BANCOLOMBIA S.A. 2Q23
BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER OF 2023.
- Net income attributable to shareholders of the parent company in 2Q23 was COP 1.5 trillion. This value represents a reduction of 14.9% compared to the previous quarter. Annualized return on equity ("ROE") at the consolidated level was 15.7% for the quarter and 17.4% for the last twelve months.
- Gross loans amount to COP 261 trillion on a consolidated basis, decreasing 2.4% compared to the previous quarter. The appreciation of the Colombian Peso against the US dollar reached 10.1% and impacted the loan balance. When excluding the currency exchange effect, the credit portfolio would have increased 1.3%.
- 30-daypast due loans stood at 4.67% and 90-day past due loans at 2.97%. Total provision charges, net for 2Q23 were COP 2,082 billion that represented an increase of 1.8% when compared to 1Q23, driven by credit deterioration mainly in the consumer portfolio.
- Shareholders' equity attributable to the owners of the parent company stood at COP 36.5 trillion as of June 30, 2023, decreasing 1.0% compared to the previous quarter. This variation is largely explained by the negative effect of foreign balances on local currency. Basic solvency stood at 10.45% and the total consolidated solvency ratio was 12.54% for 2Q23, complying with the minimum regulatory requirements.
- Bancolombia illustrates an encouraging quarterly growth trend in digital users. As of June 2023, the bank has 8.0 million active digital customers in the Retail APP (over a period of three months), as well as 23.1 million accounts in its financial inclusion platforms (6.5 million users in Bancolombia a la Mano and 16.6 million in NEQUI).
August 9, 2023. Medellin, Colombia - Today, BANCOLOMBIA S.A. ("Bancolombia" or "the Bank") announced its earnings results for the second quarter of 20231.
1 This report corresponds to the interim unaudited consolidated financial information of BANCOLOMBIA S.A. and its subsidiaries ("BANCOLOMBIA" or "The Bank") which Bancolombia controls, amongst others, by owning directly or indirectly, more than 50% of the voting capital stock. This financial information has been prepared based on financial records generated in accordance with International Financial Reporting Standards - IFRS. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as "Ps." or "COP". The financial information for the quarter ended June 30, 2023 is 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.
. BANCOLOMBIA's first IFRS financial statements will cover the year ending in 2015. 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, July 1, 2023 $4,177.58 = US$ 1
1
2Q23 | |||||||||||||||
BANCOLOMBIA: Summary of consolidated financial quarterly results | |||||||||||||||
CONSOLIDATED BALANCE SHEET | Quarter | Change | |||||||||||||
AND INCOME STATEMENT | |||||||||||||||
(COP million) | 2Q22 | 1Q23 | 2Q23 | 2Q23 | / 1Q23 | 2Q23 / 2Q22 | |||||||||
ASSETS | |||||||||||||||
Net Loans | 228,054,203 | 250,756,177 | 244,018,017 | -2.69% | 7.00% | ||||||||||
Investments | 27,415,761 | 30,968,605 | 26,028,005 | -15.95% | -5.06% | ||||||||||
Other assets | 57,961,839 | 67,598,162 | 68,550,647 | 1.41% | 18.27% | ||||||||||
Total assets | 313,431,803 | 349,322,944 | 338,596,669 | -3.07% | 8.03% | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
Deposits | 222,331,703 | 251,007,379 | 243,352,178 | -3.05% | 9.45% | ||||||||||
Other liabilities | 56,001,080 | 60,461,705 | 57,746,360 | -4.49% | 3.12% | ||||||||||
Total liabilities | 278,332,783 | 311,469,084 | 301,098,538 | -3.33% | 8.18% | ||||||||||
Non-controlling interest | 1,817,384 | 936,297 | 955,492 | 2.05% | -47.42% | ||||||||||
Shareholders' equity | 33,281,636 | 36,917,563 | 36,542,639 | -1.02% | 9.80% | ||||||||||
Total liabilities and shareholders' equity | 313,431,803 | 349,322,944 | 338,596,669 | -3.07% | 8.03% | ||||||||||
Interest income | 5,954,765 | 9,383,121 | 9,074,683 | -3.29% | 52.39% | ||||||||||
Interest expense | (1,639,837) | (4,025,263) | (4,141,013) | 2.88% | 152.53% | ||||||||||
Net interest income | 4,314,928 | 5,357,858 | 4,933,670 | -7.92% | 14.34% | ||||||||||
Net provisions | (612,763) | (2,045,644) | (2,082,200) | 1.79% | 239.81% | ||||||||||
Fees and income from service, net | 878,792 | 1,001,596 | 997,998 | -0.36% | 13.56% | ||||||||||
Other operating income | 493,564 | 989,880 | 1,119,725 | 13.12% | 126.87% | ||||||||||
Total Dividends received and equity method | 84,830 | 116,636 | 112,270 | -3.74% | 32.35% | ||||||||||
Total operating expense | (2,519,735) | (3,071,662) | (3,170,973) | 3.23% | 25.85% | ||||||||||
Profit before tax | 2,639,616 | 2,348,664 | 1,910,490 | -18.66% | -27.62% | ||||||||||
Income tax | (784,776) | (586,371) | (426,328) | -27.29% | -45.68% | ||||||||||
Net income before non-controlling interest | 1,854,840 | 1,762,293 | 1,484,162 | -15.78% | -19.98% | ||||||||||
Non-controlling interest | (75,145) | (45,516) | (23,671) | -47.99% | -68.50% | ||||||||||
Net income | 1,779,695 | 1,716,777 | 1,460,491 | -14.93% | -17.94% | ||||||||||
PRINCIPAL RATIOS | Quarter | As of | |||||||||||||
2Q22 | 1Q23 | 2Q23 | 2Q22 | 2Q23 | |||||||||||
PROFITABILITY | |||||||||||||||
Net interest margin | (1) | from continuing operations | 6.69% | 7.17% | 6.72% | 6.33% | 6.95% | ||||||||
Return on average total assets | (2) | from continuing operations | 2.37% | 1.96% | 1.70% | 2.38% | 1.83% | ||||||||
Return on average shareholders´ equity | (3) | 22.55% | 17.67% | 15.75% | 21.95% | 16.66% | |||||||||
EFFICIENCY | |||||||||||||||
Operating expenses to net operating income | 43.65% | 41.14% | 44.26% | 44.64% | 42.67% | ||||||||||
Operating expenses to average total assets | 3.36% | 3.50% | 3.68% | 3.37% | 3.59% | ||||||||||
Operating expenses to productive assets | 3.90% | 4.11% | 4.32% | 3.91% | 4.22% | ||||||||||
CAPITAL ADEQUACY | |||||||||||||||
Shareholders' equity to total assets | 10.62% | 10.57% | 10.79% | 10.62% | 10.79% | ||||||||||
Technical capital to risk weighted assets | 12.93% | 12.01% | 12.54% | 12.93% | 12.54% | ||||||||||
KEY FINANCIAL HIGHLIGHTS | |||||||||||||||
Net income per ADS from continuing operations | 1.78 | 1.54 | 1.45 | 3.52 | 3.16 | ||||||||||
Net income per share $COP from continuing operations | 1,850.33 | 1,784.91 | 1,518.46 | 3,650.92 | 3,303.37 | ||||||||||
P/BV ADS | (4) | 0.92 | 0.76 | 0.73 | 0.92 | 0.73 | |||||||||
P/BV Local | (5) (6) | 0.97 | 0.91 | 0.82 | 0.97 | 0.82 | |||||||||
P/E | (7) | from continuing operations | 4.43 | 4.52 | 4.86 | 4.49 | 4.47 | ||||||||
ADR price | 30.83 | 25.13 | 26.68 | 30.83 | 26.68 | ||||||||||
Common share price | (8) | 33,540.00 | 34,990.00 | 31,000.00 | 33,540.00 | 31,000.00 | |||||||||
Weighted average of Preferred Shares outstanding | 961,827,000 | 961,827,000 | 961,827,000 | 961,827,000 | 961,827,000 | ||||||||||
USD exchange rate (quarter end) | 4,151.21 | 4,646.08 | 4,177.58 | 4,151.21 | 4,177.58 |
- 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.
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2Q23
1. BALANCE SHEET
1.1. Assets
As of June 30, 2023, Bancolombia's assets at the consolidated level totaled COP 338,597 billion, which represents an increase of 8.0% compared to 2Q22 and a decrease of 3.1% compared to 1Q23. The quarterly variation is explained by the reduction of the investment portfolio and the negative effect of balances in dollars, signaling the largest asset contraction in value since December 2020 when the loan portfolio was impacted by the pandemic and the Colombian peso appreciation.
During the quarter, the peso appreciated 10.1% against the US dollar and depreciated 0.6% in the last 12 months. The average exchange rate was 3.4% lower in 2Q23 versus 1Q23, and 17.4% higher in the last 12 months.
1.2. Loan Portfolio
The following table shows the composition of Bancolombia loans on a consolidated basis by type and currency:
(COP Million) | Amounts in COP | Amounts in USD converted to COP | Amounts in USD (thousands) | Total | ||||
(1 USD = 4177.58 COP) | 2Q23 | 2Q23 / 1Q23 | 2Q23 | 2Q23 / 1Q23 | 2Q23 | 2Q23 / 1Q23 | 2Q23 | 2Q23 / 1Q23 |
Commercial loans | 112,804,997 | 4.00% | 53,649,685 | -12.21% | 12,842,288 | -2.37% | 166,454,682 | -1.84% |
Consumer loans | 39,909,507 | -0.94% | 17,387,949 | -7.93% | 4,162,206 | 2.40% | 57,297,456 | -3.17% |
Mortgage loans | 20,322,392 | 2.26% | 15,734,947 | -9.50% | 3,766,522 | 0.65% | 36,057,339 | -3.23% |
Small business loans | 542,116 | -2.61% | 647,978 | -10.47% | 155,108 | -0.42% | 1,190,094 | -7.05% |
Interests paid in advance | (17,518) | 5.08% | (1,166) | 17.44% | (279) | 30.61% | (18,683) | 5.77% |
Gross loans | 173,561,494 | 2.60% | 87,419,393 | -10.89% | 20,925,845 | -0.90% | 260,980,888 | -2.35% |
In 2Q23, gross loans declined 2.4% compared to 1Q23 (increasing 1.3% when excluding the FX effect) and rose 7.4% compared to 2Q22. During the last 12 months peso-denominated loans grew 10.6% and dollar-denominated loans (expressed in USD) grew 0.8%.
At the end of 2Q23, Banco Agricola operations in El Salvador, Banistmo in Panama and BAM in Guatemala represented 26.5% of total gross loans. Gross loans denominated in currencies other than COP, generated by operations in Central America, the international operation of Bancolombia Panamá, Puerto Rico and the USD denominated loans in Colombia, accounted for 33.5% of the portfolio, and decreased 0.9% in the quarter (when expressed in USD).
Total reserves (provisions in the balance sheet) for loan losses increased 2.7% during the quarter and totaled COP 16,963 billion or 6.5% of the gross loans at the end of the quarter.
As in the previous quarter, during 2Q23 there is a sequential decrease in the total loan portfolio. The appreciation of the Colombian peso against the dollar impacted the balance of foreign subsidiaries. The most significant reduction on a consolidated basis took place in consumer loans in Bancolombia S.A., which represents 71% of this category and is explained by the lower credit demand from individuals. In the other geographies, conversely, there is an upward trend in retail that partially mitigates the exchange rate impact.
Banco Agromercantil recorded a quarterly growth of 0.4% when calculated in USD given the activity in consumer that continues to gain share within the total portfolio following the trend of recent quarters.
Banco Agricola reports a 0.3% increase when calculated in USD during the quarter, the expansion on retail offsets the decrease in mortgages and commercial loans, however, the credit portfolio is experiencing a gradual deceleration and a lower demand when compared to the performance a year ago.
Banistmo´s loan book remained stable in the quarter. Growth in mortgages and retail was offset by the contraction on commercial loans.
3
2Q23
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 total loan portfolio on a consolidated basis:
LOAN PORTFOLIO | 2Q22 | 1Q23 | 2Q23 | 2Q23 | / 1Q23 | 2Q23 | / 2Q22 | % of total loans |
(COP million) | ||||||||
Commercial | 155,271,122 | 169,573,762 | 166,454,682 | -1.84% | 7.20% | 63.8% | ||
Consumer | 53,707,360 | 59,171,343 | 57,297,456 | -3.17% | 6.68% | 22.0% | ||
Mortgage | 32,785,538 | 37,261,321 | 36,057,339 | -3.23% | 9.98% | 13.8% | ||
Microcredit | 1,328,020 | 1,280,352 | 1,190,094 | -7.05% | -10.39% | 0.5% | ||
Interests received in advance | (12,987) | (17,663) | (18,683) | 5.77% | 43.86% | 0.0% | ||
Total loan portfolio | 243,079,053 | 267,269,115 | 260,980,888 | -2.35% | 7.4% | 100.0% | ||
Allowance for loan losses | (15,024,850) | (16,512,938) | (16,962,871) | 2.72% | 12.90% | |||
Total loans, net | 228,054,203 | 250,756,177 | 244,018,017 | -2.69% | 7.00% |
1.3. Investment Portfolio
As of June 30, 2023, Bancolombia net investment portfolio at the consolidated level totaled COP 26,028 billion, decreasing 16.0% from the end of 1Q23 and 5.1% from the end of 2Q22. The bank´s temporal needs for liquidity in Colombia drove the balance reduction. At the end of 2Q23, the debt securities portfolio had a duration of 15.3 months and a weighted average yield to maturity of 9.0%.
1.4. Goodwill and intangibles
At the end of 2Q23, Bancolombia's goodwill and intangibles at the consolidated level totaled COP 9,130 billion, down 9.5% compared to 1Q23. This quarterly variation is mainly explained by the appreciation of the COP against the USD.
1.5. Funding
As of June 30, 2023, Bancolombia's liabilities at the consolidated level totaled COP 301,099 billion, decreasing 3.3% from the end of 1Q23, and increasing 8.2% compared to 2Q22.
Customer deposits totaled COP 243,352 billion (80.8% of liabilities) at the end of 2Q23, dropping 3.0% compared to 1Q23 and rising 9.5% over the last 12 months. The quarterly decrease is largely explained by the peso depreciation and its currency effect on the subsidiaries balance. The net loan-to-deposit ratio was 100.3% at the end of 2Q23 remaining relatively stable compared to 99.9% in 1Q23.
Certificates of deposit continue to gradually grow in volume over the past five quarters as a general effect across all subsidiaries. Such growth takes place in Bancolombia S.A. to a greater extent, given the interest rates environment causing a continued migration towards cost interest-bearing deposits. In the funding mix there is a significant variation in the last 12 months, time deposits now represent 35% compared to 26% a year ago. Loans with banks presented a balance decrease, mainly in Bancolombia S.A. and Bancolombia Panama.
FUNDING MIX | 2Q22 | 1Q23 | 2Q23 | |||
COP Million | ||||||
Checking accounts | 40,062,692 | 15% | 37,944,551 | 13% | 34,012,858 | 12% |
Saving accounts | 111,399,791 | 43% | 111,021,738 | 38% | 105,880,404 | 38% |
Time deposits | 66,652,747 | 26% | 97,466,462 | 34% | 98,445,525 | 35% |
Other deposits | 7,120,690 | 3% | 5,024,575 | 2% | 5,543,500 | 2% |
Long term debt | 21,462,415 | 8% | 19,061,952 | 7% | 17,643,566 | 6% |
Loans with banks | 12,515,221 | 5% | 19,860,965 | 7% | 17,843,618 | 6% |
Total Funds | 259,213,556 | 100% | 290,380,243 | 100% | 279,369,471 | 100% |
1.6. Shareholders' Equity and Regulatory Capital
4
2Q23
Shareholders' equity attributable to the owners of the parent company at the end of 2Q23 was COP 36,543 billion, decreasing by 1.0% compared to 1Q23 and increasing by 9.8% when compared to 2Q22. The currency appreciation in the quarter contributed to the negative variation, partially offset by the net income generated.
Bancolombia solvency ratio on a consolidated basis under Basel III was 12.54% in 2Q23 standing 167 basis points above the minimum level required by the regulator in Colombia, while the basic capital ratio (Tier 1) stood at 10.45%, 295 basis points above the minimum regulatory capital level (value to fully comply with the new capital requirements in the third year of the Basel III phase-in period). The increase in solvency levels is mainly due to the earnings accrual during the quarter. The tangible capital ratio, defined as shareholders' equity minus goodwill and intangible assets divided by tangible assets, was 8.13% at the end of 2Q23.
TECHNICAL CAPITAL RISK WEIGHTED ASSETS | |||
Consolidated (COP millions) | |||
Basic capital (Tier I) | |||
Additional capital (Tier II) | |||
Technical capital | (1) | ||
Risk weighted assets including market and operational risk | (2) | ||
CAPITAL ADEQUACY | (3) | ||
2Q22 | % | 1Q23 | % | 2Q23 | % |
26,299,311 | 10.28% | 27,940,470 | 9.75% | 28,562,022 | 10.45% |
6,770,767 | 2.65% | 6,498,880 | 2.27% | 5,739,243 | 2.10% |
33,057,251 | 0.00% | 34,424,167 | 0.00% | 34,288,731 | 0.00% |
255,721,580 | - | 286,568,991 | - | 273,396,254 | - |
12.93% | 12.01% | 12.54% |
(1) Technical capital is the sum of basic and additional capital, minus deductions ($15,184MM for 1Q23and $12,534MM for 2Q23).
(2) Operational risk applies to 2Q22, 1Q23 and 2Q23 after the adoption of Basel III regulation.
(3) Capital adequacy is technical capital divided by risk-weighted assets.
2. INCOME STATEMENT
2.
Net income attributable to equity holders of the parent company was COP 1,460 billion in 2Q23, or COP 1,518.46 per share (USD $ 1.45 per ADR). This profit represents a decrease of 14.9% compared to 1Q23, as a result mainly of the lower net interest income. The company´s annualized return on equity ("ROE") was 15.7% for 2Q23 and 17.4% for the last 12 months.
2.1. Net Interest Income
Net interest income totaled COP 4,934 billion in 2Q23, 7.9% lower than the income reported in 1Q23. The main fact to highlight is the performance of the investment portfolio generating interest on debt instruments and valuation on financial instruments of COP 41 billion in 2Q23, dropping 90.8% compared to 1Q23. Such decrease is the result, to a greater extent, of the higher rates and the increasing cost of funding. It is worth noting that devaluation of investments in dollars is offset in other operating income due to exchange rate hedging strategies. Derivatives distribution had a positive performance with a significant volume of financial instruments sold in an environment of high volatility in interest rates and in foreign currency.
Net Interest Margin
The annualized net interest margin for investments in 2Q23 stood at -2.6%, impacting the bank´s NIM on a consolidated basis dropping 44 bps to 6.7%.
The annualized net interest margin of the loan portfolio was 7.9%, up 3 bps when compared to 1Q23 and 86 basis points above 2Q22, decelerating gradually due to a slower pace of reference rate hikes in Colombia and higher funding costs.
Annualized Interest | 2Q22 | 1Q23 | 2Q23 |
Margin | |||
Loans' Interest margin | 7.0% | 7.9% | 7.9% |
Debt investments' margin | 4.1% | 2.0% | -2.6% |
Net interest margin (1) | 6.7% | 7.2% | 6.7% |
(1) Net interest margin and valuation income on financial instruments.
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Bancolombia SA published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 21:01:26 UTC.
