthiness.

Preferred shares

In the valuation of the liability component of preferred shares related to the minimum dividend of 1% of the subscription price, the Bank uses the Gordon Model to price the obligation, taking into account its own credit risk, which is measured using the market spread based on observable inputs such as quoted prices of sovereign debt. The Gordon Model is commonly used to determine the intrinsic value of a stock based on a future series of dividends that are estimated by the Bank and growth at a constant rate considering the Bank’s own perspectives of the payout ratio.

Loans and advances to customers

Estimating the fair value of loans and advances to customers is considered an area of considerable uncertainty as there is no observable market. The loan portfolio is stratified into tranches and loans segments suchs as commercial, consumer, small business loans, mortgage and leasing. The fair value of loans and advances to customers and financial institutions is determined using a discounted cash flow methodology, considering each credit’s principal and interest projected cash flows to the prepayment date. The projected cash flows are discounted using reference curves according to the type of loan and its maturity date.

Items measured at fair value on a non-recurring basis

The Bank measures assets held for sale based on fair value less costs to sell. This category includes certain foreclosed assets and investments in associates held for sale. The fair values were determined using external and internal valuation

techniques or third party experts, depending on the type of underlying asset. The following breakdown sets forth the fair value hierarchy of those assets classified by type:

	March 31, 2024				December 31, 2023
	Fair-value hierarchy			Total fair	Fair-value hierarchy			Total fair
	Level 1	Level 2	Level 3	value	Level 1	Level 2	Level 3	value
In millions of COP
Machinery and equipment	-	-	12,972	12,972	-	-	11,702	11,702
Real estate for residential purposes	-	-	135,576	135,576	-	-	117,476	117,476
Real estate different from residential properties	-	-	26,754	26,754	-	-	30,273	30,273
Total	-	-	175,302	175,302	-	-	159,451	159,451

Changes in level 3 fair-value category

The table below presents reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs at March 31, 2024 and 2023:

As of March 31, 2024

	Balance,	Included							Transfers	Transfers	Balance,
	January 1,	in	OCI	Purchases	Settlement	Reclassifications	(1)	Prepaids	in to	out of	March 31,
	2024	earnings							level 3	level 3	2024
In millions of COP
Assets
Debt instruments at fair value though profit or loss
Securities issued or secured by other financial entities	78,729	(79)	-	192	(3,664)	-		(1,807)	-	(5,567)	67,804
Corporate bonds	14,284	(328)	-	-	-	-		-	-	-	13,956
Total	93,013	(407)	-	192	(3,664)	-		(1,807)	-	(5,567)	81,760
Debt instruments at fair value through OCI
Securities issued by the Colombian Government	2,664,295	-	69,240	-	-	-		-	-	-	2,733,535
Total	2,664,295	-	69,240	-	-	-		-	-	-	2,733,535
Derivative financial instruments
Foreign exchange contracts	1,384,673	56,915	-	356,351	(816,780)	(512)		-	30,086	(46,289)	964,444
Interest rate contracts	15,621	(4,967)	-	2,270	(876)	(283)		-	8	(85)	11,688
Equity contracts	2,863	-	-	1,108	(2,863)	-		-	-	-	1,108
Total	1,403,157	51,948	-	359,729	(820,519)	(795)		-	30,094	(46,374)	977,240
Equity securities
Equity securities	384,682	72	3,311	2,310	(1,181)	-		-	-	-	389,194
Total	384,682	72	3,311	2,310	(1,181)	-		-	-	-	389,194
Other financial instruments
Other financial instruments	38,319	147		-							38,466
Total	38,319	147	-	-	-	-		-	-	-	38,466
Investment in associates
PA Viva Malls	1,661,679	66,690	-	-	-	-		-	-	-	1,728,369
PA Distrito Vera	9,103	337	-	7,963	-	-		-	-	-	17,403
Total	1,670,782	67,027	-	7,963	-	-		-	-	-	1,745,772
Investment properties
Investment properties	4,709,911	7,819	-	68,927	(73,895)	-		-	-	-	4,712,762
Total	4,709,911	7,819	-	68,927	(73,895)	-		-	-	-	4,712,762
Total Assets	10,964,159	126,606	72,551	439,121	(899,259)	(795)		(1,807)	30,094	(51,941)	10,678,729
Liabilities
Derivative financial instruments
Foreign exchange contracts	170,798	3,585	-	32,496	(57,815)	(512)		-	14,165	(2,221)	160,496
Interest rate contracts	11,078	(1,279)	-	-	(156)	(283)		-	228	(5,675)	3,913
Equity contracts	1,852	-	-	140	(1,852)	-		-	-	-	140
Total	183,728	2,306	-	32,636	(59,823)	(795)		-	14,393	(7,896)	164,549
Total liabilities	183,728	2,306	-	32,636	(59,823)	(795)		-	14,393	(7,896)	164,549

(1) From derivative assets to derivative liabilities classified in level 3 and vice versa.

As of March 31, 2023

	Balance,	Included												Transfers		Transfers	Balance,
	January 1,	in		OCI		Purchases		Settlement		Reclassifications(1)		Prepaids		in to		out of	March 31,
	2023	earnings												level 3		level 3	2023
In millions of COP
Assets
Debt instruments at fair value though profit or loss
Securities issued or secured by other financial entities	81,389		5,565		-		557		(4,402)		-	(4,618)	1,659		-		80,150
Total	81,389		5,565		-		557		(4,402)		-	(4,618)	1,659		-		80,150
Derivative financial instruments
Foreign exchange contracts	1,163,336		(9,836)		-		401,180		(311,997)		(41,092)	-	109,170		(196,851)		1,113,910
Interest rate contracts	29,170		179		-		899		(1,160)		(38)	-	545		(25,221)		4,374
Equity contracts	105		-		-		285		(105)		-	-	-		-		285
Total	1,192,611		(9,657)		-		402,364		(313,262)		(41,130)	-	109,715		(222,072)		1,118,569
Equity securities
Equity securities	449,269		306		(9,440)		1,276		(9,723)		-	-	-		(41,856)		389,832
Total	449,269		306		(9,440)		1,276		(9,723)		-	-	-		(41,856)		389,832
Other financial instruments
Other financial instruments	42,171		-		(1,001)		-										41,170
Total	42,171		-		(1,001)		-		-		-	-	-		-		41,170
Investment in associates
PA Viva Malls	1,530,459		77,929		-		917		-		-	-	-		-		1,609,305
PA Distrito Vera	1,697		(9)		-		-		-		-	-	-		-		1,688
Total	1,532,156		77,920		-		917		-		-	-	-		-		1,610,993
Investment properties
Investment properties	3,994,058		85,487		-		98,816		(5,766)		-	-	-		-		4,172,595
Total	3,994,058		85,487		-		98,816		(5,766)		-	-	-		-		4,172,595
Total Assets	7,291,654		159,621		(10,441)		503,930		(333,153)		(41,130)	(4,618)	111,374		(263,928)		7,413,309
Liabilities
Derivative financial instruments
Foreign exchange contracts	348,027		89,026		-		100,840		(112,671)		(41,092)	-	30,048		(162,213)		251,965
Interest rate contracts	51,662		9,704		-		2,448		(8,198)		(38)	-	7,814		(25,467)		37,925
Equity contracts	-		-		-		1,836		-		-	-	-		-		1,836
Total	399,689		98,730		-		105,124		(120,869)		(41,130)	-	37,862		(187,680)		291,726
Total liabilities	399,689		98,730		-		105,124		(120,869)		(41,130)	-	37,862		(187,680)		291,726

(1) From derivative assets to derivative liabilities classified in level 3 and vice versa.

Level 3 fair value rollforward

The following were the significant level 3 transfers at March 31, 2024 and 2023:

As of March 31, 2024 and 2023, net transfers in Bancolombia S.A. for COP 38,478 and COP 34,392, respectively, from level 3 to level 2 of derivatives foreign exchange contracts and interest rate contracts, it was presented due to the transfer of the credit risk of the counterparty to the own credit risk. As of March 31, 2024, net transfers for COP 15,701, from level 2 to level 3 of the derivative foreign exchange contracts and interest rate contracts, it was presented due to the transfer of the credit risk from the Bank to the credit risk of the counterparty.

As of March 31, 2024 and 2023, unrealized gains and losses on debt instruments were COP (407) and COP 5,565; equity securities COP 72 and COP 306, respectively.

Transfers between level 1 and level 2 of the fair value hierarchy

The table below presents the transfers for all assets and liabilities measured at fair value on a recurring basis between level 1 and level 2 as of March 31, 2024 and December 31, 2023:

	March 31, 2024		December 31, 2023
	Transfers level 1	Transfers level	Transfers level	Transfers level
	to level 2	2 to level 1	1 to level 2	2 to level 1
In millions of COP
Debt instruments at fair value though profit or loss
Securities issued or secured by foreign government	4,009	-	1,712	-
Securities issued or secured by government entities	-	17,067	13,619.0	-
Corporate bonds	-	-	-	8,397
Securities issued or secured by other financial entities	-	-	1,848	-
Total	4,009	17,067	17,179	8,397
Debt instruments at fair value through OCI
Securities issued or secured by foreign government	307,347	-	572,800	-
Securities issued or secured by other financial entities	-	19,097	64,944	-
Corporate bonds	-	-	-	95,572
Total	307,347	19,097	637,744	95,572
Equity securities
Equity securities	-	13,202	13,740	7
Total	-	13,202	13,740	7

As of March 31, 2024, the Bank transferred securities from level 1 to level 2, because such securities had lower liquidity and lower trading in an active market.

All transfers are assumed to occur at the end of the reporting period.

Quantitative information about level 3 fair value measurements

The fair value of financial instruments is, in certain circumstances, measured using valuation techniques that incorporate assumptions that are not evidenced by prices from observable market transactions in the same instrument and are not based on observable market data. Changing one or more of the inputs to the valuation models to reasonably possible alternative assumptions would change the fair values and therefore a valuation adjustment would be recognized in profit or loss. Favorable and unfavorable changes are determined on the basis of changes in the value of the instrument as a result of varying the levels of the unobservable input as described in the table below.

The following table sets forth information about significant unobservable inputs related to the Bank’s material categories of level 3 financial assets and liabilities and the sensitivity of these fair values to reasonably possible alternative assumptions.

As of March 31, 2024

								Sensitivity	Sensitivity
		Valuation	Significant	Range of		Weighted		100	100
Financial instrument	Fair Value	technique	unobservable input	inputs		average		basis point	basis point
								increase	decrease
In millions of COP
Debt instruments
Securities issued by other financial institutions
			Yield	0.00% to 9.67	%	4.53	%	64,045	68,187
TIPS	66,072	Discounted cash flow	Prepayment Speed	n/a		n/a		67,632	n/a
			Prepayment Speed	n/a		n/a		62,716	n/a
Time deposits	1,732	Discounted cash flow	Interest rate	4.30% to 6.10	%	5.65	%	1,483	1,771
Total securities issued by other financial institutions	67,804
Securities issued by the Colombian Government
Bonds by government entities	2,733,535	Discounted cash flow	Yield	1.18% to 1.18	%	1.18	%	2,730,788	2,739,082
Corporate bonds
Corporate bonds	13,956	Discounted cash flow	Yield	3.42% to 3.42	%	3.42	%	13,348	14,595
Total debt instruments	2,815,295
Equity securities
Equity securities	389,194	Price-based	Price	n/a		n/a		n/a	n/a
Other financial instruments
Other financial instruments	38,466	Internal valuation methodology	Internal valuation methodology	n/a		n/a		n/a	n/a
Derivative financial instruments
Forward	677,693	Discounted cash flow	Credit spread / Yield	0.00% to 32.84	%	4.35	%	676,750	681,118
Swaps	107,119	Discounted cash flow	Credit spread	0.00% to 47.84	%	3.83	%	107,135	108,375
Options	27,879	Discounted cash flow	Credit spread	0.09% to 34.01	%	0.60	%	27,668	27,981
Total derivative financial instruments	812,691
Investment in associates
P.A Viva Malls	1,728,369	Price-based	Price	n/a		n/a		n/a	n/a
P.A Distrito Vera	17,403	Price-based	Price	n/a		n/a		n/a	n/a
Total investment in associates	1,745,772

As of December 31, 2023

								Sensitivity	Sensitivity
		Valuation	Significant	Range of		Weighted		100	100
Financial instrument	Fair Value	technique	unobservable input	inputs		average		basis point	basis point
								increase	decrease
In millions of COP
Debt instruments
Securities issued by other financial institutions
			Yield	2.06% to 10.73	%	5.48	%	70,982	75,852
TIPS	74,087	Discounted cash flow	Prepayment Speed	n/a		n/a		78,953	n/a
			Prepayment Speed	n/a		n/a		73,271	n/a
Time deposits	4,642	Discounted cash flow	Yield / Interest rate	2.15% to 5.70	%	3.78	%	4,277	4,701
Total securities issued by other financial institutions	78,729
Securities issued by the Colombian Government
Bonds by government entities	2,664,295	Discounted cash flow	Yield	0.00% to 1.18	%	1.17	%	2,658,010	2,679,372
Corporate bonds
Corporate bonds	14,284	Discounted cash flow	Yield	3.49% to 3.49	%	3.49	%	13,700	14,912
Total debt instruments	2,757,308
Equity securities
Equity securities	384,682	Price-based	Price	n/a		n/a		n/a	n/a
Other financial instruments
Other financial instruments	38,319	Internal valuation methodology	Internal valuation methodology	n/a		n/a		n/a	n/a
Derivative financial instruments
Forward	1,006,834	Discounted cash flow	Credit spread / Yield	0.00% to 50.58	%	7.22	%	1,004,399	1,009,283
Swaps	138,992	Discounted cash flow	Credit spread	0.00% to 63.39	%	5.86	%	139,451	138,577
Options	73,603	Discounted cash flow	Credit spread	0.13% to 33.77	%	0.57	%	73,048	73,870
Total derivative financial instruments	1,219,429
Investment in associates
P.A Viva Malls	1,661,679	Price-based	Price	n/a		n/a		n/a	n/a
P.A Distrito Vera	9,103	Price-based	Price	n/a		n/a		n/a	n/a
Total investment in associates	1,670,782

The following table sets forth information about valuation techniques used in the measurement of the fair value investment properties of the Bank, the significant unobservable inputs and the respective sensivity:

Methodology	Valuation technique	Significant unobservable input	Description of sensitivity
Sales Comparison Approach - SCA The fair value assessment is based on the examination of prices at which similar properties in the same area recently sold. Since no two properties are identical the measurement valuation must take into account adjustments for the differences between the sold properties and those held by the Bank to earn rentals or for capital appreciation.	Comparable prices	The weighted average rates used in the capitalization methodology for revenues in the first quarter for 2024 are: •   Direct capitalization: initial rate 8.28%. •   Discounted cash flow: discount rate: 12.72%, terminal rate: 8.40%. The same weighted rates for the last quarter of 2023 were: •   Direct capitalization: initial rate 8.07%. •   Discounted cash flow: discount rate: 12.44%, terminal rate: 8.25%. The ratio between monthly gross income and real estate value directly administered by the FIC (rental rate) considering the differences in placements and individual factors between properties and in a weighted way in the first quarter of 2024 are 0.83% and for December 31, 2023 was 0.82%.	An increase (light, normal, considerable, significant) in the capitalization rate used would generate a decrease (significant, considerable, normal, light) in the fair value of the asset, and vice versa. An increase (light, normal, considerable, significant) in the leases used in the valuation would generate a (significant, light, considerable) increase in the fair value of the asset, and vice versa.
Income Approach Used to estimate the fair value of the property by taking future net cash flows and discounting them at the capitalization rate.	Direct capitalization Discounted cash flows
Cost approach Used to estimate the fair value of the property considering the cost to replace or build a property at the same or equal conditions of the asset to be measured, deducting the accumulated depreciation charge and adding-up the amount of the land.	Replacement cost

There has been no change to the valuation technique during the year 2024 for each asset.

NOTE 23. SUBSEQUENT EVENTS

Approval of Consolidated Financial Statements

These Condensed Consolidated Interim Financial Statements were approved by Chief Executive Financial for publication  at May 10, 2024. The Financial Statements have been reviewed, not audited.

On April 23, 2024 Bancolombia S.A. executed a purchase and sale contract for the acquisition of fiduciary rights over the PA CEDIS Sodimac for COP 451,000. With this transaction the Bank has acquired a subsidiary.

RISK MANAGEMENT

Beginning of 2024 has been characterized as a more dynamic period than expected, after a challenging economic closure the previous year; a context of local uncertainty persists in the overview (related to the health system and the impact of the El Niño phenomenon), and international uncertainty due to the evolution of geopolitical conflicts, which has continued to limit the dynamism that our economy has shown until now.

Credit risk

Credit risk is the risk of an economic loss to the Bank due to a non-fulfillment of financial obligations by a customer or counterparty and arises principally from the decline on borrower´s creditworthiness or changes in the business climate. Credit risk is the single largest risk for the Bank's business; the Bank manages its exposure to credit risk.

The information below contains the maximum exposure to credit risk for the periods ending March 31, 2024 and December 2023:

March 31, 2024

Maximum exposure to credit risk - Financial instruments subject to impairment
In millions of COP
	Stage 1	Stage 2	Stage 3	Total
Loans and Advances	228,363,717	16,308,901	15,634,957	260,307,575
Commercial	127,599,453	5,034,398	8,597,303	141,231,154
Consumer	45,306,348	4,655,259	4,023,607	53,985,214
Mortgage	32,481,633	2,996,374	1,458,028	36,936,035
Small Business Loans	733,780	256,858	104,530	1,095,168
Financial Leases	22,242,503	3,366,012	1,451,489	27,060,004
Off-Balance Sheet Exposures	41,965,924	324,051	233,897	42,523,872
Financial Guarantees	11,310,613	13,468	128,876	11,452,957
Loan Commitments	30,655,311	310,583	105,021	31,070,915
Loss Allowance	(3,561,718)	(2,733,267)	(10,150,719)	(16,445,704)
Total	266,767,923	13,899,685	5,718,135	286,385,743

December 31, 2023

Maximum exposure to credit risk - Financial instruments subject to impairment
In millions of COP
	Stage 1	Stage 2	Stage 3	Total
Loans and Advances	222,372,889	16,042,661	15,536,097	253,951,647
Commercial	120,773,927	5,453,537	8,459,932	134,687,396
Consumer	46,060,615	4,407,067	4,124,087	54,591,769
Mortgage	32,210,648	2,628,654	1,411,106	36,250,408
Small Business Loans	774,571	260,303	110,143	1,145,017
Financial Leases	22,553,128	3,293,100	1,430,829	27,277,057
Off-Balance Sheet Exposures	39,266,370	154,567	157,801	39,578,738
Financial Guarantees	12,533,868	26,889	130,441	12,691,198
Loan Commitments	26,732,502	127,678	27,360	26,887,540
Loss Allowance	(3,854,240)	(2,581,460)	(10,042,022)	(16,477,722)
Total	257,785,019	13,615,768	5,651,876	277,052,663

Maximum exposure to credit risk of the loans and advances refers to the carrying amount at the end of the period. It does not take into account any collateral received or any other credit risk mitigants.

Maximum exposure to credit risk of financial guarantees and loan commitments corresponds to the total amount guaranteed at the end of the period. It does not take into account any collateral received or any other credit risk mitigants..

a. Credit Risk Management - Loans and Advances

The first quarter of 2024 shows a low economic growth performance, mainly explained by the global economic uncertainty, added to the political and social tensions generated by the electoral periods in Central America, the impact on productive sectors due to climate change and the slow decline in inflation and interest rates, which directly affect consumption and investment in the geographies where the Bank operates. About that, proactive credit risk management was maintained through the monitoring and follow-up of customers and portfolios, the evaluation of the conditions and specific requirements of each one, as well as the development of methods, tools and models to optimize collection. Monitoring and

reviewing the credit portfolio continues to be a key factor in identifying and applying proactive strategies at different stages of the credit cycle,

The risk management of the different types of operations throughout the stages of the credit cycle carried out by the Group is developed through compliance with the policies, procedures and methodologies established in the Risk Management System (in Colombia the Comprehensive Risk Management System - SIAR), which also includes the general criteria for assessing, qualifying, assuming, controlling and covering the aforementioned risk. In addition, the management has developed manuals of procedures and methodologies that specify the policies and procedures for the different products and segments served by the banks and that take into account the strategy approved by the Board of Directors for the monitoring and control of credit risk.

Country Risk

At the end of march 2024, there were no alerts on any investments, nor were any adjustments made for deterioration in investments that could affect or deteriorate the Bank's financial strength. The variation in the balance of investments is due to valuations and other concepts in relation to the ultimate value of the investment.

b. Credit Quality Analysis - Loans and Financial Leases

At the end of March 2024, the Bank experienced moderate dynamics in its portfolio compared to December 2023, with a 2.5% increase in the consolidated portfolio balance in local currency. The first quarter of 2024 was characterized by a greater dynamism in the Bank’s disbursements, especially in the corporate segment of the commercial portfolio; the mortgage portfolio remains stable with a gentle upward trend in Colombia, while the consumer and microcredit portfolios, with the exception of Banco Agricola of Salvador, showed a slight decrease in their balance.

The 30-day past due loan ratio (consolidated) at stood at 5.68% as of March 2024, showing an increase compared to 5.39% in December 2023. The level of the bank´s non-performing loans is mainly impacted by the deterioration of the retail portfolio in Colombia and Panama, especially in the mortgage loans, coupled with an increase in the indicator in the commercial loans, in the SME and Corporate segments. Macroeconomic factors such as the slow decline in inflation, low economic growth, rising raw material prices and extreme climatic effects, are affecting sectors such as agriculture, construction, mass consumer retail and others. All portfolios continue to be managed at different stages of the credit cycle in order to anticipate the materialization of risks and strategies for normalizing and containing the portfolio have been implemented.

Special Customer Administration (AEC)

The Bank implements proactive management in monitoring the credit risk of its clients, accompanied by extraordinary diagnostic spaces, early warning alert mechanisms, and general action strategies for client inclusion and follow-up.

As part of the monitoring strategies, the Bank has established a periodic committee to identify and manage risk situations arising from events that could potentially lead to a deterioration in the debtor's repayment capacity. This committee facilitates tailored solutions based on the circumstances of each client.

The amount and allowance of customer included in the described watch list, as of march 31, 2024 and December 2023 is shown below:

March 31, 2024

Watch List - March 2024
Million COP
Risk Level	Amount	%	Allowance
Level 1 – Low Risk	15,119,050	0.82%	123,760
Level 2 – Medium Risk	4,416,801	5.35%	236,101
Level 3 – High Risk	2,748,293	49.23%	1,352,992
Level 4 – High Risk	5,475,056	61.21%	3,351,415
Total	27,759,200	18.24%	5,064,268

December 31, 2023

Watch List - December 2023
Million COP
Risk Level	Amount	%	Allowance
Level 1 – Low Risk	14,358,838	1.02%	146,014
Level 2 – Medium Risk	4,744,341	7.38%	349,972
Level 3 – High Risk	2,886,649	53.31%	1,538,882
Level 4 – High Risk	5,239,356	73.24%	3,837,196
Total	27,229,184	21.57%	5,872,064

Risk Concentration – Loans and Advances

Concentration of loans by economic sector:

The following table contains the detail of the portfolio of loans and financial leases by main economic activity of the borrower for the periods ending in March 2024 and December 2023:

March 31, 2024

Economic sector	Loans and advances
	Local	Foreign	Total
Agriculture	5,337,500	2,397,338	7,734,838
Petroleum and Mining Products	1,887,594	377,362	2,264,956
Food, Beverages and Tobacco	9,347,909	2,017,424	11,365,333
Chemical Production	4,460,153	268,404	4,728,557
Government	8,787,680	902,345	9,690,025
Construction	15,899,024	8,020,706	23,919,730
Commerce and Tourism	23,804,691	7,654,297	31,458,988
Transport and Communications	10,264,774	712,487	10,977,261
Public Services	12,092,827	1,304,410	13,397,237
Consumer Services	58,509,204	30,788,856	89,298,060
Commercial Services	29,251,499	11,182,031	40,433,530
Other Industries and Manufactured Products	9,455,420	5,583,640	15,039,060
Total	189,098,275	71,209,300	260,307,575

December 31, 2023

December 31, 2023
Economic sector	Loans and advances
	Local	Foreign	Total
	In millions of COP
Agriculture	5,162,973	2,488,789	7,651,762
Petroleum and Mining Products	1,846,238	234,523	2,080,761
Food, Beverages and Tobacco	9,147,936	888,429	10,036,365

December 31, 2023
Economic sector	Loans and advances
	Local	Foreign	Total
Chemical Production	4,299,308	25,409	4,324,717
Government	8,369,707	887,448	9,257,155
Construction	16,202,035	5,561,782	21,763,817
Commerce and Tourism	23,803,830	11,068,049	34,871,879
Transport and Communications	9,574,318	351,176	9,925,494
Public Services	11,758,265	1,286,561	13,044,826
Consumer Services	59,032,642	32,965,565	91,998,207
Commercial Services	27,474,593	7,217,591	34,692,184
Other Industries and Manufactured Products	8,679,684	5,624,796	14,304,480
Total	185,351,529	68,600,118	253,951,647

Concentration of loan by maturity :

The following table shows the ranges of maturity for the credit loans and financial leases, according for the remaining term for the completion of the contract of loans and financial leases for the periods ending in March 2024 and December 2023:

March 31, 2024

Maturity	Less Than 1 Year	Between 1 and 5 Years	Between 5 and 15 Years	Greater Than 15 Years	Total
In millions of COP
Commercial	44,974,575	58,514,229	37,384,708	357,642	141,231,154
Corporate	26,948,879	29,101,250	20,448,068	190,496	76,688,693
SME	4,648,643	7,259,009	2,207,833	16,144	14,131,629
Others	13,377,053	22,153,970	14,728,807	151,002	50,410,832
Consumer	1,221,502	26,411,228	25,739,633	612,851	53,985,214
Credit card	282,883	1,917,541	8,710,001	0	10,910,425
Vehicle	62,971	3,058,005	2,357,268	154	5,478,398
Order of payment	50,646	1,932,953	7,146,623	418,980	9,549,202
Others	825,002	19,502,729	7,525,741	193,717	28,047,189
Mortgage	79,061	1,062,207	9,790,127	26,004,640	36,936,035
VIS	23,727	270,627	2,250,778	11,122,387	13,667,519
Non-VIS	55,334	791,580	7,539,349	14,882,253	23,268,516
Finanacial Leases	1,794,716	9,015,719	12,762,178	3,487,391	27,060,004
Small business loans	258,700	699,238	134,432	2,798	1,095,168
Total gross loans and financial leases	48,328,554	95,702,621	85,811,078	30,465,322	260,307,575

December 31, 2023

Maturity	Less Than 1 Year	Between 1 and 5 Years	Between 5 and 15 Years	Greater Than 15 Years	Total
In millions of COP
Commercial	40,601,345	57,828,301	35,936,869	320,881	134,687,396
Corporate	22,360,108	27,329,312	19,970,727	183,507	69,843,654

SME	4,486,326	7,497,307	2,200,274	16,650	14,200,557
Others	13,754,911	23,001,682	13,765,868	120,724	50,643,185
Consumer	1,289,150	26,549,043	26,086,537	667,039	54,591,769
Credit card	417,390	1,755,518	9,034,823	0	11,207,731
Vehicle	55,295	2,982,439	2,371,163	329	5,409,226
Order of payment	57,211	1,872,546	7,061,605	470,527	9,461,889
Others	759,254	19,938,540	7,618,946	196,183	28,512,923
Mortgage	75,189	1,005,831	9,601,783	25,567,605	36,250,408
VIS	23,303	264,232	2,157,322	10,552,767	12,997,624
Non-VIS	51,886	741,599	7,444,461	15,014,838	23,252,784
Financial Leases	1,639,218	9,165,622	12,939,908	3,532,309	27,277,057
Small business loans	208,429	737,255	194,581	4,752	1,145,017
Total gross loans and financial leases	43,813,331	95,286,052	84,759,678	30,092,586	253,951,647

Concentration by past due days: The following table shows the loans and financial leases according to past due days. Loans or financial leases are considered past due if it is more than one month overdue (i.e. 31 days):.

March 31, 2024

Past-due
Period	0 - 30 Days	31 - 90 Days	91 - 120 Days	121 - 360 Days	More Than 360 Days	Total
In millions of COP
Commercial	135,935,375	689,838	293,824	1,552,961	2,759,156	141,231,154
Consumer	48,823,717	2,260,686	657,864	2,057,578	185,369	53,985,214
Mortgage	33,770,020	1,653,182	226,084	625,681	661,068	36,936,035
Financial Leases	26,042,975	381,591	65,967	216,671	352,800	27,060,004
Small Business Loan	956,317	57,831	12,461	53,513	15,046	1,095,168
Total	245,528,404	5,043,128	1,256,200	4,506,404	3,973,439	260,307,575

December 31, 2023

December 31, 2023
Past-due
Period	0 - 30 Days	31 - 90 Days	91 - 120 Days	121 - 360 Days	More Than 360 Days	Total
In millions of COP
Commercial	129,866,971	500,794	205,141	1,777,620	2,336,870	134,687,396
Consumer	49,418,431	2,244,017	794,005	1,994,748	140,568	54,591,769
Mortgage	33,524,034	1,290,817	212,433	599,351	623,773	36,250,408
Financial Leases	26,436,493	247,124	56,434	196,578	340,428	27,277,057
Small Business Loans	1,005,725	50,138	14,859	58,244	16,051	1,145,017
Total	240,251,654	4,332,890	1,282,872	4,626,541	3,457,690	253,951,647

c. Credit Risk Management – Other Financial Instruments

The portfolio is exposed to credit risks given the probability of incurring losses originated by the default in the payment of a coupon, principal and/or yields/dividends of a financial instrument by its issuer or counterparty. The probability of

this type of events materializing may increase if there are scenarios of concentration in few issuers (counterparties) and whose credit performance is reflected by higher risk ratings; likewise, increases in credit risk may occur in scenarios in which the portfolio presents low levels of diversification at the level of type and sector of the counterparties with which financial asset transactions are carried out.

The Bank maintains the control and continuous monitoring of the assigned credit risk limits, as well as the consumption thereof. Additionally, the Bank follows up and manages alerts on counterparties and issuers of securities, based on public market information and news related to their performance; this allows mitigating the risks of default or reduction of value for the managed positions.

For credit risk management, each of the positions that make up the portfolio of the own position are adjusted to the policies and limits that have been defined and that seek to minimize the exposure to the same:

● Term Limits

● Credit Limits

● Counterparty Limits

● Master Agreement

● Margin Agreements

● Counterparty Alerts

d. Credit Quality Analysis - Other Financial Instruments

In order to evaluate the credit quality of a counterparty or issuer (to determine a risk level or profile), the Bank relies on two rating systems: an external one and an internal one, both of which allow to identify a degree of risk differentiated by segment and country and to apply the policies that have been established for issuers or counterparties with different levels of risk, in order to limit the impact on liquidity and/or the income statement of the Bank.

External credit rating system is divided by the type of rating applied to each instrument or counterparty; in this way the geographic location, the term and the type of instrument allow the assignment of a rating according to the methodology that each examining agency uses.

Internal credit rating system: The “ratings or risk profiles” scale is created with a range of levels that go from low exposure to high exposure (this can be reported in numerical or alphanumerical scales), where the rating model is sustained by the implementation and analysis of qualitative and quantitative variables at sector level, which according to the relative analysis of each variable, determine credit quality; in this way the internal credit rating system aims to establish adequate margin in decision-making regarding the management of financial instruments.

In accordance with the criteria and considerations specified in the internal rating allocation and external credit rating systems methodologies, the following schemes of relation can be established, according to credit quality given to each one of the qualification scales:

Low Risk: All investment grade positions (from AAA to BBB-), as well as those issuers that according to the information available (financial statements, relevant information, external ratings, CDS, among others) reflect adequate credit quality.

Medium Risk: All speculative grade positions (from BB+ to BB-), as well as those issuers that according to the available information (Financial statements, relevant information, external qualifications, CDS, among others) reflect weaknesses that could affect their financial situation in the medium term.

High Risk: All positions of speculative grade (from B+ to D), as well as those issuers that according to the information available (Financial statements, relevant information, external qualifications, CDS, among others) reflect a high probability of default of financial obligations or that already have failed to fulfill them.

● Credit Quality Analysis of the Bank

	Debt Instruments		Equity		Other financial instruments(1)		Derivatives(2)
	March 2024	December 2023	March 2024	December 2023	March 2024	December 2023	March 2024	December 2023
In Millions of COP
Maximum Exposure to Credit Risk
Low Risk	22,606,765	21,078,496	313,740	220,967	2,832	21,976	1,199,083	1,711,788
Medium Risk	2,631,185	827,469	17,444	17,354	19220	-	1,666	316
Hihg Risk	2,538,129	3,242,504	590	587	2,966	2966	4,918	17,327
Without Rating	-	-	302,774	304,302	13,448	13,377	113221	95319
Total	27,776,079	25,148,469	634,547	543,210	38,466	38,319	1,318,887	1,824,750

¹⁾ Corresponds to SAFE "Simple Agreement for Future Equity", in Inversiones CFNS S.A.S., Sistema de Inversiones y Negocios, S.A. and Banagrícola S.A (For 2023). For the year 2022 were revealed as debt securities and equity.

⁽²⁾ For derivatives transactions counterparty risk is disclosed as long as the valuation is positive.

● Risk exposure by credit rating

	Other financial instruments
	March 2024	December 2023
In Millions of COP
Maximum Exposure to Credit Risk
Sovereign Risk	9,454,070	7,520,002
AAA	8,805,875	9,613,353
AA+	3,866,803	2,934,561
AA	757,475	761,139
AA-	215,657	285,253
A+	679,912	763,754
A	587,622	465,025
A-	408,015	396,755
BBB+	424,269	604,672
BBB	277,250	243,820
BBB-	956,419	1,808,396
Other	2,905,170	1,745,020
No rated	429,443	412,998
Total	29,767,980	27,554,748

● Financial credit quality of other financial instruments that are not in default nor impaired in value

Debt instruments: 100% of the debt instruments are not in default.

Equity: The positions do not represent significant risks.

Derivatives: 99.9% of the credit exposure does not present incidences of material default. The remaining percentage corresponds to default events at the end of the period.

● Maximum exposure level to the credit risk given:

	Maximum Exposure		Collateral		Net Exposure
	March 2024	December 2023	March 2024	December 2023	March 2024	December 2023
In Millions of COP
Maximum Exposure to Credit Risk
Debt Instruments	27,776,079	25,148,469	(2,147,120)	(1,407,484)	25,628,959	23,740,985
Derivatives	1,318,887	1,824,750	338,587	(698,663)	1,657,474	1,126,088
Equity	634,547	543,210	0	0	634,547	543,210
Other financial instruments	38,466	38,319	-	-	38,466	38,319
Total	29,767,980	27,554,748	(1,808,534)	(2,106,146)	27,959,446	25,448,602
Collateral Held (-) and Collateral Pledged (+)

● Collateral - other financial instruments

Level of collateral: Respect to the type of asset or operation, a collateral level is determined according to the policies defined for each product and the market where the operation is carried out.

Assets held as collateral in organized markets: The only assets that can be received as collateral are those defined by the central counterparties, the stock market where the operation is negotiated, those assets that are settled separately in different contracts or documents, which can be managed by each organization and must comply with the investment policies defined by the Bank, taking into account the credit limit for each type of asset or operation received or delivered, which collateral received are the best credit quality and liquidity.

Assets received as bilateral collateral between counterparties: The collateral accepted in international OTC derivative operations is agreed on bilaterally in the Credit Support Annex (CSA)¹ and with fulfillment in cash in dollars and managed by ClearStream. This company acts on behalf of Bancolombia for making international margin calls and providing a better management of the collateral.

Collateral adjustments for margin agreements: The adjustments will be determined by the criteria applied by both the external and internal regulations in effect, and at the same time, mitigation standards are maintained so that the operation fulfills the liquidity and solidity criteria for settlement.

Credit risk concentration - other financial instruments

According to the regulations, the Bank must control daily the risk of positions of the Bank’s companies where the same issuer or counterparty stands, below the legal limits.By the same way, the positions of the Bank are verified in respect of the authorized risk levels in each country to guarantee the alerts and positions limits, that are considered outside of the Bank risk appetite.

Currently, the Bank's positions do not exceed the concentration limit.

Relevant facts

By March 2024 inflation rate decreased up to 7.36% from 9.28% in December 2023, “Banco de la República de Colombia” (Central bank) cut its key interest rate up to 12.25% in March vs. 13% in December 2023, this condition affects mainly

¹A Credit Support Annex (CSA) provides credit protection by setting forth the rules governing the mutual posting of collateral. CSAs are used in documenting collateral arrangements between two parties that trade privately negotiated (over the counter) derivative securities. The trade is documented under a standard contract called a master agreement, developed by the International Swaps and Derivatives Association (ISDA).

fixed Income portfolios' valuation. According to the economic expectations survey, inflation rate will be in the range of 5.4% to 5.6% by December 2024 and if the restrictive monetary stance continues, household debt will be a more latent risk in the local financial system and its consequence in credit.

In international fixed income, the Federal Reserve's restrictive stance on monetary expansion was observed when it maintained the interest rate at 5.50% in March, the same figure as in December 2023, to which is added the fear of a resurgence of geopolitical tensions, deepening the risks in the portfolios management.

The Colombian stock market index (MSCI COLCAP) closed by end of March with an appreciation year-to-date of 11.5%. Uncertainty remains due to political tensions related to pension, health and labour reforms; in addition, risks could materialise for local market issuers due to rising commodity prices and the El Niño phenomenon, which further drive inflation rate.

The international market closed March with quarterly appreciation in the S&P 500 of 10.16% in a market where inflationary risk remains. The Euro zone presented a quarterly appreciation in the Euro Stoxx 50 of 9.36% and registered a lower producer price index so the European Central Bank could have arguments to start its rate cut. In conclusion, fears of a possible economic recession have eased, however, inflation warnings continue in some developed countries and low economic growth, which could affect the financial results of companies in these markets.

In March 2024 compared to December 2023 in the local market, interest rate futures trading fell by (29.2%) and currency futures increased 236% given the high volatility and adjustment of the exchange rate in in the first quarter of 2024, which closed at COP 3,842.30 and presented a year-to-date devaluation of 0.53%.

It is possible to maintain a negative impact on the markets, due to certain macroeconomic effects, such as scenarios where inflation has not eased as expected and has prevented the cut of intervention rates to lower levels, slow economic growth, and geopolitical tensions.

MARKET RISK

Bancolombia’s Bank currently measure the treasury book exposure to market risk (including OTC derivatives positions) as well as the currency risk exposure of the banking book, which is provided to the Treasury Division, using a VaR methodology established in accordance with “Chapter XXXI of the Basic Accounting Circular”, issued by the Financial Superintendence of Colombia.

The VaR methodology established by “Chapter XXXI of the Basic Accounting Circular” is based on the model recommended by the Amendment to the Capital Accord to Incorporate Market Risks of Basel Committee, which focuses on the treasury book and excludes investments classified as amortized cost which are not being given as collateral and any other investment that comprises the banking book. In addition, the methodology aggregates all risks by the use of correlations, through an allocation system based on defined zones and bands, affected by given sensitivity factors.

Bancolombia use different models with the purpose of measure risk exposure and the portfolio diversification effect, the main metrics are: i) the standard methodology required by the Financial Superintendence of Colombia, is established by “Chapter XXXI of the Basic Accounting Circular”, and ii) the internal methodology of historical weighted simulation, which use a confidence level of 99%, a holding period of 10 days, a time frame of 250 business days and hierarchical VaR limits.

The guidelines and principles of the Bank´s Market Risk Management have been keeping in accordance with disclose of December 31, 2023.

The total market risk VaR had an increase of 23.6%, from COP 1,096,000 in December 31, 2023 to COP 1,354,253 in March 31, 2024. This increase was highlighted by the exchange rate and interest rate risk factors. The exchange rate factor rises due to an increase exposure in the US Dollar and Euros. The interest rate factor rises due to an increase  in Colombia Government Bonds.

Factor March 31, 2024 In millions of Colombian pesos

	End of Period	Average	Maximum March, 2024	Minimum January, 2024
Interest rate	515,585	484,597	515,585	453,240
Exchange rate	459,321	396,308	459,321	364,421
Stock price	354,771	349,920	354,771	346,694
Collective investment funds	24,576	23,406	24,576	18,005
VaR Total	1,354,253	1,254,230	1,354,253	1,182,360

Factor	December 31, 2023 In millions of Colombian pesos
	End of Period	Average	Maximum August, 2023	Minimum January, 2023
Interest rate	405,467	418,472	542,464	383,914
Exchange rate	332,662	185,624	295,572	95,115
Stock price	342,024	332,443	338,540	312,136
Collective investment funds	15,847	23,292	27,923	24,207
VaR Total	1,096,000	959,832	1,204,500	815,373

On the other hand, regarding the VaR measured with the internal, no relevant variations were identified in the VaR metrics at the end of the quarter, nor were any exceedances of the approved limits.

This exposure have been permanently monitored by the Board of Directors and is an input for the decision-making process to preserve the stability in the Bank.

Non-trading instruments market risk measurement

Interest Risk Exposure (Banking Book)

The Bancolombia Group performs a sensitivity analysis of interest rate risk, estimating the impact on the net interest margin of each position in the banking book using a repricing model and assuming a positive parallel change of 100 basis points (bps) in the rates.

Table 1 provides information about the interest rate risk sensitivity of the Bancolombia Group's banking book positions .

Table 1. Sensitivity to Interest Rate Risk of the Banking Book

The chart below provides information about interest rate risk sensitivity in local currency (COP) at March 31, 2024 and December 31, 2023:

	March 31, 2024	December 31, 2023
In millions of COP
Assets sensitivity 100 bps	1,150,132	1,152,782
Liabilities sensitivity 100 bps	565,066	595,749
Net interest income sensitivity 100 bps	585,066	557,033

The chart below provides information about interest rate risk sensitivity in foreign currency (US dollars) at March 31, 2024 and December 31, 2023:

	March 31, 2024	December 31, 2023
In thousand of USD
Assets sensitivity 100 bps	73,032	75,052
Liabilities sensitivity 100 bps	68,365	74,800

Net interest income sensitivity 100 bps 4,667 252

A positive net sensitivity denotes a higher sensitivity of assets than of liabilities and implies that a rise in interest rates will positively affect the Bank´s net interest income. A negative sensitivity denotes a higher sensitivity of liabilities than of assets and implies that a rise in interest rates will negatively affect the Bank´s net interest income. In the event of a decrease in interest rates, the impacts on net interest income would be opposite to those described above.

Total Exposure

As of March 31, 2024, the net sensitivity of the banking book in legal currency to positive and parallel variations in interest rates of 100 basis points was COP 585,066. The variation in the sensitivity of the net interest margin between December 2023 and March 2024 is presented by the increase in the balance and maturity of time deposits in fixed-rate and a reduction of time deposits in floating rate and the account deposits.

On the other hand, the sensitivity to the net interest margin in foreign currency, assuming the same parallel displacement of 100 basis points presented an increase between December 31, 2023 and March 31, 2024, due to the decrease in passive loans of Bancolombia and Banistmo.

Liquidity risk

During the first quarter, Bancolombia presented a comfortable liquidity level, accomplishing with internal and mandatory ratios. Likewise, the alerts established for monitoring liquidity did not present breaches that could materialize any risk.  Additionally, liquid assets fullfilled the limits and comfortably covered the liquidity requirements of the Bank companies.

Liquidity risk exposure:

In order to estimate liquidity risk, the Bank measures a liquidity coverage ratio to ensure holding liquid assets sufficient to cover potential net cash outflows over 30 days. This indicator allows the Bank to meet liquidity coverage for the next month. The liquidity coverage ratio is presented as follows:

Liquidity Coverage Ratio	March 31, 2024	December 31, 2023
In millions of COP
Net cash outflows into 30 days	13,185,232	13,752,496
Liquid Assets	42,863,937	50,680,823
Liquidity coverage ratio*	325.09%	368.52%

The coverage indicator showed a reduction from 368.5% in December to 325.0% in March, mainly explained by the reduction in the level of liquid assets.

Liquid Assets

One of the main guidelines of the Bank is to maintain a solid liquidity position, therefore, the ALCO Committee, has established a minimum level of liquid assets, based on the funding needs of each subsidiary, to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Bank’s reputation.

The following table shows the liquid assets held by Bank:

Liquid Assets(1)	March 31, 2024	December 31, 2023
In millions of COP
High quality liquid assets
Cash	19,724,182	25,273,317
High quality liquid securities(2)	18,005,432	19,951,771
Other Liquid Assets

Other securities(3)	5,134,323	5,455,735
Total Liquid Assets	42,863,937	50,680,823

⁽¹⁾ Liquid assets: Liquid assets will be considered those that are easily realized and are part of the entity's portfolio or those that have been received as collateral in active operations in the money market and have not been subsequently used in passive operations in the money market. and do not have any mobility restrictions. The following are considered liquid assets: available assets, shares in open collective investment funds without a permanence agreement, shares registered on a stock exchange in Colombia that are eligible to be subject to repo or repo operations, and negotiable investments available for sale. sale of fixed income securities.

⁽²⁾ High quality securities are considered to be those available and the shares that are eligible to be subject to repo or repo operations, additionally for those entities that are in the group of OMAS Placement Agents (ACO) those liquid assets that receive the Banco de la República for its monetary expansion and contraction operations described in section 3.1.1 of the External Regulatory Circular DODM-142 of the Banco de la República or otherwise (if it is not ACO) only those securities that are mandatory listing in the market maker program. This applies to all securities that are accepted as collateral by the central banks of the geographies where the Bancolombia Group is located. The characteristic of high liquidity is possessed by the available, in all cases, and those liquid assets that central banks use for their monetary expansion and contraction operations. Liquid assets are adjusted for market liquidity and currency risk.

⁽³⁾ Other liquid assets: liquid assets that do not meet the quality characteristic are those included in this item.

Interest Rate Benchmark Reform

As part of the LIBOR benchmark reform that is being implemented since 2017 by the Financial Conduct Authority of the UK, in March of the present year, it was announced that the publication of LIBOR on a representative basis will cease for the one-week and two-month USD LIBOR settings immediately after December 31, 2021, and the remaining USD LIBOR settings immediately after June 30, 2023.

Grupo Bancolombia has taken the necessary measures to identify and implement the action plans required to address the discontinuation process of the LIBOR rate, among them, the approval of SOFR rate as the replacement rate of LIBOR in USD, which was approved by the Asset and Liability Management (ALM) Committee and the Risk Committee of the Board of Directors, to commenced with the development of products indexed to the new reference rate (SOFR).

The following tables provide a breakdown by currency and nature of financial instruments exposed to the LIBOR rate for the periods ending in March 2024 and December 2023:

Marzo 31, 2024
millones COP
	USD LIBOR1
Assets
Loans	3,991
Bonds
Derivatives
Total Assets	3,991
Liabilities
Loans	247
Term deposits	8,370
Total Liabilities	8,617

1Cessation date: USD LIBOR 06/30/23. Portfolio balances and market value of derivative transactions outstanding at March 31, 2024.

December 31, 2023
millones COP
	USD LIBOR1
Assets
Loans	66,351

Bonds	-
Derivatives	-
Total Assets	66,351
Liabilities
Loans	323
Term deposits	6,750
Total Liabilities	7,073

¹ La fecha de cese es: USD LIBOR 30 de junio de 2023. Saldos de cartera y valor a mercado de las operaciones derivados vigentes al 31 de diciembre de 2023. Corresponde a operaciones realizadas antes del 30 junio de 2023, cuyo vencimiento se dará según las condiciones contractuales pactadas.

Risk

Any failure by market participants, such as the Bank, and regulators to successfully introduce benchmark rates to replace LIBOR and implement effective transitional arrangements to address the discontinuation of LIBOR could result in disruption of the financial and capital markets. In addition, the transition process to an alternative reference rate could impact the Bank’s business, financial condition or result of operations, as a result of:

● An adverse impact in pricing, liquidity, value, return and trading for a broad array of financial products, loans and derivatives that are included in the Bank’s financial assets and liabilities.

● Extensive changes to internal processes and documentation that contain references to LIBOR or use formulas that depend on LIBOR.

● Disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of provisions in LIBOR -based products such as fallback language or other related provisions.

● The transition and development of appropriate systems and models to effectively transition the Bank’s risk management processes from LIBOR -based products to those based on one or more alternative reference rates in a timely manner; and

● An increase in prepayments of LIBOR -linked loans by the Bank’s clients.

From January 2022, products indexed to the SOFR rate began to be offered, additionally it was defined not to carry new operations indexed to the LIBOR rate. In turn, as an organization, we will continue, during 2024, on the transition process of operations that are indexed to LIBOR.