UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2007.

Comission File Number 001-32535

Bancolombia S.A.

(Translation of registrant’s name into English)

Calle 50 No. 51-66
Medellín, Colombia
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ		Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(2): o

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o		No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________.

 

 

CONSOLIDATED FINANCIAL RESULTS
FOR THE QUARTER ENDED JUNE 30, 2007

August 7, 2007. Medellín, Colombia — Today, BANCOLOMBIA S.A. (“BANCOLOMBIA” or the “Bank”) (NYSE: CIB) announced its financial results for the second quarter of fiscal year 2007, ended June 30, 2007, including for the first time Banagrícola’s results¹.

CONSOLIDATED BALANCE SHEET		Bancolombia Stand Alone Basis																				Including Banagricola
AND INCOME STATEMENT		Quarter												Growth												Growth
(Ps millions)		2Q06				1Q07				2Q07 *				2Q07*/1Q07				2Q07*/2Q06				1H07				1H07/1H06
ASSETS
Loans and financial leases, net			21,084,601				24,869,858				26,234,049				5.49	%			24.42	%			31,110,145				47.55	%
Investment securities, net			7,954,602				5,248,891				5,175,402				-1.40	%			-34.94	%			5,517,317				-30.64	%
Other assets			4,448,419				6,344,005				6,674,828				5.21	%			50.05	%			8,383,636				88.46	%
Total assets			33,487,622				36,462,754				38,084,279				4.45	%			13.73	%			45,011,098				34.41	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits			20,681,265				24,237,791				24,101,922				-0.56	%			16.54	%			29,540,131				42.84	%
Non-interest bearing			3,282,769				3,956,609				3,620,506				-8.49	%			10.29	%			4,499,236				37.06	%
Interest bearing			17,398,496				20,281,182				20,481,416				0.99	%			17.72	%			25,040,895				43.93	%
Other liabilities			9,590,872				8,803,978				10,372,129				17.81	%			8.15	%			11,902,250				24.10	%
Total liabilities			30,272,137				33,041,769				34,474,051				4.33	%			13.88	%			41,442,381				36.90	%
Shareholders’ equity			3,215,485				3,420,985				3,610,228				5.53	%			12.28	%			3,568,717				10.99	%
Total liabilities and shareholders’ equity			33,487,622				36,462,754				38,084,279				4.45	%			13.73	%			45,011,098				34.41	%
Interest income			484,489				892,401				1,013,532				13.57	%			109.20	%			2,192,023				77.87	%
Interest expense			301,759				353,834				416,793				17.79	%			38.12	%			887,134				49.98	%
Net interest income			182,730				538,567				596,739				10.80	%			226.57	%			1,304,889				103.61	%
Net provisions			(7,554	)			(37,109	)			(129,229	)			248.24	%			1610.74	%			(193,607	)			232.48	%
Fees and income from service, net			210,335				214,169				220,186				2.81	%			4.68	%			537,422				29.05	%
Other operating income			87,677				31,052				54,232				74.65	%			-38.15	%			79,596				-53.89	%
Operating expense			(426,601	)			(477,117	)			(506,913	)			6.25	%			18.83	%			(1,119,165	)			32.37	%
Non-operating income, net			55,515				13,712				17,344				26.49	%			-68.76	%			14,213				-75.40	%
Income tax expense			(33,054	)			(83,317	)			(71,027	)			-14.75	%			114.88	%			(175,654	)			74.20	%
Net income			69,048				199,957				181,332				-9.31	%			162.62	%			447,694				58.11	%

2Q07* Corresponds to the consolidated financial statements of BANCOLOMBIA and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock, excluding Banagrícola’s results.

1H07 corresponds to the financial statements of BANCOLOMBIA, including Banagrícola, for the first half of the year 2007. For this presentation, the income statement comparisons have been made between semesters, and not quarters as the Bank usually reports, because Banagrícola’s results and consolidation were calculated on a semester basis.

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 must be understood as referring to the Bank together with its affiliates, unless otherwise specified.

Representative Market Exchange Rate: June 30, 2007 Ps 1,960.61 = US$ 1 Average exchange rate June 2007 Ps 2,125.83 = US$ 1

2Q07

1. HIGHLIGHTS:

•

This is the first time that BANCOLOMBIA releases consolidated results since the acquisition of Banagricola which settled on May 16, 2007, therefore, going forward, the Bank’s consolidated financial statements will include Banagrícola’s results. However, for this presentation BANCOLOMBIA’s consolidated results excluding Banagricola are presented on a quarterly basis permitting trend analysis.

Including Banagrícola

	•		Total assets contributed by the consolidation of Banagricola amounted to Ps 6,927 billion, where net loans and financial leases totaled Ps 4,876 billion and net investment securities Ps 342 billion.
	•		The net income contributed by the consolidation of Banagricola amounted to Ps 66.4 billion on the first semester of 2007.

BANCOLOMBIA with Banagrícola

	•		Net income for the first half of 2007 totaled Ps 447.7 billion, increasing 58.1% as compared to the first half 2006.
	•		Net loans and financial leases totaled Ps 31,110 billion.
	•		Investments in debt securities totaled Ps 5,363 billion (11.9% of total assets).
	•		Net interest income for the first half of 2007, totaled Ps 1,304.9 billion.

Stand Alone Basis ²

	•		The Bank’s net income for the second quarter of 2007 totaled Ps 181.3 billion.
	•		Net loans and financial leases totaled Ps 26,234 billion as of June 30, 2007, representing an increase of 5.5% over the quarter and a 24.4% over the year.
	•		Debt securities represented 11.1% of total assets as of June 30, 2007, decreasing 15.0% over the quarter and 45.1% over the year.
	•		The net interest income for the period ended June 30, 2007, represented an increase of 10.8% over the quarter and 226.6% over the year. The Bank’s net interest margin for the second quarter of 2007 was 7.42%.
	•		The efficiency measured as operating expenses as a percentage of interest, fees, services and other operating income for the second quarter of 2007, was 58.2% improving from the 60.9% on the previous quarter.
	•		The allowances for loan losses increased 8.0% over the quarter and 25.9% over the year. The asset quality remained in similar ratios as the past due loans to total loans stayed at 2.7% and the allowances to past due loans remained close to 130%.

2Q07

•

On the second quarter of 2007, the Bank concluded the public offering of US$400 million U.S. dollar denominated subordinated notes due 2017. Additionally, on July 24, 2007, BANCOLOMBIA concluded its public offering of preferred shares. As a result of this transaction, the Bank increased its equity by approximately Ps 927.6 billion (US$ 480 million). Most of this equity increase took place in July and it is not reflected on June’s consolidated balance sheet3.

		Quarter																As of
KEY FINANCIAL HIGHLIGHTS		2Q 06				1Q 07				2Q 07 *				1H 07				Jun-06				Jun-07 *
Net Income (Ps millions)			68,048				199,957				181,332				447,694				283,150				381,289
Basic and Diluted net income per ADS			0.147				0.502				0.508				1.254				0.603				1.069
Return on average total assets (1)			0.85	%			2.28	%			2.00	%			1.99	%			1.87	%			2.11	%
Return on average shareholders’ equity (2)			8.56	%			22.06	%			20.28	%			25.09	%			17.41	%			21.32	%
P/BV ADS (3)			3.52				3.23				3.24				3.28
P/BV Local (4) (5)			3.03				3.19				3.10				3.14
P/E (6)			37.00				13.69				15.65				12.68
Weighted average of Preferred and Common Shares outstanding			727,827,005				727,827,005				727,827,005				728,314,060

 

2Q07* Corresponds to the consolidated financial statements of BANCOLOMBIA and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock, excluding Banagrícola’s results.

Jun- 07* corresponds to the financial statements of BANCOLOMBIA, excluding Banagrícola, for the first half of the year 2007.

2Q07

2. CONSOLIDATED BALANCE SHEET

2.1. Assets

BANCOLOMBIA’s total assets amounted to Ps 45,011 billion as of June 30, 2007. The increase in total assets was primarily due to the impact of Banagrícola’s assets (Ps 6,927 billion) in the consolidated balance sheet.

On a stand alone basis, the Bank’s total assets at the end of the second quarter of 2007 amounted to Ps 38,084 billion, representing an increase of 4.4% as compared to Ps 36,463 billion for the first quarter of 2007 and a 13.7% increase, as compared to Ps 33,488 billion as of June 30, 2006.

2.1.1. Loan Portfolio

•

BANCOLOMBIA including Banagrícola

As of June 30, 2007, total loans and financial leases totaled Ps 31,110 billion of which Ps 4,876 billion correspond to the consolidation of Banagricola.

Corporate loans amounted to Ps 15,835 billion, retail and small medium-sized enterprise (“SME”) loans amounted to Ps 9,447 billion, financial leases amounted to Ps 3,990 billion and mortgage loans amounted to Ps 2,956 billion.

•

Stand Alone Basis

Due to a solid expansion of the Colombian aggregate demand and its subsequent effect on the credit appetite, total loans and financial leases continued to grow, although moderating its growing pace due to the measures implemented by Colombia’s Central Bank, reaching a total of Ps 26,234 billion, as of June 30, 2007, representing a 5.5% increase as compared to March 31, 2007 and 24.4% increase as compared to June 30, 2006.

Corporate loans amounted to Ps 13,162 billion as of June 30, 2007, representing a 2.7% increase as compared to Ps 12,820 billion as of March 31, 2007 and a 17.3% increase as compared to Ps 11,224 billion as of June 30, 2006.

SME’s loans amounted to Ps 8,004 billion as of June 30, 2007, representing a 8.3% increase as compared to Ps 7,394 billion as of March 31, 2007 and a 37.9% increase as compared to Ps 5,806 billion as of June 30, 2006.

Financial leases amounted to Ps 3,990 billion at June 30, 2007, increasing 4.1% over the quarter and 28.7% over the year.

Mortgage loans amounted to Ps 2,039 billion as of June 30, 2007, increasing 19.0% over the quarter and 18.6% over the year. It is important to note that BANCOLOMBIA securitized mortgage loans amounting to Ps 905 billion in the second half of 2006. Taking that into account, the increase in mortgage loans for the second quarter of 2007, including past securitizations, was 10.3% as compared to March 31, 2007 and 49.9% as compared to June 30, 2006.

2Q07

LOAN PORTFOLIO		As of																Growth
(Ps millions)		30-Jun-06				31-Mar-07				30-Jun-07 *				30-Jun-07				Jun-07/Mar-07				Jun-07/Jun-06
CORPORATE
Working capital loans			9,983,764				11,686,537				11,725,329				14,058,294				20.29	%			40.81	%
Loans funded by domestic development banks			394,049				348,662				523,519				608,272				74.46	%			54.36	%
Trade Financing			649,875				607,841				704,672				945,679				55.58	%			45.52	%
Overdrafts			147,057				124,476				136,293				145,706				17.06	%			-0.92	%
Credit Cards			49,363				53,053				72,669				76,867				44.89	%			55.72	%
TOTAL CORPORATE			11,224,108				12,820,569				13,162,482				15,834,818				23.51	%			41.08	%
RETAIL AND SMEs
Working capital loans			1,878,090				2,442,163				2,666,934				2,680,255				9.75	%			42.71	%
Personal loans			1,807,138				2,419,199				2,525,168				3,780,146				56.26	%			109.18	%
Loans funded by domestic development banks			405,651				386,636				439,181				439,583				13.69	%			8.36	%
Credit Cards			700,157				868,419				985,469				1,126,592				29.73	%			60.91	%
Overdrafts			176,774				175,633				197,251				218,921				24.65	%			23.84	%
Automobile loans			760,980				1,039,109				1,114,110				1,121,268				7.91	%			47.35	%
Trade Financing			77,305				62,692				75,849				80,230				27.97	%			3.78	%
TOTAL RETAIL AND SMEs			5,806,095				7,393,851				8,003,962				9,446,995				27.77	%			62.71	%
MORTGAGE			1,719,002				1,713,518				2,039,223				2,955,711				72.49	%			71.94	%
FINANCIAL LEASES			3,099,021				3,831,727				3,989,510				3,989,953				4.13	%			28.75	%
Total loans and financial leases			21,848,226				25,759,665				27,195,177				32,227,477				25.11	%			47.51	%
Allowance for loan losses and financial leases			(763,625	)			(889,807	)			(961,128	)			(1,117,332	)			25.57	%			46.32	%
Total loans and financial leases, net			21,084,601				24,869,858				26,234,049				31,110,145				25.09	%			47.55	%

2.1.2. Debt Securities Portfolio

•

BANCOLOMBIA including Banagrícola

BANCOLOMBIA’s investments in debt securities including Banagrícola amounted to Ps 5,363 billion (11.9% of total assets) as of June 30, 2007. The debt securities portfolio is classified as follows; Ps 1,999 billion in trading securities (37.3% of total debt securities), Ps 1,448 billion in available for sale securities (27.0% of total debt securities) and Ps 1,916 billion in held to maturity securities (35.7% of total debt securities).

•

Stand Alone Basis

Investment in debt securities amounted to PS 4,229 billion (11.1% of total assets) as of June 30, 2007. This decrease was primarily due to a strategic approach towards the increase on inflation and its consequences on the price of fixed income bonds, and is also explained by the level of emerging credit spreads at historical minimums that became a good opportunity for an asset reallocation, from investment securities to loan portfolio. The debt securities portfolio duration was 2.58 years as of June 30, 2007 on an unconsolidated basis.

2.1.3. Asset Quality

•

BANCOLOMBIA including Banagrícola

As of June 30, 2007, past due loans accounted for 2.7% of total loans, while the ratio of allowances to past due loans at the end of the quarter was 129.7%. Loans classified as C, D and E comprised 2.5% of total loans. In addition, the ratio of allowances to loans classified as C, D and E at the end of the quarter was 138.4%.

2Q07

•

Stand Alone Basis

During the second quarter of 2007, the composition of the loans and financial leases classification, changed as the loans classified as “B”, to total loans, increased to 3.7% from 2.8%, mainly due to a client’s classification review that took place in June, more than half of this increase is explained by clients that did not respond to the Bank’s periodic information update request. Nevertheless, past due loans accounted for 2.6%of total loans, while the ratio of allowances to past due loans at the end of the quarter was 138.7%

Loans classified as C, D and E comprised 2.5% of total loans as of June 30, 2007. Whereas the ratio of allowances to loans classified as C, D and E at the end of the quarter was 142.7%⁴.

LOANS AND FINANCIAL LEASES CLASSIFICATION
(Ps millions)		As of 30-Jun-06								As of 30-Mar-07								As of 30-Jun-07 *								As of 30-Jun-07
¨A¨ Normal			20,437,368				93.6	%			24,348,087				94.5	%			25,493,108				93.7	%			30,307,013				94.1	%
¨B¨ Subnormal			814,255				3.7	%			719,860				2.8	%			1,018,513				3.7	%			1,101,821				3.4	%
¨C¨ Deficient			199,243				0.9	%			261,021				1.0	%			210,619				0.8	%			260,297				0.8	%
¨D¨ Doubtful recovery			247,670				1.1	%			220,989				0.9	%			265,014				1.0	%			295,430				0.9	%
¨E¨ Unrecoverable			149,690				0.7	%			209,708				0.8	%			207,923				0.8	%			262,916				0.8	%
Total			21,848,226				100	%			25,759,665				100	%			27,195,177				100	%			32,227,477				100	%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases			2.7	%							2.7	%							2.5	%							2.5	%

ASSET QUALITY		As of												Growth								Growth
(Ps millions)		30-Jun-06				31-Mar-07				30-Jun-07 *				2Q 07 */1Q 07				2Q 07 */2Q 06				30-Jun-07				2Q 07/1Q 07				2Q 07/2Q 06
Total performing past due loans (1)			281,598				316,748				308,111				-2.73	%			9.42	%			387,295				22.27	%			37.53	%
Total non-performing past due loans			310,069				375,570				395,532				5.32	%			27.56	%			486,762				29.61	%			56.99	%
Total past due loans			591,667				692,318				703,643				1.64	%			18.93	%			874,057				26.25	%			47.73	%
Allowance for loans and accrued interest losses			773,157				902,723				975,802				8.10	%			26.21	%			1,133,380				25.55	%			46.59	%
Past due loans to total loans			2.71	%			2.69	%			2.59	%											2.71	%
Non-performing loans as a percentage of total loans			1.42	%			1.46	%			1.45	%											1.51	%
“C”, “D” and “E” loans as a percentage of total loans			2.73	%			2.69	%			2.51	%											2.54	%
Allowances to past due loans (2)			130.67	%			130.39	%			138.68	%											129.67	%
Allowance for loan and accrued interest losses as a percentage of “C”, “D” and “E” loans (2)			129.59	%			130.50	%			142.75	%											138.45	%
Allowance for loan and accrued interest losses as a percentage of non-performing loans (2)			249.35	%			240.36	%			246.71	%											232.84	%
Allowance for loan and accrued interest losses as a percentage of total loans			3.54	%			3.50	%			3.59	%											3.52	%
Percentage of performing loans to total loans			98.58	%			98.54	%			98.55	%											98.49	%

2.1.4. Goodwill

As a result of the acquisition of Banagrícola the goodwill increased to Ps 873.8 billion from Ps 33.2 billion as of March 31, 2007 (According to Colombian GAAP). This number includes Ps 752.2 billion generated on the transaction.

2Q07

2.2. Liabilities

•

BANCOLOMBIA including Banagrícola

As of June 30, 2007, BANCOLOMBIA’s total deposits amounted to Ps 29,540 billion. Interest bearing deposits amounted to Ps 25,041 billion (84.8% of total deposits) and non-interest bearing amounted to Ps 4,449 billion (15.2% of total deposits).

•

Stand Alone Basis

Total deposits amounted to Ps 24,102 billion as of June 30, 2007, representing a decrease of 0.6% as compared to March 31, 2007, and an increase of 16.5% as compared to June 30, 2006. It is important to note that the composition of the deposits changed during the second quarter of 2007. As of March 30, 2007, checking accounts represented 7.0% of total interest bearing deposits, time deposits represented 40.1% and savings deposits represented 52.9%, while as of the second quarter of this year, they represented 5.2%, 44.2% and 50.6% respectively as of June 30, 2007.

As of June 30, 2007, time deposits increased 11.3% as compared to March 31, 2007, whereas checking accounts and savings deposits decreased 11.6% and 3.4% respectively as compared to the same period. As compared to June 30, 2006, saving deposits, time deposits and checking accounts increased 17.6%, 24.0% and 1.8%, respectively. This change took place due to the recent measures taken by the Colombia’s Central Bank in terms of marginal reserve requirements.

The increase on bonds of 74.8% over the second quarter of 2007 was due to the public offering of US$400 million U.S. dollar denominated subordinated notes due 2017.

2.3. Shareholders’ Equity

As of June 30, 2007 BANCOLOMBIA’s shareholders’ equity amounted to Ps 3,569 billion, representing an increase of 4.3% as compared to March 31, 2007 and an increase of 11% as compared to the figures presented on June 30, 2006.

Unrealized losses on available-for-sale debt securities amounted to Ps 23.2 billion as of June 30, 2007.

Also as of June 30, 2007, the Bank’s consolidated ratio of technical capital to risk-weighted assets including Banagrícola was 11.85%. The Bank estimates that its ratio of technical capital to risk-weighted assets including Banagrícola, after taking into account the equity increase that took place in July would be close to 14.19% 5 .

TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (Ps millions)		Jun-06				Mar-07				Jun-07 *				Jun-07
Basic capital (Tier I)			2,835,435				3,144,457				3,315,486				3,382,308
Additional capital (Tier II)			369,393				426,799				1,237,409				1,297,599
Technical capital (1)			3,204,828				3,571,256				4,552,895				4,679,907
Risk weighted assets included market risk			28,282,884				32,055,602				34,278,261				39,507,368
CAPITAL ADEQUACY (2)			11.33	%			11.14	%			13.28	%			11.85	%

2Q07

3. INCOME STATEMENT

BANCOLOMBIA’s net income for the first half of 2007, including Banagrícola, totaled Ps 447.7 billion. The net income contributed by the consolidation of Banagricola amounted to Ps 66.4 billion on the first semester of 2007.

On a stand alone basis⁶, the Bank’s net income for the second quarter of 2007 totaled Ps 181.3 billion, representing a decrease of 9.3%, as compared to Ps 200.0 billion for the first quarter of 2007 and an increase of 162.6% as compared to Ps 69.0 billion for the second quarter of 2006.

3.1. Net Interest Income

•

Bancolombia including Banagrícola

During the first half of 2007 interest on loans amounted to Ps 1,664.9 billion. The interest on loans contributed by the consolidation of Banagricola amounted to Ps 245.1 billion on the same period.

On the other hand, interests on investment securities amounted to Ps 217.7 billion on the first semester of 2007. The interests on investment securities contributed by the consolidation of Banagricola amounted to Ps 28.8 billion on the same period.

Total Interest expenses amounted to Ps 887.1 billion during the first semester ended June 30, 2007. The Interest expenses contributed by the consolidation of Banagricola amounted to Ps 116.5 billion on the semester.

Net interest income totaled Ps 1,304.9 billion for the first half of 2007. The net interest income contributed by the consolidation of Banagricola amounted to Ps 169.6 billion on the semester.

•

Stand Alone Basis

In a quarterly basis, interest on loans amounted to Ps 745.6 billion, increasing 10.6% as compared to the first quarter of 2007 (when interest on loans amounted to Ps 674.2 billion) and 37.1% as compared the second quarter of 2006 (when interest on loans amounted to Ps 543.6 billion). On the other hand, interests on investment securities amounted to Ps 106.2 billion, which represents an increase of 28.3% as compared to the first quarter of 2007 and an increase of 167.0% as compared to the second quarter of 2006.

Total interest expenses on the second quarter of 2007 amounted to Ps 416,793 million, increasing 17.8% as compared to the quarter ended March 31, 2007 and 38.1% as compared to the quarter ended June 30, 2006. These increases where mainly caused by the higher interest rates and cost of deposits, due to the tightening cycle of the Colombian Central Bank and the measures related to it.

Net interest income amounted to Ps 596.7 billion for the quarter ended June 30, 2007, increasing 10.8% as compared to the first quarter of 2007 and 226.6%, as compared to the figures presented for the second quarter of 2006.

Net interest margin for the second quarter of 2007 was 7.4%, improving from 6.8% on the previous quarter and 2.48% on the second quarter of 2006.

2Q07

3.2. Provisions

For the first half of the year, ended June 30, 2007, provisions for loan and interest losses, net of recoveries including Banagricola’s provisions amounted to Ps 247 billion.

On a stand alone basis, provisions for loan and interest losses, net of recoveries for the second quarter of 2007 amounted to Ps 146 billion, representing an increase of 96.3% as compared to Ps 74,392 million for the first quarter of 2007 and an increase of 117.3%, as compared to the second quarter of 2006, when such provisions amounted to Ps 67 billion. This increase can be explained mainly by the fact that the Bank continued adjusting its provisions to meet the Superintendency of Finance’s most recent requirements⁷. The provision related to this adjustment accounted for approximately 54% of the quarter’s figure.

On the other hand, on a stand alone basis, recoveries of provisions for foreclosed assets amounted to Ps 13,441 million during the second quarter of 2007, decreasing 54.3% as compared to the first quarter of 2007.

3.3. Fees and Income from Services

•

Bancolombia including Banagrícola

BANCOLOMBIA’s net fees and income from services amounted to Ps 537.4 billion during the first half of 2007. The net fees and income from services added by the consolidation of Banagricola amounted to Ps 103.1 billion on the semester.

•

Stand Alone Basis

Net fees and income from services amounted to Ps 220,186 million during the second quarter of 2007, increasing 2.8% as compared to the first quarter of 2007 and increasing 4.7% as compared to the second quarter of 2006.

Net fees and income from services figures were affected as compared to the second quarter of 2006 and to the first half of the same year due to the sale of Almacenar S.A. whose revenue income was included in the net fees and income from services line. When taking into account this event, the net fees and income from services increased 13.6% over the year.

On the other hand, in the brokerage fees there is a decrease of 8.4% as compared to the first quarter of 2007 and a decrease of 26.7% as compared to the first half of the year 2006, affecting directly the fees and income from services line. These were mainly due to a less dynamic Colombian capital market in the first half of 2007 as compared to the fist half of 2006.

During the second quarter of 2007, on a stand alone basis, BANCOLOMBIA’s accumulated unconsolidated credit card billing increased 28.5%, resulting in a 22.1% market share of the Colombian credit card business. In addition, the number of outstanding credit cards issued by BANCOLOMBIA increased 24.1%, resulting in a 14.9% market share.

2Q07

ACCUMULATED CREDIT CARD BILLING										%				2007
(Millions of pesos as of June 30, 2007)		June-06				June-07				Growth				Market Share
Bancolombia VISA			499.631				648.134				29,72	%			7,12	%
Bancolombia Mastercard			763.740				924.987				21,11	%			10,17	%
Bancolombia American Express			303.313				440.838				45,34	%			4,85	%
Total Bancolombia			1.566.684				2.013.958				28,55	%			22,14	%
Colombian Credit Card Market			7.273.940				9.098.199				25,08	%

Source: Credibanco y Redeban multicolor

CREDIT CARD MARKET SHARE										%				2007
(Outstanding credit cards as of June 30, 2007)		June-06				June-07				Growth				Market Share
Bancolombia VISA			205.237				246.507				20,11	%			4,92	%
Bancolombia Mastercard			272.303				328.563				20,66	%			6,56	%
Bancolombia American Express			123.282				170.737				38,49	%			3,41	%
Total Bancolombia			600.822				745.807				24,13	%			14,88	%
Colombian Credit Card Market			3.884.469				5.011.592				29,02	%

Source: Credibanco y Redeban multicolor

3.4. Operating expenses

•

Bancolombia including Banagrícola

Operating expenses amounted to Ps 1,087.8 billion during the first half of 2007. The operating expenses contributed by the consolidation of Banagricola amounted to Ps 124.2 billion on the first semester of 2007.

During the first half of the year 2007, BANCOLOMBIA’s efficiency ratio as calculated by dividing operating expenses by net operating income was 58.2%. Also during the same period, BANCOLOMBIA’s efficiency ratio measured by dividing operating expenses by total assets was 5.0%.

•

Stand Alone Basis

Operating expenses amounted to Ps 493.5 billion, representing an increase of 4.9% as compared to the first quarter of 2007 when operating expenses amounted to Ps 470.2 billion and an increase of 19.6% as compared to the second quarter of 2006 when operating expenses amounted to Ps 412.5 billion.

Despite that the ratio of operating expenses divided by average total assets was 5.60%, coming from 5.43% of the prior quarter, the Bank’s efficiency ratio for the quarter as calculated by dividing operating expenses by net operating income improved to 58.19% from 60.87% of the prior quarter.

2Q07

		Quarter																As of
PRINCIPAL RATIOS		2Q 06				1Q 07				2Q 07 *				1H 07				Jun-06				Jun-07 *
PROFITABILITY
Net interest margin (1)			2.48	%			6.76	%			7.42	%			6.73	%			4.69	%			7.06	%
Return on average total assets (2)			0.85	%			2.28	%			2.00	%			1.99	%			1.87	%			2.11	%
Return on average shareholders ´ equity (3)			8.56	%			22.06	%			20.28	%			25.09	%			17.41	%			21.32	%
EFFICIENCY
Operating expenses as a percentage of interest, fees, services and other operating income (4)			88.74	%			60.87	%			58.19	%			58.23	%			68.74	%			59.46	%
Operating expenses to average assets			5.27	%			5.43	%			5.60	%			4.97	%			5.58	%			5.43	%
CAPITAL ADEQUACY
Period-end shareholders’ equity as a percentage of period-end total assets			9.60	%			9.38	%			9.48	%			7.93	%
Technical capital to risk weighted assets			11.33	%			11.14	%			13.28	%			11.85	%

Jun-07* & 2Q07* Correspond to the financial statements of BANCOLOMBIA, excluding Banagrícola.

2Q07

		As of												Growth												Growth
CONSOLIDATED BALANCE SHEET														Last												Last
(Ps millions)		Jun-06				Mar-07				Jun-07 *				Quarter				Annual				Jun-07				Quarter				Annual
ASSETS
Cash and due from banks			1,123,060				1,785,031				2,093,444				17.28	%			86.41	%			3,405,203				90.76	%			203.21	%
Overnight funds sold			647,403				1,644,686				497,960				-69.72	%			-23.08	%			513,713				-68.77	%			-20.65	%
Total cash and equivalents			1,770,463				3,429,717				2,591,404				-24.44	%			46.37	%			3,918,916				14.26	%			121.35	%
Debt securities			7,698,653				4,976,814				4,228,879				-15.03	%			-45.07	%			5,363,253				7.76	%			-30.34	%
Trading			3,990,245				2,470,100				1,999,470				-19.05	%			-49.89	%			1,999,470				-19.05	%			-49.89	%
Available for Sale			2,508,292				1,419,690				1,157,403				-18.47	%			-53.86	%			1,447,851				1.98	%			-42.28	%
Held to Maturity			1,200,116				1,087,024				1,072,006				-1.38	%			-10.67	%			1,915,932				76.25	%			59.65	%
Equity securities			334,519				348,326				1,023,424				193.81	%			205.94	%			231,115				-33.65	%			-30.91	%
Trading			137,378				184,153				70,590				-61.67	%			-48.62	%			70,613				-61.66	%			-48.60	%
Available for Sale			197,141				164,173				952,834				480.38	%			383.33	%			160,502				-2.24	%			-18.59	%
Market value allowance			(78,570	)			(76,249	)			(76,901	)			0.86	%			-2.12	%			(77,051	)			1.05	%			-1.93	%
Net investment securities			7,954,602				5,248,891				5,175,402				-1.40	%			-34.94	%			5,517,317				5.11	%			-30.64	%
Commercial loans			14,052,561				16,251,374				16,908,930				4.05	%			20.33	%			19,581,261				20.49	%			39.34	%
Consumer loans			2,903,674				3,840,002				4,144,674				7.93	%			42.74	%			5,569,558				45.04	%			91.81	%
Small business loans			73,968				123,044				112,840				-8.29	%			52.55	%			130,994				6.46	%			77.10	%
Mortgage loans			1,719,002				1,713,518				2,039,223				19.01	%			18.63	%			2,955,711				72.49	%			71.94	%
Finance lease			3,099,021				3,831,727				3,989,510				4.12	%			28.73	%			3,989,953				4.13	%			28.75	%
Allowance for loan losses			(763,625	)			(889,807	)			(961,128	)			8.02	%			25.86	%			(1,117,332	)			25.57	%			46.32	%
Net total loans and financial leases			21,084,601				24,869,858				26,234,049				5.49	%			24.42	%			31,110,145				25.09	%			47.55	%
Accrued interest receivable on loans			210,003				269,255				305,233				13.36	%			45.35	%			326,995				21.44	%			55.71	%
Allowance for accrued interest losses			(9,532	)			(12,916	)			(14,674	)			13.61	%			53.94	%			(16,048	)			24.25	%			68.36	%
Net total interest accrued			200,471				256,339				290,559				13.35	%			44.94	%			310,947				21.30	%			55.11	%
Customers’ acceptances and derivatives			54,707				174,370				233,689				34.02	%			327.16	%			237,126				35.99	%			333.45	%
Net accounts receivable			396,608				574,400				574,901				0.09	%			44.95	%			625,336				8.87	%			57.67	%
Net premises and equipment			649,493				696,105				741,687				6.55	%			14.19	%			885,393				27.19	%			36.32	%
Foreclosed assets, net			25,859				19,032				17,162				-9.83	%			-33.63	%			40,688				113.79	%			57.35	%
Prepaid expenses and deferred charges			50,516				40,751				83,846				105.75	%			65.98	%			119,440				193.10	%			136.44	%
Goodwill			53,991				33,250				778,555				2241.52	%			1342.01	%			873,854				2528.13	%			1518.52	%
Operating leases, net			149,800				211,625				341,659				61.45	%			128.08	%			345,446				63.23	%			130.60	%
Other			725,965				578,306				657,141				13.63	%			-9.48	%			662,265				14.52	%			-8.77	%
Reappraisal of assets			370,546				330,110				364,225				10.33	%			-1.71	%			364,225				10.33	%			-1.71	%
Total assets			33,487,622				36,462,754				38,084,279				4.45	%			13.73	%			45,011,098				23.44	%			34.41	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
DEPOSITS
Non-interest bearing			3,282,769				3,956,609				3,620,506				-8.49	%			10.29	%			4,499,236				13.71	%			37.06	%
Checking accounts			3,006,549				3,522,589				3,308,966				-6.06	%			10.06	%			4,150,606				17.83	%			38.05	%
Other			276,220				434,020				311,540				-28.22	%			12.79	%			348,630				-19.67	%			26.21	%
Interest bearing			17,398,496				20,281,182				20,481,416				0.99	%			17.72	%			25,040,895				23.47	%			43.93	%
Checking accounts			1,281,143				1,418,384				1,056,299				-25.53	%			-17.55	%			1,056,299				-25.53	%			-17.55	%
Time deposits			7,306,274				8,136,221				9,060,015				11.35	%			24.00	%			12,045,703				48.05	%			64.87	%
Savings deposits			8,811,079				10,726,577				10,365,102				-3.37	%			17.64	%			11,938,893				11.30	%			35.50	%
Total deposits			20,681,265				24,237,791				24,101,922				-0.56	%			16.54	%			29,540,131				21.88	%			42.84	%
Overnight funds			1,818,644				714,864				1,882,290				163.31	%			3.50	%			1,882,290				163.31	%			3.50	%
Bank acceptances outstanding			62,563				54,912				57,071				3.93	%			-8.78	%			57,071				3.93	%			-8.78	%
Interbank borrowings			1,899,892				1,649,062				1,063,584				-35.50	%			-44.02	%			1,752,518				6.27	%			-7.76	%
Borrowings from domestic development banks			2,439,329				2,556,219				2,750,898				7.62	%			12.77	%			2,780,660				8.78	%			13.99	%
Accounts payable			1,001,489				1,764,544				1,550,175				-12.15	%			54.79	%			1,573,156				-10.85	%			57.08	%
Accrued interest payable			218,011				191,296				217,200				13.54	%			-0.37	%			228,875				19.64	%			4.98	%
Other liabilities			392,553				368,275				388,437				5.47	%			-1.05	%			486,007				31.97	%			23.81	%
Bonds			1,382,430				1,119,807				1,957,128				74.77	%			41.57	%			2,438,909				117.80	%			76.42	%
Accrued expenses			320,850				335,695				447,415				33.28	%			39.45	%			516,710				53.92	%			61.04	%
Minority interest in consolidated subsidiaries			55,111				49,304				57,931				17.50	%			5.12	%			186,054				277.36	%			237.60	%
Total liabilities			30,272,137				33,041,769				34,474,051				4.33	%			13.88	%			41,442,381				25.42	%			36.90	%
SHAREHOLDERS’ EQUITY
Subscribed and paid in capital			366,027				363,914				365,375				0.40	%			-0.18	%			365,375				0.40	%			-0.18	%
Retained earnings			2,325,159				2,503,244				2,671,671				6.73	%			14.90	%			2,612,363				4.36	%			12.35	%
Appropiated			2,042,009				2,303,287				2,290,382				-0.56	%			12.16	%			2,164,669				-6.02	%			6.01	%
Unappropiated			283,150				199,957				381,289				90.69	%			34.66	%			447,694				123.90	%			58.11	%
Reappraisal and others			580,639				560,705				596,421				6.37	%			2.72	%			614,218				9.54	%			5.78	%
Gross unrealized gain or loss on debt securities			(56,340	)			(6,878	)			(23,239	)			237.87	%			-58.75	%			(23,239	)			237.87	%			-58.75	%
Total shareholder’s equity			3,215,485				3,420,985				3,610,228				5.53	%			12.28	%			3,568,717				4.32	%			10.99	%

2Q07

		As of																				Quarter												Growth
CONSOLIDATED INCOME STATEMENT										Jun-07*/Jun-06								Jun-07/Jun-06
(Ps Millions)		Jun-06				Jun-07 *				Growth				Jun-07				Growth				2Q 06				1Q 07				2Q 07 *				2Q 07 * /1Q 07				2Q 07 * /2Q 06
Interest income and expenses
Interest on loans			1,062,922				1,419,773				33.57	%			1,664,884				56.63	%			543,606				674,217				745,556				10.58	%			37.15	%
Interest on investment securities			(23,022	)			188,940				920.69	%			217,732				1045.76	%			(158,401	)			82,752				106,188				28.32	%			167.04	%
Overnight funds			17,635				44,296				151.18	%			56,468				220.20	%			8,620				14,993				29,303				95.44	%			239.94	%
Leasing			174,859				252,924				44.64	%			252,939				44.65	%			90,664				120,439				132,485				10.00	%			46.13	%
Total interest income			1,232,394				1,905,933				54.65	%			2,192,023				77.87	%			484,489				892,401				1,013,532				13.57	%			109.20	%
Interest expense Checking accounts			15,230				16,449				8.00	%			19,355				27.08	%			8,132				8,509				7,940				-6.69	%			-2.36	%
Time deposits			218,552				282,088				29.07	%			346,805				58.68	%			112,536				130,722				151,366				15.79	%			34.50	%
Savings deposits			112,121				207,834				85.37	%			212,514				89.54	%			56,844				92,832				115,002				23.88	%			102.31	%
Total interest on deposits			345,903				506,371				46.39	%			578,674				67.29	%			177,512				232,063				274,308				18.20	%			54.53	%
Interbank borrowings			55,669				41,948				-24.65	%			70,102				25.93	%			27,584				15,881				26,067				64.14	%			-5.50	%
Borrowings from domestic development banks			83,183				116,846				40.47	%			119,777				43.99	%			42,326				53,697				63,149				17.60	%			49.20	%
Overnight funds			47,115				53,404				13.35	%			53,404				13.35	%			26,280				28,687				24,717				-13.84	%			-5.95	%
Bonds			59,650				52,058				-12.73	%			65,177				9.27	%			28,057				23,506				28,552				21.47	%			1.76	%
Total interest expense			591,520				770,627				30.28	%			887,134				49.98	%			301,759				353,834				416,793				17.79	%			38.12	%
Net interest income			640,874				1,135,306				77.15	%			1,304,889				103.61	%			182,730				538,567				596,739				10.80	%			226.57	%
Provision for loan and accrued interest losses, net			(131,433	)			(220,451	)			67.73	%			(246,961	)			87.90	%			(67,228	)			(74,392	)			(146,059	)			96.34	%			117.26	%
Recovery of charged-off loans			32,074				33,163				3.40	%			41,250				28.61	%			15,327				15,375				17,788				15.69	%			16.06	%
Provision for foreclosed assets and other assets			(20,132	)			(21,912	)			8.84	%			(30,758	)			52.78	%			(7,496	)			(7,513	)			(14,399	)			91.65	%			92.09	%
Recovery of provisions for foreclosed assets and other assets			61,259				42,862				-30.03	%			42,862				-30.03	%			51,843				29,421				13,441				-54.31	%			-74.07	%
Total net provisions			(58,232	)			(166,338	)			185.65	%			(193,607	)			232.48	%			(7,554	)			(37,109	)			(129,229	)			248.24	%			1610.74	%
Net interest income after provision for loans and accrued interest losses			582,642				968,968				66.31	%			1,111,282				90.73	%			175,176				501,458				467,510				-6.77	%			166.88	%
Commissions from banking services and other services			69,320				94,623				36.50	%			124,751				79.96	%			41,357				46,141				48,482				5.07	%			17.23	%
Electronic services and ATM fees			42,550				34,423				-19.10	%			37,126				-12.75	%			21,825				17,489				16,934				-3.17	%			-22.41	%
Branch network services			26,151				48,016				83.61	%			50,726				93.97	%			13,318				24,087				23,929				-0.66	%			79.67	%
Collections and payments fees			33,844				51,909				53.38	%			60,559				78.94	%			18,680				24,927				26,982				8.24	%			44.44	%
Credit card merchant fees			4,314				10,229				137.11	%			19,306				347.52	%			2,079				6,119				4,110				-32.83	%			97.69	%
Credit and debit card annual fees			118,251				119,696				1.22	%			119,745				1.26	%			59,003				56,547				63,149				11.68	%			7.03	%
Checking fees			28,988				32,746				12.96	%			33,100				14.19	%			14,292				16,252				16,494				1.49	%			15.41	%
Warehouse services (2)			34,012				—				*				—				*				16,031				—				—				*				*
Fiduciary activities			28,870				32,454				12.41	%			32,795				13.60	%			13,275				15,859				16,595				4.64	%			25.01	%
Pension plan administration			—				—				*				41,267				*				—				—				—				*				*
Brokerage fees			36,111				26,465				-26.71	%			29,949				-17.06	%			12,728				13,814				12,651				-8.42	%			-0.60	%
Check remittance			5,589				5,024				-10.11	%			11,126				99.07	%			2,737				2,698				2,326				-13.79	%			-15.02	%
International operations			15,674				19,454				24.12	%			20,832				32.91	%			8,838				9,878				9,576				-3.06	%			8.35	%
Fees and other service income			443,674				475,039				7.07	%			581,282				31.02	%			224,163				233,811				241,228				3.17	%			7.61	%
Fees and other service expenses			(27,220	)			(40,684	)			49.46	%			(43,860	)			61.13	%			(13,828	)			(19,642	)			(21,042	)			7.13	%			52.17	%
Total fees and income from services, net			416,454				434,355				4.30	%			537,422				29.05	%			210,335				214,169				220,186				2.81	%			4.68	%
Other operating income
Net foreign exchange gains			143,463				(74,770	)			-152.12	%			(86,725	)			-160.45	%			132,194				(15,884	)			(58,886	)			270.73	%			-144.55	%
Forward contracts in foreign currency			(63,470	)			106,614				267.98	%			110,340				273.85	%			(67,807	)			26,846				79,768				197.13	%			217.64	%
Gains on sales of investments on equity securities			43,015				(15,123	)			-135.16	%			(15,123	)			-135.16	%			8,894				(15,185	)			62				100.41	%			-99.30	%
Dividend income			19,718				15,879				-19.47	%			16,146				-18.12	%			98				14,703				1,176				-92.00	%			1100.00	%
Revenues from commercial subsidiaries			21,951				43,515				98.24	%			43,515				98.24	%			8,706				16,209				27,306				68.46	%			213.65	%
Insurance income			—				—				*				2,169				*				—				—				—				*				*
Communication, postage, rent and others			7,938				9,169				15.51	%			9,274				16.83	%			5,592				4,363				4,806				10.15	%			-14.06	%
Total other operating income			172,615				85,284				-50.59	%			79,596				-53.89	%			87,677				31,052				54,232				74.65	%			-38.15	%
Total income			1,171,711				1,488,607				27.05	%			1,728,300				47.50	%			473,188				746,679				741,928				-0.64	%			56.79	%
Operating expenses
Salaries and employee benefits			335,647				370,243				10.31	%			412,846				23.00	%			171,869				180,661				189,582				4.94	%			10.31	%
Bonus plan payments			8,288				24,155				191.45	%			34,764				319.45	%			61				11,865				12,290				3.58	%			20047.54	%
Compensation			1,598				10,219				539.49	%			10,413				551.63	%			882				6,025				4,194				-30.39	%			375.51	%
Administrative and other expenses			398,012				476,436				19.70	%			540,519				35.80	%			199,486				236,135				240,301				1.76	%			20.46	%
Deposit security, net			29,333				24,230				-17.40	%			24,316				-17.10	%			13,651				12,247				11,983				-2.16	%			-12.22	%
Donation expenses			135				596				341.48	%			1,794				1228.89	%			77				435				161				-62.99	%			109.09	%
Depreciation			48,034				57,810				20.35	%			63,196				31.57	%			26,436				22,835				34,975				53.16	%			32.30	%
Total operating expenses			821,047				963,689				17.37	%			1,087,848				32.50	%			412,462				470,203				493,486				4.95	%			19.64	%
Net operating income			350,664				524,918				49.69	%			640,452				82.64	%			60,726				276,476				248,442				-10.14	%			309.12	%
Merger expenses			12,478				—				*				—				*				7,814				—				—				*				*
Goodwill amortization (1)			11,987				20,341				69.69	%			31,317				161.26	%			6,325				6,914				13,427				94.20	%			112.28	%
Non-operating income (expense) Other income			141,745				61,940				-56.30	%			64,157				-54.74	%			121,284				33,607				28,333				-15.69	%			-76.64	%
Minority interest			(4,306	)			(3,706	)			-13.93	%			(23,898	)			454.99	%			(1,545	)			(2,407	)			(1,299	)			-46.03	%			-15.92	%
Other expense			(79,655	)			(27,178	)			-65.88	%			(26,046	)			-67.30	%			(64,224	)			(17,488	)			(9,690	)			-44.59	%			-84.91	%
Total non-operating income			57,784				31,056				-46.26	%			14,213				-75.40	%			55,515				13,712				17,344				26.49	%			-68.76	%
Income before income taxes			383,983				535,633				39.49	%			623,348				62.34	%			102,102				283,274				252,359				-10.91	%			147.16	%
Income tax expense			(100,833	)			(154,344	)			53.07	%			(175,654	)			74.20	%			(33,054	)			(83,317	)			(71,027	)			-14.75	%			114.88	%
Net income			283,150				381,289				34.66	%			447,694				58.11	%			69,048				199,957				181,332				-9.31	%			162.62	%