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, 2018

 

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 ¨

 

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 ¨                    No þ

 

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

 

 

 

 

 

 

   

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 522 BILLION FOR THE FIRST QUARTER OF 2018 WHICH REPRESENTS A DECREASE OF 14% COMPARED TO 1Q17.

 

·Gross loans grew 4.1% when compared to 1Q17 and decreased by 1.1% during the quarter. This annual growth shows moderation in the credit demand in Colombia, as well as, an appreciation of the COP against the USD by 3.6% during the last twelve months. Peso-denominated loans grew 11.1% when compared to 1Q17.

 

·Net interest income was COP 2.51 trillion for 1Q18, decreasing by 4.1% when compared to 1Q17. This slowdown in NII is explained by the adoption of IFRS 9 during 2018, which cause a reduction of COP 102 billion during the quarter. Also, the appreciation of the COP against the USD during the last twelve months impacted the number. Net interest income decreased by 5.0% during the quarter.

 

·Net fees were COP 680 billion and increased by 8.8% compared to 1Q17. This growth was mainly driven by an increase in fees related to credit and debit cards, bancassurance, payments and collections, as well as trust services. Net fees increased by 3.4% during the quarter.

 

·The annualized net interest margin for the quarter was 5.8%. The margin decreased by 19 basis points during the quarter and by 52 basis points when compared to 4Q17. Impacted mainly by the decrease in the NII product of the adoption of IFRS 9. The efforts in the control of the cost of deposits allowed to moderate the decrease of the margin during the quarter.

 

·Provision charges for the quarter were COP 875 billion and the coverage ratio for 90-day past due loans was 173.6%. Provision charges increased by 13.0% when compared to1Q17 and decreased by 5.9% compared to 4Q17, these provisions allow us to maintain a solid coverage ratio amid a challenging environment. New past due loans totaled COP 1,488 billion for the quarter explain largely by corporate clients.

 

·Efficiency was 49.3% during the last twelve months. Operating expenses decreased by 1.6% when compared to 1Q17. The annual decrease in operating expenses is explained by several strategies done on this front, which includes the reduction in the network of branches, automation and optimization of processes and the rationalization of personal expenses.

 

·Tier 1 ratio was 10.2% at March 31, 2018 and decreased by 37 basis points when compared to March 31, 2017. The capital adequacy ratio was 13.7%.

 

May 15, 2018. Medellin, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the first quarter of 20181. For the quarter ended on March 31, 2018 (“1Q18”), Bancolombia reported consolidated net income of COP 522 billion, or COP 542.47 per share - USD 0.78 per ADR. This net income represents a decrease of 42.1% compared to the quarter ended on December 31, 2017 (“4Q17”) and of 14.3% compared to the quarter ended on March 31, 2017 (“1Q17”).

 

 

1. This report corresponds to the interim unaudited consolidated financial information of BANCOLOMBIA S.A. and its subsidiaries (“BANCOLOMBIA” or “The Bank”) which Bancolombia controls, amongst others, by owning directly or indirectly, more than 50% of the voting capital stock. This financial information has been prepared based on financial records generated in accordance with International Financial Reporting Standards – IFRS. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. The financial information for the quarter ended March 31, 2018 is not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

. BANCOLOMBIA’s first IFRS financial statements will cover the year ending in 2015. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties; consequently, there are or will be factors, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptances of new products or services by our targeted customers, changes in business strategy and various others factors, that could cause actual results to differ materially from those indicated in such statements. We do not intend, and do not assume any obligation, to update these forward-looking statements. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Any reference to BANCOLOMBIA means the Bank together with its affiliates, unless otherwise specified.

Representative Market Rate, April 1, 2018 $2,780.47 = US$ 1

 

  1

 

   

 

BANCOLOMBIA: Summary of consolidated financial quarterly results

 

CONSOLIDATED BALANCE SHEET      
AND INCOME STATEMENT Quarter Growth
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
ASSETS          
Net Loans 145,331,160 152,244,991 149,654,067 -1.70% 2.97%
Investments 15,146,243 16,377,253 16,720,642 2.10% 10.39%
Other assets 36,264,595 35,285,967 34,570,861 -2.03% -4.67%
Total assets 196,741,998 203,908,211 200,945,570 -1.45% 2.14%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits 124,496,843 131,959,215 130,164,630 -1.36% 4.55%
Other liabilities 50,194,786 47,519,446 47,591,297 0.15% -5.19%
Total liabilities 174,691,629 179,478,661 177,755,927 -0.96% 1.75%
Non-controlling interest 1,183,988 1,316,586 1,237,585 -6.00% 4.53%
Shareholders' equity 20,866,381 23,112,964 21,952,058 -5.02% 5.20%
Total liabilities and shareholders' equity 196,741,998 203,908,211 200,945,570 -1.45% 2.14%
           
Interest income 4,202,956 4,151,605 3,946,739 -4.93% -6.10%
Interest expense (1,581,650) (1,505,606) (1,434,194) -4.74% -9.32%
Net interest income 2,621,306 2,645,999 2,512,545 -5.04% -4.15%
Net provisions (774,458) (930,368) (875,016) -5.95% 12.98%
Fees and income from service, net 624,838 657,628 679,917 3.39% 8.81%
Other operating income 353,401 558,363 318,457 -42.97% -9.89%
Total Dividends received and equity method 32,418 2,392 48,166 1913.63% 48.58%
Total operating expense (1,858,767) (1,619,786) (1,828,882) 12.91% -1.61%
Profit before tax 998,738 1,314,228 855,187 -34.93% -14.37%
Income tax (366,685) (345,556) (311,138) -9.96% -15.15%
Net income before non-controlling interest 632,053 968,672 544,049 -43.84% -13.92%
Non-controlling interest (23,299) (66,771) (22,289) -66.62% -4.33%
Net income 608,754 901,901 521,760 -42.15% -14.29%

 

PRINCIPAL RATIOS   Quarter  
  1Q17 4Q17 1Q18
PROFITABILITY      
Net interest margin (1) from continuing operations 6.31% 5.98% 5.80%
Return on average total assets (2) from continuing operations 1.25% 1.76% 1.04%
Return on average shareholders´ equity (3) 11.44% 15.96% 9.21%
EFFICIENCY      
Operating expenses to net operating income 51.18% 41.92% 51.38%
Operating expenses to average total assets 3.80% 3.16% 3.64%
Operating expenses to productive assets 4.48% 3.66% 4.22%
CAPITAL ADEQUACY      
Shareholders' equity to total assets 10.61% 11.33% 10.92%
Technical capital to risk weighted assets 14.46% 14.18% 13.73%
KEY FINANCIAL HIGHLIGHTS      
Net income per ADS from continuing operations 0.88 1.26 0.78
Net income per share $COP from continuing operations 632.91 937.70 542.47
P/BV ADS (4) 1.33 1.23 1.28
P/BV Local (5) (6) 1.21 1.25 1.32
P/E (7) from continuing operations 10.84 7.94 13.71
ADR price 39.87 39.66 42.02
Common share price (8) 26,260 29,980 30,220
Weighted average of Preferred Shares outstanding 961,827,000 961,827,000 961,827,000
USD exchange rate (quarter end) 2,885.57 2,984.00 2,780.47

 

(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.

 

  2

 

 

   

 

Implementation of IFRS 9

 

Impact in Allowances:

In the Balance Sheet, this implementation consists of an initial recognition of COP 599 billion in the line of "Retained earnings" in the equity (decrease) and in the line of "Allowance for loan and lease losses" in the assets (Increase). This impact happened only once on January 1, 2018. This estimate could vary mainly due to:

·Estimates of ECL models (Expected Credit Loss) which are being refined.
·The Bank is finalizing the tests and evaluations of the controls of the new systems and processes.

 

The overall impact of IFRS 9 in the Balance Sheet, could range between COP 470 billion and COP 730 billion, net of taxes.

 

Impact in Income Statement:

In the Income Statement, the impact is presented in both lines "interest income and valuation on investments", and "credit impairment charges, net" which were both reduced by COP 102 billion during the quarter. On the other hand, the net interest margin and the efficiency ratio were negatively impacted and the cost of risk and the fee income ratio improved.

 

Bancolombia did not restate the financial statements under IFRS 9 for years prior to 2018.

 

1.BALANCE SHEET

 

1.1.Assets

 

As of March 31, 2018, Bancolombia’s assets totaled COP 200,945 billion, which represents a decrease of 1.4% compared to 4Q17 and an increase of 2.1% compared to 1Q17.

 

During the quarter, the COP appreciated 6.8% versus the USD and over the past 12 months, it appreciated 3.6%.

 

The increase in total assets during the quarter is largely explained by the growth in reverse repurchase agreements and derivative financial instruments.

 

1.2.Loan Portfolio

 

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

 

(COP Million) Amounts in COP Amounts in USD converted to COP Amounts in USD (thousands) Total
(1 USD = 2780,47 COP) 1Q18 1Q18/4Q17 1Q18 1Q18/4Q17 1Q18 1Q18/4Q17 1Q18 1Q18/4Q17
Commercial loans 76,316,391 1.86% 33,561,026 -7.06% 12,070,271 -0.25% 109,877,417 -1.04%
Consumer loans 19,185,924 1.81% 8,132,362 -9.80% 2,924,816 -3.20% 27,318,286 -1.95%
Mortgage loans 11,714,548 2.33% 8,715,857 -3.79% 3,134,670 3.25% 20,430,405 -0.37%
Small business loans 628,927 -3.41% 395,212 -6.99% 142,139 -0.18% 1,024,140 -4.82%
Interests paid in advance (3,395) -15.82% (1,393) 3.25% (501) 10.80% (4,788) -11.04%
Gross loans 107,842,395 1.87% 50,803,065 -6.97% 18,271,395 -0.16% 158,645,460 -1.14%

 

During the quarter 1Q18, gross loans decreased by 1.1% when compared to 4Q17. Peso-denominated loans grew 11.1% and the dollar-denominated loans decreased by 4.6% when compared to 1Q17. In comparison with 1Q17, total gross loans grew 4.1%.

 

As of March 31, 2018, our operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala, represented 24% of total gross loans.

 

  3

 

 

   

 

Gross loans denominated in currencies other than COP, originated by our operations in Central America and the offshore operation of Bancolombia Panama as well as the USD denominated loans in Colombia, accounted for 32% and decreased by 6.9% during 1Q18 (when expressed in COP), explained mainly by the reduction of the loan portfolio in dollars in Colombia and the appreciation of the COP against the USD during the quarter.

 

Total reserves (allowances in the balance sheet) for loan losses increased by 9.3% during the quarter and totaled COP 8,991 billion, equivalent to 5.7% of gross loans at the end of the quarter. Of this increase, COP 599 billion were explained by the implementation of IFRS 9.

 

For further explanation regarding coverage of the loan portfolio and credit quality trends, (see section 2.4. Asset Quality, Provision Charges and Balance Sheet Strength).

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO           % of total loans
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
Commercial 107,398,707 111,029,197 109,877,417 -1.04% 2.31% 69.26%
Consumer 24,571,455 27,860,987 27,318,286 -1.95% 11.18% 17.22%
Mortgage 19,330,932 20,507,249 20,430,405 -0.37% 5.69% 12.88%
Microcredit 1,040,089 1,076,043 1,024,140 -4.82% -1.53% 0.65%
Interests received in advance - (5,382) (4,788) -11.04% 100.00% 0.00%
Total loan portfolio 152,341,183 160,468,095 158,645,460 -1.14% 4.14% 100.00%
Allowance for loan losses (7,010,023) (8,223,103) (8,991,393) 9.34% 28.26%  
Total loans, net 145,331,160 152,244,992 149,654,067 -1.70% 2.97%  

 

1.3.Investment Portfolio

 

As of March 31, 2018, Bancolombia’s net investment portfolio totaled COP 16,721 billion, increasing by 2.1% from the end of 4Q17 and 10.4% from the end of 1Q17. The investment portfolio consists primarily of debt securities, which represent 72.5% of Bancolombia’s total investments and 6.0% of assets at the end of 1Q18.

 

At the end of 1Q18, the debt securities portfolio had a duration of 20.7 months and a weighted average yield to maturity of 4.5%.

 

1.4.Goodwill and intangibles

 

As of 1Q18, Bancolombia’s goodwill and intangibles totaled COP 6,174 billion, decreasing by 6.9% compared to 4Q17. This variation is explained by the appreciation of the COP against the USD during the quarter.

 

1.5.Funding

 

As of March 31, 2018, Bancolombia’s liabilities totaled COP 177,756 billion, decreasing by 1.0% from the end of 4Q17 and increasing by 1.8% compared to 1Q17.

 

Deposits by customers totaled COP 130,165 billion (or 73.2% of liabilities) at the end of 1Q18, decreasing by 1.4% during the quarter and increasing by 4.5% over the last 12 months. The net loans to deposits ratio was 115.0% at the end of 1Q18.

 

Bancolombia’s funding strategy during the last months has been to reduce the average life of time deposits and promote saving and checking accounts in the consumer segment in order to keep the funding cost at a minimum. The objective is to build and maintain ample liquidity and reduce the sensitivity of the balance sheet to cuts in interest rates.

 

  4

 

 

   

 

Funding mix 1Q17 4Q17 1Q18
COP Million          
Checking accounts 20,213,911 12% 22,065,647 13% 20,246,222 12%
Saving accounts 49,294,251 30% 54,255,583 32% 54,549,203 33%
Time deposits 53,584,352 33% 53,961,586 32% 54,213,615 33%
Other deposits 5,621,646 3% 4,912,527 3% 5,187,212 3%
Long term debt 18,098,431 11% 19,648,714 12% 18,380,881 11%
Loans with banks 17,212,856 10% 14,906,743 9% 13,784,738 8%
Total Funds 164,025,447 100% 169,750,800 100% 166,361,871 100%

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 1Q18 was COP 21,952 billion, decreasing by 5.0% or COP 1,161 billion, compared to the value reported at the end of 4Q17. This decrease is mainly explained by the impact of IFRS 9 in the equity line “Accumulated other comprehensive income (loss), net of tax”, as well as, by the dividends declared in the Annual General Assembly of last March.

 

Bancolombia’s capital adequacy ratio was 13.7% in 1Q18.

 

Bancolombia’s capital adequacy ratio was 473 basis points above the minimum 9% required by the Colombian regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 10.2%, 566 basis points above the regulatory minimum of 4.5%. The tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 7.9% at the end of 1Q18.

 

In the last months, Bancolombia has generated capital organically due to the appropriation of earnings in March 2018 and to the efficient allocation of capital in different products. The annual increase in the RWA is mainly explained by the growth in the loan book, as well as the market risk.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS            
Consolidated (COP millions) 1Q17 % 4Q17 % 1Q18 %
Basic capital (Tier I) 17,798,470 10.53% 18,032,743 10.15% 18,557,539 10.16%
Additional capital (Tier II) 6,626,701 3.92% 7,143,524 4.03% 6,513,470 3.57%
Technical capital (1) 24,425,171   25,176,267   25,071,009  
Risk weighted assets including market risk 168,947,148   177,600,261   182,615,322  
CAPITAL ADEQUACY (2)   14.46%   14.18%   13.73%

 

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

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

 

  5

 

 

   

 

2.INCOME STATEMENT

 

Net income totaled COP 522 billion in 1Q18, or COP 542.47 per share - USD 0.78 per ADR. This net income represents a decrease of 42.1% compared to 4Q17 and of 14.3% compared to 1Q17. Bancolombia’s annualized ROE for 1Q18 was 9.2%.

 

2.1.Net Interest Income

 

Net interest income totaled COP 2,512 billion in 1Q18, 5.0% less than the one reported in 4Q17, and 4.1% less than the figure for 1Q17. During the quarter, the Net Interest Income was impacted negatively by the implementation of IFRS 9 which cause a reduction of COP 102 billion. Also, the Net Interest Income was impacted by the appreciation of the COP against the USD.

 

During 1Q18, the investment, interest rate derivatives and repos portfolio generated COP 114 billion, down by 33.8% from 4Q17.

 

Net Interest Margin

 

The annualized net interest margin decreased to 5.8% in 1Q18. The annualized net interest margin for investments was 0.5%, and the annualized net interest margin of the loan portfolio was 6.2%, decreasing compared to the one reported in 4Q17.

 

Annualized Interest      
Margin 1Q17 4Q17 1Q18
Loans' Interest margin 6.6% 6.3% 6.2%
Debt investments' margin 3.2% 2.6% 0.5%
Net interest margin 6.3% 6.0% 5.8%

 

Total funding cost decreased during 1Q18, due to the reduction of long-term debt, as well as a reduction of the average life of time deposits. Savings and checking accounts represented the same proportion of the total cost of funding as in 4Q17, and the annualized average weighted cost of deposits was 3.0% in 1Q18, decreasing 15 basis point compared to 4Q17 and 42 basis points compared to 1Q17.

 

Average weighted      
funding cost 1Q17 4Q17 1Q18
Checking accounts 0.00% 0.00% 0.00%
Saving accounts 2.37% 2.10% 1.94%
Time deposits 5.79% 5.44% 5.29%
Total deposits 3.45% 3.17% 3.02%
Long term debt 6.66% 6.24% 6.00%
Loans with banks 2.76% 2.33% 2.31%
Total funding cost 3.68% 3.39% 3.25%

 

2.2.Fees and Income from Services

 

During 1Q18, net fees and income from services totaled COP 680 billion, increasing by 3.4% compared to 4Q17, and 8.8% compared to 1Q17. The positive annual performance in fees compared with 1Q17 is due to higher volumes of transactions and the good performance of credit and debit cards, bancassurance, payments and collections and trust services.

 

  6

 

  

   

 

Fees from credit and debit cards increased by 9.8% compared to 4Q17, and 11.2% compared to 1Q17. Fees from asset management and trust services increased by 0.2% compared to 4Q17 and 15.8% compared to 1Q17, due to an increase in the assets under management. Fees from our bancassurance business decreased by 25.3% compared to 4Q17 and increased by 24.9% with respect to 1Q17, thanks to the continuation of cross-selling initiatives led by our sales teams.

 

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

 

ACCUMULATED CREDIT CARD BILLING % 2018
(COP millions) Jan-17 Jan-18 Growth Market Share
Bancolombia VISA 496,888 674,595 35.76% 11.39%
Bancolombia Mastercard 483,100 530,772 9.87% 8.96%
Bancolombia American Express 335,011 314,761 -6.04% 5.31%
Total Bancolombia 1,314,999 1,520,128 15.60% 25.66%
Colombian Credit Card Market 5,324,040 5,923,872 11.27%  
         
CREDIT CARD MARKET SHARE % 2018
(Outstanding credit cards) Jan-17 Jan-18 Growth Market Share
Bancolombia VISA 712,924 820,696 15.12% 4.94%
Bancolombia Mastercard 838,916 931,576 11.05% 5.60%
Bancolombia American Express 604,861 528,691 -12.59% 3.18%
Total Bancolombia 2,156,701 2,280,963 5.76% 13.72%
Colombian Credit Card Market 16,623,403 16,621,157 -0.01%  

Source: Superintendencia Financiera de Colombia

 

2.3.Other Operating Income

 

Total other operating income was COP 318 billion in 1Q18, decreasing by 42.9% compared to 4Q17, and by 9.9% compared to 1Q17.

 

Revenues from the operating leases totaled COP 145 billion in 1Q18, decreasing by 1.7% compared to 4Q17 and increasing by 4.3% compared to those reported in 1Q17. The annual increase is due to higher volumes of operations and delivered assets under leasing.

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The principal balance for past due loans (those that are overdue for more than 30 days) totaled COP 7,782 billion at the end of 1Q18 and represented 5.1% of total gross loans, increasing by 12.1% compared to 4Q17, when past due loans represented 4.5% of total gross loans. During 1Q18, Charge-offs totaled COP 647 billion.

 

The coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 105.5% at the end of 1Q18, decreasing compared to 107.5% at the end of 4Q17.

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 1,488 billion in 1Q18. During the quarter, the deterioration of loans increased mainly in the commercial segment and SMEs. Provision charges (net of recoveries) totaled COP 875 billion in 1Q18. Provisions as a percentage of the average gross loans were 2.2% for 1Q18 and 2.3% for the last 12 months.

 

Bancolombia maintains a strong balance sheet supported by an adequate level of loan loss reserves. Allowances (for the principal) for loan losses totaled COP 8.214 billion, or 5.3% of total loans at the end of 1Q18, increasing as compared to 4Q17.

 

  7

 

 

   

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY As of
(COP millions) 1Q17 4Q17 1Q18
Total 30-day past due loans 6,018,555 6,940,620 7,782,225
Allowance for loan losses (1) 6,414,376 7,462,401 8,213,979
Past due loans to total loans 4.10% 4.49% 5.06%
Allowances to past due loans 106.58% 107.52% 105.55%
Allowance for loan losses as a percentage of total loans 4.37% 4.83% 5.34%

(1) Allowances are reserves for the principal of loans.

 

PDL Per Category     30 days
  % Of loan Portfolio 1Q17 4Q17 1Q18
Commercial loans 69.3% 3.12% 3.39% 4.04%
Consumer loans 17.2% 5.27% 5.88% 6.40%
Mortgage loans 12.9% 7.43% 7.92% 8.18%
Microcredit 0.6% 12.39% 12.86% 13.88%
PDL TOTAL   4.10% 4.49% 5.06%
         
PDL Per Category     90 days
  % Of loan Portfolio 1Q17 4Q17 1Q18
Commercial loans 69.3% 1.97% 2.69% 2.85%
Consumer loans 17.2% 2.50% 3.16% 3.34%
Mortgage loans* 12.9% 2.91% 3.60% 3.65%
Microcredit 0.6% 7.48% 9.21% 8.82%
PDL TOTAL   2.22% 2.94% 3.08%

* Mortgage loans that were overdue were calculated for past due loans for 120 days instead of 90 days.

  

2.5.Operating Expenses

 

During 1Q18, operating expenses totaled COP 1,829 billion, increasing by 12.9% with respect to 4Q17 and decreasing by 1.6% with respect to 1Q17. The annual decrease in operating expenses is explained by several strategies done on this front, which includes the reduction in the network of branches, automation and optimization of processes and the rationalization of personal expenses.

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 763 billion in 1Q18, increasing by 54.2% compared to 4Q17 and decreasing by 3.4% compared to 1Q17. The quarterly variation is explained by a base effect due to a reversion of bonuses during 4Q17.

 

During 1Q18, administrative expenses totaled COP 702 billion, decreasing by 22.1% compared to 4Q17 and increasing by 14.1% as compared to 1Q17.

 

Depreciation and amortization expenses totaled COP 118 billion in 1Q18, decreasing by 3.3% compared to 4Q17 and 0.9% compared to 1Q17.

 

As of March 31, 2018, Bancolombia had 31,000 employees, owned 1,054 branches, 5,680 ATMs, 10,493 banking agents and served more than 12 million customers.

 

2.6.Taxes

 

Income tax expense was COP 311 billion for 1Q18, decreasing by 9.9% when compared to the income tax registered in 4Q17, and by 15.1% compared to 1Q17.

 

  8

 

   

 

3.BREAK DOWN OF OPERATIONS

 

The following table summarizes the financial statements of our operations in each country.

 

BANCOLOMBIA S.A. (STAND ALONE) - COLOMBIA

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
ASSETS          
Gross loans 106,724,791 113,609,285 114,433,308 0.73% 7.22%
Allowances for loans (5,756,119) (7,150,727) (7,550,734) 5.59% 31.18%
Investments 17,581,875 18,565,320 18,788,259 1.20% 6.86%
Other assets 15,553,909 17,183,966 16,937,072 -1.44% 8.89%
Total assets 134,104,455 142,207,845 142,607,906 0.28% 6.34%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits 77,654,502 85,321,406 86,488,060 1.37% 11.38%
Other liabilities 40,673,532 40,213,087 39,673,487 -1.34% -2.46%
Total liabilities 118,328,034 125,534,493 126,161,547 0.50% 6.62%
Shareholders' equity 15,776,421 16,673,352 16,446,360 -1.36% 4.25%
Total liabilities and shareholders' equity 134,104,455 142,207,845 142,607,906 0.28% 6.34%
           
Interest income 3,365,091 3,242,299 3,099,988 -4.39% -7.88%
Interest expense (1,303,521) (1,211,002) (1,153,345) -4.76% -11.52%
Net interest income 2,061,569 2,031,296 1,946,643 -4.17% -5.57%
Net provisions (647,868) (892,038) (762,128) -14.56% 17.64%
Fees and income from service, net 422,651 396,869 452,777 14.09% 7.13%
Other operating income 206,785 282,555 254,375 -9.97% 23.01%
Total operating expense (1,289,709) (1,010,814) (1,255,722) 24.23% -2.64%
Profit before tax 753,428 807,868 635,946 -21.28% -15.59%
Income tax (303,488) (297,621) (235,600) -20.84% -22.37%
Net income 449,940 510,247 400,345 -21.54% -11.02%

 

BANISTMO- PANAMA

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
ASSETS          
Gross loans 21,432,272 22,405,137 21,027,872 -6.15% -1.89%
Allowances for loans (579,729) (345,846) (584,021) 68.87% 0.74%
Investments 2,346,794 2,722,609 2,896,912 6.40% 23.44%
Other assets 3,255,955 3,337,605 2,968,978 -11.04% -8.81%
Total assets 26,455,291 28,119,504 26,309,742 -6.44% -0.55%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits 19,018,367 19,378,355 18,374,672 -5.18% -3.38%
Other liabilities 4,790,394 5,662,115 5,202,423 -8.12% 8.60%
Total liabilities 23,808,761 25,040,470 23,577,095 -5.84% -0.97%
Shareholders' equity 2,646,531 3,079,035 2,732,647 -11.25% 3.25%
Total liabilities and shareholders' equity 26,455,291 28,119,504 26,309,742 -6.44% -0.55%
           
Interest income 359,070 385,109 364,248 -5.42% 1.44%
Interest expense (124,981) (143,521) (135,511) -5.58% 8.42%
Net interest income 234,089 241,589 228,737 -5.32% -2.29%
Net provisions (60,937) 7,594 (53,630) -806.24% -11.99%
Fees and income from service, net 43,745 55,145 41,986 -23.86% -4.02%
Other operating income 1,970 5,129 2,882 -43.81% 46.28%
Total operating expense (150,057) (174,296) (133,287) -23.53% -11.18%
Profit before tax 68,810 135,160 86,688 -35.86% 25.98%
Income tax (10,956) (38,712) (17,587) -54.57% 60.53%
Net income 57,854 96,448 69,101 -28.35% 19.44%

  9

 

   

 

BANCO AGRÍCOLA- EL SALVADOR

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
ASSETS          
Gross loans 8,749,210 9,114,167 8,709,879 -4.44% -0.45%
Allowances for loans (335,797) (357,496) (326,604) -8.64% -2.74%
Investments 532,360 622,865 621,129 -0.28% 16.67%
Other assets 3,881,880 3,564,526 3,269,668 -8.27% -15.77%
Total assets 12,827,653 12,944,062 12,274,074 -5.18% -4.32%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits 8,705,596 9,191,818 8,663,548 -5.75% -0.48%
Other liabilities 2,666,316 2,111,769 2,171,409 2.82% -18.56%
Total liabilities 11,371,912 11,303,586 10,834,957 -4.15% -4.72%
Shareholders' equity 1,455,741 1,640,476 1,439,117 -12.27% -1.14%
Total liabilities and shareholders' equity 12,827,653 12,944,062 12,274,074 -5.18% -4.32%
           
Interest income 212,740 248,671 216,751 -12.84% 1.89%
Interest expense (64,712) (64,133) (60,005) -6.44% -7.27%
Net interest income 148,028 184,538 156,745 -15.06% 5.89%
Net provisions (30,899) (20,486) (32,009) 56.25% 3.59%
Fees and income from service, net 36,664 46,069 41,571 -9.76% 13.38%
Other operating income 1,107 433 3,771 770.70% 240.56%
Total operating expense (97,519) (116,638) (106,475) -8.71% 9.18%
Profit before tax 57,381 93,916 63,604 -32.28% 10.84%
Income tax (20,436) (34,016) (17,130) -49.64% -16.18%
Net income 36,945 59,900 46,474 -22.41% 25.79%

 

GRUPO AGROMERCANTIL HOLDING – GUATEMALA

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 1Q17 4Q17 1Q18 1Q18/4Q17 1Q18/1Q17
ASSETS          
Gross loans 8,409,818 8,902,627 8,481,592 -4.73% 0.85%
Allowances for loans (126,898) (188,369) (310,379) 64.77% 144.59%
Investments 1,603,335 1,584,745 1,357,455 -14.34% -15.34%
Other assets 1,926,094 1,892,866 1,609,287 -14.98% -16.45%
Total assets 11,812,350 12,191,869 11,137,955 -8.64% -5.71%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits 8,056,406 8,472,200 7,770,806 -8.28% -3.55%
Other liabilities 2,509,526 2,375,695 2,223,253 -6.42% -11.41%
Total liabilities 10,565,933 10,847,895 9,994,059 -7.87% -5.41%
Non-controlling interest 19,108 20,709 19,119 -7.68% 0.05%
Shareholders' equity 1,227,309 1,323,265 1,124,778 -15.00% -8.35%
Total liabilities and shareholders' equity 11,812,350 12,191,869 11,137,955 -8.64% -5.71%
           
Interest income 214,666 232,356 211,327 -9.05% -1.56%
Interest expense (87,423) (91,336) (84,842) -7.11% -2.95%
Net interest income 127,242 141,021 126,485 -10.31% -0.60%
Net provisions (29,417) (40,232) (32,833) -18.39% 11.61%
Fees and income from service, net 24,840 27,067 25,330 -6.42% 1.97%
Other operating income 10,108 19,499 12,291 -36.97% 21.59%
Total operating expense (107,749) (121,182) (109,353) -9.76% 1.49%
Profit before tax 25,025 26,172 21,919 -16.25% -12.41%
Income tax (3,145) (1,863) (4,651) 149.59% 47.85%
Net income before non-controlling interest 21,879 24,309 17,268 -28.96% -21.08%
Non-controlling interest (895) (709) (308) -56.58% -65.61%
Net income 20,984 23,600 16,960 -28.13% -19.18%

  10

 

  

   

 

4.RECENT DEVELOPMENTS

  

·March 14, 2018. The General Shareholders’ Assembly approved a profit distribution proposal and declared a dividend equal to COP $1,020 per outstanding share, to be paid as follows: COP $255 per share per quarter on the following dates: April 2, 2018, July 3, 2018, October 1, 2018 and January 2, 2019.

 

  11

 

 

   

 

5.BANCOLOMBIA Company Description (NYSE: CIB)

 

GRUPO BANCOLOMBIA is a full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 12 million customers. GRUPO 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 and local (Banistmo S.A.) banking subsidiaries in Panama, Guatemala, Cayman and Puerto Rico. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, among others.

 

Contact Information

 

Bancolombia’s Investor Relations

Phone: (574) 4041837 / (574) / (574) 4043917/ (574) 4041918.

E-mail: IR@bancolombia.com.co

Contacts: Alejandro Mejia (IR Manager) / Juliana Álvarez (Analyst) / Santiago López (Analista).

Website: http://www.grupobancolombia.com/wps/portal/about-us/corporate-information/investor-relations/

 

  12

 

 

   

 

BALANCE SHEET       Growth    
(COP million) Mar-17 Dec-17 Mar-18 mar-18 /
dec-17		 mar-18 /
mar-17		 % of
Assets		 % of
Liabilities
ASSETS              
Cash and balances at central bank        15,047,380        15,523,123        13,214,789 -14.87% -12.18% 6.58%  
Interbank borrowings          2,403,587          1,761,460          1,536,078 -12.80% -36.09% 0.76%  
Reverse repurchase agreements and other similar secured lend             933,844             881,061          2,101,645 138.54% 125.05% 1.05%  
Financial assets investments        15,146,243        16,377,253        16,720,642 2.10% 10.39% 8.32%  
Derivative financial instruments          1,629,255          1,134,372          1,385,187 22.11% -14.98% 0.69%  
Loans and advances to customers      152,341,183      160,468,094      158,645,460 -1.14% 4.14% 78.95%  
Allowance for loan and lease losses        (7,010,023)        (8,223,103)        (8,991,393) 9.34% 28.26% -4.47%  
Investment in associates and joint ventures          1,371,488          1,565,059          1,560,048 -0.32% 13.75% 0.78%  
Goodwill and Intangible assets, net          6,422,749          6,631,424          6,174,055 -6.90% -3.87% 3.07%  
Premises and equipment, net          3,019,732          3,127,405          3,046,733 -2.58% 0.89% 1.52%  
Investment property          1,617,160          1,657,409          1,679,465 1.33% 3.85% 0.84%  
Prepayments             300,682             287,550             297,857 3.58% -0.94% 0.15%  
Tax receivables             739,231             256,721             435,973 69.82% -41.02% 0.22%  
Deferred tax             727,225             148,614             660,022 344.12% -9.24% 0.33%  
Assets held for sale and inventories             251,814             377,003             372,794 -1.12% 48.04% 0.19%  
Other assets          1,800,448          1,934,766          2,106,215 8.86% 16.98% 1.05%  
Total assets      196,741,998      203,908,211      200,945,570 -1.45% 2.14% 100.00%  
LIABILITIES AND SHAREHOLDERS' EQUITY              
LIABILITIES               
Deposit by customers      124,496,843      131,959,215      130,164,630 -1.36% 4.55% 64.78% 73.23%
Interbank Deposits             726,366          1,084,591          1,231,999 13.59% 69.61% 0.61% 0.69%
Derivative financial instrument          1,248,707             945,853          1,433,810 51.59% 14.82% 0.71% 0.81%
Borrowings from other financial institutions        16,486,490        13,822,152        12,552,739 -9.18% -23.86% 6.25% 7.06%
Debt securities in issue        18,098,431        19,648,714        18,380,881 -6.45% 1.56% 9.15% 10.34%
Preferred shares             539,361             582,985             540,374 -7.31% 0.19% 0.27% 0.30%
Repurchase agreements and other similar secured borrowing          4,217,317          3,236,128          4,031,622 24.58% -4.40% 2.01% 2.27%
Liabilities relating to assets held for sale                       -                102,976               90,362 -12.25% 0.00% 0.04% 0.05%
Current tax             430,101             161,966             411,045 153.78% -4.43% 0.20% 0.23%
Deferred tax          1,848,570          1,440,198          1,834,873 27.40% -0.74% 0.91% 1.03%
Employees benefit plans             449,189             697,401             131,430 -81.15% -70.74% 0.07% 0.07%
Other liabilities          6,150,254          5,796,482          6,952,162 19.94% 13.04% 3.46% 3.91%
Total liabilities      174,691,629      179,478,661      177,755,927 -0.96% 1.75% 88.46% 100.00%
SHAREHOLDERS' EQUITY              
Share Capital             480,914             480,914             480,914 0.00% 0.00% 0.24%  
Additional paid-in-capital          4,857,454          4,857,454          4,857,454 0.00% 0.00% 2.42%  
Appropriated reserves          9,049,252          9,045,155          9,935,857 9.85% 9.80% 4.94%  
Retained earnings          4,134,418          6,183,182          4,422,159 -28.48% 6.96% 2.20%  
Accumulated other comprehensive income (loss), net of tax          2,344,343          2,546,259          2,255,674 -11.41% -3.78% 1.12%  
Stockholders’ equity attributable to the owners of the parent company        20,866,381        23,112,964        21,952,058 -5.02% 5.20% 10.92%  
Non-controlling interest          1,183,988          1,316,586          1,237,585 -6.00% 4.53% 0.62%  
Total liabilities and equity      196,741,998      203,908,211      200,945,570 -1.45% 2.14% 100.00%  

  

  13

 

   

 

INCOME STATEMENT       Growth
(COP million) 1Q 17 4Q 17 1Q 18 1Q18 / 4Q17 1Q18 / 1Q17
Interest income and expenses          
Interest on loans and financial leases          
Commercial      2,029,581      1,983,801      1,793,042 -9.62% -11.65%
Consumer         872,418      1,022,645         994,257 -2.78% 13.97%
Small business loans           60,550           58,855           53,737 -8.70% -11.25%
Mortgage         499,423         412,237         495,092 20.10% -0.87%
Leasing         535,607         494,914         487,909 -1.42% -8.91%
Interest income on loans and financial leases      3,997,579      3,972,452      3,824,037 -3.74% -4.34%
Interest income on overnight and market funds             5,015             6,523             8,418 29.05% 67.86%
Interest and valuation on Investments          
Debt investments, net           41,768           39,780           44,326 11.43% 6.12%
Net gains from investment activities at fair value through income statement          
Debt investments         189,260         199,761           83,403 -58.25% -55.93%
Derivatives            (5,033)          (27,433)           12,211 144.51% 342.62%
Repos          (22,642)          (37,073)          (10,464) -71.77% -53.79%
Other            (2,991)            (2,405)          (15,192) 531.68% 407.92%
Total Net gains from investment activities at fair value through profit and loss         158,594         132,850           69,958 -47.34% -55.89%
Total Interest and valuation on investments           200,362         172,630         114,284 -33.80% -42.96%
Total interest and valuation      4,202,956      4,151,605      3,946,739 -4.93% -6.10%
Interest expense          
Borrowing costs        (179,317)        (148,166)        (135,269) -8.70% -24.56%
Overnight funds            (3,866)            (2,484)            (1,868) -24.80% -51.68%
Debt securities in issue        (306,491)        (304,478)        (285,113) -6.36% -6.98%
Deposits     (1,072,879)     (1,031,530)        (992,525) -3.78% -7.49%
Preferred Shares Dividends          (15,091)          (14,980)          (15,091) 0.74% 0.00%
Other interest (expense)            (4,006)            (3,968)            (4,328) 9.07% 8.04%
Total interest expenses     (1,581,650)     (1,505,606)     (1,434,194) -4.74% -9.32%
Net interest margin and valuation income on financial instruments before impairment on loans and financial leases and off balance sheet credit instruments       2,621,306      2,645,999      2,512,545 -5.04% -4.15%
Credit impairment charges on loans and advance and financial leases        (863,290)     (1,072,421)        (964,038) -10.11% 11.67%
Recovery of charged-off loans           72,155         159,628           84,403 -47.13% 16.97%
Credit impairment charges on/recoveries on off balance sheet credit instruments           16,677          (17,575)             4,619 126.28% -72.30%
Total credit impairment charges, net        (774,458)        (930,368)        (875,016) -5.95% 12.98%
Net interest margin and valuation income on financial instruments after impairment on loans and financial leases and off balance sheet credit instruments      1,846,848      1,715,631      1,637,529 -4.55% -11.33%
Fees and commissions income          
Banking services         207,466         233,831         215,444 -7.86% 3.85%
Credit and debit card fees and commercial establishments         293,460         297,064         326,250 9.82% 11.17%
Brokerage             5,335             4,865             5,783 18.87% 8.40%
Acceptances and Guarantees           14,025           12,707           10,994 -13.48% -21.61%
Trust           82,860           95,720           95,934 0.22% 15.78%
Bancassurance           77,861         130,166           97,217 -25.31% 24.86%
Payments and Collections           55,340           62,483           62,491 0.01% 12.92%
Other         108,811         143,989         111,907 -22.28% 2.85%
Fees and commission income         845,158         980,825         926,020 -5.59% 9.57%
Fees and commission expenses          
Banking services          (93,287)        (107,782)        (105,464) -2.15% 13.05%
Other        (127,033)        (215,415)        (140,639) -34.71% 10.71%
Fees and commission expenses        (220,320)        (323,197)        (246,103) -23.85% 11.70%
Total fees and comissions, net         624,838         657,628         679,917 3.39% 8.81%
Other operating income          
Derivatives FX contracts          (14,623)           34,391        (185,628) -639.76% 1169.42%
Net foreign exchange           97,211           42,686         228,464 435.22% 135.02%
Hedging                 (27)               (778)               (436) -43.96% 1514.81%
Operating leases         138,761         147,264         144,787 -1.68% 4.34%
Gains (or losses) on sale of assets             7,233           27,152           11,371 -58.12% 57.21%
Other reversals                674                918                828 -9.80% 22.85%
Other         124,172         306,730         119,071 -61.18% -4.11%
Total other operating income         353,401         558,363         318,457 -42.97% -9.89%
Dividends received, and share of profits of equity method investees           
Dividends           11,137           11,152           11,713 5.03% 5.17%
Equity investments             2,006           15,470            (2,802) -118.11% -239.68%
Equity method           19,275         149,109           39,255 -73.67% 103.66%
Impairment charges on joint ventures                   -           (173,339)                   -    -100.00% 0.00%
Total dividends received, and share of profits of equity method investees           32,418             2,392           48,166 1913.63% 48.58%
Total operating income, net      2,857,505      2,934,014      2,684,069 -8.52% -6.07%

  14

 

 

   

 

INCOME STATEMENT       Growth
(COP million) 1Q 17 4Q 17 1Q 18 1Q18 / 4Q17 1Q18 / 1Q17
Operating expenses          
Salaries and employee benefits        (644,019)        (555,300)        (642,082) 15.63% -0.30%
Bonuses        (145,810)           60,422        (120,993) -300.25% -17.02%
Other administrative and general expenses        (615,291)        (901,266)        (701,972) -22.11% 14.09%
Tax contributions and other tax burden        (216,085)          (32,472)        (179,180) 451.80% -17.08%
Impairment, depreciation and amortization        (119,533)        (122,488)        (118,384) -3.35% -0.96%
Other expenses          (60,263)          (68,682)          (66,271) -3.51% 9.97%
Equity Tax          (57,766)                   -                      -    0.00% -100.00%
Total operating expenses     (1,858,767)     (1,619,786)     (1,828,882) 12.91% -1.61%
Profit before tax         998,738      1,314,228         855,187 -34.93% -14.37%
Income tax        (366,685)        (345,556)        (311,138) -9.96% -15.15%
Profit for the year from continuing operations         632,053         968,672         544,049 -43.84% -13.92%
Non-controlling interest          (23,299)          (66,771)          (22,289) -66.62% -4.33%
Net income         608,754         901,901         521,760 -42.15% -14.29%

 

  15

 

  

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 15, 2018 By: /s/  JAIME ALBERTO VELÁSQUEZ B.  
    Name: Jaime Alberto Velásquez B.  
    Title: Vice President of Strategy and Finance