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

Bancolombia S.A.

(Translation of registrant’s name into English)

Cra. 48 # 26-85
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, 2009

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. SUMMARY1			3
2. CONSOLIDATED BALANCE SHEET			5
2.1. Assets			5
2.1.1 Loan Portfolio			5
2.1.2. Investment Portfolio			6
2.2. Funding			7
2.3. Shareholders’ equity and regulatory capital			8
3. INCOME STATEMENT			9
3.1 Effect of non-recurring items in results			9
3.2. Net Interest Income			9
3.3. Fees and Income from Services			10
3.4. Other Operating Income			11
3.5. Provision charges			11
3.6. Operating expenses			11
4. Asset Quality and Balance Sheet Strength			12
5. BANCOLOMBIA Company Description (NYSE: CIB)			13
6. Annexs			14
6.1. Balance Sheet			14
6.2 Income Statement			15

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, 2009 COP. 2,145.21= US$ 1 Average Representative Market Rate 1H09 COP 2,326.40 = US$

1. SUMMARY

Bancolombia S.A. (“BANCOLOMBIA” or the “Bank”) reports consolidated net income of 253.1 billion Colombian pesos (“COP”) for the quarter ended June 30, 2009 (“2Q09”) or COP 321.29 per share-U.S. $0.60 per ADR. For the first six months of 2009, (“1H09”) net income totaled COP 564.2 billion, decreasing 10.3% as compared to the first six months of 2008 (“1H08).

During 2Q09, BANCOLOMBIA maintained its strong balance sheet. The Bank reserves for loan losses represented 5.2% of total loans by the end of 2Q09 while coverage, measured by the ratio of allowances for loans and accrued interest losses to past due loans (overdue more than 30 days), increased to 137.3% in 2Q09. On the other hand, past due loans ratio improved, decreasing from 4.0% in 1Q09 to 3.9% by the end of 2Q09.

Driven primarily by corporate lending, BANCOLOMBIA experienced loan growth in COP denominated loans during 2Q09, increasing 5% and 17% as compared to the end of the quarter ended March 31, 2009 (“1Q09”) and the quarter ended June 30, 2008 (“2Q08”) respectively. Likewise, deposits continued their positive performance reaching COP 42,888 billion as of June 30, 2009, representing an increase of 24% as compared to 2Q08, while the ratio of net loans to deposits (including borrowings from development banks) remained stable at 92% at the end of 2Q09.

In 2Q09 net interest income decreased 6% as compared to 1Q09 as the Bank experienced margin compression driven by the rapid decrease in interest rates in Colombia; the weighted average of the interest rates for 90 day CDs offered by the Colombian financial system (“DTF”) felt 259 basis points during the quarter. As a result, the Bank’s net interest margins compressed as a significant portion of BANCOLOMBIA’s loan portfolio is indexed to DTF.

In addition, the Bank’s non-interest income was mixed during 2Q09:

•

Net fees and income from services continued its positive performance reaching a record COP 379.7 billion for 2Q09, representing an increase of 27.0% as compared to 2Q08.

•

Other operating income amounted to COP 20 billion, decreasing 89.8% as compared to 2Q08 due to the negative impact in the line item of income from derivative financial instruments caused by a COP 62.9 billion non-recurring charge during 2Q09, related to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator. The Bank notes that it finished amortizing the reduction in the carrying value of derivatives in 2Q09. For further information about non-recurring events please see Section 2.1 “Effect of non-recurring items in results” of this report.

The Bank’s results were impacted by high credit cost as net provision charges totaled COP 345.0 billion in 2Q09, an increase of 43% as compared to 2Q08, although stable as compared to the COP 339.9 billion provision charges for 1Q09. In addition, operating expenses totaled COP 681.3 billion, decreasing for the second consecutive quarter (down 5% as compared to 1Q09).

Overall, the annualized return on average shareholders’ equity (“ROE”) for 2Q09 is 16.5% while the ROE for the first six months of 2009 is 18.2%.

Shareholders’ equity amounted to COP 6,213 billion by the end of 2Q09 while capital adequacy (tier 1+ 2 capital ratio) finished at 12.94% in 2Q09, up from 12.73% in 1Q09.

BANCOLOMBIA: Summary of consolidated financial quarterly results².

CONSOLIDATED BALANCE SHEET
AND INCOME STATEMENT		Quarter												Growth
(COP millions)		2Q 08				1Q 09				2Q 09				2Q 09 / 1Q 09				2Q 09 / 2Q 08
ASSETS
Loans and financial leases, net			37,710,491				43,492,984				42,383,700				-2.55	%			12.39	%
Investment securities, net			6,168,070				8,268,653				7,549,268				-8.70	%			22.39	%
Other assets			10,432,007				13,182,624				13,334,336				1.15	%			27.82	%
Total assets			54,310,568				64,944,261				63,267,304				-2.58	%			16.49	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits			34,538,354				43,515,189				42,888,356				-1.44	%			24.18	%
Non-interest bearing			4,764,975				5,071,172				5,008,486				-1.24	%			5.11	%
Interest bearing			29,773,379				38,444,017				37,879,870				-1.47	%			27.23	%
Other liabilities			14,480,464				15,350,824				14,165,459				-7.72	%			-2.18	%
Total liabilities			49,018,818				58,866,013				57,053,815				-3.08	%			16.39	%
Shareholders’ equity			5,291,750				6,078,248				6,213,489				2.22	%			17.42	%
Total liabilities and shareholders’ equity			54,310,568				64,944,261				63,267,304				-2.58	%			16.49	%
Interest income			1,494,665				1,790,817				1,652,790				-7.71	%			10.58	%
Interest expense			636,839				805,646				726,356				-9.84	%			14.06	%
Net interest income			857,826				985,171				926,434				-5.96	%			8.00	%
Net provisions			(241,685	)			(339,913	)			(344,957	)			1.48	%			42.73	%
Fees and income from service, net			298,984				367,047				379,719				3.45	%			27.00	%
Other operating income			195,761				126,372				20,025				-84.15	%			-89.77	%
Total operating expense			(609,566	)			(716,667	)			(681,306	)			-4.93	%			11.77	%
Goodwill amortization			(10,497	)			(20,193	)			(18,104	)			-10.35	%			72.47	%
Non-operating income, net			29,883				27,181				24,920				-8.32	%			-16.61	%
Income tax expense			(145,359	)			(117,873	)			(53,608	)			-54.52	%			-63.12	%
Net income			375,347				311,125				253,123				-18.64	%			-32.56	%

		Quarter												As of
PRINCIPAL RATIOS		2Q08				1Q09				2Q09				Jun-08				Jun-09
PROFITABILITY
Net interest margin (1)			7.51	%			7.06	%			6.66	%			7.26	%			6.88	%
Return on average total assets (2)			2.860	%			1.950	%			1.58	%			2.41	%			1.77	%
Return on average shareholders’ equity (3)			29.50	%			19.95	%			16.54	%			24.40	%			18.22	%
EFFICIENCY
Operating expenses to net operating income			45.84	%			49.84	%			52.74	%			47.12	%			51.21	%
Operating expenses to average total assets			4.72	%			4.61	%			4.37	%			4.67	%			4.50	%
CAPITAL ADEQUACY
Shareholders’ equity to total assets			9.74	%			9.36	%			9.82	%
Technical capital to risk weighted assets			11.82	%			12.73	%			12.94	%
KEY FINANCIAL HIGHLIGHTS
Net income per ADS (USD)			0.99				0.62				0.60				1.66				1.34
Net income per share $COP			476.43				394.92				321.29				798.68				716.21
P/BV ADS (4)			2.24				1.61				2.07
P/BV Local (5) (6)			2.12				1.58				2.08
P/E (7)			7.62				7.77				12.75
ADR price (8)			31.30				19.47				30.50
Common price (8)			14,220				12,220				16,400
Shares outstanding (9)			787,827,003				787,827,003				787,827,003
US Dollar exchange rate (quarter end)			1,923.02				2,544.24				2,145.21

2. CONSOLIDATED BALANCE SHEET

2.1. Assets

As of June 30, 2009, BANCOLOMBIA’s assets totaled COP 63,267 billion, representing a decrease of 3% as compared to the end of 1Q09 and an increase of 17% as compared to the end of 2Q08. Assets denominated in currencies other than COP (primarily U.S. dollars) represented 27% of total assets (or U.S. 7.9 billion) by the end of 2Q09. The 16% appreciation of the COP against the U.S. dollar during 2Q09 affected the COP conversion of assets denominated in currencies other than COP and accounted for the 3% decrease in the Bank’s assets at the end of 2Q09.

Asset structure remained stable during 2Q09: net loans and financial leases accounted for 67.0% of assets, representing no change as compared to the previous quarter, while net investments securities decreased to 11.9% from 12.7%, and cash and equivalents increased to 10.7% from 10.0% as compared to 1Q09.

2.1.1 Loan Portfolio

As of June 30, 2009, BANCOLOMBIA’s gross loans totaled COP 44,714 billion, decreasing 2% as compared to 1Q09 and increasing 14% as compared to 2Q08. As of June 30, 2009 U.S. dollar denominated loans represented 25% of the loan portfolio; therefore, COP appreciation also had a significant impact on the COP conversion of the U.S. dollar denominated loans.

During 2Q09, BANCOLOMBIA maintained a strong balance sheet through the adequate coverage of its loan portfolio. For further explanation regarding coverage of the loan portfolio, please see Section 3 “Asset Quality & Balance Sheet Strength” of this report.

Overall, BANCOLOMBIA maintained its position as leader in the Colombian and Salvadorian markets in 2Q09. According to ASOBANCARIA (Colombia’s national banking association), BANCOLOMBIA’s gross loans market share of the Colombian financial system as of June 2009 was 21.8%, favorably compared to the 21.2% market share the firm had by the end of 2Q08. Likewise, according to ABANSA (El Salvador’s national banking association), Banco Agricola, Bancolombia’s subsidiary in El Salvador, had a market share of 30.2% of Salvadorian gross loans as of June 30, 2009, increasing significantly from the 28.5%% market share at the end of 2Q08.

Peso denominated lending activity and loan portfolio

Last quarter was a dynamic period for lending activity for COP denominated loans which account for 75% of total loans, representing an increase of 5% and 17% as compared to the figures presented at the end of 1Q9 and 2Q08, respectively. Loan growth was driven by commercial loans which increased 9% during 2Q09, and was slightly off-set by consumer loans which decreased 2% during 2Q09. Loan growth in 2Q09 was driven to a large extent by loans in the oil & gas sector, infrastructure development, commercial electricity generation and telecommunications.

Mortgage loans presented no significant growth in 2Q09 and increased 0.4% when accounting for securitized mortgage loans (BANCOLOMBIA securitized COP 259.9 billion of mortgage loans in the local market in 2Q09). However, mortgage applications increased as a result of the Colombian government’s housing subsidy program that was implemented in April 09 and also by lower long-term interest rates in Colombia. The housing subsidy consists of interest rate relief (paid by the Colombian Government directly to mortgage lenders) ranging from 3 to 5 percentage points deducted from the total interest rate (depending on the size of the mortgage). The housing subsidy is only applicable for the purchase of new houses, has a time frame of 7 years from disbursement and is not cumulative with other housing subsidies.

U.S. dollar denominated lending activity

U.S. dollar denominated lending remained weak, reflecting a lower demand for credit in the Bank’s off-shore subsidiaries (explained by lower international trade flows from our clients) and a lower economic environment in El Salvador. Net.net, loans amounted to U.S. $5.2 billion by the end of 2Q09, decreasing 5.1% as compared to 2Q08.

The following table summarizes BANCOLOMBIA’S total loan portfolio:

LOAN PORTFOLIO		As of												Growth
(COP millions)		30-Jun-08				31-Mar-09				30-Jun-09				Jun-09/Mar-09				Jun-09/Jun-08
CORPORATE
Working capital loans			16,147,393				19,912,726				20,480,489				2.85	%			26.83	%
Loans funded by domestic development banks			983,613				1,139,681				754,878				-33.76	%			-23.25	%
Trade Financing			993,021				1,759,618				1,536,181				-12.70	%			54.70	%
Overdrafts			227,848				106,149				108,467				2.18	%			-52.40	%
Credit Cards			43,414				45,081				38,577				-14.43	%			-11.14	%
TOTAL CORPORATE			18,395,289				22,963,255				22,918,592				-0.19	%			24.59	%
RETAIL AND SMEs
Working capital loans			3,913,770				4,180,779				4,139,241				-0.99	%			5.76	%
Personal loans			3,982,508				4,390,615				4,009,022				-8.69	%			0.67	%
Loans funded by domestic development banks			807,006				887,381				841,001				-5.23	%			4.21	%
Credit Cards			2,220,956				2,495,335				2,409,140				-3.45	%			8.47	%
Overdrafts			306,272				300,937				305,275				1.44	%			-0.33	%
Automobile loans			1,358,355				1,313,282				1,228,467				-6.46	%			-9.56	%
Trade Financing			96,566				119,932				98,344				-18.00	%			1.84	%
TOTAL RETAIL AND SMEs			12,685,433				13,688,261				13,030,490				-4.81	%			2.72	%
MORTGAGE			3,149,911				3,521,499				3,271,842				-7.09	%			3.87	%
FINANCIAL LEASES			5,096,379				5,670,912				5,492,600				-3.14	%			7.77	%
Total loans and financial leases			39,327,012				45,843,927				44,713,524				-2.47	%			13.70	%
Allowance for loan losses and financial leases			(1,616,521	)			(2,350,943	)			(2,329,824	)			-0.90	%			44.13	%
Total loans and financial leases, net			37,710,491				43,492,984				42,383,700				-2.55	%			12.39	%

2.1.2. Investment Portfolio

As of June 30, 2009, BANCOLOMBIA’s net investment securities amounted to COP. 7,549 billion, representing a 9% decrease as compared to the end of 1Q09, and an increase of 22% as compared to the figures at the end of 2Q09. Net investment securities are primarily investments in debt securities, which represented 98% of BANCOLOMBIA’s net investment securities portfolio at the end of 2Q09 and 11.6% of total assets, down from 12.4% of assets represented at the end of 1Q09.

2.2. Funding

As of June 30, 2009, BANCOLOMBIA’s liabilities reached COP 57,054 billion, decreasing 3% as compared to 1Q09 and increasing 16% as compared to 2Q08.

As a result of an expansionist monetary policy, the Colombian monetary market’s liquidity has remained adequate allowing the local capital markets to function properly. In fact, local bond issuances activity continued to be dynamic during 2Q09. During the first half of 2009 new corporate bonds issued in the local market accounted for COP 5.8 trillion, an amount approximately three times greater than that corresponding to bonds issued in the local market during 1H08.

Regardless of the type of currency, the Bank has maintained a solid liquidity position. In particular, the Bank continued to experience deposit growth in 2Q09, with deposits totaling COP 42,888 billion, an increase of COP 8,350 billion, or 24% as compared to 2Q08. COP denominated deposits, 71% of BANCOLOMBIA’s total deposits, increased 1% and 22% as compared to 1Q09 and 2Q08 respectively. During the last year, the Bank increased its market share of deposits within Colombia’s banking system from 18.5% in June 2008 to 19.7% in June 2009. In El Salvador, through its subsidiary Banco Agricola, the Bank increased its market share of deposits from 29.8% in June 2008 to 31.1% in June 2009.

With regard to the funding mix, non-interest bearing deposits decreased 1% over 2Q09 reaching COP 5,008 billion. On a yearly basis, non-interest bearing deposits increased 5% from the figure presented at the end of 2Q08. On the other hand, interest bearing deposits decreased 1% during 2Q09 as compared to 1Q09. Overall, time deposits slightly decreased their relative size in the funding mix to 50% from 51% in 1Q09, while demand deposits increased to 49% from 48% at the end of 1Q09.

U.S. dollar denominated deposits continued to grow, increasing 10% in 2Q09 as compared to 1Q09 (measured in U.S. dollars), as the Bank’s off-shore banking franchises continue to benefit from underlying growth, particularly from increasing client fund inflows and deposit growth in El Salvador. As a result of the solid performance of U.S. dollar denominated deposits, U.S. dollar interbank borrowings decreased 39% in 2Q09 as compared to 1Q09, while U.S. dollar denominated borrowing from domestic development banks decreased 43% in the same period.

Overall, as a result of the growth of deposits, the Bank’s liabilities structure has changed in the last year. As of June 30, 2009, deposits represented 75% of total liabilities, up from 70% at the end of 2Q08, while the ratio of net loans to deposits (including borrowings from development banks) remained stable at 92% at the end of 2Q09. On the other hand, liabilities in the form of bonds or notes amounted to COP 3,894 billion, a decrease of 2% as compared to 1Q09 while borrowing from domestic development banks and interbank borrowings line items decreased 11%.

Deposits Mix
COP Millions		Jun-08								Mar-09								Jun-09
Checking accounts			5,892,512				17.06	%			7,285,850				16.74	%			6,878,151				16.04	%
Time deposits			16,097,667				46.61	%			22,165,667				50.94	%			21,508,359				50.15	%
Savings deposits			12,150,236				35.18	%			13,644,258				31.36	%			14,133,895				32.96	%
Others			397,939				1.15	%			419,414				0.96	%			367,951				0.86	%
Total deposits			34,538,354				100.00	%			43,515,189				100.00	%			42,888,356				100.00	%

2.3. Shareholders’ equity and regulatory capital

Shareholders’ equity amounted to COP 6,213 billion at the end of 2Q09, increasing from COP 6,078 billion at the end of 1Q09, driven primarily by the quarter’s results. On a yearly basis, shareholders’ equity increased 17.4% as compared to the end of 2Q08.

During 2Q09, the Bank’s capital adequacy slightly increased. Capital adequacy (tier 1+ 2 capital ratio) finished 2Q09 at 12.9%, up from 12.7% in 1Q09. Basic capital (tier 1) ratio at the end of 2Q09 was 10.0% while additional capital (tier 2) ratio was 2.9%.

TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (COP millions)		Jun-08				%				Mar-09				%				Jun-09				%
Basic capital (Tier I)			4,569,691				9.49	%			5,544,550				9.62	%			5,540,492				9.99	%
Additional capital (Tier II)			1,122,139				2.33	%			1,792,719				3.11	%			1,632,250				2.94	%
Technical capital (1)			5,691,830				11.82	%			7,337,270				12.73	%			7,172,742				12.94	%
Risk weighted assets included market risk			48,139,875								57,657,657								55,434,962
CAPITAL ADEQUACY (2)			11.82	%							12.73	%							12.94	%

3. INCOME STATEMENT

BANCOLOMBIA reported net income of COP 253.1 billion for the quarter ended June 30, 2009 (COP 321.29 per share or U.S. $0.60 per ADR) representing a decrease of 19% as compared to 1Q09 and a decrease of 33% as compared to 2Q08. The results are primarily explained by lower revenues (lower other operating income and net interest income, though slightly off-set by the good performance of fees) and provisions charges that remained high during 2Q09. On the positive side, operating expenses decreased 5% in 2Q09 as compared to 1Q09 and the Bank finished amortizing the reduction in the carrying value of derivatives during 2Q09, relating to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator.

For the 1H09, net income totaled COP 564.2 billion, decreasing 10.3% as compared to the 1H08.

ROE for 2Q09 is 16.5% while the ROE for the first six months of 2009 is 18.2%.

3.1. Effect of non-recurring items in results

The Bank’s results in 2Q09 and 2Q08 presented significant non-recurring items that affect the comparison basis between periods. The following is a summary of the most representative non-recurring events.

Other operating income line item was impacted by:

•

A positive non-recurring impact in the line item of sales of equity securities in 2Q08, as the Bank recorded gains on sales of investment securities of COP 37.1 billion related to the sale of its interest in Multienlace S.A.

•

A negative impact on the line item of income from derivative financial instruments in 2Q09 by a COP 62.9 billion charge related to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator. As previously noted, the Bank finished amortizing the reductions related to such regulatory changes in 2Q09.

In 2Q08, the Bank recorded non operating income of COP 26.1 billion related to the compensation received in connection with the membership rights recognized by Visa International Service Association (“Visa International”) as a result of the initial public offering of VISA Inc.

3.2. Net Interest Income

During 2Q09, interest on loans reached COP 1,306 billion, decreasing 6% as compared to 1Q09, due to lower interest rates in the loan portfolio as a result of the decreasing interest rates environment in Colombia. During the last few months, the Colombian Central Bank has continued its expansionist monetary cycle in an effort to support economic activity in the current economic slowdown and due to a more favorable inflationary outlook for 2009. Specifically, the Colombian Central Bank’s overnight lending decreased 550 basis points since December 2008, of which 250 basis points were cut in 2Q09. By the end of 2Q09 the Colombian Central Bank’s overnight lending rate was 4.5%. The DTF has followed suit, falling 259 basis points during 2Q09 and reaching 5.54% in the week of June 29, 2009. Such a decrease in rates impacts a significant portion of BANCOLOMBIA’s loan portfolio that is indexed to DTF. On a yearly basis, interest on loans increased COP 131.8 billion in 2Q09, or 11.2% as compared to COP 1,174 billion recorded in 2Q08.

Interest on financial leases reached COP 191.7 billion, decreasing 10.5% as compared to 1Q09 and increasing 1.6% as compared to 2Q08.

Interest on investment securities amounted to COP 137.7 billion, decreasing 10.6% in 2Q09 as compared to 1Q09 and increasing 1.6% as compared to 2Q08, driven by a more stable performance in the valuation of bonds in Colombia and a smaller average debt securities portfolio held during 2Q09.

Overall, total interest income was COP 1,653 billion during 2Q09, decreasing 8% as compared to 1Q09, while interest expense was COP 726.4 billion, decreasing 10% as compared to the previous quarter. Consequently, net interest income for 2Q09 totaled COP. 926.4 billion, decreasing 6% as compared to the previous quarter but 8% higher than net interest income for 2Q08. As a result of decreasing interest rates and their net effect in the net interest income, net interest margin was 6.7% for 2Q09, down from the 7.1% for 1Q09.

3.3. Fees and Income from Services

During 2Q09 net fees and income from services continued to perform well totaling COP 379.7 billion, which represents an increase of 3.5% as compared to 1Q09 and 27.0% as compared to 2Q08. Net fees and income from services were driven primarily by the solid performance of credit and debit card annual fees, fiduciary activities, commission from banking and other services and collection and payments fees.

In particular, credit and debit card annual fees were COP 137.3 billion, up 27% from 2Q08. Fees related to fiduciary activities outperformed its solid 1Q09 results reaching COP 42.7 billion, up 10% as compared to 1Q09, and almost doubling the results for 2Q08 (an increase of 93%). Commissions from banking services and other services were COP 69.0 billion, up 21% as compared with 2Q08. Collections and payments fees were COP 45.9 billion, increasing 19% as compared to 2Q08. Branch network services were COP 26.8 billion, up 7% from 2Q08. Pension plan administration fees were COP 25.3 billion, up 32% as compared to 2Q08. The remaining fee categories: checking, electronic services and ATM, international operations, brokerage, credit card merchant, check remittances fees had aggregated revenue of COP 69.5 billion, decreasing 9% as compared to 2Q08.

Fees and other service related expenses totaled COP 36.8 billion in 2Q09, increasing 9.2% as compared to 1Q09. On a yearly basis, fees and other service expenses decreased COP 10.7 billion, or 22.6% as compared to 2Q08.

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

ACCUMULATED CREDIT CARD BILLING										%				2009
(COP millions)		31/06/2008				31/06/2009				Growth				Market Share
Bancolombia VISA			807,371				845,281				4.70	%			8.24	%
Bancolombia Mastercard			1,055,566				1,124,231				6.51	%			10.96	%
Bancolombia American Express			691,620				818,916				18.41	%			7.98	%
Total Bancolombia			2,554,557				2,788,427				9.16	%			27.18	%
Colombian Credit Card Market			9,929,899				10,259,263				3.32	%

Source: Credibanco y Redeban multicolor

CREDIT CARD MARKET SHARE										%				2009
(Outstanding credit cards)		31/06/2008				31/06/2009				Growth				Market Share
Bancolombia VISA			305,780				306,966				0.39	%			5.87	%
Bancolombia Mastercard			361,480				365,572				1.13	%			6.99	%
Bancolombia American Express			273,378				324,541				18.72	%			6.20	%
Total Bancolombia			940,638				997,079				6.00	%			19.05	%
Colombian Credit Card Market			5,265,859				5,232,858				-0.63	%

Source: Credibanco y Redeban multicolor

3.4. Other Operating Income

Total other operating income totaled COP 20.0 billion for 2Q09, decreasing 84.2% as compared to 1Q09 and 89.8% as compared to 2Q08. As explained, the other operating income line item was substantially affected by non-recurring events in 2Q09 and 2Q08, thereby affecting the comparison basis between periods. Please refer to Section 2.1. “Effect of non-recurring items in results” of this report for an explanation of these events.

The combined revenue related to net foreign exchange gains and derivative financial instruments totaled a negative COP 60.2 billion in 2Q09, decreasing COP 79.4 billion as compared to 1Q09 and COP 136.8 billion as compared to 2Q08. In particular, this combined revenue was impacted by the adoption during the second half of 2008 of certain rule changes concerning valuation methodologies for derivative instruments. These changes in valuation methodologies of derivatives were required by external circulars 025, 030, 044 and 063 issued by the Colombian Superintendency of Finance and resulted in a reduction in the carrying value of derivatives which negatively impacted the income from derivative financial instruments in COP 62.9 billion during 2Q09.

Communication, postage, rent and others (primarily comprising income related to operating leases and commercial discounts) totaled COP 38.4 billion in 2Q09, representing an increase of 44% as compared to 2Q08. Dividend income, primarily obtained from investments in non-subsidiaries totaled COP 4.2 billion, decreasing from COP 16.6 billion in 2Q08.

The remaining other operating income categories (i.e. gains(losses) on sales of investments on equity securities, securitization income, revenues from commercial subsidiaries and insurance income) had an aggregated revenue of COP 37.6 billion, decreasing COP 16.5 billion, or 31% as compared to 1Q09 due to lower insurance income during 2Q09. On a yearly basis, the remaining other operating income categories decreased COP 39.0 billion, or 51% as compared to 2Q08 due to the lower gains on sales of equity securities as in 2Q08 there was a positive non-recurring impact in such line item in connection with the Bank’s recorded gains on sales of investment securities of COP 37.2 billion related to the sale of interest in Multienlace S.A.

3.5. Provision charges

Provision charges totaled COP 345.0 billion in 2Q09, a 1.5% increase as compared to COP 339.9 billion for 1Q09. On a relative basis, annualized provision charges for 2Q09 represented 3.1% of average loans, a slight increase from 3.0% in 1Q09.

For an explanation of the trends driving the current level of provisions charges, please see Section 4 “Asset Quality & Balance Sheet Strength” of this report.

3.6. Operating expenses

During 2Q09, operating expenses totaled COP 681.3 billion, decreasing 5% as compared to 1Q09, but increasing 12% as compared to the figures for 2Q08.

Administrative and other expenses decreased for the second consecutive quarter, totaling COP 333.7 billion in 2Q09, which represents a decrease of COP 32.5 billion, or 9%, as compared to 1Q09. On a yearly basis, administrative and other expenses increased 14% as compared to 2Q08 driven by increased fees paid in connection with software development and IT upgrades the Bank is currently undertaking.

Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 282.3 billion in 2Q09, decreasing 1% as compared to 1Q09 and increasing 4% as compared to 2Q08. Such performance has been primarily driven by lower bonus plan payments related to BANCOLOMBIA’s variable compensation program in which compensation is determined taking into account the economic value added by the firm.

Depreciation expense totaled COP 45.6 billion in 2Q09, up 47% as compared to 2Q08, driven by the growth in the depreciation of assets that are part of the operating lease business of BANCOLOMBIA. In particular, COP 15.8 billion or 33% of the quarter’s depreciation expense is associated with operating lease assets.

Despite decreasing expenses, efficiency, measured as the ratio of operating expenses to net operating income, experienced some deterioration as this ratio increased to 52.7% from 49.8% the previous quarter. Such deterioration is explained by the impact of lower revenues during 2Q09. However, operating expenses for the quarter ended June 30, 2009 represented 4.4% of total assets, a smaller proportion than the 4.6% as of the end of 2Q08.

4. Asset Quality and Balance Sheet Strength

As of June, 30, 2009 past due loans (“PDLs”), those overdue more than 30 days, amounted to COP. 1,737.1 billion, or 3.88%, of total loans decreasing from COP 1,829.9 billion, or 3.99% of total loans, in 1Q09. The lower level of PDLs as a percentage of total loans is explained primarily by higher charge-offs during 2Q09, although a milder increase in past due loans (before charge-offs) is also responsible for the improvement of such quality indicator. Net loans’ charge-offs during 2Q09 totaled COP 330.7 billion, representing an increase as compared to COP 182.8 billion in charge-offs during 1Q09. However, the pace of deterioration slowed during 2Q09 as compared to 1Q09; the increase of past due loans before charge-offs for 2Q09 was COP 237.9 billion, down COP 150.9 billion or 39% as compared to COP 388.7 billion presented for 1Q09.

During 2Q09, BANCOLOMBIA maintained a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,330 billion, or 5.2% of total loans, which is higher than the 5.1% of total loans as of March 30, 2009, while coverage, measured by the ratio of allowances for loans and accrued interest losses to PDLs reached 137.3% at the end of 2Q09, increasing from 131.7% in 1Q09 and 120.1% in 2Q08.

The following tables present key metrics for asset quality:

ASSET QUALITY		As of												Growth
(COP millions)		Jun-08				Mar-09				Jun-09				2Q 09 / 1Q 09				2Q 09 / 2Q 08
Total performing past due loans (1)			589,206				752,104				774,928				3.03	%			31.52	%
Total non-performing past due loans			786,658				1,077,823				962,163				-10.73	%			22.31	%
Total past due loans			1,375,864				1,829,927				1,737,091				-5.07	%			26.25	%
Allowance for loans and accrued interest losses			1,652,491				2,409,784				2,385,645				-1.00	%			44.37	%
Past due loans to total loans			3.50	%			3.99	%			3.88	%
Non-performing loans as a percentage of total loans			2.00	%			2.35	%			2.15	%
“C”, “D” and “E” loans as a percentage of total loans			3.34	%			4.18	%			4.00	%
Allowances to past due loans (2)			120.11	%			131.69	%			137.34	%
Allowance for loan and accrued interest losses as a percentage of “C”, “D” and “E” loans (2)			125.92	%			125.74	%			133.48	%
Allowance for loan and accrued interest losses as a percentage of non-performing loans (2)			210.06	%			223.58	%			247.95	%
Allowance for loan and accrued interest losses as a percentage of total loans			4.20	%			5.26	%			5.34	%
Percentage of performing loans to total loans			98.00	%			97.65	%			97.85	%

		PDL/ total loans as Of
LOAN CLASSIFICATION		% Of loan Portfolio				30-Jun-08				31-Mar-09				30-Jun-09
Commercial loans			64.1	%			2.1	%			2.7	%			2.7	%
Consumer loans			16.0	%			6.2	%			6.5	%			6.2	%
Microcredit			0.3	%			10.2	%			12.8	%			10.6	%
Mortgage loans*			7.3	%			7.5	%			8.9	%			9.3	%
Finance lease			12.3	%			3.7	%			3.8	%			3.7	%
TOTAL LOAN PORTFOLIO			100.0	%			3.5	%			4.0	%			3.9	%

LOANS AND FINANCIAL LEASES CLASSIFICATION
(COP millions)		As of 30-Jun-08								As of 31-Mar-09								As of 30-Jun-09
“A” Normal			36,597,476				93.1	%			41,996,277				91.6	%			41,324,935				92.4	%
“B” Subnormal			1,417,227				3.6	%			1,931,128				4.2	%			1,601,358				3.6	%
“C” Deficient			374,663				1.0	%			587,394				1.3	%			574,681				1.3	%
“D” Doubtful recovery			621,091				1.5	%			957,631				2.1	%			908,207				2.0	%
“E” Unrecoverable			316,555				0.8	%			371,497				0.8	%			304,343				0.7	%
Total			39,327,012				100	%			45,843,927				100	%			44,713,524				100	%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases			3.3	%							4.2	%							4.0	%

5. BANCOLOMBIA Company Description (NYSE: CIB)

BANCOLOMBIA 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 products and services via its regional network comprised of Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore 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.

6. Annexs

6.1. Balance Sheet

BALANCE SHEET														Last
(COP millions)		Jun-08				Mar-09				Jun-09				Quarter				Annual
ASSETS
Cash and due from banks			4,203,606				4,227,630				4,725,276				11.77	%			12.41	%
Overnight funds sold			820,588				2,241,330				2,054,241				-8.35	%			150.34	%
Total cash and equivalents			5,024,194				6,468,960				6,779,517				4.80	%			34.94	%
Debt securities			6,013,604				8,073,275				7,366,892				-8.75	%			22.50	%
Trading			1,954,381				2,748,186				2,220,649				-19.20	%			13.62	%
Available for Sale			1,883,080				2,261,753				2,032,017				-10.16	%			7.91	%
Held to Maturity			2,176,143				3,063,336				3,114,226				1.66	%			43.11	%
Equity securities			227,372				264,098				250,629				-5.10	%			10.23	%
Trading			51,726				71,000				61,509				-13.37	%			18.91	%
Available for Sale			175,646				193,098				189,120				-2.06	%			7.67	%
Market value allowance			-72,906				-68,720				-68,253				-0.68	%			-6.38	%
Net investment securities			6,168,070				8,268,653				7,549,268				-8.70	%			22.39	%
Commercial loans			24,022,762				28,823,076				28,639,686				-0.64	%			19.22	%
Consumer loans			6,925,338				7,683,969				7,157,808				-6.85	%			3.36	%
Microcredit			132,622				144,471				151,588				4.93	%			14.30	%
Mortgage loans			3,149,911				3,521,499				3,271,842				-7.09	%			3.87	%
Finance lease			5,096,379				5,670,912				5,492,600				-3.14	%			7.77	%
Allowance for loan losses			-1,616,521				-2,350,943				-2,329,824				-0.90	%			44.13	%
Net total loans and financial leases			37,710,491				43,492,984				42,383,700				-2.55	%			12.39	%
Accrued interest receivable on loans			482,991				604,388				512,409				-15.22	%			6.09	%
Allowance for accrued interest losses			-35,970				-58,841				-55,820				-5.13	%			55.18	%
Net total interest accrued			447,021				545,547				456,589				-16.31	%			2.14	%
Customers’ acceptances and derivatives			100,081				87,781				129,448				47.47	%			29.34	%
Net accounts receivable			855,548				728,475				782,705				7.44	%			-8.51	%
Net premises and equipment			885,666				1,269,341				1,268,141				-0.09	%			43.19	%
Foreclosed assets, net			23,672				30,914				31,684				2.49	%			33.85	%
Prepaid expenses and deferred charges			135,071				295,294				143,062				-51.55	%			5.92	%
Goodwill			909,121				1,123,093				929,702				-17.22	%			2.26	%
Operating leases, net			630,942				781,411				795,070				1.75	%			26.01	%
Other			904,895				1,185,864				1,364,256				15.04	%			50.76	%
Reappraisal of assets			515,796				665,944				654,162				-1.77	%			26.83	%
Total assets			54,310,568				64,944,261				63,267,304				-2.58	%			16.49	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
DEPOSITS
Non-interest bearing			4,764,975				5,071,172				5,008,486				-1.24	%			5.11	%
Checking accounts			4,367,036				4,651,758				4,640,535				-0.24	%			6.26	%
Other			397,939				419,414				367,951				-12.27	%			-7.54	%
Interest bearing			29,773,379				38,444,017				37,879,870				-1.47	%			27.23	%
Checking accounts			1,525,476				2,634,092				2,237,616				-15.05	%			46.68	%
Time deposits			16,097,667				22,165,667				21,508,359				-2.97	%			33.61	%
Savings deposits			12,150,236				13,644,258				14,133,895				3.59	%			16.33	%
Total deposits			34,538,354				43,515,189				42,888,356				-1.44	%			24.18	%
Overnight funds			2,772,806				1,994,609				2,472,605				23.96	%			-10.83	%
Bank acceptances outstanding			36,536				42,216				33,086				-21.63	%			-9.44	%
Interbank borrowings			1,493,083				1,701,495				876,344				-48.50	%			-41.31	%
Borrowings from domestic development banks			3,718,117				3,676,489				3,260,963				-11.30	%			-12.30	%
Accounts payable			2,059,164				2,040,332				1,809,332				-11.32	%			-12.13	%
Accrued interest payable			334,435				469,841				517,775				10.20	%			54.82	%
Other liabilities			521,447				662,175				521,279				-21.28	%			-0.03	%
Bonds			2,767,762				3,983,146				3,893,681				-2.25	%			40.68	%
Accrued expenses			688,604				589,587				588,149				-0.24	%			-14.59	%
Minority interest in consolidated subsidiaries			88,510				190,934				192,245				0.69	%			117.20	%
Total liabilities			49,018,818				58,866,013				57,053,815				-3.08	%			16.39	%
SHAREHOLDERS’ EQUITY
Subscribed and paid in capital			393,914				393,914				393,914				0.00	%			0.00	%
Retained earnings			4,223,649				4,869,462				4,995,206				2.58	%			18.27	%
Appropiated			3,594,426				4,558,337				4,430,958				-2.79	%			23.27	%
Unappropiated			629,223				311,125				564,248				81.36	%			-10.33	%
Reappraisal and others			737,842				827,189				817,229				-1.20	%			10.76	%
Gross unrealized gain or loss on debt securities			-63,655				-12,317				7,140				157.97	%			111.22	%
Total shareholder’s equity			5,291,750				6,078,248				6,213,489				2.22	%			17.42	%

6.2 Income Statement

INCOME STATEMENT		As of								Growth																Growth
(COP millions)		Jun-08				Jun-09				Jun-08/Jun-09				2Q 08				1Q 09				2Q 09				2Q 09/1Q 09				2Q 09/2Q 08
Interest income and expenses
Interest on loans			2,307,700				2,700,263				17.01	%			1,174,262				1,394,222				1,306,041				-6.32	%			11.22	%
Interest on investment securities			190,839				291,752				52.88	%			111,136				154,063				137,689				-10.63	%			23.89	%
Overnight funds			49,331				45,577				-7.61	%			20,528				28,258				17,319				-38.71	%			-15.63	%
Leasing			366,400				406,015				10.81	%			188,739				214,274				191,741				-10.52	%			1.59	%
Total interest income			2,914,270				3,443,607				18.16	%			1,494,665				1,790,817				1,652,790				-7.71	%			10.58	%
Interest expense
Checking accounts			17,564				23,653				34.67	%			8,745				12,009				11,644				-3.04	%			33.15	%
Time deposits			578,168				811,342				40.33	%			301,342				411,442				399,900				-2.81	%			32.71	%
Savings deposits			271,644				257,760				-5.11	%			132,763				143,893				113,867				-20.87	%			-14.23	%
Total interest on deposits			867,376				1,092,755				25.98	%			442,850				567,344				525,411				-7.39	%			18.64	%
Interbank borrowings			29,935				35,620				18.99	%			13,268				23,002				12,618				-45.14	%			-4.90	%
Borrowings from domestic development banks			169,134				154,119				-8.88	%			84,469				87,097				67,022				-23.05	%			-20.65	%
Overnight funds			77,467				67,613				-12.72	%			35,270				37,984				29,629				-22.00	%			-15.99	%
Bonds			116,087				181,895				56.69	%			60,982				90,219				91,676				1.61	%			50.33	%
Total interest expense			1,259,999				1,532,002				21.59	%			636,839				805,646				726,356				-9.84	%			14.06	%
Net interest income			1,654,271				1,911,605				15.56	%			857,826				985,171				926,434				-5.96	%			8.00	%
Provision for loan and accrued interest losses, net			(449,107	)			(768,211	)			71.05	%			(255,225	)			(383,607	)			(384,604	)			0.26	%			50.69	%
Recovery of charged-off loans			40,448				81,719				102.03	%			18,607				33,159				48,560				46.45	%			160.98	%
Provision for foreclosed assets and other assets			(24,316	)			(39,064	)			60.65	%			(13,700	)			(23,311	)			(15,753	)			-32.42	%			14.99	%
Recovery of provisions for foreclosed assets and other assets			18,056				40,686				125.33	%			8,633				33,846				6,840				-79.79	%			-20.77	%
Total net provisions			(414,919	)			(684,870	)			65.06	%			(241,685	)			(339,913	)			(344,957	)			1.48	%			42.73	%
Net interest income after provision for loans and accrued interest losses			1,239,352				1,226,735				-1.02	%			616,141				645,258				581,477				-9.88	%			-5.63	%
Commissions from banking services and other services			110,313				130,695				18.48	%			56,937				61,653				69,042				11.98	%			21.26	%
Electronic services and ATM fees			42,563				30,424				-28.52	%			21,171				15,463				14,961				-3.25	%			-29.33	%
Branch network services			49,033				53,396				8.90	%			25,166				26,590				26,806				0.81	%			6.52	%
Collections and payments fees			75,649				88,813				17.40	%			38,753				42,889				45,924				7.08	%			18.50	%
Credit card merchant fees			13,984				13,807				-1.27	%			5,906				7,216				6,591				-8.66	%			11.60	%
Credit and debit card annual fees			208,529				274,458				31.62	%			108,029				137,205				137,253				0.03	%			27.05	%
Checking fees			33,076				34,435				4.11	%			16,726				16,959				17,476				3.05	%			4.48	%
Fiduciary activities			41,980				81,633				94.46	%			22,176				38,941				42,692				9.63	%			92.51	%
Pension plan administration			39,997				51,499				28.76	%			19,143				26,163				25,336				-3.16	%			32.35	%
Brokerage fees			30,456				18,312				-39.87	%			16,329				7,902				10,410				31.74	%			-36.25	%
Check remittance			13,011				12,898				-0.87	%			6,333				6,150				6,748				9.72	%			6.55	%
International operations			19,965				26,940				34.94	%			9,872				13,632				13,308				-2.38	%			34.81	%
Fees and other service income			678,556				817,310				20.45	%			346,541				400,763				416,547				3.94	%			20.20	%
Fees and other service expenses			(72,631	)			(70,544	)			-2.87	%			(47,557	)			(33,716	)			(36,828	)			9.23	%			-22.56	%
Total fees and income from services, net			605,925				746,766				23.24	%			298,984				367,047				379,719				3.45	%			27.00	%
Other operating income
Net foreign exchange gains			(50,326	)			(116,648	)			131.78	%			59,760				205,295				(321,943	)			-256.82	%			-638.73	%
Forward contracts in foreign currency			182,848				75,728				-58.58	%			16,846				(186,065	)			261,793				240.70	%			1454.04	%
Gains(loss) on sales of investments on equity securities			37,084				538				-98.55	%			37,180				6				532				8766.67	%			-98.57	%
Securitization income			21,844				27,162				24.35	%			12,776				13,668				13,494				-1.27	%			5.62	%
Dividend income			36,417				20,772				-42.96	%			15,929				16,570				4,202				-74.64	%			-73.62	%
Revenues from commercial subsidiaries			51,722				51,875				0.30	%			25,635				28,656				23,219				-18.97	%			-9.42	%
Insurance income			5,797				12,178				110.07	%			985				11,811				367				-96.89	%			-62.74	%
Communication, postage, rent and others			45,118				74,792				65.77	%			26,650				36,431				38,361				5.30	%			43.94	%
Total other operating income			330,504				146,397				-55.70	%			195,761				126,372				20,025				-84.15	%			-89.77	%
Total income			2,175,781				2,119,898				-2.57	%			1,110,886				1,138,677				981,221				-13.83	%			-11.67	%
Operating expenses
Salaries and employee benefits			437,013				519,644				18.91	%			217,796				254,652				264,992				4.06	%			21.67	%
Bonus plan payments			65,971				37,936				-42.50	%			47,519				26,023				11,913				-54.22	%			-74.93	%
Compensation			13,534				10,224				-24.46	%			6,301				4,834				5,390				11.50	%			-14.46	%
Administrative and other expenses			583,391				699,863				19.96	%			293,916				366,188				333,675				-8.88	%			13.53	%
Deposit security, net			26,678				38,639				44.83	%			12,354				19,617				19,022				-3.03	%			53.97	%
Donation expenses			1,519				1,393				-8.29	%			546				706				687				-2.69	%			25.82	%
Depreciation			65,538				90,274				37.74	%			31,134				44,647				45,627				2.19	%			46.55	%
Total operating expenses			1,193,644				1,397,973				17.12	%			609,566				716,667				681,306				-4.93	%			11.77	%
Net operating income			982,137				721,925				-26.49	%			501,320				422,010				299,915				-28.93	%			-40.17	%
Goodwill amortization (1)			27,058				38,297				41.54	%			10,497				20,193				18,104				-10.35	%			72.47	%
Non-operating income (expense)
Other income			80,966				119,174				47.19	%			58,628				62,766				56,408				-10.13	%			-3.79	%
Minority interest			(10,196	)			(10,743	)			5.36	%			(6,435	)			(5,136	)			(5,607	)			9.17	%			-12.87	%
Other expense			(94,316	)			(56,330	)			-40.28	%			(22,310	)			(30,449	)			(25,881	)			-15.00	%			16.01	%
Total non-operating income			(23,546	)			52,101				321.27	%			29,883				27,181				24,920				-8.32	%			-16.61	%
Income before income taxes			931,533				735,729				-21.02	%			520,706				428,998				306,731				-28.50	%			-41.09	%
Income tax expense			(302,310	)			(171,481	)			-43.28	%			(145,359	)			(117,873	)			(53,608	)			-54.52	%			-63.12	%
Net income			629,223				564,248				-10.33	%			375,347				311,125				253,123				-18.64	%			-32.56	%