EX-99.1 2 v371864_ex99-1.htm EXHIBIT 99.1

   

4Q13

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 489 BILLION FOR THE FOURTH QUARTER OF 2013 (COP 574 PER SHARE - USD 1.19 PER ADR), WHICH REPRESENTS AN INCREASE OF 51% COMPARED TO THE SAME QUARTER LAST YEAR.

 

·The bank showed a strong and healthy growth in assets during 4Q13. Bancolombia’s assets grew 15.1% during the quarter and 33.6% during 2013. The annual growth was explained 14.6% by the contribution of Banistmo (formerly HSBC Panama) and 19% by the organic growth of the existing operation before the consolidation of Banistmo.

 

·Past due loans as a percentage of total loans remain low in 4Q13. 30 days (or more) past due loans as a percentage of total gross loans were 2.9%. Net provision charges for past due loans and foreclosed assets totaled COP 273 billion, which represents 1.30% of gross loans when annualized, an improvement compared to the 1.50% reported in 3Q13 and the 1.99% in 4Q12.

 

·Loan portfolio coverage remains at high levels. At the end of 4Q13, the ratio between allowances for loans losses and 30-days past due loans was 157%, indicating that Bancolombia has sufficient reserves to maintain its business operation and has a strong and healthy balance.

 

·The bank improved its liquidity position. Deposits grew 20percent during 4Q13 and 35% during 2013 and the ratio of net loans to deposits ended at 94%. This annual growth was explained, 17% by the contribution of Banistmo (formerly HSBC Panama) and 19% by the organic growth of the existing operation before consolidation Banistmo. The weighted cost of deposits at the end of 4Q13 was 2.6%, less than the 2.7% reported in 3Q13 and the 3.3% in 4Q12.

 

March 17, 2014. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the fourth quarter of 2013.

 

For the quarter ended on December 31, 2013 (“4Q13”), Bancolombia reported consolidated net income of COP 489 billion, or COP 574 per share - USD 1.19 per ADR, which represents an increase of 51% as compared to the results for the quarter ended on September 30, 2013 (“3Q13”) and an increase of 4.5% as compared to the results for the quarter ended on December 31, 2012 (“4Q12”).

 

Bancolombia ended 4Q13 with COP 130,816 billion in assets, 15.1% higher than those at the end of 3Q13 and 33.6% greater than those at the end of 4Q12. At the same time, liabilities totaled COP 118,323 billion, increasing 16.4% as compared to the figure presented in 3Q13 and 37.1% as compared to 4Q121.

 

 

1 This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. (“BANCOLOMBIA”) and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of Superintendencia Financiera de Colombia, collectively COL GAAP. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank's principal accounting policies in the quarter ended December 31, 2013. The statements of income for the quarter ended December 31, 2013 are not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties; consequently, there are or will be factors, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptances of new products or services by our targeted customers, changes in business strategy and various others factors, that could cause actual results to differ materially from those indicated in such statements. We do not intend, and do not assume any obligation, to update these forward-looking statements. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Any reference to BANCOLOMBIA means the Bank together with its affiliates, unless otherwise specified.

Representative Market Rate January 1, 2014 $$1.926,83 = US$ 1

 

1
 

 

   

4Q13

  

BANCOLOMBIA: Summary of consolidated financial quarterly results2

 

CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT  Quarter   Growth 
(COP millions)  4Q12   3Q13   4Q13   4Q13/3Q13   4Q13/4Q12 
ASSETS                         
Loans and financial leases, net   66,739,040    74,727,617    85,394,012    14.27%   27.95%
Investment securities, net   12,554,311    14,523,348    13,805,790    -4.94%   9.97%
Other assets   18,623,029    24,417,371    31,616,439    29.48%   69.77%
Total assets   97,916,380    113,668,336    130,816,241    15.09%   33.60%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits   64,158,720    72,013,506    86,556,579    20.19%   34.91%
Non-interest bearing   9,798,874    9,217,936    14,680,487    59.26%   49.82%
Interest bearing   54,359,846    62,795,570    71,876,092    14.46%   32.22%
Other liabilities   22,150,705    29,655,143    31,766,816    7.12%   43.41%
Total liabilities   86,309,425    101,668,649    118,323,395    16.38%   37.09%
Shareholders' equity   11,606,955    11,999,687    12,492,846    4.11%   7.63%
Total liabilities and shareholders' equity   97,916,380    113,668,336    130,816,241    15.09%   33.60%
                          
Interest income   2,034,208    1,979,128    2,151,683    8.72%   5.77%
Interest expense   794,120    758,928    803,137    5.83%   1.14%
Net interest income   1,240,088    1,220,200    1,348,546    10.52%   8.75%
Net provisions   (334,677)   (289,233)   (272,919)   -5.64%   -18.45%
Fees and income from service, net   494,479    460,540    525,018    14.00%   6.18%
Other operating income   196,251    217,172    257,790    18.70%   31.36%
Total operating expense   (1,054,978)   (1,143,502)   (1,207,369)   5.59%   14.44%
Goodwill amortization   (11,165)   (12,745)   (38,335)   200.78%   243.35%
Non-operating income, net   6,135    (4,687)   20,061    528.01%   226.99%
Income tax expense   (68,371)   (123,820)   (144,052)   16.34%   110.69%
Net income   467,762    323,925    488,740    50.88%   4.48%

 

PRINCIPAL RATIOS      Quarter       As of 
   4Q12   3Q13   4Q13   Dec-12   Dec-13 
PROFITABILITY                         
Net interest margin (1)   6.28%   5.27%   5.33%   6.49%   5.48%
Return on average total assets (2)   1.97%   1.16%   1.56%   1.92%   1.37%
Return on average shareholders´ equity (3)   16.47%   10.95%   15.97%   15.97%   12.76%
EFFICIENCY                         
Operating expenses to net operating income   55.22%   60.92%   58.45%   56.19%   59.75%
Operating expenses to average total assets   4.49%   4.15%   3.99%   4.69%   4.19%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   11.85%   10.56%   9.55%   11.85%   9.55%
Technical capital to risk weighted assets   15.77%   15.30%   10.61%   15.77%   10.61%
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS (USD)   1.24    0.80    1.19           
Net income per share $COP   549.13    380.27    573.75           
P/BV ADS (4)   2.16    1.95    1.61           
P/BV Local (5) (6)   2.20    1.91    1.62           
P/E  (7)   13.55    17.83    10.34           
ADR price  (8)   66.58    57.54    49.02           
Common share price  (8)   30,000    26,900    23,820           
Shares outstanding  (9)   851,827,000    851,827,000    851,827,000           
USD exchange rate (quarter end)   1,768.23    1,908.29    1,926.83           

 

 

(1) Defined as net interest income divided by monthly average interest-earning assets. (2) Net income divided by monthly average assets. (3) Net income divided by monthly average shareholders' equity. (4) Defined as ADS price divided by ADS book value. (5) Defined as share price divided by share book value. (6) Share prices on the Colombian Stock Exchange; (7) Defined as market capitalization divided by annualized quarter results. (8) Prices at the end of the respective quarter. (9) Common and preferred.

 

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4Q13

  

1.BALANCE SHEET

 

1.1.Assets

 

As of December 31, 2013, Bancolombia’s assets totaled COP 130,816 billion, which represents an increase of 15.1% compared to 3Q13 and an increase of 33.6% compared to 4Q12.

 

The annual growth of the assets was explained 14.6% by the contribution of Banistmo and 19% by the organic growth of the existing operation before the consolidation of Banistmo. It is highlighted the growth of loans and finance leases, which represented 65% of the assets at the end of 4Q13.

 

1.2.Loan Portfolio

 

The following table shows the composition of Bancolombia’s investments and loans by type and currency:

 

(COP Million)  Amounts in COP   Amounts in USD converted to COP   Amounts in USD (thousands)   Total 
(1 USD = 1926,83 COP)      4Q13/3Q13   4Q13/4Q12       4Q13/3Q13   4Q13/4Q12       4Q13/3Q13   4Q13/4Q12       4Q13/3Q13   4Q13/4Q12 
Net investment securities   10,060,478    3.07%   -0.51%   3,745,312    -21.36%   53.35%   1,943,769    -21.36%   40.73%   13,805,790    -4.94%   9.97%
Gross Loans   61,527,941    1.26%   14.54%   27,931,601    58.19%   71.65%   14,496,142    58.19%   57.52%   89,459,542    14.08%   27.82%
Commercial loans   33,788,752    -0.78%   13.07%   18,574,767    37.48%   47.63%   9,640,065    37.48%   35.48%   52,363,519    10.09%   23.31%
Consumer loans   12,075,048    2.61%   14.51%   4,526,842    92.84%   122.42%   2,349,373    92.84%   104.11%   16,601,890    17.62%   31.96%
Small  business loans   391,309    6.98%   28.83%   125,458    353.38%   306.71%   65,111    353.38%   273.23%   516,767    31.34%   54.45%
Mortgage loans   6,616,309    5.78%   27.22%   3,679,621    338.64%   386.01%   1,909,676    338.64%   346.00%   10,295,930    45.14%   72.81%
Finance lease   8,656,523    4.06%   11.22%   1,024,913    9.94%   18.21%   531,917    9.94%   8.48%   9,681,436    4.7%   11.9%
Allowance for loan losses   (3,392,580)   1.16%   15.87%   (672,950)   100.51%   109.22%   (349,252)   100.51%   92.00%   (4,065,530)   10.20%   25.11%
Net total loans and fin. leases   58,135,361    1.27%   14.47%   27,258,651    57.37%   70.89%   14,146,889    57.37%   56.83%   85,394,012    14.27%   27.95%
Operating leases, net   2,825,245    3.32%   35.16%   93,936    2.48%   -7.64%   48,752    2.48%   -15.24%   2,919,181    3.29%   33.18%
Total assets   88,861,014    6.56%   9.30%   41,955,641    38.56%   152.49%   21,774,438    38.56%   131.71%   130,816,655    15.09%   33.60%
Total deposits   63,101,253    8.25%   20.04%   23,455,326    70.92%   102.31%   12,173,013    70.92%   85.65%   86,556,579    20.19%   34.91%
Total liabilities   77,553,432    7.50%   9.23%   40,766,617    38.08%   166.28%   21,157,350    38.08%   144.36%   118,320,049    16.38%   37.09%

 

The most relevant aspects regarding the evolution of the loan portfolio during 4Q13 were:

 

·         The growth of commercial, consumer and mortgage loans in Colombia during 4Q13 indicates a sustained credit demand.

 

·         Net loans in USD correspond to loans originated in Colombia (USD 4,321 million, 30%), El Salvador (USD 2,661 million, 19%), Panamá (USD 6,878 million, 48%), and other countries (USD 421 million, 3%). USD denominated loans represented 32% of total loans as of 4Q13.

 

·         COP depreciated 1.0% versus USD during 4Q13 and 9.0% during 2013.

 

·         Mortgage loans denominated in COP presented a dynamic performance. The dynamism of mortgage lending in Colombia is explained by the lower long-term interest rates, as well as by the Colombian government’s interest rate subsidy programs. On the other hand, the mortgage balance denominated in USD from our operation in El Salvador and Panama represented 36% of the mortgage loans at the end of 4Q13.

 

·         Financial leases, of which 89% are denominated in COP, increased 4.7% during the quarter and 11.9% as compared to 4Q12. Operating leases, net of depreciation, increased 3.3% during 4Q13 and 33.2% in the last 12 months. These two products are mainly used by enterprises in order to finance equipment, commercial real estate and commercial vehicles.

  

When analyzing the loan portfolio according to the customer categories established by Bancolombia in order to manage its commercial strategy (see table below), it becomes clear that commercial loans led the growth during 4Q13, as they increased 12.1% with respect to 3Q13, in part by the consolidation of the commercial loan portfolio of Banistmo. The organic increase is explained by the credit demand for business investment. This is the segment that contributes the most to the nominal growth of the total loan book. Consumer and SMEs loans increased 11.7% when compared with 3Q13, which indicates a sustained credit demand under strict underwriting criteria.

 

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4Q13

 

Total reserves (allowances in balance sheet) for loan losses increased by 10.2% during 4Q13 and totaled COP 4,066 billion, or 4.5% of gross loans at the end of the quarter. For further explanation regarding coverage of the loan portfolio and credit quality trends, see section “2.4. Asset Quality, Provision Charges and Balance Sheet Strength”.

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO      As of       Growth   % of Total   % of 
(COP million)  Dec-12   Sep-13   Dec-13   4Q13/3Q13   4Q13/4Q12   loans   Category 
CORPORATE                                   
Working capital loans   30,493,677    34,072,869    33,992,771    -0.24%   11.47%   38.00%   82.28%
Funded by domestic development banks   261,701    417,679    489,798    17.27%   87.16%   0.55%   1.19%
Trade Financing   2,215,613    2,076,044    6,706,315    223.03%   202.68%   7.50%   16.23%
Overdrafts   103,434    239,602    80,023    -66.60%   -22.63%   0.09%   0.19%
Credit Cards   35,619    42,252    42,406    0.36%   19.05%   0.05%   0.10%
TOTAL CORPORATE   33,110,044    36,848,446    41,311,313    12.11%   24.77%   46.18%   100.00%
RETAIL AND SMEs                                   
Working capital loans   8,426,695    9,534,830    9,666,234    1.38%   14.71%   10.81%   34.31%
Personal loans   6,820,922    7,850,183    9,573,141    21.95%   40.35%   10.70%   33.98%
Loans funded by   domestic development banks   863,025    1,086,850    1,319,245    21.38%   52.86%   1.47%   4.68%
Credit Cards   3,672,766    4,041,083    4,548,670    12.56%   23.85%   5.08%   16.15%
Overdrafts   223,550    315,850    251,724    -20.30%   12.60%   0.28%   0.89%
Automobile loans   2,155,547    2,284,997    2,577,704    12.81%   19.58%   2.88%   9.15%
Trade Financing   108,363    110,153    234,145    112.56%   116.07%   0.26%   0.83%
TOTAL RETAIL AND SMEs   22,270,868    25,223,946    28,170,863    11.68%   26.49%   31.49%   100.00%
MORTGAGE   5,957,824    7,093,610    10,295,930    45.14%   72.81%   11.51%   100.00%
FINANCIAL LEASES   8,649,943    9,250,968    9,681,436    4.65%   11.92%   10.82%   100.00%
Total loans and financial leases   69,988,679    78,416,970    89,459,542    14.08%   27.82%   100.00%   100.00%
Allowance for loan losses   (3,249,639)   (3,689,353)   (4,065,530)   10.20%   25.11%          
Total loans and financial leases, net   66,739,040    74,727,617    85,394,012    14.27%   27.95%          

 

1.3.Investment Portfolio

 

As of December 31, 2013, Bancolombia’s net investment portfolio totaled COP 13,806 billion, 4.9% lower than that reported in 3Q13 and 10.0% higher when compared to that reported in 4Q12. The investment portfolio consisted primarily of debt investment securities, which represented 88% of Bancolombia’s total investments and 9% of assets at the end of 4Q13. Investments denominated in USD totaled USD 1,944 million and represented 27% of the investment portfolio.

 

Additionally, the Bank had COP 952 billion in net mortgage backed securities, which represented 6.9% of the investment portfolio.

 

After the loss in value in the securities portfolio in 2Q13 because of the expectations of a reduction in the monetary stimulus in the U.S., Bancolombia's strategy focused on reducing volatility and duration of the portfolio in order to minimize the impact on the bank's results. At the end of 4Q13, the portfolio of investments in debt securities had a duration of 15.3 months and a yield to maturity of 4.1%.

 

1.4.Goodwill

 

As of 4Q13, Bancolombia’s goodwill totaled COP 3,589 billion, increasing 525.7% compared to the amount reported in 3Q13 and 528.2% compared to 4Q12. This variation is explained by the acquisition of Banistmo which generated goodwill of approximately 1.500 million USD. Under COL GAAP, goodwill is amortized within a maximum period of 20 years.

 

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4Q13

 

1.5.Funding

 

As of December 31, 2013, Bancolombia’s liabilities totaled COP 118,323 billion, increasing 16.4% compared to 3Q13 and 37.1% compared to 4Q12.

 

Deposits totaled COP 86,557 billion (or 73% of liabilities) at the end of 4Q13, increasing 20% during the quarter and 35% over the last 12 months. The annual growth of the deposits was explained 17% by the contribution of Banistmo and 19% by the organic growth of the bank. The higher growth rate in deposits against net loans led the bank to a better liquidity position, where net loans to deposits ratio (including borrowings from domestic development banks) was 94% at the end of 4Q13, decreasing compared to the 98% reported in 3Q13, and the 104% reported in 4Q12.

 

Bancolombia´s funding strategy is meant to improve the liquidity position and to encourage non interest bearing checking accounts and savings accounts, and reduce the proportion of time deposits.. This strategy allowed the bank to reduce the cost on deposits during the quarter. The ultimate goal is to defend the net interest margin.

 

Funding mix            
COP Million  4Q12   3Q13   4Q13 
Checking accounts   11,298,901    14%   11,664,539    12%   16,784,933    15%
Saving accounts   27,113,914    33%   29,406,525    30%   34,649,764    31%
Time deposits   24,767,489    30%   30,227,429    31%   34,058,452    30%
Other deposits   978,416    1%   715,013    1%   1,063,430    1%
Long term debt   12,059,219    15%   12,331,172    13%   12,328,275    11%
Loans with banks   5,316,443    7%   12,509,301    13%   13,632,894    12%
Total Funds   81,534,382    100%   96,853,979    100%   112,517,748    100%

 

At the end of 4Q13, Bancolombia had outstanding bonds for USD 3,740 million in international markets and for COP 5,122 billion in local markets. The maturities of these bonds range from 2 to 10 years.

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 4Q13 was COP 12,493 billion, increasing 7.6% or COP 886 billion, with respect to the 11,607 billion reported at the end of 4Q12.

 

Bancolombia’s capital adequacy ratio was 10.61%, 469 basis points below the 15.3% for 3Q13 and 516 basis points below the 15.77% at the end of 4Q12. This annual decrease in the capital adequacy was due to the implementation in Colombia of a new capital regulation for banks, which increased deductions from the tier 1 calculation.

 

Bancolombia’s capital adequacy ratio was 161 basis points above the minimum level required by Colombia’s regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 5.8%, 131 basis points above the regulatory minimum of 4.5% . The tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 6.5% at the end of 4Q13.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS         
Consolidated (COP millions)  4Q123   %   3Q13   %   4Q13   % 
Basic capital (Tier I)   9,070,487    10.39%   9,522,134    10.12%   6,207,425    5.81%
Additional capital (Tier II)   4,694,203    5.38%   4,873,451    5.18%   5,124,336    4.80%
Technical capital (1)   13,764,690         14,395,585         11,331,761      
Risk weighted assets included market risk   87,262,916         94,070,332         106,826,579      
CAPITAL ADEQUACY (2)   15.77%        15.30%        10.61%     

 

(1) Technical capital is the sum of basic and additional capital.

(2) Capital adequacy is technical capital divided by risk weighted assets.

(3) Capital adequacy ratios for 3Q12 and 2Q13 are calculated according to the capital rules existing until August 2013

 

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4Q13

 

2.INCOME STATEMENT

 

Net income totaled COP 489 billion in 4Q13, or COP 574 per share - USD 1.19 per ADR, which represents an increase of 51.0% compared to 3Q13 and 4.5% compared to 4Q12. Bancolombia’s annualized ROE was 16% for 4Q13, and 12.8% for 2013.

 

2.1.Net Interest Income

 

Net interest income totaled COP 1,349 billion in 4Q13, 10.5% higher than that reported in 3Q13, and 8.7% higher than the figure for 4Q12. The annual increase in net interest income was driven by the larger size of the loan portfolio, although it was overshadowed by the return on investments during the year, which decreased 50.8% compared to the 4Q12.

 

During 4Q13, the investment portfolio continued its path of recovery from the losses posted in 2Q13, generating USD 99 billion. The strategy for the last quarters has been maintaining low the volatility and duration of the portfolio.

 

Net Interest Margin

 

The annualized net interest margin kept compressing during 4Q13, in line with the trend seen since the end of 4Q12, reaching 5.3% in 4Q13.

 

The annualized net interest margin for investments was 0.1% due to lower yields on debt securities of the Colombian government and the annualized net interest margin of the loan portfolio, financial leases, overnight funds and interbank loans was 6.0%, negatively impacted by lower interest rates, the change in the composition of the portfolio by type of client, where the corporate credit became more important within the overall portfolio, and the consolidation of Banistmo’s assets denominated in USD Banistmo, in which net interest margin is lower.

 

Annualized Interest                                    
Margin  4Q11   1Q12   2Q12   3Q12   4Q12   1Q13   2Q13   3Q13   4Q13 
Loans' Interest margin   6.7%   6.8%   7.0%   7.1%   6.9%   6.6%   6.4%   6.2%   6.0%
Debt investments' margin   1.2%   4.1%   4.1%   4.0%   2.9%   8.0%   -5.1%   -0.4%   0.1%
Net interest margin   5.9%   6.5%   6.6%   6.6%   6.3%   6.8%   4.7%   5.3%   5.3%

 

The funding cost decreased during 4Q13 due to the rate cuts and management of the liabilities structure. Savings and checking accounts slightly increased their share during the quarter, and the annualized average weighted cost of deposits was 2.6% in 4Q13, decreasing compared to the 2.7% for 3Q13 and the 3.3% for 4Q12.

 

Average weighted            
funding cost  3Q12   2Q13   3Q13 
Checking accounts   0.24%   0.26%   0.24%
Time deposits   5.55%   4.74%   4.42%
Saving accounts   2.86%   2.22%   2.03%
Total deposits   3.47%   2.87%   2.69%
Long term debt   6.59%   6.06%   6.12%
Loans with banks   5.18%   4.32%   3.27%
Total funding cost   4.12%   3.45%   3.21%

 

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4Q13

 

2.2.Fees and Income from Services

 

During 4Q13, net fees and income from services totaled COP 525 billion, 14.0% higher than those reported in 3Q13 and 6.2% higher compared to those reported in 4Q12. Fees from credit and debit cards increased 32.1% compared to 3Q13 due to higher volume of transactions and the incorporation of this type of income generated for Banistmo in the last two months of the year. Fees from banking services decreased 14.9% compared to 3Q13 because in 4Q13 there was not income from advisory services in structuring capital markets operations, and decreased 15.6% compared to 4Q12; this line includes fees from insurance distribution throughout the distribution networks in Colombia and in El Salvador. Fees from brokerage services increased 10.5% in 4Q13 as compared to 3Q13 and decreased 29.0% as compared to those in 4Q12, explained by seasonality of business.

 

The following table summarizes Bancolombia’s participation in the credit card business in Colombia:

 

ACCUMULATED CREDIT CARD BILLING  %   2013 
(COP millions)  Dec-12   Dec-13   Growth   Market Share 
Bancolombia VISA   425,879    454,068    6.62%   4.99%
Bancolombia Mastercard   464,266    598,727    28.96%   6.58%
Bancolombia American Express   641,445    687,433    7.17%   7.55%
Total Bancolombia   1,531,590    1,740,228    13.62%   19.12%
Colombian Credit Card Market   8,425,638    9,102,320    8.03%     

 

CREDIT CARD MARKET SHARE  %   2013 
(Outstanding credit cards)  Dec-12   Dec-13   Growth   Market Share 
Bancolombia VISA   2,537,429    2,842,025    12.00%   7.51%
Bancolombia Mastercard   2,995,373    3,504,939    17.01%   9.26%
Bancolombia American Express   3,724,676    4,013,749    7.76%   10.60%
Total Bancolombia   9,257,478    10,360,713    11.92%   27.37%
Colombian Credit Card Market   33,878,386    37,860,903    11.76%     
Source: Superintendencia Financiera de Colombia

 

2.3.Other Operating Income

 

Total other operating income was COP 258 billion in 4Q13, 18.7% higher than that in 3Q13, and 31.4% higher than in 4Q12. Income from foreign exchange gains and derivatives denominated in foreign currencies increased in the quarter due to the net effect of the active and passive positions the bank had in foreign currency.

 

During 4Q13 the bank received 8.4 billion in dividends from companies in which Bancolombia and its subsidiaries have interests, especially from Sura Asset Management (COP 3.9 billion) and Bolsa de Valores de Colombia (COP 1 billion).

 

Revenues aggregated in the communication, rent and others line totaled COP 121.4 billion in 4Q13, which is 1.45% lower as compared to 3Q13 and 7.62% higher as compared to those in 4Q12. This line includes revenues from commercial discounts and operating leases payments, which have increased as the operating leasing business grows.

 

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4Q13

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The quality of the loan portfolio showed a slight deterioration in 4Q13 due to the incorporation of Banistmo’s assets that under Colombian rule resulted in an increase in the past due loans. Colombian standards consider those loans overdue more than 30 days as delinquent while Panamanian law considers them past due after 90 days or more. Thus, past due loans (those that are overdue for more than 30 days) totaled COP 2.597 billion at the end of 4Q13, representing 2.9% of total gross loans for 4Q13, and increasing compared to the 2.7% reported in 3Q13 and the 2.6% reported in 4Q12. Charge-offs totaled COP 282 billion in 4Q13.

 

The coverage measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 157% at the end of 4Q13, decreasing with respect to the 175% of 3Q13 and the 177% of 4Q12. Likewise, the coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 111% at the end of 4Q13, decreasing with respect to the 120% reported in 3Q13 and the 117% reported in 4Q12. These reductions are explained by the consolidation of Banistmo.

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 775 billion in 4Q13, which represented 1.0 % of the loan portfolio at the beginning of the quarter, increasing with respect to the COP 144 billion in 4Q12. The loan portfolio of Banistmo that under Colombian rule is considered overdue explains COP 562 billion deterioration presented during the quarter.

 

Provision charges (net of recoveries) totaled COP 273 billion in 4Q13. Provisions as a percentage of the average gross loans were 1.3% for 4Q13 and 1.59% for 2013.

 

Bancolombia maintains a strong balance sheet supported on an adequate level of loan loss reserves. Allowances for loan losses totaled COP 4,066 billion, or 4.54% of total loans at the end of 4Q13. This proportion decreased with respect to the 4.70% presented at the end of 3Q13, and with respect to the 4.64% for 4Q12.

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY      As of       Growth 
( COP millions)  Dec-12   Sep-13   Dec-13   4Q13/3Q13   4Q13/4Q12 
Total performing past due loans (1)   604,375    692,137    967,194    39.74%   60.03%
Total non-performing past due loans   1,228,327    1,411,940    1,630,027    15.45%   32.70%
Total past due loans   1,832,702    2,104,077    2,597,221    23.44%   41.72%
Allowance for loans interest losses   3,249,639    3,689,353    4,065,530    10.20%   25.11%
Past due loans to total loans   2.62%   2.68%   2.90%          
Non-performing loans as a percentage of total loans   1.76%   1.80%   1.82%          
“C”, “D” and “E” loans as a percentage of total loans   3.96%   3.91%   4.11%          
Allowances to past due loans (2)   177.31%   175.34%   156.53%          
Allowance for loan  losses as a percentage of “C”, “D” and “E” loans (2)    117.35%   120.33%   110.54%          
Allowance for loan losses as a percentage of non-performing loans (2)   264.56%   261.30%   249.41%          
Allowance for loan losses as a percentage of total loans   4.64%   4.70%   4.54%          
Percentage of performing loans to total loans   98.24%   98.20%   98.18%          

 

(1) "Performing" past due loans are loans upon which Bancolombia continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.

 

(2)Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.
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4Q13

 

PDL Per Category (30 days)                
   % de la cartera total   4Q12   3Q13   4Q13 
Commercial loans   58.53%   1.48%   1.55%   1.75%
Consumer loans   18.56%   4.80%   4.80%   4.73%
Microcredit   0.58%   9.32%   10.30%   9.89%
Mortgage loans   11.51%   6.86%   6.13%   6.22%
Finance lease   10.82%   1.84%   2.31%   2.09%
PDL TOTAL   100.00%   2.62%   2.68%   2.90%

 

                 
PDL Per Category (90 days)                
   % de la cartera total   4Q12   3Q13   4Q13 
Commercial loans   58.53%   1.16%   1.09%   1.13%
Consumer loans   18.56%   2.55%   2.42%   2.30%
Microcredit   0.58%   5.81%   7.27%   6.52%
Mortgage loans   11.51%   2.97%   2.81%   2.39%
Finance lease   10.82%   1.36%   1.33%   1.28%
TOTAL LOAN PORTFOLIO   100.00%   1.62%   1.54%   1.54%

 

LOANS AND FINANCIAL LEASES CLASSIFICATION     
( COP millions)  4Q12   3Q13   4Q13 
¨A¨ Normal   65,453,223    93.52%   73,087,284    93.20%   82,576,481    92.31%
¨B¨ Subnormal   1,766,262    2.52%   2,263,565    2.89%   3,205,115    3.58%
¨C¨ Deficient   1,179,600    1.69%   1,292,074    1.65%   1,590,505    1.77%
¨D¨ Doubtful recovery   948,051    1.35%   1,045,062    1.33%   1,213,257    1.36%
¨E¨ Unrecoverable   641,543    0.92%   728,985    0.93%   874,184    0.98%
Total   69,988,679    100.00%   78,416,970    100.00%   89,459,542    100.00%
                               
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases   3.96%        3.91%        4.11%     

 

2.5.Operating Expenses

 

During 4Q13, operating expenses totaled COP 1,207 billion, increasing 5.6% with respect to 3Q13 and 14.4% with respect to 4Q12.

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 393 billion in 4Q13, decreasing 2.5 % as compared to 3Q13 and 3.0% as compared to 4Q12. This reduction is explained by lower bonuses payments as well as the little growth in the number of employees

 

During 4Q13, administrative expenses totaled COP 660 billion, increasing 14.3% as compared to 3Q13 and 24.8% as compared to 4Q12. This variation during the year is mainly explained by the costs of integration of Banistmo, higher rent expenses, higher taxes (other than income tax), higher amortization of capitalized expenses and higher expenses for maintenance of fixed assets.

 

Depreciation expenses totaled COP 119 billion in 4Q13, increasing 7.0% as compared to 3Q13 and 32.1% as compared to 4Q12. The increase in this type of expense is explained by the increase of operating leases from Leasing Bancolombia whose assets given on lease are depreciated.

 

At the end of 4Q13, Bancolombia had 28,759 employees, 1,090 branches and 4,310 ATMs.

 

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4Q13

 

3.BANCOLOMBIA Company Description (NYSE: CIB)

 

GRUPO BANCOLOMBIA is a full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 9 million customers. GRUPO BANCOLOMBIA delivers its products and services via its regional network comprised of: Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore and local (Banistmo S.A.) banking subsidiaries in Panama, Cayman and Puerto Rico. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, among others.

 

Contact Information

 

Bancolombia’s Investor Relations

Phone: (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Alejandro Mejia (IR Manager) / Simon Botero (Analyst)

Website: http://www.grupobancolombia.com/investorRelations/

 

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4Q13

 

BALANCE SHEET                        
(COP million)  Dec-12   Sep-13   Dec-13   Last
Quarter		   Annual   % of
Assets		   % of
Liabilities		 
ASSETS                                   
Cash and due from banks   7,144,015    8,439,492    11,427,441    35.40%   59.96%   8.74%     
Overnight funds and interbank loans   1,025,082    4,267,357    3,981,205    -6.71%   288.38%   3.04%     
Total cash and equivalents   8,169,097    12,706,849    15,408,646    21.26%   88.62%   11.78%     
Debt securities   11,432,214    13,288,857    12,136,179    -8.67%   6.16%   9.28%     
Trading   6,492,812    8,114,463    6,537,697    -19.43%   0.69%   5.00%     
Available for Sale   1,456,042    1,555,171    1,803,144    15.95%   23.84%   1.38%     
Held to Maturity   3,483,360    3,619,223    3,795,338    4.87%   8.96%   2.90%     
Equity securities   1,136,256    1,241,511    1,680,237    35.34%   47.87%   1.28%     
Trading   327,091    412,532    411,987    -0.13%   25.95%   0.31%     
Available for Sale   809,165    828,979    1,268,250    52.99%   56.74%   0.97%     
Allowance for impairment   -14,159    -7,020    -10,626    51.37%   -24.95%   -0.01%     
Net investment securities   12,554,311    14,523,348    13,805,790    -4.94%   9.97%   10.55%     
Commercial loans   42,465,660    47,563,831    52,363,519    10.09%   23.31%   40.03%     
Consumer loans   12,580,661    14,115,106    16,601,890    17.62%   31.96%   12.69%     
Small business loans   334,591    393,456    516,767    31.34%   54.45%   0.40%     
Mortgage loans   5,957,824    7,093,609    10,295,930    45.14%   72.81%   7.87%     
Financial leases   8,649,943    9,250,968    9,681,436    4.65%   11.92%   7.40%     
Allowance for loan and financial lease losses   -3,249,639    -3,689,353    -4,065,530    10.20%   25.11%   -3.11%     
Net total loans and financial leases   66,739,040    74,727,617    85,394,012    14.27%   27.95%   65.28%     
Accrued interest receivable on loans and financial leases   578,067    622,991    624,317    0.21%   8.00%   0.48%     
Allowance for accrued interest losses   -54,026    -61,803    -63,745    3.14%   17.99%   -0.05%     
Net total interest accrued   524,041    561,188    560,572    -0.11%   6.97%   0.43%     
Customers' acceptances and derivatives   783,014    598,237    602,409    0.70%   -23.07%   0.46%     
Accounts receivable, net   1,243,263    1,538,437    1,537,218    -0.08%   23.64%   1.18%     
Premises and equipment, net   1,341,698    1,569,253    2,191,677    39.66%   63.35%   1.68%     
Foreclosed assets, net   84,818    97,581    103,565    6.13%   22.10%   0.08%     
Prepaid expenses and deferred charges, net   772,930    547,638    690,932    26.17%   -10.61%   0.53%     
Goodwill   571,373    573,608    3,589,203    525.72%   528.17%   2.74%     
Premises and equipment under operating leases, net   2,191,928    2,826,134    2,919,181    3.29%   33.18%   2.23%     
Other assets   2,088,947    2,419,752    2,590,110    7.04%   23.99%   1.98%     
Reappraisal of assets   851,920    978,694    1,422,926    45.39%   67.03%   1.09%     
Total assets   97,916,380    113,668,336    130,816,241    15.09%   33.60%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
DEPOSITS                                   
Non-interest bearing   9,798,874    9,217,936    14,680,487    59.26%   49.82%   11.22%   12.41%
Checking accounts   8,820,458    8,502,923    13,617,057    60.15%   54.38%   10.41%   11.51%
Other   978,416    715,013    1,063,430    48.73%   8.69%   0.81%   0.90%
Interest bearing   54,359,846    62,795,570    71,876,092    14.46%   32.22%   54.94%   60.75%
Checking accounts   2,478,443    3,161,616    3,167,876    0.20%   27.82%   2.42%   2.68%
Time deposits   24,767,489    30,227,429    34,058,452    12.67%   37.51%   26.04%   28.78%
Savings deposits   27,113,914    29,406,525    34,649,764    17.83%   27.79%   26.49%   29.28%
Total deposits   64,158,720    72,013,506    86,556,579    20.19%   34.91%   66.17%   73.15%
Overnight funds and interbank borrowings   44,935    2,185,843    1,124,802    -48.54%   2403.18%   0.86%   0.95%
Bank acceptances outstanding and derivatives   625,632    455,051    464,514    2.08%   -25.75%   0.36%   0.39%
Other interbank borrowings   1,803,665    6,338,644    7,876,792    24.27%   336.71%   6.02%   6.66%
Borrowings from development and other domestic banks   3,467,843    3,984,814    4,631,300    16.22%   33.55%   3.54%   3.91%
Accounts payable   2,311,221    1,882,304    2,611,114    38.72%   12.98%   2.00%   2.21%
Accrued interest payable   523,655    561,695    610,511    8.69%   16.59%   0.47%   0.52%
Other liabilities   888,190    780,879    1,250,757    60.17%   40.82%   0.96%   1.06%
Long-term debt   12,059,219    12,331,172    12,328,275    -0.02%   2.23%   9.42%   10.42%
Accrued expenses   344,951    1,057,542    423,303    -59.97%   22.71%   0.32%   0.36%
Minority interest   81,394    77,199    445,448    477.01%   447.27%   0.34%   0.38%
Total liabilities   86,309,425    101,668,649    118,323,395    16.38%   37.09%   90.45%   100.00%
SHAREHOLDERS' EQUITY                                   
Subscribed and paid in capital   425,914    425,914    425,914    0.00%   0.00%   0.33%     
Retained earnings   10,250,192    10,748,889    11,253,148    4.69%   9.78%   8.60%     
Appropiated   8,548,146    9,820,186    9,802,509    -0.18%   14.67%   7.49%     
Unappropiated   1,702,046    928,703    1,450,639    56.20%   -14.77%   1.11%     
Reappraisal of assets   894,206    829,433    853,454    2.90%   -4.56%   0.65%     
Gross unrealized net gain on investments   36,643    -4,549    -39,670    772.06%   -208.26%   -0.03%     
Total shareholder's equity   11,606,955    11,999,687    12,492,846    4.11%   7.63%   9.55%     

 

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4Q13

 

INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Dec-12   Dec-13   Dic-13/Dic-12   4Q12   3Q13   4Q13   4Q13/3Q13   4Q13/4Q12 
Interest income and expenses                                        
Interest on loans   6,047,906    6,730,380    11.28%   1,603,351    1,661,695    1,821,119    9.59%   13.58%
Interest on investment securities   759,513    489,528    -35.55%   202,004    95,030    99,396    4.59%   -50.80%
Overnight funds and interbank loans   24,178    26,900    11.26%   6,163    6,375    8,970    40.71%   45.55%
Financial leases   830,286    883,876    6.45%   222,690    216,028    222,198    2.86%   -0.22%
Total interest income   7,661,883    8,130,684    6.12%   2,034,208    1,979,128    2,151,683    8.72%   5.77%
Interest expense                                        
Checking accounts   24,931    29,403    17.94%   6,244    7,377    7,119    -3.50%   14.01%
Time deposits   1,117,435    1,330,439    19.06%   324,736    319,342    357,034    11.80%   9.95%
Savings deposits   659,355    642,616    -2.54%   169,576    151,586    142,083    -6.27%   -16.21%
Total interest on deposits   1,801,721    2,002,458    11.14%   500,556    478,305    506,236    5.84%   1.13%
Interbank borrowings   50,209    77,995    55.34%   9,025    22,887    31,494    37.61%   248.96%
Borrowings from development and other domestic banks   220,096    223,193    1.41%   58,658    55,717    58,437    4.88%   -0.38%
Overnight funds   97,620    61,104    -37.41%   28,592    9,965    19,113    91.80%   -33.15%
Long-term debt   725,214    757,376    4.43%   197,289    192,054    187,857    -2.19%   -4.78%
Total interest expense   2,894,860    3,122,126    7.85%   794,120    758,928    803,137    5.83%   1.14%
Net interest income   4,767,023    5,008,558    5.07%   1,240,088    1,220,200    1,348,546    10.52%   8.75%
Provisions for loans and accrued interest losses and other receivables , net   (1,240,339)   (1,394,075)   12.39%   (356,609)   (326,879)   (327,858)   0.30%   -8.06%
Recovery of charged-off loans   167,819    231,396    37.88%   44,195    52,279    69,412    32.77%   57.06%
Provision for foreclosed assets and other assets   (118,961)   (152,802)   28.45%   (42,862)   (32,281)   (37,347)   15.69%   -12.87%
Recovery of provisions for foreclosed assets and other assets   80,608    84,881    5.30%   20,599    17,648    22,874    29.61%   11.04%
Total net provisions   (1,110,873)   (1,230,600)   10.78%   (334,677)   (289,233)   (272,919)   -5.64%   -18.45%
Net interest income after provision for loans                                        
and accrued interest losses   3,656,150    3,777,958    3.33%   905,411    930,967    1,075,627    15.54%   18.80%
Commissions from banking services   449,452    469,896    4.55%   124,317    123,366    104,963    -14.92%   -15.57%
Electronic services and ATM fees   73,887    87,516    18.45%   19,608    19,243    29,571    53.67%   50.81%
Branch network services   126,356    135,474    7.22%   34,098    34,696    38,628    11.33%   13.29%
Collections and payments fees   256,503    283,788    10.64%   70,415    71,232    77,784    9.20%   10.47%
Credit card merchant fees   9,684    8,295    -14.34%   3,248    2,490    2,697    8.31%   -16.96%
Credit and debit card fees   654,900    731,095    11.63%   160,488    170,889    225,767    32.11%   40.68%
Checking fees   72,636    70,261    -3.27%   17,860    17,577    17,653    0.43%   -1.16%
Trust activities   208,583    207,994    -0.28%   54,859    46,730    49,046    4.96%   -10.60%
Brokerage fees   63,631    62,615    -1.60%   18,148    11,651    12,878    10.53%   -29.04%
Check remittances   22,120    44,368    100.58%   5,766    5,618    28,341    404.47%   391.52%
International wire transfers   71,932    62,921    -12.53%   24,109    19,901    17,253    -13.31%   -28.44%
Fees and other service income   2,009,684    2,164,223    7.69%   532,916    523,393    604,581    15.51%   13.45%
Fees and other service expenses   (202,644)   (247,867)   22.32%   (38,437)   (62,853)   (79,563)   26.59%   107.00%
Total fees and income from services, net   1,807,040    1,916,356    6.05%   494,479    460,540    525,018    14.00%   6.18%
Other operating income                                        
Foreign exchange gain (loss), net   103,953    94,595    -9.00%   24,578    25,989    62,889    141.98%   155.88%
Gains on forward contracts in foreign currency   58,902    27,320    -53.62%   14,968    23,802    7,613    -68.02%   -49.14%
Gains on sales of investments in equity securities   82,187    3,780    -95.40%   (2,176)   (3,205)   4,916    253.39%   325.92%
Gains on sales of mortgage loans   43,146    31,593    -26.78%   7,691    5,703    5,758    0.96%   -25.13%
Dividend income   47,610    63,007    32.34%   1,750    7,303    8,402    15.05%   380.11%
Income from non-financial subsidiaries   147,304    143,893    -2.32%   36,598    34,349    36,605    6.57%   0.02%
Insurance income   -    10,164    0.00%   -    -    10,164    0.00%   0.00%
Communication, postage, rent and others   349,995    465,773    33.08%   112,842    123,231    121,443    -1.45%   7.62%
Total other operating income   833,097    840,125    0.84%   196,251    217,172    257,790    18.70%   31.36%
Total income   6,296,287    6,534,439    3.78%   1,596,141    1,608,679    1,858,435    15.53%   16.43%
Operating expenses                                        
Salaries and employee benefits   1,394,027    1,467,780    5.29%   360,405    370,876    367,606    -0.88%   2.00%
Bonus plan payments   204,201    154,550    -24.31%   34,549    22,877    16,730    -26.87%   -51.58%
Indemnities benefits   39,452    33,965    -13.91%   9,827    9,250    8,395    -9.24%   -14.57%
Administrative and other expenses   2,040,223    2,327,908    14.10%   528,454    577,173    659,745    14.31%   24.84%
Insurance on deposits, net   105,675    135,816    28.52%   29,311    48,446    34,462    -28.87%   17.57%
Donation expenses   13,512    11,525    -14.71%   2,433    3,807    1,545    -59.42%   -36.50%
Depreciation   319,602    428,856    34.18%   89,999    111,073    118,886    7.03%   32.10%
Total operating expenses   4,116,692    4,560,400    10.78%   1,054,978    1,143,502    1,207,369    5.59%   14.44%
Net operating income   2,179,595    1,974,039    -9.43%   541,163    465,177    651,066    39.96%   20.31%
Goodwill amortization (1)   45,690    78,880    72.64%   11,165    12,745    38,335    200.78%   243.35%
Non-operating income (expense)                                        
Other income   148,751    233,721    57.12%   42,892    48,712    99,878    105.04%   132.86%
Minority interest   (5,723)   (17,364)   203.41%   (701)   (4,901)   (9,981)   103.65%   1323.82%
Other expense   (107,813)   (179,294)   66.30%   (36,056)   (48,498)   (69,836)   44.00%   93.69%
Total non-operating income   35,215    37,063    5.25%   6,135    (4,687)   20,061    528.01%   226.99%
Income before income taxes   2,169,120    1,932,222    -10.92%   536,133    447,745    632,792    41.33%   18.03%
Income tax expense   (467,074)   (417,095)   -10.70%   (68,371)   (123,820)   (144,052)   16.34%   110.69%
Net income   1,702,046    1,515,127    -10.98%   467,762    323,925    488,740    50.88%   4.48%

 

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