UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 6-K

 

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

 

For the month of March, 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:  March 05, 2012  By:   /s/  JAIME ALBERTO VELÁSQUEZ B.  
    Name:   Jaime Alberto Velásquez B.  
    Title:   Executive Vice President of Corporate Development (I)  

 

 
 

 

 

4Q11

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 504 BILLION FOR THE FOURTH QUARTER OF 2011 (COP 640 PER SHARE - USD 1.32 PER ADR), WHICH REPRESENTS AN INCREASE OF 17% COMPARED TO THE SAME QUARTER LAST YEAR.

 

·Net loans grew 7% during the quarter and 27% compared to 4Q10. This growth is in line with the current environment of solid credit demand in Colombia.
·Net interest income increased 1.5% during the quarter and 18.5% compared to 4Q10. These increases are the result of loan growth coupled with a funding strategy that allowed the Bank to maintain a moderate cost of deposits during the quarter as a measure to defend the net interest margin, which ended the period at 5.62%
·Loan portfolio quality continues showing a good trend. Loan deterioration during 4Q11 was COP 89 billion, and past due loans as a percentage of total loans were 2.2%. Net provision charges for past due loans and foreclosed assets totaled COP 328 billion for the quarter.
·The balance sheet remains strong. Loan loss reserves represented 4.6% of total loans and 210% of past due loans at the end of 4Q11. The capital adequacy ratio ended the quarter at 12.5% (Tier 1 of 9%).
·Profitability. The annualized return on equity (“ROE”) for 4Q11 was 23.1%. ROE for the year 2011 was 20.2%, which represents an increase from the 19.7% reported in 2010.

 

March 5, 2012. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the fourth quarter of 2011.

 

For the quarter ended December 31, 2011 (“4Q11”), Bancolombia reported consolidated net income of COP 504 billion, or COP 640 per share – USD 1.32 per ADR, which represents an increase of 19% as compared to the results for the quarter ended September 30, 2011 (“3Q11”) and of 17% as compared to the results for the quarter ended on December 31, 2010 (“4Q10”). Cumulative net income for 2011 was COP 1,664 billion, 16% higher than that for the same period of the previous year.

 

Bancolombia ended 4Q11 with COP 85,463 billion in assets, 6% higher than those at the end of 3Q11 and 26% greater than at the end 4Q10. At the same time, liabilities totaled COP 76,470 billion and increased 6% as compared to the figure presented in 3Q11 and 27% as compared to 4Q101.

 

 

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 December 31, 2011. The statements of income for the quarter ended December 31, 2011 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 January 1, 2012 COP$1942.70=US$ 1

 

1
 

 

4Q11

 

BANCOLOMBIA: Summary of consolidated financial quarterly results2

CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT  Quarter   Growth 
(COP millions)  4Q10   3Q11   4Q11   4Q11/3Q11   4Q11/4Q10 
ASSETS                         
Loans and financial leases, net   46,091,877    54,745,266    58,575,846    7.00%   27.08%
Investment securities, net   8,675,762    11,012,486    9,958,191    -9.57%   14.78%
Other assets   13,327,517    14,864,457    16,928,983    13.89%   27.02%
Total assets   68,095,156    80,622,209    85,463,020    6.00%   25.51%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits   43,538,967    48,472,078    52,434,492    8.17%   20.43%
Non-interest bearing   7,632,216    7,290,767    8,814,173    20.90%   15.49%
Interest bearing   35,906,751    41,181,311    43,620,319    5.92%   21.48%
Other liabilities   16,609,049    23,684,139    24,035,169    1.48%   44.71%
Total liabilities   60,148,016    72,156,217    76,469,661    5.98%   27.14%
Shareholders' equity   7,947,140    8,465,992    8,993,359    6.23%   13.16%
Total liabilities and shareholders' equity   68,095,156    80,622,209    85,463,020    6.00%   25.51%
                          
Interest income   1,253,001    1,548,720    1,647,149    6.36%   31.46%
Interest expense   392,221    542,969    626,852    15.45%   59.82%
Net interest income   860,780    1,005,751    1,020,297    1.45%   18.53%
Net provisions   (80,792)   (86,665)   (328,408)   278.94%   306.49%
Fees and income from service, net   420,031    409,191    466,994    14.13%   11.18%
Other operating income   160,344    116,892    341,557    192.20%   113.02%
Total operating expense   (813,602)   (919,426)   (903,694)   -1.71%   11.07%
Goodwill amortization   (12,960)   (11,709)   (15,026)   28.33%   15.94%
Non-operating income, net   20,011    (3,266)   55,476    1798.59%   177.23%
Income tax expense   (124,685)   (86,326)   (133,354)   54.48%   6.95%
Net income   429,127    424,442    503,842    18.71%   17.41%

 

PRINCIPAL RATIOS  Quarter   As of 
   4Q10   3Q11   4Q11   Dec-10   Dec-11 
PROFITABILITY                         
Net interest margin (1)   5.98%   5.98%   5.62%   6.16%   5.91%
Return on average total assets (2)   2.59%   2.20%   2.42%   2.27%   2.20%
Return on average shareholders´ equity (3)   22.07%   20.58%   23.11%   19.71%   20.22%
EFFICIENCY                         
Operating expenses to net operating income   57.35%   60.79%   50.23%   56.28%   57.58%
Operating expenses to average total assets   4.99%   4.83%   4.41%   4.89%   4.76%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   11.67%   10.50%   10.52%   11.67%   10.52%
Technical capital to risk weighted assets   14.67%   12.97%   12.46%   14.67%   12.46%
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS (USD)   1.14    1.12    1.32           
Net income per share $COP   544.70    538.75    639.53           
P/BV ADS (4)   2.94    2.50    2.53           
P/BV Local (5) (6)   2.92    2.63    2.49           
P/E (7)   13.56    12.90    11.19           
ADR price (8)   61.91    55.70    59.56           
Common share price (8)   29,500    28,300    28,480           
Shares outstanding (9)   787,827,003    787,827,003    787,827,003           
USD exchange rate (quarter end)   1,913.98    1,929.01    1,942.70           

  

 

(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
 

 

4Q11

 

1.BALANCE SHEET

 

1.1.Assets

 

As of December 31, 2011, Bancolombia’s assets totaled COP 85,463 billion, which represents an increase of 6% compared to 3Q11 and of 26% compared to 4Q10.

 

Prepaid expenses and deferred charges increased 146% in 4Q11 versus 4Q10. This increase is explained by the recording of deferred expenses for COP 469 billion in 1Q11, related to the wealth tax that Bancolombia and its subsidiaries will pay from 2011 to 2014. The value recorded in this line will be amortized during the next four years and will be shown mainly as a reduction in the reappraisal and others account, although a portion will be reflected on the administrative expenses and others account. As of December 2011, the prepaid expenses and deferred charges account had COP 343 billion related to this wealth tax.

 

The property, plant and equipment account increased 2% during 4Q11 and 38% with respect to 4Q10. These variations are mainly explained by the increase in the import of equipment for leasing operations, and also by investments and capitalized expenses related to technology.

 

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 = 1942,70 COP)      4Q11/3Q11   4Q11/4Q10       4Q11/3Q11   4Q11/4Q10       4Q11/3Q11   4Q11/4Q10       4Q11/3Q11   4Q11/4Q10 
Net investment securities   7,961,749    -5.29%   18.64%   1,996,442    -23.38%   1.60%   1,027,664    -23.92%   0.10%   9,958,191    -9.57%   14.78%
Gross Loans   44,412,947    5.95%   23.11%   16,975,481    9.65%   35.52%   8,738,087    8.88%   33.52%   61,388,428    6.95%   26.31%
Commercial loans   24,835,488    4.26%   13.88%   13,377,509    12.19%   45.66%   6,886,040    11.40%   43.50%   38,212,997    6.91%   23.30%
Consumer loans   8,830,864    10.02%   42.83%   2,015,182    -0.06%   1.04%   1,037,310    -0.76%   -0.45%   10,846,046    8.00%   32.64%
Small business loans   276,646    1.70%   12.82%   40,260    -3.03%   307.82%   20,724    -3.71%   301.79%   316,906    1.07%   24.24%
Mortgage loans   4,027,722    7.97%   59.73%   812,946    0.17%   -1.02%   418,462    -0.54%   -2.49%   4,840,668    6.57%   44.81%
Finance lease   6,442,227    6.16%   21.15%   729,584    6.08%   41.39%   375,552    5.34%   39.30%   7,171,811    6.15%   22.94%
Allowance for loan losses   (2,411,862)   5.74%   13.11%   (400,720)   7.49%   6.31%   (206,270)   6.73%   4.74%   (2,812,582)   5.99%   12.09%
Net total loans and fin. leases   42,001,085    5.96%   23.74%   16,574,761    9.71%   36.43%   8,531,817    8.93%   34.41%   58,575,846    7.00%   27.08%
Operating leases, net   1,278,940    16.98%   36.57%   101,117    0.52%   45.24%   52,050    -0.19%   43.09%   1,380,057    15.59%   37.17%

 

The most relevant aspects regarding the evolution of the loan portfolio during 4Q11 were:

 

·     The dynamic growth of consumer loans in Colombia during 4Q11 and compared to 4Q10. Conversely, consumer loans in USD, which correspond to the operation in El Salvador, decreased 1% during 4Q11 and 0.5% during the past 12 months.

 

·     Demand for loans denominated in USD by Colombian companies. The increase in international trade flows played an important role in the growth of loans denominated in USD as companies demanded credit to finance their exporting activities and the working capital needs associated with them. The Colombian government, in an effort to control external debt in dollars that could result in further appreciation of the COP, imposed a withholding tax on the interest paid by Colombian companies on loans granted to them by banks domiciled outside Colombia. This tax motivated companies with loans in USD granted by foreign banks to start taking loans in USD with domestic banks, which was one of the reasons for the growth in Bancolombia’s USD denominated loan book.

 

·     Net loans in USD correspond to loans originated in Colombia (USD 3,553 million, 42%), El Salvador (USD 2,358 million, 28%) and other countries (USD 2,621 million, 31%).

 

·     The COP depreciated 1% against the USD during 4Q11.

 

3
 

 

4Q11

 

·     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 4Q11, and decreased slightly in the past 12 months.

 

·     Financial leases, 90% of which are denominated in COP, increased 6% during the quarter and 23% as compared to 4Q10. Operating leases, net of depreciation, increased 16% during the quarter and 37% 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 SME loans were key drivers of the growth of the total loan portfolio during the quarter as they increased 7% with respect to 3Q11. This increase is explained by higher demand for working capital and financing by SMEs, personal loans and car loans. On the other hand, corporate loans increased 7% in the same period due to higher demand for working capital and financing by corporations.

 

Reserves for loan losses increased 6% during 4Q11 and totaled COP 2,813 billion, or 4.6% 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)  Dec-10   Sep-11   Dec-11   4Q11/3Q11   4Q11/4Q10   loans   Category 
CORPORATE                                   
Working capital loans   22,004,869    24,316,016    26,236,561    7.90%   19.23%   42.74%   84.98%
Funded by domestic development banks   319,333    269,850    263,995    -2.17%   -17.33%   0.43%   0.86%
Trade Financing   2,897,022    4,138,336    4,228,396    2.18%   45.96%   6.89%   13.70%
Overdrafts   43,753    100,583    95,834    -4.72%   119.03%   0.16%   0.31%
Credit Cards   38,009    44,398    47,369    6.69%   24.63%   0.08%   0.15%
TOTAL CORPORATE   25,302,986    28,869,183    30,872,155    6.94%   22.01%   50.29%   100.00%
RETAIL AND SMEs                                   
Working capital loans   4,722,945    5,930,290    6,393,396    7.81%   35.37%   10.41%   34.55%
Personal loans   4,539,948    5,369,049    5,819,639    8.39%   28.19%   9.48%   31.45%
Loans funded by   domestic development banks   679,442    667,109    693,703    3.99%   2.10%   1.13%   3.75%
Credit Cards   2,634,703    3,158,648    3,329,334    5.40%   26.36%   5.42%   17.99%
Overdrafts   174,693    253,217    187,113    -26.11%   7.11%   0.30%   1.01%
Automobile loans   1,334,880    1,788,166    1,993,814    11.50%   49.36%   3.25%   10.78%
Trade Financing   35,063    64,796    86,795    33.95%   147.54%   0.14%   0.47%
TOTAL RETAIL AND SMEs   14,121,674    17,231,275    18,503,794    7.38%   31.03%   30.14%   100.00%
MORTGAGE   3,342,881    4,542,280    4,840,668    6.57%   44.81%   7.89%   100.00%
FINANCIAL LEASES   5,833,549    6,756,251    7,171,811    6.15%   22.94%   11.68%   100.00%
Total loans and financial leases   48,601,090    57,398,989    61,388,428    6.95%   26.31%   100.00%   100.00%
Allowance for loan losses   (2,509,213)   (2,653,723)   (2,812,582)   5.99%   12.09%          
Total loans and financial leases, net   46,091,877    54,745,266    58,575,846    7.00%   27.08%          

 

1.3.Investment Portfolio

 

As of December 31, 2011, Bancolombia’s net investment portfolio totaled COP 9,958 billion, decreasing 10% compared to 3Q11 and increasing 15% compared to 4Q10. The investment portfolio is mainly composed of debt investment securities, which represented 92% of Bancolombia’s total investments and 11% of assets at the end of 4Q11. Investments denominated in USD totaled USD 1,027 million and represented 20% of the investment portfolio. Additionally, the Bank has COP 1,861 billion in mortgage backed securities, which represent 19% of the investment portfolio. The duration of the debt securities portfolio was 21 months with a yield to maturity of 4.39% at the end of 4Q11.

 

4
 

 

4Q11

 

1.4.Goodwill

 

As of 4Q11, Bancolombia’s goodwill totaled COP 680 billion and decreased 5% compared to the amount reported in 3Q11. 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). As of December 31, 2011, Bancolombia’s goodwill included USD 342 million related mostly to the acquisition of Banagrícola in 2007.

 

1.5.Funding

 

As of December 31, 2011, Bancolombia’s liabilities totaled COP 76.470 billion and increased 6% compared to 3Q11 and 27% compared to 4Q10. The ratio of net loans to deposits (including borrowings from domestic development banks) was 105% at the end of 4Q11, decreasing compared to the figure reported in 3Q11 (106%), and increasing compared to the figure for 4Q10 (100%). The growth of the loan portfolio and Bancolombia’s ability to obtain funds through long-term bond issuances resulted in the higher ratio of net loans to deposits for the quarter.

 

Deposits totaled COP 52,434 billion (or 69% of liabilities) at the end of 4Q11 and increased 8% during the quarter and 20% over the last 12 months. CDs represented 35% of deposits in 4Q10, and 34% of deposits in 4Q11. This decrease is in line with the funding strategy executed by the Bank during the past year, which has consisted of taking advantage of the greater liquidity and low interest rates through increasing savings and checking accounts. As a result of this recomposition of the funding mix, demand deposits went from representing 65% of the Bank’s total deposits in 4Q10, to representing 66% as of the end of 4Q11.

 

DEPOSIQ MIX  4Q10   3Q11   4Q11 
COP Million     %      %      % 
Checking accounts   9,555,933    21.95%   9,819,942    20.26%   10,293,894    19.63%
Saving accounts   18,060,869    41.48%   20,290,667    41.86%   23,263,051    44.37%
Time deposits   15,270,271    35.07%   17,787,650    36.70%   17,973,117    34.28%
Other   651,894    1.50%   573,819    1.18%   904,430    1.72%
Total deposits   43,538,967        48,472,078        52,434,492     

  

At the end of 4Q11, Bancolombia had outstanding bonds for USD 2,540 million in international markets and COP 5,375 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 4Q11 was COP 8,993 billion, increasing 13% or COP 1,046 billion with respect to the COP 7,947 billion reported at the end of 4Q10.

 

Bancolombia’s capital adequacy ratio was 12.46%, 51 basis points below the 12.97% for 3Q11 and 221 bps below the 14.67% for 4Q10. The decrease in the capital adequacy ratio is explained by the dynamic growth of the Bank’s loan portfolio and assets.

 

Bancolombia’s capital adequacy ratio was 346 basis points above the minimum level required by Colombia’s regulator, while the basic capital ratio (tier 1) was 8.98% and the tangible capital ratio, which is equal to shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 8.96% at the end of 4Q11.

 

5
 

 

 

4Q11

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS

Consolidated (COP millions)  4Q10   %   3Q11   %   4Q11   % 
Basic capital (Tier I)   6,343,769    10.32%   6,817,714    9.31%   6,979,026    8.99%
Additional capital (Tier II)   2,673,679    4.35%   2,684,736    3.67%   2,696,112    3.47%
Technical capital (1)   9,017,448         9,502,451         9,675,138      
Risk weighted assets included market risk   61,449,661         73,237,366         77,651,096      
CAPITAL ADEQUACY (2)   14.67%        12.97%        12.46%     

  

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

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

 

6
 

 

4Q11

 

2.INCOME STATEMENT

 

Net income totaled COP 504 billion in 4Q11, or COP 640 per share – USD 1.32 per ADR, which represents an increase of 19% compared to 3Q11 and of 17% compared to 4Q10. Bancolombia’s ROE was 23.1% for 4Q11, higher than the annualized ROE of 20.6% for 3Q11 and the 22% of 4Q10.

 

2.1.Net Interest Income

 

Net interest income totaled COP 1,020 billion in 4Q11, 1% higher than that reported in 3Q11, and 19% higher than the figure for 4Q10. Interest income increased 6% during the quarter, and interest expense increased 11%. The increase of interest paid on liabilities was lead by the interest on bonds outstanding, which increased 17% in 4Q11 due to growth in the amount of bonds outstanding resulting from the issuance that took place in November 2011, and the payment of coupons in dollars at a higher exchange rate.

 

During 4Q11, income generated by the investment portfolio totaled COP 120 billion, a figure 33% lower than the COP 181 billion for 3Q11 and 11% higher than the COP 109 billion for 4Q10. The decrease in income from investments during the quarter is explained by the lower value of Colombian government securities, associated presumably to the lower appetite of investors for these titles due to the uncertainty that the European crisis generated in the markets.

 

Net Interest Margin

 

Annualized net interest margin ended 4Q11 at 5.6%. Annualized net interest margin for investments was 1.4%, while the annualized net interest margin for loans, financial leases and overnight funds was 6.3%.

 

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

 

The funding cost increased during 4Q11 as deposits continued to reflect the increase in interest rates by the Colombian Central Bank. The annualized weighted average cost of deposits reached 2.8% in 4Q11, higher than the 2.7% for 3Q11 and the 2.4% for 4Q10.

 

Deposits' weighted            
average cost  4Q10   3Q11   4Q11 
Checking accounts   0.48%   0.44%   0.42%
Time deposits   3.98%   4.18%   4.46%
Saving accounts   1.96%   2.63%   2.72%
Total deposits   2.39%   2.73%   2.84%

 

2.2.Fees and Income from Services

 

During 4Q11, net fees and income from services totaled COP 467 billion, increasing 14% compared to those reported in 3Q11 and 11% higher than those reported in 4Q10. In particular, fees from credit and debit cards increased 12% with respect to 3Q11, and 21% with respect to 4Q10, and fees from banking services increased 5% with respect to 3Q11 and 20% with respect to 4Q10. Fees from brokerage services increased 197% in 4Q11 and 190% compared to 4Q10 due to the income generated from the distribution of the different equity issuances that took place in Colombia during the quarter.

 

7
 

 

4Q11

  

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

 

ACCUMULATED CREDIT CARD BILLING  As of   %   2011 
(COP millions)  Dec-10   Dec-11   Growth   Market Share 
Bancolombia VISA   1,912,045    2,247,043    17.52%   7.86%
Bancolombia Mastercard   2,318,740    2,675,815    15.40%   9.36%
Bancolombia American Express   2,459,915    2,992,160    21.64%   10.46%
Total Bancolombia   6,690,699    7,915,018    18.30%   27.68%
Colombian Credit Card Market   24,382,998    28,595,486    17.28%     

 

CREDIT CARD MARKET SHARE          %   2011 
(Outstanding credit cards)  Dec-10   Dec-11   Growth   Market Share 
Bancolombia VISA   327,787    376,475    14.85%   5.88%
Bancolombia Mastercard   350,271    390,561    11.50%   6.10%
Bancolombia American Express   456,055    571,006    25.21%   8.91%
Total Bancolombia   1,134,113    1,338,042    17.98%   20.89%
Colombian Credit Card Market   5,608,067    6,405,140    14.21%     
Source: Credibanco y Redeban multicolor                    

 

2.3.Other Operating Income

 

Total other operating income was COP 342 billion in 4Q11, 192% higher than in 3Q11, and 113% higher than in 4Q10. Income from foreign exchange gains and derivatives denominated in foreign currencies increased 35% in the quarter due to the depreciation of the COP against the USD.

 

Notably, revenues aggregated in the communication, postage, rent and others totaled COP 66 billion in 4Q11, 17% higher as compared to 3Q11 and 37% higher as compared to 4Q10. This line includes commercial discounts and operating leases payments, which have grown as the value of assets rented under operating leasing contract has increased. Finally, a gain of COP 138 billion was recorded for the sale of AFP Crecer in El Salvador.

 

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 89 billion in 4Q11. The new vintages of loans have a low deterioration and contribute to the improvement of the loan portfolio quality.

 

Past due loans (those overdue more than 30 days) totaled COP 1,341 billion at the end of 4Q11, which represents 2.2% of total gross loans. The PDL ratio decreased from 2.5% in 3Q11 and 2.9% at the end of 4Q10. Loan charge-offs totaled COP 188 billion in 4Q11.

 

Provision charges (net of recoveries) totaled COP 328 billion in 4Q11. The greater provision charges in 4Q11 are explained by countercyclical provisions associated to the new loans originated in 2011, and to the change in the parameters used in the models required by the Superintendency of Finance for calculating expected loss. The change in these parameters resulted in additional provisions of COP 25 billion in 4Q11.

 

8
 

 

 

4Q11

 

Bancolombia maintains a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,812 billion, or 4.6% of total loans at the end of 4Q11, remaining stable with respect to the 4.6% presented at the end of 3Q11, and decreasing with respect to the 5.2% at the end of 4Q10. Additionally, coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 210% at the end of 4Q11. Likewise, coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 120% at the end of 4Q11.

 

The following tables present key metrics for asset quality:

 

ASSET QUALITY      As of       Growth 
( COP millions)  Dec-10   Sep-11   Dec-11   4Q11/3Q11   4Q11/4Q10 
Total performing past due loans (1)   467,140    518,331    410,152    -20.87%   -12.20%
Total non-performing past due loans   928,759    921,055    930,540    1.03%   0.19%
Total past due loans   1,395,899    1,439,386    1,340,692    -6.86%   -3.95%
Allowance for loans interest losses   2,509,213    2,653,723    2,812,582    5.99%   12.09%
Past due loans to total loans   2.87%   2.51%   2.18%          
Non-performing loans as a percentage of total loans   1.91%   1.60%   1.52%          
“C”, “D” and “E” loans as a percentage of total loans   4.32%   3.92%   3.82%          
Allowances to past due loans (2)   179.76%   184.36%   209.79%          
Allowance for loan losses as a percentage of “C”, “D” and “E” loans (2)   119.59%   117.91%   119.83%          
Allowance for loan losses as a percentage of non-performing loans (2)   270.17%   288.12%   302.25%          
Allowance for loan losses as a percentage of total loans   5.16%   4.62%   4.58%          
Percentage of performing loans to total loans   98.09%   98.40%   98.48%          

 

(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.

 

PDL Per Category (30 days)                 
% Of loan Portfolio   4Q10   3Q11   4Q11 
Commercial loans   62.25%   2.1%   1.76%   1.4%
Consumer loans   17.67%   3.6%   3.51%   3.3%
Microcredit   0.52%   8.7%   9.22%   8.6%
Mortgage loans   7.89%   9.1%   6.67%   6.6%
Finance lease   11.68%   2.1%   1.87%   1.7%
PDL TOTAL   100.00%   2.87%   2.51%   2.18%

 

PDL Per Category (90 days)                 
% Of loan Portfolio   4Q10   3Q11   4Q11 
Commercial loans   62.25%   1.5%   1.27%   1.0%
Consumer loans   17.67%   1.7%   1.55%   1.6%
Microcredit   0.52%   5.3%   5.81%   5.0%
Mortgage loans   7.89%   4.4%   3.15%   3.0%
Finance lease   11.68%   1.4%   1.18%   1.2%
TOTAL LOAN PORTFOLIO   100.00%   1.7%   1.48%   1.28%

 

9
 

 

4Q11

 

LOANS AND FINANCIAL LEASES CLASSIFICATION  Dec-10   Sep-11   Dec-11 
( COP millions)                    
¨A¨ Normal   44,914,187    92.4%   53,822,788    93.8%   57,095,160    93.0%
¨B¨ Subnormal   1,588,798    3.3%   1,325,637    2.3%   1,946,067    3.2%
¨C¨ Deficient   606,901    1.2%   797,671    1.4%   913,893    1.4%
¨D¨ Doubtful recovery   1,014,289    2.1%   865,523    1.5%   848,682    1.4%
¨E¨ Unrecoverable   476,915    1.0%   587,370    1.0%   584,626    1.0%
Total   48,601,090    100%   57,398,989    100%   61,388,428    100%
                               
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases   4.3%        3.9%        3.8%     

 

2.5.Operating Expenses

 

During 4Q11, operating expenses totaled COP 904 billion, decreasing 2% compared to 3Q11 and increasing 11% compared to 4Q10.

 

Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 389 billion in 4Q11, increasing 9% as compared to 3Q11 and 12% as compared to 4Q10.

 

During 4Q11, administrative and other expenses totaled COP 421 billion, decreasing 13% compared to 3Q11, and increasing 9% compared to 4Q10. This variation during the quarter is explained by lower expenses for advisory fees.

 

Depreciation expenses totaled COP 65 billion in 4Q11, increasing 17% as compared to 3Q11 and 31% compared to 4Q10.

 

At the end of 4Q11 Bancolombia had 24,119 employees and 952 branches.

 

10
 

 

4Q11

 

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) /Catalina Botero (Analyst)

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

 

11
 

 

 

4Q11

 

BALANCE SHEET                        
(COP million)  Dec-10   Sep-11   Dec-11   Last
Quarter		   Annual   % of
Assets		   % of Liabilities 
ASSETS                                   
Cash and due from banks   5,312,398    5,278,593    6,818,307    29.17%   28.35%   7.98%    
Overnight funds sold   842,636    806,053    910,690    12.98%   8.08%   1.07%     
Total cash and equivalents   6,155,034    6,084,646    7,728,997    27.02%   25.57%   9.04%     
Debt securities   8,226,811    10,165,627    9,201,210    -9.49%   11.84%   10.77%     
Trading   2,230,533    4,780,614    3,706,039    -22.48%   66.15%   4.34%     
Available for Sale   2,245,951    1,756,172    1,759,483    0.19%   -21.66%   2.06%     
Held to Maturity   3,750,327    3,628,841    3,735,688    2.94%   -0.39%   4.37%     
Equity securities   539,318    906,053    838,973    -7.40%   55.56%   0.98%     
Trading   266,135    296,487    305,764    3.13%   14.89%   0.36%     
Available for Sale   273,183    609,566    533,209    -12.53%   95.18%   0.62%     
Market value allowance   -90,367    -59,194    -81,992    38.51%   -9.27%   -0.10%     
Net investment securities   8,675,762    11,012,486    9,958,191    -9.57%   14.78%   11.65%     
Commercial loans   30,992,403    35,744,366    38,212,997    6.91%   23.30%   44.71%     
Consumer loans   8,177,175    10,042,690    10,846,046    8.00%   32.64%   12.69%     
Microcredit   255,082    313,539    316,906    1.07%   24.24%   0.37%     
Mortgage loans   3,342,881    4,542,143    4,840,668    6.57%   44.81%   5.66%     
Finance lease   5,833,549    6,756,251    7,171,811    6.15%   22.94%   8.39%     
Allowance for loan losses   -2,509,213    -2,653,723    -2,812,582    5.99%   12.09%   -3.29%     
Net total loans and financial leases   46,091,877    54,745,266    58,575,846    7.00%   27.08%   68.54%     
Accrued interest receivable on loans   356,484    464,760    482,833    3.89%   35.44%   0.56%     
Allowance for accrued interest losses   -38,952    -40,427    -43,644    7.96%   12.05%   -0.05%     
Net total interest accrued   317,532    424,333    439,189    3.50%   38.31%   0.51%     
Customers' acceptances and derivatives   784,888    930,191    741,296    -20.31%   -5.55%   0.87%     
Net accounts receivable   797,715    840,161    1,016,985    21.05%   27.49%   1.19%     
Net premises and equipment   1,174,625    1,595,994    1,622,311    1.65%   38.11%   1.90%     
Foreclosed assets, net   70,277    53,461    53,194    -0.50%   -24.31%   0.06%     
Prepaid expenses and deferred charges   319,864    759,692    785,456    3.39%   145.56%   0.92%     
Goodwill   750,968    718,637    679,861    -5.40%   -9.47%   0.80%     
Operating leases, net   1,006,108    1,193,919    1,380,057    15.59%   37.17%   1.61%     
Other   1,185,977    1,482,911    1,697,648    14.48%   43.14%   1.99%     
Reappraisal of assets   764,529    780,512    783,989    0.45%   2.55%   0.92%     
Total assets   68,095,156    80,622,209    85,463,020    6.00%   25.51%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
DEPOSITS                                   
Non-interest bearing   7,632,216    7,290,767    8,814,173    20.90%   15.49%   10.31%   11.53%
Checking accounts   6,980,322    6,716,948    7,909,743    17.76%   13.31%   9.26%   10.34%
Other   651,894    573,819    904,430    57.62%   38.74%   1.06%   1.18%
Interest bearing   35,906,751    41,181,311    43,620,319    5.92%   21.48%   51.04%   57.04%
Checking accounts   2,575,611    3,102,994    2,384,151    -23.17%   -7.43%   2.79%   3.12%
Time deposits   15,270,271    17,787,650    17,973,117    1.04%   17.70%   21.03%   23.50%
Savings deposits   18,060,869    20,290,667    23,263,051    14.65%   28.80%   27.22%   30.42%
Total deposits   43,538,967    48,472,078    52,434,492    8.17%   20.43%   61.35%   68.57%
Overnight funds   1,958,846    3,089,294    1,954,552    -36.73%   -0.22%   2.29%   2.56%
Bank acceptances outstanding   645,374    707,342    513,975    -27.34%   -20.36%   0.60%   0.67%
Interbank borrowings   2,698,941    3,465,631    4,130,915    19.20%   53.06%   4.83%   5.40%
Borrowings from domestic development banks   2,551,646    2,988,391    3,328,011    11.36%   30.43%   3.89%   4.35%
Accounts payable   1,696,201    1,740,716    2,173,253    24.85%   28.12%   2.54%   2.84%
Accrued interest payable   296,580    363,090    397,412    9.45%   34.00%   0.47%   0.52%
Other liabilities   689,426    573,814    874,330    52.37%   26.82%   1.02%   1.14%
Bonds   5,718,376    9,666,416    10,308,983    6.65%   80.28%   12.06%   13.48%
Accrued expenses   283,047    1,024,702    280,282    -72.65%   -0.98%   0.33%   0.37%
Minority interest in consolidated subsidiaries   70,612    64,743    73,456    13.46%   4.03%   0.09%   0.10%
Total liabilities   60,148,016    72,156,217    76,469,661    5.98%   27.14%   89.48%   100.00%
SHAREHOLDERS' EQUITY                            0.00%     
Subscribed and paid in capital   393,914    393,914    393,914    0.00%   0.00%   0.46%     
Retained earnings   6,483,741    7,117,518    7,639,808    7.34%   17.83%   8.94%     
Appropiated   5,047,247    5,957,466    5,975,914    0.31%   18.40%   6.99%     
Unappropiated   1,436,494    1,160,052    1,663,894    43.43%   15.83%   1.95%     
Reappraisal and others   1,051,856    952,303    947,790    -0.47%   -9.89%   1.11%     
Gross unrealized gain or loss on debt securities   17,629    2,257    11,847    424.90%   -32.80%   0.01%     
Total shareholder's equity   7,947,140    8,465,992    8,993,359    6.23%   13.16%   10.52%     

 

12
 

 

4Q11

 

INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Dec-10   Dec-11   Dic-11/Dic-10   4Q10   3Q11   4Q11   4Q11/3Q11   4Q11/4Q10 
Interest income and expenses                                        
Interest on loans   3,892,114    4,660,580    19.74%   991,475    1,200,725    1,339,611    11.57%   35.11%
Interest on investment securities   454,368    625,559    37.68%   108,735    180,678    120,278    -33.43%   10.62%
Overnight funds   41,998    18,820    -55.19%   6,694    3,117    6,575    110.94%   -1.78%
Leasing   572,160    640,635    11.97%   146,097    164,200    180,685    10.04%   23.67%
Total interest income   4,960,640    5,945,594    19.86%   1,253,001    1,548,720    1,647,149    6.36%   31.46%
Interest expense   -    -         -    -    -           
Checking accounts   38,858    39,926    2.75%   11,329    10,955    11,248    2.67%   -0.71%
Time deposits   693,746    690,457    -0.47%   159,920    181,702    199,273    9.67%   24.61%
Savings deposits   321,662    479,442    49.05%   85,516    130,515    148,177    13.53%   73.27%
Total interest on deposits   1,054,266    1,209,825    14.76%   256,765    323,172    358,698    10.99%   39.70%
Interbank borrowings   19,537    45,840    134.63%   5,923    8,396    21,900    160.84%   269.75%
Borrowings from domestic development banks   139,032    159,909    15.02%   31,590    44,971    45,689    1.60%   44.63%
Overnight funds   40,451    85,260    110.77%   13,701    18,460    27,682    49.96%   102.04%
Bonds   318,295    541,172    70.02%   84,242    147,970    172,883    16.84%   105.22%
Total interest expense   1,571,581    2,042,006    29.93%   392,221    542,969    626,852    15.45%   59.82%
Net interest income   3,389,059    3,903,588    15.18%   860,780    1,005,751    1,020,297    1.45%   18.53%
Provision for loan and accrued interest losses, net   (788,794)   (840,558)   6.56%   (179,920)   (173,103)   (353,970)   104.49%   96.74%
Recovery of charged-off loans   276,209    244,141    -11.61%   96,701    69,942    57,586    -17.67%   -40.45%
Provision for foreclosed assets and other assets   (67,187)   (123,994)   84.55%   (12,009)   (34,451)   (46,467)   34.88%   286.93%
Recovery of provisions for foreclosed assets and other assets   32,057    121,706    279.65%   14,436    50,947    14,443    -71.65%   0.05%
Total net provisions   (547,715)   (598,705)   9.31%   (80,792)   (86,665)   (328,408)   278.94%   306.49%
Net interest income after provision for loans   -    -         -    -    -           
and accrued interest losses   2,841,344    3,304,883    16.31%   779,988    919,086    691,889    -24.72%   -11.29%
Commissions from banking services and other services   307,890    383,984    24.71%   85,755    98,224    103,001    4.86%   20.11%
Electronic services and ATM fees   57,019    67,267    17.97%   15,999    17,945    18,689    4.15%   16.81%
Branch network services   118,647    125,835    6.06%   32,684    31,930    34,356    7.60%   5.12%
Payment fees   226,537    224,878    -0.73%   62,306    55,937    60,141    7.52%   -3.47%
Credit card merchant fees   18,355    16,725    -8.88%   7,052    4,064    4,024    -0.98%   -42.94%
Credit and debit card annual fees   564,457    617,526    9.40%   139,818    150,999    169,428    12.20%   21.18%
Checking fees   69,425    74,514    7.33%   17,622    19,418    18,675    -3.83%   5.98%
Fiduciary activities   165,075    188,340    14.09%   40,042    47,449    46,283    -2.46%   15.59%
Pension plan administration   90,131    -    -100.00%   24,107    -    -    0.00%   -100.00%
Brokerage fees   36,779    65,943    79.30%   11,736    11,476    34,104    197.18%   190.59%
Check remittance   17,693    19,626    10.93%   4,774    5,120    5,431    6.07%   13.76%
International operations   58,559    71,293    21.75%   15,575    16,437    20,188    22.82%   29.62%
Fees and other service income   1,730,567    1,855,931    7.24%   457,470    458,999    514,320    12.05%   12.43%
Fees and other service expenses   (149,653)   (187,347)   25.19%   (37,439)   (49,808)   (47,326)   -4.98%   26.41%
Total fees and income from services, net   1,580,914    1,668,584    5.55%   420,031    409,191    466,994    14.13%   11.18%
Other operating income   -    -         -    -    -           
Net foreign exchange gains   62,110    111,774    79.96%   41,053    41,171    61,695    49.85%   50.28%
Derivatives Financial Contracts   39,536    11,034    -72.09%   3,225    (5,943)   (13,990)   135.40%   -533.80%
Gains(loss) on sales of investments on equity securities   45,716    121,166    165.04%   2,495    (16,595)   139,049    937.90%   5473.11%
Securitization income   85,862    48,714    -43.26%   41,648    12,715    15,358    20.79%   -63.12%
Dividend income   34,699    27,700    -20.17%   2,200    3,393    908    -73.24%   -58.73%
Revenues from commercial subsidiaries   87,625    100,647    14.86%   23,160    25,670    26,623    3.71%   14.95%
Insurance income   2,808    45,690    1527.14%   (1,788)   -    45,690    0.00%   2655.37%
Communication, postage, rent and others   176,700    224,512    27.06%   48,351    56,481    66,224    17.25%   36.97%
Total other operating income   535,056    691,237    29.19%   160,344    116,892    341,557    192.20%   113.02%
Total income   4,957,314    5,664,704    14.27%   1,360,363    1,445,169    1,500,440    3.82%   10.30%
Operating expenses   -    -         -    -    -           
Salaries and employee benefits   1,139,947    1,275,351    11.88%   303,752    313,392    343,624    9.65%   13.13%
Bonus plan payments   126,839    137,160    8.14%   40,624    32,077    40,292    25.61%   -0.82%
Compensation   27,551    29,347    6.52%   3,935    10,148    4,782    -52.88%   21.52%
Administrative and other expenses   1,455,025    1,780,459    22.37%   385,660    484,122    420,984    -13.04%   9.16%
Deposit insurance net   84,399    90,769    7.55%   22,033    22,733    24,704    8.67%   12.12%
Donation expenses   13,008    19,020    46.22%   7,940    1,379    4,032    192.39%   -49.22%
Depreciation   195,744    223,003    13.93%   49,658    55,575    65,276    17.46%   31.45%
Total operating expenses   3,042,513    3,555,109    16.85%   813,602    919,426    903,694    -1.71%   11.07%
Net operating income   1,914,801    2,109,595    10.17%   546,761    525,743    596,746    13.51%   9.14%
Goodwill amortization (1)   55,966    51,239    -8.45%   12,960    11,709    15,026    28.33%   15.94%
Non-operating income (expense)   -    -    0.00%   -    -    -    0.00%   0.00%
Other income   267,472    200,098    -25.19%   105,205    32,937    78,261    137.61%   -25.61%
Minority interest   (13,217)   (11,351)   -14.12%   (2,116)   (3,083)   (3,132)   1.59%   48.02%
Other expense   (168,179)   (112,692)   -32.99%   (83,078)   (33,120)   (19,653)   -40.66%   -76.34%
Total non-operating income   86,076    76,055    -11.64%   20,011    (3,266)   55,476    1798.59%   177.23%
Income before income taxes   1,944,911    2,134,411    9.74%   553,812    510,768    637,196    24.75%   15.06%
Income tax expense   (508,417)   (470,517)   -7.45%   (124,685)   (86,326)   (133,354)   54.48%   6.95%
Net income   1,436,494    1,663,894    15.83%   429,127    424,442    503,842    18.71%   17.41%

 

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