Edgar Filing: BANCOLOMBIA SA

Filed by Bowne Pure Compliance

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 March, 2009.

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 DECEMBER 31, 2008₁


Contacts
Sergio Restrepo	Jaime A. Velásquez	Juan E. Toro
Executive VP	Financial VP	IR Manager
Tel.: (574) 4041424	Tel.: (574) 4042199	Tel.: (574) 4041837


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 Superintendency of Finance in 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 changes to the Bank’s principal accounting policies in the quarter ended December 31, 2008, due to regulatory changes implemented by Colombian authorities. For more information please see the section entitled “Summary of non-recurring or extraordinary items” in this report. The statements of income for the quarter ended December 31, 2008 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 refers to the Bank together with its affiliates, unless otherwise specified.

Representative Market Rate: January 1, 2009 Ps. 2,243.59= US$ 1 Average Representative Market Rate for 2008 Ps. 1,966.26 = US$ 1

SUMMARY:

Bancolombia S.A. (“BANCOLOMBIA” or the “Bank”) delivered strong results in 2008 as it reported net income of Ps. 1,290.6 billion for the year (Ps. 1,638.23 per share and $US 2.92 per ADR), increasing 18.7% compared to 2007 figures. During 2008, the Bank experienced an expansion in its business areas driven by loan growth of 18.4% over the year while maintaining a strong balance sheet in terms of coverage for loan losses, solid liquidity and capital position, as well as a profitable operation with an average return on equity of 23.7% for 2008.

During 2008, allowances for loan losses increased to Ps. 2,134.4 billion (4.8% of gross loans and financial leases), maintaining the level of coverage, measured by the ratio of allowances to past due loans, close to 135%. The delinquencies ratio (loans overdue more than 30 days) increased slightly to 3.6% by the end of the quarter ended December 31, 2008 (“4Q08”) from 3.5% the previous quarter.

Driven by the operating results of the Bank in 2008, shareholders’ equity totaled Ps. 6,117 billion by the end of 2008, increasing 17.6% as compared to the figure as of December 31, 2007, while the Bank’s consolidated ratio of technical capital to risk-weighted assets was 11.24%.

BANCOLOMBIA continued experiencing a favorable evolution of deposit growth, strengthening its solid liquidity position. As of December 31, 2008, BANCOLOMBIA’s deposits reached Ps. 40,384 billion, increasing 8.9% as compared to the quarter ended September 30, 2008 (“3Q08”) and 17.5% as compared to the quarter ended December 31, 2007 (“4Q07”), while the ratio of net loans to deposits (including borrowings from development banks) finished the year at 96%.

BANCOLOMBIA recorded net income of Ps. 294.4 billion (Ps. 373.75 per share and $US 0.67 per ADR) for 4Q08, a decrease of 8.7% as compared to the Ps. 322.5 billion for 4Q07. Several non-recurring items were incorporated in 4Q08 resulting in a net negative impact on revenues of Ps 63.8 billion, which represents 18.7% of 4Q08 income before taxes.

The Bank’s results in 4Q08 were mainly driven by a strong performance of net interest income that totaled Ps. 985.1 billion in 4Q08, increasing 6.9% as compared to 3Q08 and 25.1% as compared to 4Q07, higher operating income other than interest or fees, which amounted to Ps. 189.3 billion in 4Q08, increasing 44.9% as compared to 3Q08 and 31.7% as compared to 4Q07 and solid net fees and income from services that totaled Ps 361.0 billion which represents a 4.1% increase as compared to 3Q08. Results for 4Q08 were offset by a higher level of provision charges as net provisions totaled Ps. 474.7 billion in 4Q08, representing an increase of 94.9% as compared to 3Q08 and 125.3% as compared to 4Q07 and operating expenses that amounted to Ps 735.3 billion, increasing 15.3% as compared to the figures for 3Q08. For more information on provision charges please see the section entitled “Asset Quality” in this report.

Net interest income for the year 2008 totaled Ps. 3,560.4 billion, increasing 26.8% as compared to the same figure for 2007, driven by the 18.4% loan growth and wider spreads during the period. Net interest margin increased from 6.8% in 2007 to 7.4% in 2008.

BANCOLOMBIA’s efficiency ratio, measured as the ratio between operating expenses and net operating income, reached 47.8% in 2008, improving in relation to the 53.0% ratio for 2007.

BANCOLOMBIA: Summary of consolidated financial quarterly results².


CONSOLIDATED BALANCE SHEET
AND INCOME STATEMENT	Quarter									Growth
(Ps millions)	4Q 07			3Q 08			4Q 08			4Q 08 / 3Q 08			4Q 08 / 4Q 07
ASSETS
Loans and financial leases, net		36,245,473			40,474,342			42,508,210			5.03	%		17.28	%
Investment securities, net		5,774,251			6,947,159			7,278,276			4.77	%		26.05	%
Other assets		10,131,925			10,539,537			11,996,593			13.82	%		18.40	%

Total assets		52,151,649			57,961,038			61,783,079			6.59	%		18.47	%


LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits		34,374,150			37,096,051			40,384,400			8.86	%		17.48	%
Non-interest bearing		5,804,724			4,582,805			5,723,460			24.89	%		-1.40	%
Interest bearing		28,569,426			32,513,246			34,660,940			6.61	%		21.32	%
Other liabilities		12,578,229			15,099,981			15,281,834			1.20	%		21.49	%
Total liabilities		46,952,379			52,196,032			55,666,234			6.65	%		18.56	%
Shareholders’ equity		5,199,270			5,765,006			6,116,845			6.10	%		17.65	%

Total liabilities and shareholders’ equity		52,151,649			57,961,038			61,783,079			6.59	%		18.47	%


Interest income		1,375,701			1,614,618			1,784,855			10.54	%		29.74	%
Interest expense		588,349			693,547			799,795			15.32	%		35.94	%
Net interest income		787,352			921,071			985,060			6.95	%		25.11	%
Net provisions		(210,719	)		(243,584	)		(474,664	)		94.87	%		125.26	%
Fees and income from service, net		345,890			346,717			361,000			4.12	%		4.37	%
Other operating income		143,710			130,622			189,316			44.93	%		31.73	%
Total operating expense		(581,988	)		(637,920	)		(735,284	)		15.26	%		26.34	%
Goodwill amortization		(19,695	)		(11,287	)		(34,804	)		208.35	%		76.71	%
Non-operating income, net		(4,832	)		(14,229	)		51,152			459.49	%		1158.61	%
Income tax expense		(137,222	)		(124,423	)		(47,323	)		-61.97	%		-65.51	%

Net income		322,496			366,967			294,453			-19.76	%		-8.70	%


PRINCIPAL RATIOS
PROFITABILITY
Net interest margin ⁽¹⁾		7.17	%		7.69	%		7.49	%		6.80	%		7.42	%
Return on average total assets ⁽²⁾		2.57	%		2.66	%		1.95	%		2.30	%		2.34	%
Return on average shareholders’ equity ⁽³⁾		25.99	%		26.66	%		19.80	%		24.41	%		23.68	%

EFFICIENCY
Operating expenses to net operating income		47.44	%		46.42	%		50.16	%		53.01	%		47.79	%
Operating expenses to average total assets		4.80	%		4.70	%		5.10	%		4.82	%		4.79	%

CAPITAL ADEQUACY
Shareholders’ equity to total assets		9.14	%		9.95%			9.90	%
Technical capital to risk weighted assets		12.67	%		11.37%			11.24	%


	Quarter						As of
KEY FINANCIAL HIGHLIGHTS	4Q 07		3Q 08		4Q 08		Dec-07		Dec-08
Net Income (Ps millions)		322,496		366,967		294,453		1,086,923		1,290,643
Basic and Diluted net income per ADS		0.81		0.85		0.67		2.74		2.92
Basic and Diluted net income per share $COP		409.35		465.80		373.75		1,379.65		1,638.23
P/BV ADS ⁽⁴⁾		2.61		2.12		1.69
P/BV Local ⁽⁵⁾		2.56		2.14		1.70
P/E ⁽⁶⁾		10.39		8.38		8.81
ADR price ⁽⁷⁾		34.20		28.45		23.35
Common price ⁽⁷⁾		16,900		15,640		13,200
Weighted average of Preferred and Common Shares outstanding		787,827,003		787,827,003		787,827,003


(1)		Calculated taking into account an average between the figures as of September 2008 and as of December 2008. It’s 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 annualized quarterly net income divided by monthly average assets.; (5) Defined as annualized quarterly net income divided by monthly average equity; (3) Defined as ADS price divided by ADS book value; (6) Defined as share price divided by share book value.; (7) Share prices on the Colombian Stock Exchange;

	2.		CONSOLIDATED BALANCE SHEET

	2.1.		Assets

			As of December 31, 2008, BANCOLOMBIA’s assets totaled Ps. 61,783 billion, representing an increase of 6.6% and 18.5% as compared to the figures presented at the end of 3Q08 and 4Q07 respectively.

	2.1.1.		Loan Portfolio

			As of December 31, 2008, BANCOLOMBIA’s gross loans totaled Ps. 44,643 billion, increasing 5.6% as compared to 3Q08 and 18.4% as compared to 4Q07.


LOAN PORTFOLIO				As of						Growth
(Ps millions)	31-Dec-07			30-Sep-08			31-Dec-08			Dec-08/Sep-08			Dec-08/Dec-07
CORPORATE
Working capital loans		16,099,499			17,339,568			19,332,292			11.49	%		20.08	%
Loans funded by domestic development banks		882,715			950,134			1,022,764			7.64	%		15.87	%
Trade Financing		1,159,546			1,817,194			1,768,964			-2.65	%		52.56	%
Overdrafts		59,146			111,717			63,508			-43.15	%		7.37	%
Credit Cards		43,159			49,510			42,366			-14.43	%		-1.84	%

TOTAL CORPORATE		18,244,065			20,268,123			22,229,894			9.68	%		21.85	%

RETAIL AND SMEs
Working capital loans		3,729,344			4,096,301			4,138,373			1.03	%		10.97	%
Personal loans		3,778,558			4,242,273			4,287,515			1.07	%		13.47	%
Loans funded by domestic development banks		719,211			861,001			896,282			4.10	%		24.62	%
Credit Cards		2,020,611			2,376,832			2,518,991			5.98	%		24.66	%
Overdrafts		218,006			313,605			229,212			-26.91	%		5.14	%
Automobile loans		1,312,396			1,340,500			1,320,409			-1.50	%		0.61	%
Trade Financing		97,978			127,259			123,826			-2.70	%		26.38	%
TOTAL RETAIL AND SMEs		11,876,104			13,357,771			13,514,608			1.17	%		13.80	%

MORTGAGE		2,883,628			3,373,317			3,391,326			0.53	%		17.61	%

FINANCIAL LEASES		4,698,827			5,289,495			5,506,742			4.11	%		17.19	%

Total loans and financial leases		37,702,624			42,288,706			44,642,570			5.57	%		18.41	%
Allowance for loan losses and financial leases		(1,457,151	)		(1,814,364	)		(2,134,360	)		17.64	%		46.47	%

Total loans and financial leases, net		36,245,473			40,474,342			42,508,210			5.03	%		17.28	%

Loan growth during 4Q08 was driven by corporate loans which presented higher than expected activity, reaching Ps 22,230 billion by the end of 2008 and increasing 9.7% as compared to 3Q08. BANCOLOMBIA’s solid liquidity position was key to boosting lending within this segment throughout 4Q08.

In contrast to the behavior observed in corporate lending, Retail and SMEs, Financial Leases and Mortgage segments experienced a decrease in their rate of growth during 4Q08 as a direct consequence of a more selective approach towards lending, combined with lower demand derived from a lower pace of economic growth. Consequently, there was a change in the loan’s book composition in favor of Corporate loans which reached 49.8% of the loan portfolio, while Retail and SME’s loans represented 30.3% and Financial leases 12.3% by the end of 2008.

As of December 31, 2008, mortgages amounted to Ps 3,391 billion (7.6% of gross loans). It is important to note that during 4Q08 BANCOLOMBIA securitized Ps. 233.6 billion in mortgage loans. If the outstanding securitized loans were added to the outstanding loans on the Bank’s balance sheet, this segment would record an increase of 3.2% as compared to 3Q08 and 20.6% compared to 4Q07.

Lending denominated in Colombian Pesos was dynamic in 4Q08 as the Colombian Peso denominated loan book (which is 71.6% of loan portfolio) increased 6.7% quarter-over-quarter and 18.2% year-over-year. On the other hand, the U.S. dollar denominated loan book (the remaining 28.4% of BANCOLOMBIA’s loans) was less active, increasing 0.2% over the quarter and 6.9% over the year when measured in U.S. dollars.

In line with the Bank’s conservative approach towards protecting the balance sheet, allowances for loans losses increased more than past due loans during 4Q08 reaching Ps. 2,134.4 billion and representing 4.8% of gross loans and financial leases.

As of December 31, 2008, net loans and financial leases amounted to Ps. 42,508 billion and represented 68.8% of total assets.

2.1.2.

Investment Portfolio

As of December 31, 2008, BANCOLOMBIA’s net investment securities amounted to Ps. 7,278 billion, representing a 4.8% increase when compared to the figures as of September 30, 2008, and an increase of 26.0% when compared to the figures as of December 31, 2007. Net investment securities comprise Investments in debt securities which represented 94.0% of BANCOLOMBIA’s net investment securities portfolio by the end of 2008 and 11.1% of total assets, decreasing slightly in relative size from the 11.6% presented by the end of 3Q08.

2.2.

Funding

As of December 31, 2008, BANCOLOMBIA’s liabilities reached Ps. 55,666 billion, increasing 6.6% as compared to 3Q08 and 18.6% as compared to 4Q07. Liabilities denominated in Colombian Pesos, which represent 69.8% of total liabilities, increased 7.9% over the quarter and 19.7% as compared to 4Q07.

During the last few months, the Central Bank of Colombia (“the Colombian Central Bank”) undertook several measures to support the proper functioning of Colombia’s financial system. At its October 24, 2008 meeting, ordinary reserve requirements were modified as follows (i) 11% for demand deposits from the (previously 11.5%); (ii) 4.5% for time deposits under 540 days (previously 6%). Subsequently, the Colombian Central Bank overnight lending rate was reduced 50 basis points (“bp”) at its December 19, 2008 meeting for the first time since April 2006 when a cycle of restrictive policy was initiated. This decision was followed by an additional reduction of 50 basis points at its January 30, 2009 meeting and 100 basis points at its February 27, 2009 meeting, leaving the Colombian Central Bank’s overnight lending rate at 8.00%. As a result of these measures, the Colombian financial system has been relatively liquid in recent months and interbank lending rates have maintained historical spreads with the Colombian Central Bank overnight lending rate.

In this interest rates environment, and reflecting BANCOLOMBIA’s focus on preserving a solid liquidity position, the Bank experienced, during 4Q08, a positive evolution of deposit growth which reached Ps. 40,384 billion, increasing 8.9% as compared to 3Q08 and 17.5% as compared to 4Q07. COP denominated deposits, 72.7% of BANCOLOMBIA’s total deposits, increased 10.2% and 19.1% as compared to 3Q08 and 4Q07 respectively. In addition, non-interest deposits increased 24.9% in 4Q08 driven by the seasonal behavior of checking accounts, while the participation of time deposits in the funding mix decreased slightly to 34.7% of total deposits from 35.7% in 3Q08.

Despite tighter general liquidity conditions for U.S. dollar denominated funds in 4Q08, BANCOLOMBIA continued to have access to sources of funding in U.S. dollars. In fact, dollar denominated deposits increased 2.6% in 4Q08, benefiting from a re-allocation of funds by some clients, while dollar denominated borrowings from other banks increased 18.7% over the same period, measured in U.S. dollars.


	Dec-07					Sep-08					Dec-08
DEPOSITS MIX	Ps. Million		%			Ps. Million		%			Ps. Million		%
Checking accounts		6,868,275		20.0	%		6,031,361		16.3	%		7,301,050		18.1	%
Time deposits		14,304,727		41.6	%		17,431,652		47.0	%		18,652,738		46.2	%
Savings deposits		12,697,288		36.9	%		13,260,107		35.7	%		13,997,070		34.7	%
Other		503,860		1.47	%		372,931		1.01	%		433,542		1.07	%

Total deposits		34,374,150		100.0	%		37,096,051		100.0	%		40,384,400		100.00	%

2.3.

Shareholders’ Equity and regulatory capital

Shareholders’ equity totaled Ps. 6,117 billion by the end of 2008, increasing 17.6% as compared to the figure by the end of 2007. The increase in equity was driven by the operating results of the Bank in 2008.

At the end of 4Q08, the Bank’s consolidated ratio of technical capital to risk-weighted assets was 11.2%, comprised of a Tier I ratio of 9.0% and a Tier II ratio of 2.3%. BANCOLOMBIA’s capital adequacy exceeds the minimum established by Colombian regulators by more than 220 basis points.


TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (Ps. millions)	Dec-07			%			Sep-08			%			Dec-08			%
Basic capital (Tier I)		4,729,101			10.14	%		4,805,333			9.10	%		4,971,755			8.95	%
Additional capital (Tier II)		1,179,216			2.53	%		1,198,724			2.27	%		1,273,869			2.29	%
Technical capital ⁽¹⁾		5,908,317			12.67	%		6,004,058			11.37	%		6,245,624			11.24	%
Risk weighted assets included market risk		46,628,036						52,784,581						55,542,485

CAPITAL ADEQUACY ⁽²⁾		12.67	%					11.37	%					11.24	%


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

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

INCOME STATEMENT

During 4Q08, BANCOLOMBIA recorded net income of Ps. 294.5 billion (Ps. 373.75 per share and $US 0.67 per ADR), a decrease of 8.7% as compared to the Ps. 322.5 billion for 4Q07.

Net income for the year ended December 31, 2008 totaled Ps. 1,290.6 billion (Ps. 1,638.23 per share and $US 2.92 per ADR), increasing 18.7% as compared to the year ended December 31, 2007.

Annualized return on average shareholders’ equity for 4Q08 was 19.8%. Return on average equity for the year ended December 31, 2008 was 23.7%, decreasing slightly from the 24.4% for the same period of 2007.

3.1.

Net Interest Income

During 4Q08, interest on loans reached Ps. 1,427 billion, increasing 12.8% as compared to 3Q08 and 33.1% as compared to the Ps. 1,071 billion recorded in 4Q07, driven by wider spreads in the loan book as net interest margin for loans during 4Q08 increased to 8.5% from 7.8% in 4Q07.

Interest on investment securities decreased 7.1% in 4Q08 to Ps. 115.9 billion, while interest on financial leases reached Ps. 211.1 billion increasing 6.1% and 24.9% as compared to 3Q08 and 4Q07 respectively.

Overall, total interest income increased 10.5% as compared to 3Q08 and 29.7% as compared to 4Q07, while total interest expense grew 15.3% and 35.9% respectively. Net interest income increased 6.9% as compared to 3Q08 and 25.1% as compared to 4Q07.

Net interest income for the year 2008 totaled Ps. 3,560.4 billion, increasing 26.8% as compared to the same figure for 2007, driven by the 18.4% loan growth and higher margins during the period. Net interest margin increased from 6.8% in 2007 to 7.4% in 2008 due to higher interest spreads in the loan portfolio and a steady income from investment securities despite a more volatile bond market conditions.

3.2.

Fees and Income from Services

Net fees and income from services totaled Ps. 361.0 billion during 4Q08, increasing 4.1% as compared to 3Q08.

For the year ended December 31, 2008, net fees and income from services totaled Ps. 1,313.6 billion, increasing 13.3% as compared to the same period of 2007. Fee revenue performance was driven by credit and debit card fees, which totaled Ps. 446.6 billion for the year ended December 31, 2008, increasing 52.1% as compared to the same period last year, fees related to fiduciary activities that totaled Ps. 98.8 billion for the year ended December 31, 2008, increasing 42.8% as compared to 2007, and fees related to collection and payment service which totaled Ps. 157.3 billion for the year ended December 31, 2008, increasing 20.6% as compared to the same period last year. Net fees and income from services performance was impacted by lower credit card merchant fees which totaled Ps. 32.2 billion for the year ended December 31, 2008, decreasing 17.8% as compared to the same period last year, and by fees and other services expenses which totaled Ps. 134.9 billion in the year ended December 31, 2008, increasing 15.9% as compared to 2007.

The following table summarizes BANCOLOMBIA’s participation in the credit card business in Colombia.


ACCUMULATED CREDIT CARD BILLING					%			2008
(Ps. millions)	Dec-07		Dec-08		Growth			Market Share
Bancolombia VISA		1,480,725		1,738,186		17.39	%		8.24	%
Bancolombia Mastercard		1,941,401		2,232,799		15.01	%		10.59	%
Bancolombia American Express		1,007,659		1,532,476		52.08	%		7.27	%
Total Bancolombia		4,429,784		5,503,462		24.24	%		26.10	%

Colombian Credit Card Market		19,214,228		21,088,011		9.75	%


Source:		Credibanco and Redeban Multicolor


CREDIT CARD MARKET SHARE					%			2008
(Outstanding credit cards)	Dec-07		Dec-08		Growth			Market Share
Bancolombia VISA		304,612		314,221		3.15	%		5.88	%
Bancolombia Mastercard		336,583		362,287		7.64	%		6.78	%
Bancolombia American Express		232,635		322,603		38.67	%		6.04	%
Total Bancolombia		873,830		999,111		14.34	%		18.70	%

Colombian Credit Card Market		5,251,549		5,341,507		1.71	%


Source:		Credibanco and Redeban Multicolor

3.3.		Other Operating Income

		Total other operating income totaled Ps. 189.3 billion for 4Q08, increasing 44.9% compared to 3Q08 and 31.7% when compared to the figures for 4Q07. This result was impacted positively by sales of equity securities, as the Bank recorded additional gains on sales of investment securities related to the sale of interest in Multienlace S.A., and negatively impacted by rule changes, concerning valuation methodologies for derivative instruments issued by the Colombian Superintendency of Finance in 2008.

		In 4Q08, net foreign exchange gains reached Ps. 80.2 billion driven by the COP depreciation that took place over during 4Q08 as this line item aggregates net gains (or losses) of the peso conversion of U.S. dollar denominated assets and liabilities, trading gains and foreign currency sales profits. BANCOLOMBIA usually hedges its currency exposure by establishing an opposite position in its derivative portfolio in order to minimize its exposure to sharp movements in exchange rates. Accordingly, exchange rate movements, tend to have an opposite effect on the line item for derivative financial instruments compared to the effect produced on the line item for net foreign exchange gains.

		For further explanation of the non recurring items affecting this line of income, please see section 3.6 “Summary of non-recurring or extraordinary items” in this report.

3.4.		Provisions

		For explanation of the trends driving the current level of provisions charges, please see the section entitled “Asset Quality” in this report.

3.5.		Operating expenses

		During 4Q08, operating expenses totaled Ps. 735.3 billion, increasing 15.3% as compared to 3Q08 and 26.3% as compared to the figures for 3Q07. Operating expenses were negatively impacted by a special provision for fidelity bonuses paid to employees that was recorded for the first time in 4Q08, amounting to Ps 31.2 billion, which increased the line item for salaries and employee benefits in 4Q08 and represented almost a third of the quarter-over-quarter variation for operating expenses. In addition, administrative and other expenses totaled Ps. 368.8 billion in 4Q08, increasing 16.4% as compared to 3Q08. As a result of the higher operating expenses and the net negative impact of non-recurring items on revenues during 4Q08, efficiency, measured as the ratio of operating expenses to net operating income, decreased as this ratio reached 50.2%, compared to 46.4%, recorded in 3Q08.

		For the year ended December 31, 2008, total operating expenses amounted to Ps 2,567 billion, increasing 16.6% as compared to the year ended December 31, 2007. The increase in operating expenses was driven by administrative and other expenses that totaled Ps. 1,269.0 billion for 2008, increasing 18.5% as compared to the same period last year. Personnel expenses (the sum of salaries and employee benefits, bonus plan payment and compensation) totaled Ps 1,077.9 billion for the year 2008, increasing 14.3% as compared to 2007. Personnel expenses were primarily driven by bonus plan payments which are part of BANCOLOMBIA’s variable compensation program.

		For the year ended December 31, 2008, efficiency, measured as the ratio of operating expenses to net operating income, improved for the second consecutive year as this ratio fell to 47.8% in 2008, from 53.0% in 2007.

3.6.		Summary of non-recurring or extraordinary items

		Several non-recurring items were recorded in the 4Q08 income statement resulting in a net negative impact on revenues of Ps 63.8 billion which represents 18.7% of 4Q08 income before taxes. Specifically, the operating results were affected by:

	•		Rule changes concerning valuation methodologies for derivative instruments as the Colombian Superintendency of Finance issued external circulars 025, 030, 044 and 063 (the “2008 External Circulars”) establishing new guidelines for the valuation of derivatives and structured products. In accordance with the 2008 External Circulars, BANCOLOMBIA adopted the methodology by which it values its portfolio of derivatives and structured products. As a result of this change, BANCOLOMBIA s balance sheet and financial results were impacted by a reduction in the carrying value of derivatives totaling Ps. 145 billion in the 2008 fiscal year, of which Ps 98.0 billion negatively impacted the income from derivative financial instruments for 4Q08. An additional reduction of Ps. $135 billion in the carrying value of derivatives will be recorded in 2009, resulting in a reduction on income that will be amortized daily, in equal installments, during the first six months of 2009.

	•		During 2Q08 BANCOLOMBIA agreed to sell 100% of its interest in Multienlace S.A, a company that provides business process outsourcing and contact center services to corporate clients. As part of this transaction, the Bank recorded in 4Q08 non recurring gains on sales of investment securities for Ps. 55.6 billion.

	•		In 4Q08 a special provision for fidelity bonuses paid to employees for every five years of employment was recorded, for the first time, totaling Ps 31.2 billion which primarily drove the increase in expenses related to salaries and employee benefits in 4Q08.

	•		During 4Q08, the Bank reviewed the allowances made in connection with pending litigation and reassessed the value of these contingencies according to the current status of the claims. As a result of this review of litigation contingencies, the Bank reversed a total amount of Ps. 32.8 billion in allowances in 4Q08.

	•		In 4Q08, the Bank modified the methodology used to calculate the goodwill amortization resulting in an increase of the amortization charge of Ps 23.0 billion for the year 2008, which was fully incorporated in 4Q08 goodwill amortization.

4.		Asset Quality

		Despite higher recovery of charged off loans during the quarter, total net provisions for 4Q08 amounted to Ps. 474.7 billion, increasing 94.9% as compared to 3Q08 and 125.3% as compared to 4Q07. The higher level of provision charges during 4Q08 are due by:

	•		A conservative effort to build reserves as allowances for loans losses increased to Ps. 2,134.4 billion during 4Q08 (4.8% of gross loans and financial leases), increasing 17.6% compared to 3Q08, and outpacing the 8.5% increase of past due loans over the quarter. Consequently, coverage, measured as the ratio of allowances for loans and accrued interest losses to past due loans, increased to 134.8% in 4Q08 from 124.1% in 3Q08.

	•		Increasing past due loans and the subsequent deterioration in asset quality indicators. Delinquencies ratio (loans overdue more than 30 days) reached 3.6% by the end of 4Q08, close to the 3.5% ratio recorded by the end of 3Q08.

		During 4Q08, charge-offs of bad loans totaled Ps. 188.6 billion.

		For the year ended December 31, 2008, net provisions totaled Ps 1,133.2 billion, increasing 89.8% as compared to the same period of 2007.

		The following tables present key metrics for asset quality:


LOANS AND FINANCIAL LEASES CLASSIFICATION
( Ps millions)	As of 31-Dec-07					As of 30-Sep-08					As of 31-Dec-08
“A” Normal		35,397,502		93.9	%		39,112,111		92.5	%		40,650,096		91.0	%
“B” Subnormal		1,135,023		3.0	%		1,641,326		3.9	%		2,216,831		5.0	%
“C” Deficient		300,085		0.8	%		507,581		1.2	%		576,557		1.3	%
“D” Doubtful recovery		604,034		1.6	%		738,867		1.7	%		871,893		2.0	%
“E” Unrecoverable		265,980		0.7	%		288,821		0.7	%		327,193		0.7	%

Total		37,702,624		100	%		42,288,706		100	%		44,642,570		100	%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases		3.1	%				3.6	%				4.0	%


ASSET QUALITY	As of									Growth
(Ps millions)	Dec-07			Sep-08			Dec-08			4Q 08 / 3Q 08			4Q 08 / 4Q 07
Total performing past due loans ⁽¹⁾		438,566			615,605			696,529			13.15	%		58.82	%
Total non-performing past due loans		666,367			880,600			927,476			5.32	%		39.18	%
Total past due loans		1,104,933			1,496,205			1,624,005			8.54	%		46.98	%
Allowance for loans and accrued interest losses		1,490,454			1,856,606			2,188,683			17.89	%		46.85	%
Past due loans to total loans		2.93	%		3.54	%		3.64	%
Non-performing loans as a percentage of total loans		1.77	%		2.08	%		2.08	%
“C”, “D” and “E” loans as a percentage of total loans		3.10	%		3.63	%		3.98	%
Allowances to past due loans ⁽²⁾		134.89	%		124.09	%		134.77	%
Allowance for loan and accrued interest losses as a percentage of “C”, “D” and “E” loans (2)		127.38	%		120.93	%		123.26	%
Allowance for loan and accrued interest losses as a percentage of non-performing loans ⁽²⁾		223.67	%		210.83	%		235.98	%
Allowance for loan and accrued interest losses as a percentage of total loans		3.95	%		4.39	%		4.90	%
Percentage of performing loans to total loans		98.23	%		97.92	%		97.92	%


(1)		“Performing” past due loans are loans upon which the Bank 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.


	PDL/ total loans as Of
LOAN CLASSIFICATION	% Of loan Portfolio			30-Sep-08			31-Dec-08
Commercial loans		62.9	%		2.3	%		2.5	%
Consumer loans		16.9	%		5.8	%		5.9	%
Small business loans		0.3	%		9.9	%		12.3	%
Mortgage loans		7.6	%		8.5	%		8.4	%
Finance lease		12.3	%		3.1	%		3.0	%

TOTAL LOAN PORTFOLIO		100.0	%		3.5	%		3.6	%

5.		BANCOLOMBIA Company Description (NYSE: CIB)

		BANCOLOMBIA S.A. is a full service financial institution incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 6.4 million customers. BANCOLOMBIA delivers its product and services via its regional network comprised of Colombia ’s largest non-government owned banking network, central America ’s presence through El Salvador ’s leading financial conglomerate (Banagricola), off-shore banking subsidiaries in Panama, Cayman and Puerto Rico, as well as an agency in Miami. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, pension fund administration, and insurance, among others.

		Annexs

6.1		Balance Sheet


BALANCE SHEET							Last
(Ps millions)	Dec-07		Sep-08		Dec-08		Quarter			Annual
ASSETS
Cash and due from banks		3,618,619		3,943,274		3,870,927		-1.83	%		6.97	%
Overnight funds sold		1,609,768		570,307		1,748,648		206.62	%		8.63	%
Total cash and equivalents		5,228,387		4,513,581		5,619,575		24.50	%		7.48	%

Debt securities		5,596,051		6,705,148		6,840,596		2.02	%		22.24	%
Trading		1,916,012		2,125,396		2,385,564		12.24	%		24.51	%
Available for Sale		1,954,593		2,135,482		2,000,588		-6.32	%		2.35	%
Held to Maturity		1,725,446		2,444,270		2,454,444		0.42	%		42.25	%
Equity securities		253,747		307,403		503,861		63.91	%		98.57	%
Trading		93,125		132,996		331,398		149.18	%		255.86	%
Available for Sale		160,622		174,407		172,463		-1.11	%		7.37	%
Market value allowance		-75,547		-65,392		-66,181		1.21	%		-12.40	%
Net investment securities		5,774,251		6,947,159		7,278,276		4.77	%		26.05	%

Commercial loans		23,397,058		26,109,332		28,068,731		7.50	%		19.97	%
Consumer loans		6,593,211		7,375,132		7,532,649		2.14	%		14.25	%
Small business loans		129,900		141,430		143,122		1.20	%		10.18	%
Mortgage loans		2,883,628		3,373,317		3,391,326		0.53	%		17.61	%
Finance lease		4,698,827		5,289,495		5,506,742		4.11	%		17.19	%
Allowance for loan losses		-1,457,151		-1,814,364		-2,134,360		17.64	%		46.47	%
Net total loans and financial leases		36,245,473		40,474,342		42,508,210		5.03	%		17.28	%

Accrued interest receivable on loans		431,863		525,401		559,981		6.58	%		29.67	%
Allowance for accrued interest losses		-33,303		-42,242		-54,323		28.60	%		63.12	%
Net total interest accrued		398,560		483,159		505,658		4.66	%		26.87	%

Customers’ acceptances and derivatives		196,001		235,133		272,458		15.87	%		39.01	%
Net accounts receivable		716,106		840,638		828,817		-1.41	%		15.74	%
Net premises and equipment		855,818		937,993		1,171,117		24.85	%		36.84	%
Foreclosed assets, net		32,294		24,179		24,653		1.96	%		-23.66	%
Prepaid expenses and deferred charges		137,901		141,609		132,881		-6.16	%		-3.64	%
Goodwill		977,095		1,019,732		1,008,639		-1.09	%		3.23	%
Operating leases, net		488,333		651,759		726,262		11.43	%		48.72	%
Other		580,642		1,141,433		1,093,850		-4.17	%		88.39	%
Reappraisal of assets		520,788		550,321		612,683		11.33	%		17.65	%

Total assets		52,151,649		57,961,038		61,783,079		6.59	%		18.47	%

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
DEPOSITS
Non-interest bearing		5,804,724		4,582,805		5,723,460		24.89	%		-1.40	%
Checking accounts		5,300,864		4,209,874		5,289,918		25.66	%		-0.21	%
Other		503,860		372,931		433,542		16.25	%		-13.96	%

Interest bearing		28,569,426		32,513,246		34,660,940		6.61	%		21.32	%
Checking accounts		1,567,411		1,821,487		2,011,132		10.41	%		28.31	%
Time deposits		14,304,727		17,431,652		18,652,738		7.00	%		30.40	%
Savings deposits		12,697,288		13,260,107		13,997,070		5.56	%		10.24	%

Total deposits		34,374,150		37,096,051		40,384,400		8.86	%		17.48	%
Overnight funds		2,005,490		2,252,672		2,564,208		13.83	%		27.86	%
Bank acceptances outstanding		55,208		49,507		56,935		15.00	%		3.13	%
Interbank borrowings		1,506,611		1,704,714		2,077,291		21.86	%		37.88	%
Borrowings from domestic development banks		3,344,635		3,682,014		3,870,634		5.12	%		15.73	%
Accounts payable		1,714,418		1,660,001		1,688,402		1.71	%		-1.52	%
Accrued interest payable		286,627		401,357		400,902		-0.11	%		39.87	%
Other liabilities		503,433		539,330		589,501		9.30	%		17.10	%
Bonds		2,850,730		3,801,313		3,643,486		-4.15	%		27.81	%
Accrued expenses		218,860		919,320		255,183		-72.24	%		16.60	%
Minority interest in consolidated subsidiaries		92,217		89,753		135,292		50.74	%		46.71	%

Total liabilities		46,952,379		52,196,032		55,666,234		6.65	%		18.56	%

SHAREHOLDERS’ EQUITY
Subscribed and paid in capital		393,914		393,914		393,914		0.00	%		0.00	%
Retained earnings		4,082,419		4,658,803		4,911,107		5.42	%		20.30	%
Appropiated		2,995,496		3,662,613		3,620,464		-1.15	%		20.86	%
Unappropiated		1,086,923		996,190		1,290,643		29.56	%		18.74	%

Reappraisal and others		752,589		770,102		860,784		11.78	%		14.38	%
Gross unrealized gain or loss on debt securities		-29,652		-57,813		-48,960		-15.31	%		65.12	%

Total shareholder’s equity		5,199,270		5,765,006		6,116,845		6.10	%		17.65	%

6.2

Income Statement


INCOME STATEMENT	As of						Growth												Growth
(Ps millions)	Dec-07			Dec-08			Dec-08/Dec-07			4Q 07			3Q 08			4Q 08			4Q 08/3Q 08			4Q 08/4Q 07
Interest income and expenses
Interest on loans		3,707,751			4,999,520			34.84	%		1,071,515			1,265,216			1,426,604			12.76	%		33.14	%
Interest on investment securities		416,644			431,589			3.59	%		105,916			124,821			115,929			-7.12	%		9.45	%
Overnight funds		115,324			106,208			-7.90	%		29,316			25,651			31,226			21.73	%		6.52	%
Leasing		570,689			776,426			36.05	%		168,954			198,930			211,096			6.12	%		24.94	%
Total interest income		4,810,408			6,313,743			31.25	%		1,375,701			1,614,618			1,784,855			10.54	%		29.74	%

Interest expense
Checking accounts		39,076			39,257			0.46	%		10,595			9,604			12,089			25.87	%		14.10	%
Time deposits		816,688			1,256,742			53.88	%		250,289			328,607			349,967			6.50	%		39.83	%
Savings deposits		461,437			589,718			27.80	%		129,902			141,685			176,389			24.49	%		35.79	%
Total interest on deposits		1,317,201			1,885,717			43.16	%		390,786			479,896			538,445			12.20	%		37.79	%

Interbank borrowings		109,843			74,792			-31.91	%		18,775			19,527			25,330			29.72	%		34.91	%
Borrowings from domestic development banks		274,484			344,900			25.65	%		81,678			83,104			92,662			11.50	%		13.45	%
Overnight funds		131,127			166,129			26.69	%		38,557			36,964			51,698			39.86	%		34.08	%
Bonds		169,435			281,803			66.32	%		58,553			74,056			91,660			23.77	%		56.54	%
Total interest expense		2,002,090			2,753,341			37.52	%		588,349			693,547			799,795			15.32	%		35.94	%

Net interest income		2,808,318			3,560,402			26.78	%		787,352			921,071			985,060			6.95	%		25.11	%
Provision for loan and accrued interest losses, net		(707,865	)		(1,263,405	)		78.48	%		(257,857	)		(294,226	)		(520,072	)		76.76	%		101.69	%
Recovery of charged-off loans		89,997			108,143			20.16	%		24,525			27,660			40,035			44.74	%		63.24	%
Provision for foreclosed assets and other assets		(60,531	)		(46,297	)		-23.52	%		(6,810	)		(8,072	)		(13,909	)		72.31	%		104.24	%
Recovery of provisions for foreclosed assets and other assets		81,364			68,392			-15.94	%		29,423			31,054			19,282			-37.91	%		-34.47	%

Total net provisions		(597,035	)		(1,133,167	)		89.80	%		(210,719	)		(243,584	)		(474,664	)		94.87	%		125.26	%
Net interest income after provision for loans and accrued interest losses		2,211,283			2,427,235			9.77	%		576,633			677,487			510,396			-24.66	%		-11.49	%

Commissions from banking services and other services		279,528			238,918			-14.53	%		103,089			67,872			60,733			-10.52	%		-41.09	%
Electronic services and ATM fees		80,711			86,070			6.64	%		22,630			20,687			22,820			10.31	%		0.84	%
Branch network services		104,601			104,010			-0.57	%		28,006			26,680			28,297			6.06	%		1.04	%
Collections and payments fees		130,421			157,281			20.59	%		36,925			39,731			41,901			5.46	%		13.48	%
Credit card merchant fees		39,191			32,215			-17.80	%		11,085			6,321			11,910			88.42	%		7.44	%
Credit and debit card annual fees		293,583			446,647			52.14	%		91,620			119,293			118,825			-0.39	%		29.69	%
Checking fees		67,438			67,963			0.78	%		17,792			17,783			17,104			-3.82	%		-3.87	%
Fiduciary activities		69,200			98,799			42.77	%		19,244			26,623			30,196			13.42	%		56.91	%
Pension plan administration		82,453			87,826			6.52	%		20,274			20,761			27,068			30.38	%		33.51	%
Brokerage fees		62,493			54,742			-12.40	%		20,005			12,137			12,149			0.10	%		-39.27	%
Check remittance		22,762			26,148			14.88	%		5,964			5,934			7,203			21.39	%		20.77	%
International operations		43,643			47,962			9.90	%		12,454			12,485			15,512			24.25	%		24.55	%
Fees and other service income		1,276,024			1,448,581			13.52	%		389,088			376,307			393,718			4.63	%		1.19	%

Fees and other service expenses		(116,453	)		(134,939	)		15.87	%		(43,198	)		(29,590	)		(32,718	)		10.57	%		-24.26	%
Total fees and income from services, net		1,159,571			1,313,642			13.29	%		345,890			346,717			361,000			4.12	%		4.37	%

Other operating income
Net foreign exchange gains		27,584			113,584			311.77	%		13,313			83,726			80,184			-4.23	%		502.30	%
Derivative Financial Instruments		141,930			142,431			0.35	%		72,224			(18,709	)		(21,708	)		16.03	%		-130.06	%
Gains on sales of investments on equity securities		(15,034	)		92,125			712.78	%		190			(589	)		55,630			9544.82	%		29178.95	%
Securitization income		50,377			41,080			-18.45	%		17,950			9,713			9,523			-1.96	%		-46.95	%
Dividend income		18,968			39,586			108.70	%		362			3,080			89			-97.11	%		-75.41	%
Revenues from commercial subsidiaries		101,148			101,730			0.58	%		34,779			24,715			25,293			2.34	%		-27.28	%
Insurance income		8,013			13,948			74.07	%		6,520			1,702			6,449			278.91	%		-1.09	%
Communication, postage, rent and others		17,572			105,958			502.99	%		(1,628	)		26,984			33,856			25.47	%		2179.61	%
Total other operating income		350,558			650,442			85.54	%		143,710			130,622			189,316			44.93	%		31.73	%

Total income		3,721,412			4,391,319			18.00	%		1,066,233			1,154,826			1,060,712			-8.15	%		-0.52	%
Operating expenses
Salaries and employee benefits		835,150			928,997			11.24	%		217,124			222,506			269,478			21.11	%		24.11	%
Bonus plan payments		84,226			125,393			48.88	%		31,917			41,742			17,680			-57.64	%		-44.61	%
Compensation		23,463			23,539			0.32	%		6,224			5,447			4,558			-16.32	%		-26.77	%
Administrative and other expenses		1,070,845			1,268,982			18.50	%		271,517			316,785			368,806			16.42	%		35.83	%
Deposit security, net		49,113			52,151			6.19	%		12,282			12,916			12,557			-2.78	%		2.24	%
Donation expenses		15,375			26,653			73.35	%		12,980			3,294			21,840			563.02	%		68.26	%
Depreciation		122,835			141,133			14.90	%		29,944			35,230			40,365			14.58	%		34.80	%
Total operating expenses		2,201,007			2,566,848			16.62	%		581,988			637,920			735,284			15.26	%		26.34	%

Net operating income		1,520,405			1,824,471			20.00	%		484,245			516,906			325,428			-37.04	%		-32.80	%
Goodwill amortization ⁽¹⁾		70,411			73,149			3.89	%		19,695			11,287			34,804			208.35	%		76.71	%
Non-operating income (expense)
Other income		93,294			172,550			84.95	%		16,940			13,086			78,498			499.86	%		363.39	%
Minority interest		(13,246	)		(18,511	)		39.75	%		12,826			(2,954	)		(5,361	)		81.48	%		-141.80	%
Other expense		(81,236	)		(140,662	)		73.15	%		(34,598	)		(24,361	)		(21,985	)		-9.75	%		-36.46	%
Total non-operating income		(1,188	)		13,377			1226.01	%		(4,832	)		(14,229	)		51,152			459.49	%		1158.61	%
Income before income taxes		1,448,806			1,764,699			21.80	%		459,718			491,390			341,776			-30.45	%		-25.66	%
Income tax expense		(361,883	)		(474,056	)		31.00	%		(137,222	)		(124,423	)		(47,323	)		-61.97	%		-65.51	%

Net income		1,086,923			1,290,643			18.74	%		322,496			366,967			294,453			-19.76	%		-8.70	%

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	BANCOLOMBIA S.A.
	(Registrant)

Date: March 02, 2009	By:	/s/ JAIME ALBERTO VELÁSQUEZ B.

		Name:	Jaime Alberto Velásquez B.
		Title:	Vice President of Finance