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 May, 2012

 

Comission File Number 001-32535

 

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):___

 

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):___

 

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-                    .

 

 
 

 

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:  May 09, 2012  By:   /s/ JAIME ALBERTO VELÁSQUEZ B.  
    Name:   Jaime Alberto Velásquez B.  
    Title:   Vice President of Finance and Strategy  
 

 

 
 

  

 

1Q12

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET
INCOME OF COP 446 BILLION FOR THE FIRST QUARTER OF 2012 (COP 523 PER SHARE - USD 1.17 PER
ADR), WHICH REPRESENTS AN INCREASE OF 27% COMPARED TO THE SAME QUARTER LAST YEAR.

 

• Net interest income increased 27% compared to 1Q11 and 11% compared to 4Q11. These increases are the result of loan growth coupled with a mild recovery of the net interest margin, which ended the period at 6.2%.
• Net loans increased 20% compared to 1Q11. This variation is in line with the current loan demand in Colombia, although it gets affected by the COP appreciation versus USD during the last 12 months.
• Profitability. The annualized return on equity (“ROE”) for 1Q12 was 18.1%, which represents an increase from the 17.6% reported in 1Q11. This ROE was generated over a higher equity, result of the COP 1,680 billion of primary capital issued by the bank in February 2012.
• Past due loans as a percentage of total loans continues being low. Past due loans as a percentage of total loans were 2.7%. Loan deterioration during 1Q12 was COP 407 billion, and net provision charges for past due loans and foreclosed assets totaled COP 198 billion, which represents 1.3% of gross loans when annualized.
• The balance sheet remains strong. Loan loss reserves represented 4.7% of total loans and 175% of past due loans at the end of 1Q12. The capital adequacy ratio ended the quarter at 15.5% (Tier 1 of 12%).

 

May 9, 2012. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the first quarter of 2012.

 

For the quarter ended March 31, 2012 (“1Q12”), Bancolombia reported consolidated net income of COP 446 billion, or COP 523 per share - USD 1.17 per ADR, which represents a decrease of 12% as compared to the results for the quarter ended December 31, 2011 (“4Q11”) and an increase of 27% as compared to the results for the quarter ended on March 31, 2011 (“1Q11”).

 

Bancolombia ended 1Q12 with COP 84,237 billion in assets, 1% lower than those at the end of 4Q11 and 18% greater than at the end of 1Q11. At the same time, liabilities totaled COP 73,805 billion, decreasing 3% as compared to the figure presented in 4Q11 and increased 16% as compared to 1Q111.

 

 

 

 

 

1 This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. (“BANCOLOMBIA”) and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of Superintendencia Financiera de Colombia, collectively COL GAAP. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank's principal accounting policies in the quarter ended March 31, 2012. The statements of income for the quarter ended March 31, 2012 are not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

 

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

 

Representative Market Rate April 1, 2012 $1792.07 = US$ 1

 

1
 

 

1Q12

 

BANCOLOMBIA: Summary of consolidated financial quarterly results2

 

CONSOLIDATED BALANCE SHEET                         
AND INCOME STATEMENT  Quarter    Growth  
(COP millions)  1Q11   4Q11   1Q12   1Q12/4Q11   1Q12/1Q11 
ASSETS                         
Loans and financial leases, net   48,238,517    58,575,846    57,896,430    -1.16%   20.02%
Investment securities, net   10,832,235    9,958,191    8,672,604    -12.91%   -19.94%
Other assets   12,111,714    16,928,983    17,667,740    4.36%   45.87%
Total assets   71,182,466    85,463,020    84,236,774    -1.43%   18.34%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                   
Deposits   45,533,412    52,434,492    51,967,757    -0.89%   14.13%
Non-interest bearing   7,048,610    8,814,173    7,653,768    -13.17%   8.59%
Interest bearing   38,484,802    43,620,319    44,313,989    1.59%   15.15%
Other liabilities   17,934,957    24,035,169    21,837,349    -9.14%   21.76%
Total liabilities   63,468,369    76,469,661    73,805,106    -3.48%   16.29%
Shareholders' equity   7,714,097    8,993,359    10,431,668    15.99%   35.23%
Total liabilities and shareholders' equity   71,182,466    85,463,020    84,236,774    -1.43%   18.34%
                          
Interest income   1,301,605    1,647,149    1,785,336    8.39%   37.16%
Interest expense   407,714    626,852    653,527    4.26%   60.29%
Net interest income   893,891    1,020,297    1,131,809    10.93%   26.62%
Net provisions   (79,692)   (328,408)   (198,155)   -39.66%   148.65%
Fees and income from service, net   385,101    466,994    422,964    -9.43%   9.83%
Other operating income   111,467    341,557    198,547    -41.87%   78.12%
Total operating expense   (843,249)   (903,694)   (962,527)   6.51%   14.15%
Goodwill amortization   (12,757)   (15,026)   (11,819)   -21.34%   -7.35%
Non-operating income, net   14,451    55,476    13,393    -75.86%   -7.32%
Income tax expense   (119,129)   (133,354)   (148,642)   11.46%   24.77%
Net income   350,083    503,842    445,570    -11.57%   27.28%

 

PRINCIPAL RATIOS  Quarter   As of 
   1Q 11   4Q 11   1Q 12   Mar-11   uMar-12 
PROFITABILITY                         
Net interest margin (1)   5.87%   5.62%   6.16%   5.87%   6.16%
Return on average total assets (2)   2.01%   2.42%   2.12%   2.01%   2.12%
Return on average shareholders´ equity (3)   17.58%   23.11%   18.14%   17.58%   18.14%
EFFICIENCY                         
Operating expenses to net operating income   61.56%   50.23%   55.57%   61.56%   55.57%
Operating expenses to average total assets   4.92%   4.41%   4.64%   4.92%   4.64%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   10.84%   10.52%   12.38%   10.84%   12.38%
Technical capital to risk weighted assets   14.21%   12.46%   15.52%   14.21%   15.52%
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS (USD)   0.95    1.32    1.17           
Net income per share $COP   444.37    639.53    523.08           
P/BV ADS (4)   2.99    2.53    2.37           
P/BV Local (5) (6)   2.98    2.49    2.29           
P/E (7)   16.45    11.19    13.60           
ADR price (8)   62.66    59.56    64.66           
Common share price (8)   29,200    28,480    28,100           
Shares outstanding (9)   787,827,003    787,827,003    851,827,000           
USD exchange rate (quarter end)   1,870.60    1,942.70    1,792.07           

 

 

 

 

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

 

2
 

 

1Q12

 

1.BALANCE SHEET

 

1.1.Assets

 

As of March 31, 2012, Bancolombia’s assets totaled COP 84,237 billion, which represents a decrease of 1.4% compared to 4Q11 and an increase of 18.3% compared to 1Q11.

 

The decrease in assets presented for the quarter is mainly explained by the 1% decrease in net loans, which represented 69% of total assets at the end of 1Q12. Similarly, investments decreased 13% during the quarter due to the reduction of the trading securities portfolio, from which profits were taken.

 

The appreciation of the peso versus the dollar (7.8% for the quarter and 4.2% in the last 12 months) caused that the USD denominated assets represented less Colombian pesos at the end of the quarter.

 

It is highlighted the growth of assets given under operating leases, which increased 12% during the quarter and 50% compared to 1Q11.

 

1.2.Loan Portfolio

 

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

 

(COP Million)  Amounts in COP   Amounts in USD converted to COP   Amounts in USD (thousands)   Total 
(1 USD = 1792.07 COP)        1Q12/4Q11    1Q12/1Q11         1Q12/4Q11    1Q12/1Q11         1Q12/4Q11    1Q12/1Q11         1Q12/4Q11    1Q12/1Q11 
Net investment securities   6,835,548    -14.15%   -22.76%   1,837,056    -7.98%   -7.32%   1,025,103    -0.25%   -3.26%   8,672,604    -12.91%   -19.94%
Gross Loans   46,221,671    4.07%   24.17%   14,554,938    -14.26%   7.27%   8,121,858    -7.05%   11.97%   60,776,609    -1.00%   19.65%
Commercial loans   25,668,013    3.35%   17.14%   11,193,128    -16.33%   9.17%   6,245,921    -9.30%   13.95%   36,861,141    -3.54%   14.60%
Consumer loans   9,356,280    5.95%   42.27%   1,905,272    -5.45%   -0.99%   1,063,168    2.49%   3.35%   11,261,552    3.83%   32.48%
Small  business loans   282,797    2.22%   14.36%   34,688    -13.84%   296.48%   19,356    -6.60%   313.85%   317,485    0.18%   24.00%
Mortgage loans   4,214,022    4.63%   40.39%   748,676    -7.91%   -6.37%   417,772    -0.16%   -2.26%   4,962,698    2.52%   30.56%
Finance lease   6,700,559    4.01%   22.11%   673,174    -7.73%   15.53%   375,640    0.02%   20.60%   7,373,733    2.82%   21.47%
Allowance for loan losses   (2,515,589)   4.30%   14.99%   (364,590)   -9.02%   -0.72%   (203,446)   -1.37%   3.63%   (2,880,179)   2.40%   12.73%
Net total loans and fin. leases   43,706,082    4.06%   24.74%   14,190,348    -14.39%   7.49%   7,918,412    -7.19%   12.20%   57,896,430    -1.16%   20.02%
Operating leases, net   1,457,229    13.94%   51.14%   95,022    -6.03%   31.80%   53,024    1.87%   37.57%   1,552,251    12.48%   49.79%

 

The most relevant aspects regarding the evolution of the loan portfolio during 1Q12 were:

 

·       The dynamic growth of consumer loans in Colombia during 1Q12 and compared to 1Q11.

 

·       The demand for USD denominated loans by Colombian companies during the last 12 months. However, a slower pace is seen in the last quarter. The increase in international trade flows played an important role in the growth of this type of loans.

 

·       Net loans in USD correspond to loans originated in Colombia (USD 3,284 million, 41%), El Salvador (USD 2,338 million, 30%) and other countries (USD 2,297 million, 29%).

 

·       COP appreciated 7.8% versus USD during 1Q12 and 4.2% for the last 12 months. This had a negative impact on the conversion of USD denominated loans to COP of around COP 1,193 billion.

 

·       Mortgage loans denominated in COP showed a positive performance. The increased dynamism of mortgage lending in Colombia is explained by optimism regarding the economy, lower long-term interest rates, as well as by the Colombian government’s interest rate subsidy programs, which have produced higher credit demand in this segment. On the other hand, the outstanding mortgage balances denominated in USD from our operation in El Salvador remained stable in 1Q12, and decreased 2% in the past 12 months.

 

3
 

 

 

1Q12

 

·       Financial leases, 91% of which are denominated in COP, increased 3% during the quarter and 21% as compared to 1Q11. Operating leases, net of depreciation, increased 12% during the quarter and 50% during the year.

 

When analyzing the performance of the loan portfolio according to the categories established by Bancolombia to manage its commercial strategy, it becomes clear that retail and SMEs loans were key drivers of the growth of the total loan portfolio during the quarter as they increased 4% with respect to 4Q11. This increase is explained by higher demand for working capital and financing by SMEs, personal loans and credit cards. On the other hand, corporate loans decreased 5% in the same period due to anticipated payments of working capital loans by some corporations.

 

Reserves for loan losses increased 2% during 1Q12 and totaled COP 2,880 billion, or 4.7% of total loans at the end of the quarter. For further explanation regarding coverage of the loan portfolio and credit quality trends, please see Section 2.4. “Asset Quality, Provision Charges and Balance Sheet Strength” of this report.

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO      As of       Growth   % of Total   % of 
(COP million)  Mar-11   Dec-11   Mar-12   1Q12/4Q11   1Q12/1Q11   loans   Category  
CORPORATE                                   
Working capital loans   22,509,901    26,236,561    25,053,335    -4.51%   11.30%   41.22%   85.70%
Funded by domestic development banks   283,477    263,995    240,287    -8.98%   -15.24%   0.40%   0.82%
Trade Financing   3,209,437    4,228,396    3,762,238    -11.02%   17.22%   6.19%   12.87%
Overdrafts   79,256    95,834    129,876    35.52%   63.87%   0.21%   0.44%
Credit Cards   46,006    47,369    48,046    1.43%   4.43%   0.08%   0.16%
TOTAL CORPORATE   26,128,077    30,872,155    29,233,782    -5.31%   11.89%   48.10%   100.00%
RETAIL AND SMEs                                   
Working capital loans   5,089,002    6,393,396    6,870,855    7.47%   35.01%   11.31%   35.77%
Personal loans   4,575,797    5,819,639    6,123,115    5.21%   33.82%   10.07%   31.88%
Loans funded by   domestic development banks   637,267    693,703    704,423    1.55%   10.54%   1.16%   3.67%
Credit Cards   2,747,490    3,329,334    3,440,670    3.34%   25.23%   5.66%   17.91%
Overdrafts   241,249    187,113    271,247    44.96%   12.43%   0.45%   1.41%
Automobile loans   1,465,988    1,993,814    1,719,882    -13.74%   17.32%   2.83%   8.95%
Trade Financing   37,129    86,795    76,204    -12.20%   105.24%   0.13%   0.40%
TOTAL RETAIL AND SMEs   14,793,922    18,503,794    19,206,396    3.80%   29.83%   31.60%   100.00%
MORTGAGE   3,801,283    4,840,668    4,962,698    2.52%   30.55%   8.17%   100.00%
FINANCIAL LEASES   6,070,189    7,171,811    7,373,733    2.82%   21.47%   12.13%   100.00%
Total loans and financial leases   50,793,471    61,388,428    60,776,609    -1.00%   19.65%   100.00%   100.00%
Allowance for loan losses   (2,554,954)   (2,812,582)   (2,880,179)   2.40%   12.73%          
Total loans and financial leases, net   48,238,517    58,575,846    57,896,430    -1.16%   20.02%          

 

1.3.Investment Portfolio

 

As of March 31, 2012, Bancolombia’s net investment portfolio totaled COP 8,673 billion, decreasing 13% compared to 4Q11 and decreasing 20% compared to 1Q11. The investment portfolio is mainly composed of debt investment securities, which represented 91% of Bancolombia’s total investments and 9% of assets at the end of 1Q12. Investments denominated in USD totaled USD 1,025 million and represented 21% of the investment portfolio. Additionally, the Bank has COP 1,760 billion in mortgage backed securities, which represent 20% of the investment portfolio. The duration of the debt securities portfolio was 20.1 months with a yield to maturity of 5.13% at the end of 1Q12.

 

4
 

  

1Q12

 

1.4.Goodwill

 

As of 1Q12, Bancolombia’s goodwill totaled COP 616 billion and decreased 9% compared to the amount reported in 4Q11 and decreasing 15% compared to 1Q11. This variation is explained by the amortization of goodwill reported during the past year (under COL GAAP, goodwill is amortized within a period of 20 years) and the appreciation of the Colombian peso versus the dollar. As of March 31, 2012, Bancolombia’s goodwill included USD 337 million related mostly to the acquisition of Banagrícola in 2007.

 

1.5.Funding

 

As of March 31, 2012, Bancolombia’s liabilities totaled COP 73.805 billion and decreased 3% compared to 4Q11 and increased 16% compared to 1Q11. The ratio of net loans to deposits (including borrowings from domestic development banks) was 105% at the end of 1Q12, remaining stable compared to the figure reported in 4Q11, and increasing compared to the figure for 1Q11 (100%).

 

Deposits totaled COP 51,968 billion (or 70% of liabilities) at the end of 1Q12, decreased 1% during the quarter and increased 14% over the last 12 months. CDs represented 37% of deposits in 1Q12. Bancolombia´s funding strategy has aimed to take advantage from higher liquidity and low interest rates, through increasing savings and checking accounts (which have a lower cost). The ultimate goal is to defend the net interest margin.

 

DEPOSIQ MIX   1Q11     4Q11    1Q12  
COP Million        %         %         % 
Checking accounts   9,157,424    20.11%   10,293,894    19.63%   9,293,698    17.88%
Saving accounts   19,657,523    43.17%   23,263,051    44.37%   22,538,485    43.37%
Time deposits   16,147,318    35.46%   17,973,117    34.28%   19,401,674    37.33%
Other   571,147    1.25%   904,430    1.72%   733,900    1.41%
Total deposits   45,533,412         52,434,492         51,967,757      

  

At the end of 1Q12, Bancolombia had outstanding bonds for USD 2,540 million in international markets and COP 5,237 billion in local markets. The maturities of these bonds range from 2 to 10 years.

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 1Q12 was COP 10,432 billion, increasing 35% or COP 2,718 billion with respect to the COP 7,714 billion reported at the end of 1Q11.

 

Bancolombia’s capital adequacy ratio was 15.52%, 306 basis points above the 12.46% for 4Q11 and 131 bps above the 14.21% for 1Q11. This increase in the capital adequacy ratio is explained by the COP 1,680 billion stock issuance in 1Q12.

 

Bancolombia’s capital adequacy ratio was 652 basis points above the minimum level required by Colombia’s regulator, while the basic capital ratio (tier 1) was 12.00% and the tangible capital ratio, which is equal to shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 10.89% at the end of 1Q12.

 

 

5
 

 

1Q12

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS                    
Consolidated (COP millions)  1Q11   %   4Q11   %   1Q12   % 
Basic capital (Tier I)   6,715,196    10.22%   6,979,026    8.99%   9,045,808    12.00%
Additional capital (Tier II)   2,623,348    3.99%   2,696,112    3.47%   2,653,063    3.52%
Technical capital (1)   9,338,544         9,675,138         11,698,871      
Risk weighted assets included market risk   65,715,356         77,651,096         75,397,039      
CAPITAL ADEQUACY (2)   14.21%        12.46%        15.52%     

 

 

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

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

 

6
 

 

 

1Q12

 

2.INCOME STATEMENT

 

Net income totaled COP 446 billion in 1Q12, or COP 523 per share - USD 1.17 per ADR, which represents a decrease of 12% compared to 4Q11 and an increase of 27% compared to 1Q11. Bancolombia’s annualized ROE was 18.1% for 1Q12, lower than the annualized ROE of 23.1% for 4Q11 and higher than the 17.6% of 1Q11.

 

2.1.Net Interest Income

 

Net interest income totaled COP 1,132 billion in 1Q12, 11% higher than that reported in 4Q11, and 27% higher than the figure for 1Q11. Interest income increased 8% during the quarter, and interest expense increased 4%. The increase of net interest income is explained by the improvement of the margin as well as the loan increases from previous quarters.

 

During 1Q12, income generated by the investment portfolio totaled COP 172 billion, a figure 43% higher than the COP 120 billion for 4Q11 and 30% higher than the COP 133 billion for 1Q11. The increase in income from investments during the quarter is explained by the higher value of Colombian government securities, and also by the COP 20 billion increase in the residual value of mortgage backed securities performed by Bancolombia in the past.

 

Net Interest Margin

 

Annualized net interest margin ended 1Q12 at 6.2%. Annualized net interest margin for investments was 4.3%, which recovered compared to 4Q11 due to appreciation of Colombian government securities. Annualized net interest margin for loans, financial leases and overnight funds was 6.4%. The increases in the Central Bank rate have allowed a faster pace of growth of returns for loans than funding costs.

  

Annualized Interest                                
Margin  2Q10   3Q10   4Q10   1Q11   2Q11   3Q11   4Q11   1Q12 
Loans´Interest margin   7.1%   6.7%   6.6%   6.4%   6.3%   6.3%   6.3%   6.4%
Debt investments´margin   3.1%   3.6%   2.3%   3.0%   5.1%   4.3%   1.4%   4.3%
Net interest margin   6.4%   6.2%   6.0%   5.9%   6.2%   6.0%   5.6%   6.2%

 

The funding cost increased during 1Q12 as deposits continued to reflect the increase in interest rates by the Colombian Central Bank. The annualized weighted average cost of deposits reached 3.0% in 1Q12, higher than the 2.8% for 4Q11 and the 2.2% for 1Q11.

 

Deposits' weighted               
average cost   1Q11    4Q11    1Q12 
Checking accounts   0.35%   0.42%   0.24%
Time deposits   3.73%   4.46%   4.86%
Saving accounts   1.91%   2.72%   2.85%
Total deposits   2.20%   2.84%   3.04%

 

2.2.Fees and Income from Services

 

During 1Q12, net fees and income from services totaled COP 423 billion, decreasing 9% compared to those reported in 4Q11 and 10% higher than those reported in 1Q11.

  

7
 

 

 

1Q12

 

In particular, fees from credit and debit cards decreased 7% with respect to 4Q11 due to a lower transactional volume, but increased 7% with respect to 1Q11. Fees from banking services remained stable compared to 4Q11 and increased 19% with respect to 1Q11. Fees from brokerage services decreased 48% in 1Q12, which is basically explained by the fact that some revenues generated by the distribution of stock issuances occurred in Colombia in 4Q11, weren´t presented again in 1Q12, however these fees increased 62% compared to 1Q11, which is explained by higher transactional volumes.

 

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

 

ACCUMULATED CREDIT CARD BILLING  %   2012 
(COP millions)  Mar-11   Mar-12   Growth   Market Share 
Bancolombia VISA   499,565    581,773    16.46%   7.64%
Bancolombia Mastercard   601,604    695,366    15.59%   9.13%
Bancolombia American Express   647,245    862,221    33.21%   11.32%
Total Bancolombia   1,748,414    2,139,359    22.36%   28.09%
Colombian Credit Card Market   6,260,038    7,616,252    21.66%     
Source: Credibanco y Redeban multicolor                    

 

 

CREDIT CARD MARKET SHARE  %   2012 
(Outstanding credit cards)  Mar-11   Mar-12   Growth   Market Share 
Bancolombia VISA   337,372    385,119    14.15%   5.86%
Bancolombia Mastercard   357,829    397,120    10.98%   6.04%
Bancolombia American Express   477,854    589,845    23.44%   8.98%
Total Bancolombia   1,173,055    1,372,084    16.97%   20.88%
Colombian Credit Card Market   5,709,694    6,570,180    15.07%     
Source: Credibanco y Redeban multicolor                    

 

2.3.Other Operating Income

 

Total other operating income was COP 199 billion in 1Q12, 42% lower than in 4Q11, and 78% higher than in 1Q11. Income from foreign exchange gains and derivatives denominated in foreign currencies decreased 38% in the quarter due to the appreciation of the COP versus USD.

 

It is highlighted the growth of dividend revenues generated from investments in non consolidated companies (COP 11 billion from Odinsa S.A., COP 8 billion from Protección S.A., COP 7 billion from Titularizadora Colombiana S.A., COP 5 billion from EPSA and 10 billion from other companies).

 

Revenues aggregated in the communication, rent and others totaled COP 71 billion in 1Q12, which is 8% higher as compared to 4Q11 and 45% higher as compared to 1Q11. This line includes revenues from commercial discounts and operating leases payments, which have grown as the value of assets rented under operating leasing contracts have increased.

 

In 4Q11, COP 46 billion was registered as insurance income generated by Asesuisa during the year 2011. In 1Q12, this type of income only registered COP 12 billion corresponding to income generated during the quarter, which explains a COP 34 billion decrease.

 

Finally, a decrease is identified in the line of gains on sales of investments. This is basically explained by the COP 139 billion income registered in 4Q11 on the sale of the pension fund company AFP Crecer in El Salvador, and there was no similar event during 1Q12.

 

8
 

 

1Q12

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The deterioration of the loan portfolio (new past due loans before charge-offs) was COP 407 billion in 1Q12. The vintages of consumer loans originated in 2010 and 2011 have some deterioration, which however, does not represent a threat to the balance sheet´s strength, since the provisions performed in 2010 and 2011 cover all those potential deteriorations. The largest part of the 1Q12 loan portfolio weakening occurred in the consumer loans and SMEs loans segments. These deteriorations had been previously calculated and are the result of the growth strategy implemented by the bank since beginnings of 2010.

 

Past due loans (those overdue more than 30 days) totaled COP 1,641 billion at the end of 1Q12, which represents 2.7% of total gross loans. The PDL ratio increased from 2.2% in 4Q11 and decreased from 2.9% at the end of 1Q11. Loan charge-offs totaled COP 107 billion in 1Q12.

 

Provision charges (net of recoveries) totaled COP 198 billion in 1Q12. The lower provision charges in 1Q12 are explained by additional provisions originated in 4Q11, which were not originated in 1Q12.

 

Bancolombia maintains a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,880 billion, or 4.7% of total loans at the end of 1Q12, increasing with respect to the 4.6% presented at the end of 4Q11, and decreasing with respect to the 5.0% at the end of 1Q11. Additionally, coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 175% at the end of 1Q12. Likewise, coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 123% at the end of 1Q12, increasing with respect to to the 114% in 1Q11 and to the 120% in 4Q11.

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY      As of       Growth 
(COP millions)  Mar-11   Dec-11   Mar-12   1Q12/4Q11   1Q12/1Q11 
Total performing past due loans (1)   547,623    410,152    648,827    58.19%   18.48%
Total non-performing past due loans   913,660    930,540    992,504    6.66%   8.63%
Total past due loans   1,461,283    1,340,692    1,641,331    22.42%   12.32%
Allowance for loans interest losses   2,554,954    2,812,582    2,880,179    2.40%   12.73%
Past due loans to total loans   2.88%   2.18%   2.70%          
Non-performing loans as a percentage of total loans   1.80%   1.52%   1.63%          
“C”, “D” and “E” loans as a percentage of total loans   4.41%   3.82%   3.84%          
Allowances to past due loans (2)   174.84%   209.79%   175.48%          
Allowance for loan losses as a percentage of “C”, “D” and “E” loans (2)   114.12%   119.83%   123.26%          
Allowance for loan losses as a percentage of non-performing loans (2)   279.64%   302.25%   290.19%          
Allowance for loan losses as a percentage of total loans   5.03%   4.58%   4.74%          
Percentage of performing loans to total loans   98.20%   98.48%   98.37%          

 

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

 

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

 

9
 

 

1Q12

 

PDL Per Category (30 days)                    
    % Of loan Portfolio    1Q11    4Q11    1Q12 
Commercial loans   60.65%   2.0%   1.36%   1.7%
Consumer loans   18.53%   3.6%   3.25%   4.0%
Microcredit   0.52%   9.4%   8.62%   10.2%
Mortgage loans   8.17%   8.0%   6.55%   7.1%
Finance lease   12.13%   2.9%   1.74%   2.3%
PDL TOTAL   100.00%   2.88%   2.18%   2.70%

 

 

PDL Per Category (90 days)                    
    % Of loan Portfolio    1Q11    4Q11    1Q12 
Commercial loans   60.65%   1.4%   0.96%   1.1%
Consumer loans   18.53%   1.5%   1.61%   1.7%
Microcredit   0.52%   5.5%   4.98%   6.2%
Mortgage loans   8.17%   3.8%   3.02%   2.9%
Finance lease   12.13%   1.5%   1.19%   1.1%
TOTAL LOAN PORTFOLIO   100.00%   1.7%   1.28%   1.36%

 

 

LOANS AND FINANCIAL LEASES CLASSIFICATION  Mar-11   Dec-11   Mar-12 
( COP millions)                    
¨A¨ Normal   47,162,691    92.9%   57,095,160    93.0%   56,345,911    92.7%
¨B¨ Subnormal   1,392,012    2.7%   1,946,067    3.2%   2,093,981    3.5%
¨C¨ Deficient   733,349    1.4%   913,893    1.4%   936,521    1.5%
¨D¨ Doubtful recovery   952,355    1.9%   848,682    1.4%   799,171    1.3%
¨E¨ Unrecoverable   553,064    1.1%   584,626    1.0%   601,024    1.0%
Total   50,793,471    100%   61,388,428    100%   60,776,608    100%
                               
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases   4.4%        3.8%        3.8%     

 

 

2.5.Operating Expenses

 

During 1Q12, operating expenses totaled COP 963 billion, increasing 7% with respect to 4Q11 and 14% compared to 1Q11.

 

Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 392 billion in 1Q12, increasing 1% as compared to 4Q11 and 13% as compared to 1Q11. The increase in the last 12 months is explained by the bank´s higher number of employees and the 2012 wage increases.

 

During 1Q12, administrative and other expenses totaled COP 474 billion, increasing 13% compared to 4Q11, and 11% compared to 1Q11. This variation during the quarter is mainly explained by higher expenses for advisory fees, as well as higher taxes (other than income tax)

 

Depreciation expenses totaled COP 70 billion in 1Q12, increasing 7% as compared to 4Q11 and 40% compared to 1Q11. The increase in this type of expense is in line with the operating leasing from Leasing Bancolombia.

 

At the end of 1Q12 Bancolombia had 24,425 employees and 952 branches.

 

 

10
 

 

1Q12

 

3.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 7 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, and insurance, among others.

 

Contact Information

 

Bancolombia’s investor Relations

Phone (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Alejandro Mejia (IR Manager) / David Olano (Analyst)

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

 

11
 

 

1Q12

  

BALANCE SHEET                                   
(COP million)   Mar-11    Dec-11    Mar-12    Last Quarter    Annual    % of Assets    % of Liabilities 
ASSETS                                   
Cash and due from banks   4,066,446    6,818,307    6,552,446    -3.90%   61.13%   7.78%     
Overnight funds sold   492,017    910,690    1,420,166    55.94%   188.64%   1.69%     
Total cash and equivalents   4,558,463    7,728,997    7,972,612    3.15%   74.90%   9.46%     
Debt securities   10,287,179    9,201,210    7,881,941    -14.34%   -23.38%   9.36%     
Trading   4,537,984    3,706,039    2,452,717    -33.82%   -45.95%   2.91%     
Available for Sale   2,070,826    1,759,483    1,673,586    -4.88%   -19.18%   1.99%     
Held to Maturity   3,678,369    3,735,688    3,755,638    0.53%   2.10%   4.46%     
Equity securities   626,469    838,973    865,667    3.18%   38.18%   1.03%     
Trading   291,007    305,764    327,741    7.19%   12.62%   0.39%     
Available for Sale   335,462    533,209    537,926    0.88%   60.35%   0.64%     
Market value allowance   -81,413    -81,992    -75,004    -8.52%   -7.87%   -0.09%     
Net investment securities   10,832,235    9,958,191    8,672,604    -12.91%   -19.94%   10.30%     
Commercial loans   32,165,219    38,212,997    36,861,141    -3.54%   14.60%   43.76%     
Consumer loans   8,500,806    10,846,046    11,261,552    3.83%   32.48%   13.37%     
Microcredit   256,040    316,906    317,485    0.18%   24.00%   0.38%     
Mortgage loans   3,801,217    4,840,668    4,962,698    2.52%   30.56%   5.89%     
Finance lease   6,070,189    7,171,811    7,373,733    2.82%   21.47%   8.75%     
Allowance for loan losses   -2,554,954    -2,812,582    -2,880,179    2.40%   12.73%   -3.42%     
Net total loans and financial leases   48,238,517    58,575,846    57,896,430    -1.16%   20.02%   68.73%     
Accrued interest receivable on loans   394,345    482,833    531,956    10.17%   34.90%   0.63%     
Allowance for accrued interest losses   -40,122    -43,644    -47,400    8.61%   18.14%   -0.06%     
Net total interest accrued   354,223    439,189    484,556    10.33%   36.79%   0.58%     
Customers' acceptances and derivatives   688,979    741,296    815,693    10.04%   18.39%   0.97%     
Net accounts receivable   772,454    1,016,985    1,122,353    10.36%   45.30%   1.33%     
Net premises and equipment   1,257,107    1,622,311    1,644,538    1.37%   30.82%   1.95%     
Foreclosed assets, net   62,096    53,194    55,874    5.04%   -10.02%   0.07%     
Prepaid expenses and deferred charges   797,605    785,456    797,656    1.55%   0.01%   0.95%     
Goodwill   721,400    679,861    615,686    -9.44%   -14.65%   0.73%     
Operating leases, net   1,036,262    1,380,057    1,552,251    12.48%   49.79%   1.84%     
Other   1,098,212    1,697,648    1,792,123    5.57%   63.19%   2.13%     
Reappraisal of assets   764,913    783,989    814,398    3.88%   6.47%   0.97%     
Total assets   71,182,466    85,463,020    84,236,774    -1.43%   18.34%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
DEPOSITS                                   
Non-interest bearing   7,048,610    8,814,173    7,653,768    -13.17%   8.59%   9.09%   10.37%
Checking accounts   6,477,463    7,909,743    6,919,868    -12.51%   6.83%   8.21%   9.38%
Other   571,147    904,430    733,900    -18.85%   28.50%   0.87%   0.99%
Interest bearing   38,484,802    43,620,319    44,313,989    1.59%   15.15%   52.61%   60.04%
Checking accounts   2,679,961    2,384,151    2,373,830    -0.43%   -11.42%   2.82%   3.22%
Time deposits   16,147,318    17,973,117    19,401,674    7.95%   20.15%   23.03%   26.29%
Savings deposits   19,657,523    23,263,051    22,538,485    -3.11%   14.66%   26.76%   30.54%
Total deposits   45,533,412    52,434,492    51,967,757    -0.89%   14.13%   61.69%   70.41%
Overnight funds   2,439,788    1,954,552    855,725    -56.22%   -64.93%   1.02%   1.16%
Bank acceptances outstanding   497,036    513,975    551,720    7.34%   11.00%   0.65%   0.75%
Interbank borrowings   2,406,648    4,130,915    3,014,022    -27.04%   25.24%   3.58%   4.08%
Borrowings from domestic development banks   2,515,081    3,328,011    3,058,511    -8.10%   21.61%   3.63%   4.14%
Accounts payable   1,997,473    2,173,253    2,568,827    18.20%   28.60%   3.05%   3.48%
Accrued interest payable   293,000    397,412    402,116    1.18%   37.24%   0.48%   0.54%
Other liabilities   588,612    874,330    792,124    -9.40%   34.57%   0.94%   1.07%
Bonds   6,444,127    10,308,983    9,789,091    -5.04%   51.91%   11.62%   13.26%
Accrued expenses   690,078    280,282    740,623    164.24%   7.32%   0.88%   1.00%
Minority interest in consolidated subsidiaries   63,114    73,456    64,590    -12.07%   2.34%   0.08%   0.09%
Total liabilities   63,468,369    76,469,661    73,805,106    -3.48%   16.29%   87.62%   100.00%
SHAREHOLDERS' EQUITY                            0.00%     
Subscribed and paid in capital   393,914    393,914    425,914    8.12%   8.12%   0.51%     
Retained earnings   6,275,794    7,639,808    9,004,852    17.87%   43.49%   10.69%     
Appropiated   5,925,711    5,975,914    8,559,282    43.23%   44.44%   10.16%     
Unappropiated   350,083    1,663,894    445,570    -73.22%   27.28%   0.53%     
Reappraisal and others   1,037,726    947,790    983,838    3.80%   -5.19%   1.17%     
Gross unrealized gain or loss on debt securities   6,663    11,847    17,064    44.04%   156.10%   0.02%     
Total shareholder's equity   7,714,097    8,993,359    10,431,668    15.99%   35.23%   12.38%     

 

12
 

  

1Q12

 

INCOME STATEMENT                 Growth 
(COP million)   1Q11    4Q11    1Q12   1Q12/4Q11   1Q12/1Q11 
Interest income and expenses                         
Interest on loans   1,019,606    1,339,611    1,412,218    5.42%   38.51%
Interest on investment securities   132,611    120,278    172,263    43.22%   29.90%
Overnight funds   4,902    6,575    5,978    -9.08%   21.95%
Leasing   144,486    180,685    194,877    7.85%   34.88%
Total interest income   1,301,605    1,647,149    1,785,336    8.39%   37.16%
Interest expense   -    -    -           
Checking accounts   8,678    11,248    6,441    -42.74%   -25.78%
Time deposits   146,302    199,273    227,012    13.92%   55.17%
Savings deposits   90,273    148,177    162,981    9.99%   80.54%
Total interest on deposits   245,253    358,698    396,434    10.52%   61.64%
Interbank borrowings   6,937    21,900    17,573    -19.76%   153.32%
Borrowings from domestic development banks   32,564    45,689    54,125    18.46%   66.21%
Overnight funds   18,108    27,682    16,245    -41.32%   -10.29%
Bonds   104,852    172,883    169,150    -2.16%   61.32%
Total interest expense   407,714    626,852    653,527    4.26%   60.29%
Net interest income   893,891    1,020,297    1,131,809    10.93%   26.62%
Provision for loan and accrued interest losses, net   (136,741)   (353,970)   (229,485)   -35.17%   67.82%
Recovery of charged-off loans   55,573    57,586    41,662    -27.65%   -25.03%
Provision for foreclosed assets and other assets   (17,648)   (46,467)   (31,153)   -32.96%   76.52%
Recovery of provisions for foreclosed assets and other assets   19,124    14,443    20,821    44.16%   8.87%
Total net provisions   (79,692)   (328,408)   (198,155)   -39.66%   148.65%
Net interest income after provision for loans   -    -    -           
and accrued interest losses   814,199    691,889    933,654    34.94%   14.67%
Commissions from banking services and other services   86,474    103,001    103,004    0.00%   19.12%
Electronic services and ATM fees   13,080    18,689    17,410    -6.84%   33.10%
Branch network services   28,892    34,356    30,093    -12.41%   4.16%
Payment fees   53,199    60,141    59,519    -1.03%   11.88%
Credit card merchant fees   2,767    4,024    1,293    -67.87%   -53.27%
Credit and debit card annual fees   147,767    169,428    157,411    -7.09%   6.53%
Checking fees   17,969    18,675    18,524    -0.81%   3.09%
Fiduciary activities   46,179    46,283    51,020    10.23%   10.48%
Pension plan administration   -    -    -    0.00%   0.00%
Brokerage fees   10,901    34,104    17,708    -48.08%   62.44%
Check remittance   4,444    5,431    5,406    -0.46%   21.65%
International operations   16,729    20,188    15,122    -25.09%   -9.61%
Fees and other service income   428,401    514,320    476,510    -7.35%   11.23%
Fees and other service expenses   (43,300)   (47,326)   (53,546)   13.14%   23.66%
Total fees and income from services, net   385,101    466,994    422,964    -9.43%   9.83%
Other operating income   -    -    -           
Net foreign exchange gains   21,108    61,695    (15,793)   -125.60%   -174.82%
Derivatives Financial Contracts   (114)   (13,990)   45,358    424.22%   39887.72%
Gains(loss) on sales of investments on equity securities   (440)   139,049    (289)   -100.21%   -34.32%
Securitization income   8,851    15,358    13,235    -13.82%   49.53%
Dividend income   8,047    908    40,681    4380.29%   405.54%
Revenues from commercial subsidiaries   25,000    26,623    32,100    20.57%   28.40%
Insurance income   -    45,690    12,018    -73.70%   0.00%
Communication, postage, rent and others   49,015    66,224    71,237    7.57%   45.34%
Total other operating income   111,467    341,557    198,547    -41.87%   78.12%
Total income   1,310,767    1,500,440    1,555,165    3.65%   18.65%
Operating expenses   -    -    -           
Salaries and employee benefits   305,430    343,624    346,913    0.96%   13.58%
Bonus plan payments   31,258    40,292    40,395    0.26%   29.23%
Compensation   8,888    4,782    4,491    -6.09%   -49.47%
Administrative and other expenses   425,306    420,984    473,829    12.55%   11.41%
Deposit insurance net   20,990    24,704    26,140    5.81%   24.54%
Donation expenses   1,412    4,032    780    -80.65%   -44.76%
Depreciation   49,965    65,276    69,979    7.20%   40.06%
Total operating expenses   843,249    903,694    962,527    6.51%   14.15%
Net operating income   467,518    596,746    592,638    -0.69%   26.76%
Goodwill amortization (1)   12,757    15,026    11,819    -21.34%   -7.35%
Non-operating income (expense)   -    -    -    0.00%   0.00%
Other income   39,818    78,261    36,954    -52.78%   -7.19%
Minority interest   (3,110)   (3,132)   (1,004)   -67.94%   -67.72%
Other expense   (22,257)   (19,653)   (22,557)   14.78%   1.35%
Total non-operating income   14,451    55,476    13,393    -75.86%   -7.32%
Income before income taxes   469,212    637,196    594,212    -6.75%   26.64%
Income tax expense   (119,129)   (133,354)   (148,642)   11.46%   24.77%
Net income   350,083    503,842    445,570    -11.57%   27.28%

 

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