Form 6-K
Table of Contents

 
 
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 August, 2009.
Commission 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): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(2): o
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o     No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-__________.
 
 

 

 


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(BANCOLOMBIA LOGO)
CONSOLIDATED FINANCIAL RESULTS
FOR THE QUARTER ENDED
JUNE 30, 2009
         
Contacts
       
Sergio Restrepo
  Jaime A. Velásquez   Juan E. Toro
Executive VP
  Financial VP   IR Manager
Tel.: (574) 4041424
  Tel.: (574) 4042199   Tel.: (574) 4041837

 

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This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. (“BANCOLOMBIA”) and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of Superintendency of Finance in Colombia, collectively COL GAAP. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank’s principal accounting policies in the quarter ended June 30, 2009. The statements of income for the quarter ended June 30, 2009 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: July 1, 2009 COP. 2,145.21= US$ 1 Average Representative Market Rate 1H09 COP 2,326.40 = US$

 

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(BANCOLOMBIA LOGO)
1. SUMMARY
Bancolombia S.A. (“BANCOLOMBIA” or the “Bank”) reports consolidated net income of 253.1 billion Colombian pesos (“COP”) for the quarter ended June 30, 2009 (“2Q09”) or COP 321.29 per share-U.S. $0.60 per ADR. For the first six months of 2009, (“1H09”) net income totaled COP 564.2 billion, decreasing 10.3% as compared to the first six months of 2008 (“1H08).
During 2Q09, BANCOLOMBIA maintained its strong balance sheet. The Bank reserves for loan losses represented 5.2% of total loans by the end of 2Q09 while coverage, measured by the ratio of allowances for loans and accrued interest losses to past due loans (overdue more than 30 days), increased to 137.3% in 2Q09. On the other hand, past due loans ratio improved, decreasing from 4.0% in 1Q09 to 3.9% by the end of 2Q09.
Driven primarily by corporate lending, BANCOLOMBIA experienced loan growth in COP denominated loans during 2Q09, increasing 5% and 17% as compared to the end of the quarter ended March 31, 2009 (“1Q09”) and the quarter ended June 30, 2008 (“2Q08”) respectively. Likewise, deposits continued their positive performance reaching COP 42,888 billion as of June 30, 2009, representing an increase of 24% as compared to 2Q08, while the ratio of net loans to deposits (including borrowings from development banks) remained stable at 92% at the end of 2Q09.
In 2Q09 net interest income decreased 6% as compared to 1Q09 as the Bank experienced margin compression driven by the rapid decrease in interest rates in Colombia; the weighted average of the interest rates for 90 day CDs offered by the Colombian financial system (“DTF”) felt 259 basis points during the quarter. As a result, the Bank’s net interest margins compressed as a significant portion of BANCOLOMBIA’s loan portfolio is indexed to DTF.
In addition, the Bank’s non-interest income was mixed during 2Q09:
   
Net fees and income from services continued its positive performance reaching a record COP 379.7 billion for 2Q09, representing an increase of 27.0% as compared to 2Q08.
   
Other operating income amounted to COP 20 billion, decreasing 89.8% as compared to 2Q08 due to the negative impact in the line item of income from derivative financial instruments caused by a COP 62.9 billion non-recurring charge during 2Q09, related to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator. The Bank notes that it finished amortizing the reduction in the carrying value of derivatives in 2Q09. For further information about non-recurring events please see Section 2.1 “Effect of non-recurring items in results” of this report.
The Bank’s results were impacted by high credit cost as net provision charges totaled COP 345.0 billion in 2Q09, an increase of 43% as compared to 2Q08, although stable as compared to the COP 339.9 billion provision charges for 1Q09. In addition, operating expenses totaled COP 681.3 billion, decreasing for the second consecutive quarter (down 5% as compared to 1Q09).
Overall, the annualized return on average shareholders’ equity (“ROE”) for 2Q09 is 16.5% while the ROE for the first six months of 2009 is 18.2%.
Shareholders’ equity amounted to COP 6,213 billion by the end of 2Q09 while capital adequacy (tier 1+ 2 capital ratio) finished at 12.94% in 2Q09, up from 12.73% in 1Q09.

 

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(BANCOLOMBIA LOGO)
BANCOLOMBIA: Summary of consolidated financial quarterly results2.
                                         
CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT   Quarter     Growth  
(COP millions)   2Q 08     1Q 09     2Q 09     2Q 09 / 1Q 09     2Q 09 / 2Q 08  
ASSETS
                                       
Loans and financial leases, net
    37,710,491       43,492,984       42,383,700       -2.55 %     12.39 %
Investment securities, net
    6,168,070       8,268,653       7,549,268       -8.70 %     22.39 %
Other assets
    10,432,007       13,182,624       13,334,336       1.15 %     27.82 %
 
                             
Total assets
    54,310,568       64,944,261       63,267,304       -2.58 %     16.49 %
 
                             
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Deposits
    34,538,354       43,515,189       42,888,356       -1.44 %     24.18 %
Non-interest bearing
    4,764,975       5,071,172       5,008,486       -1.24 %     5.11 %
Interest bearing
    29,773,379       38,444,017       37,879,870       -1.47 %     27.23 %
Other liabilities
    14,480,464       15,350,824       14,165,459       -7.72 %     -2.18 %
Total liabilities
    49,018,818       58,866,013       57,053,815       -3.08 %     16.39 %
Shareholders’ equity
    5,291,750       6,078,248       6,213,489       2.22 %     17.42 %
 
                             
Total liabilities and shareholders’ equity
    54,310,568       64,944,261       63,267,304       -2.58 %     16.49 %
 
                             
 
                                       
Interest income
    1,494,665       1,790,817       1,652,790       -7.71 %     10.58 %
Interest expense
    636,839       805,646       726,356       -9.84 %     14.06 %
Net interest income
    857,826       985,171       926,434       -5.96 %     8.00 %
Net provisions
    (241,685 )     (339,913 )     (344,957 )     1.48 %     42.73 %
Fees and income from service, net
    298,984       367,047       379,719       3.45 %     27.00 %
Other operating income
    195,761       126,372       20,025       -84.15 %     -89.77 %
Total operating expense
    (609,566 )     (716,667 )     (681,306 )     -4.93 %     11.77 %
Goodwill amortization
    (10,497 )     (20,193 )     (18,104 )     -10.35 %     72.47 %
Non-operating income, net
    29,883       27,181       24,920       -8.32 %     -16.61 %
Income tax expense
    (145,359 )     (117,873 )     (53,608 )     -54.52 %     -63.12 %
 
                             
Net income
    375,347       311,125       253,123       -18.64 %     -32.56 %
 
                             
                                         
    Quarter     As of  
PRINCIPAL RATIOS   2Q08     1Q09     2Q09     Jun-08     Jun-09  
PROFITABILITY
                                       
Net interest margin (1)
    7.51 %     7.06 %     6.66 %     7.26 %     6.88 %
Return on average total assets (2)
    2.860 %     1.950 %     1.58 %     2.41 %     1.77 %
Return on average shareholders’ equity (3)
    29.50 %     19.95 %     16.54 %     24.40 %     18.22 %
EFFICIENCY
                                       
Operating expenses to net operating income
    45.84 %     49.84 %     52.74 %     47.12 %     51.21 %
Operating expenses to average total assets
    4.72 %     4.61 %     4.37 %     4.67 %     4.50 %
CAPITAL ADEQUACY
                                       
Shareholders’ equity to total assets
    9.74 %     9.36 %     9.82 %                
Technical capital to risk weighted assets
    11.82 %     12.73 %     12.94 %                
KEY FINANCIAL HIGHLIGHTS
                                       
Net income per ADS (USD)
    0.99       0.62       0.60       1.66       1.34  
Net income per share $COP
    476.43       394.92       321.29       798.68       716.21  
P/BV ADS (4)
    2.24       1.61       2.07                  
P/BV Local (5) (6)
    2.12       1.58       2.08                  
P/E (7)
    7.62       7.77       12.75                  
ADR price (8)
    31.30       19.47       30.50                  
Common price (8)
    14,220       12,220       16,400                  
Shares outstanding (9)
    787,827,003       787,827,003       787,827,003                  
US Dollar exchange rate (quarter end)
    1,923.02       2,544.24       2,145.21                  
 
     
(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 by the end of the respective quarter.
 
(9)  
Common and preferred.

 

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2. CONSOLIDATED BALANCE SHEET
2.1. Assets
As of June 30, 2009, BANCOLOMBIA’s assets totaled COP 63,267 billion, representing a decrease of 3% as compared to the end of 1Q09 and an increase of 17% as compared to the end of 2Q08. Assets denominated in currencies other than COP (primarily U.S. dollars) represented 27% of total assets (or U.S. 7.9 billion) by the end of 2Q09. The 16% appreciation of the COP against the U.S. dollar during 2Q09 affected the COP conversion of assets denominated in currencies other than COP and accounted for the 3% decrease in the Bank’s assets at the end of 2Q09.
Asset structure remained stable during 2Q09: net loans and financial leases accounted for 67.0% of assets, representing no change as compared to the previous quarter, while net investments securities decreased to 11.9% from 12.7%, and cash and equivalents increased to 10.7% from 10.0% as compared to 1Q09.
2.1.1 Loan Portfolio
As of June 30, 2009, BANCOLOMBIA’s gross loans totaled COP 44,714 billion, decreasing 2% as compared to 1Q09 and increasing 14% as compared to 2Q08. As of June 30, 2009 U.S. dollar denominated loans represented 25% of the loan portfolio; therefore, COP appreciation also had a significant impact on the COP conversion of the U.S. dollar denominated loans.
During 2Q09, BANCOLOMBIA maintained a strong balance sheet through the adequate coverage of its loan portfolio. For further explanation regarding coverage of the loan portfolio, please see Section 3 “Asset Quality & Balance Sheet Strength” of this report.
Overall, BANCOLOMBIA maintained its position as leader in the Colombian and Salvadorian markets in 2Q09. According to ASOBANCARIA (Colombia’s national banking association), BANCOLOMBIA’s gross loans market share of the Colombian financial system as of June 2009 was 21.8%, favorably compared to the 21.2% market share the firm had by the end of 2Q08. Likewise, according to ABANSA (El Salvador’s national banking association), Banco Agricola, Bancolombia’s subsidiary in El Salvador, had a market share of 30.2% of Salvadorian gross loans as of June 30, 2009, increasing significantly from the 28.5%% market share at the end of 2Q08.
Peso denominated lending activity and loan portfolio
Last quarter was a dynamic period for lending activity for COP denominated loans which account for 75% of total loans, representing an increase of 5% and 17% as compared to the figures presented at the end of 1Q9 and 2Q08, respectively. Loan growth was driven by commercial loans which increased 9% during 2Q09, and was slightly off-set by consumer loans which decreased 2% during 2Q09. Loan growth in 2Q09 was driven to a large extent by loans in the oil & gas sector, infrastructure development, commercial electricity generation and telecommunications.
Mortgage loans presented no significant growth in 2Q09 and increased 0.4% when accounting for securitized mortgage loans (BANCOLOMBIA securitized COP 259.9 billion of mortgage loans in the local market in 2Q09). However, mortgage applications increased as a result of the Colombian government’s housing subsidy program that was implemented in April 09 and also by lower long-term interest rates in Colombia. The housing subsidy consists of interest rate relief (paid by the Colombian Government directly to mortgage lenders) ranging from 3 to 5 percentage points deducted from the total interest rate (depending on the size of the mortgage). The housing subsidy is only applicable for the purchase of new houses, has a time frame of 7 years from disbursement and is not cumulative with other housing subsidies.

 

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U.S. dollar denominated lending activity
U.S. dollar denominated lending remained weak, reflecting a lower demand for credit in the Bank’s off-shore subsidiaries (explained by lower international trade flows from our clients) and a lower economic environment in El Salvador. Net.net, loans amounted to U.S. $5.2 billion by the end of 2Q09, decreasing 5.1% as compared to 2Q08.
The following table summarizes BANCOLOMBIA’S total loan portfolio:
                                         
LOAN PORTFOLIO   As of     Growth  
(COP millions)   30-Jun-08     31-Mar-09     30-Jun-09     Jun-09/Mar-09     Jun-09/Jun-08  
CORPORATE
                                       
Working capital loans
    16,147,393       19,912,726       20,480,489       2.85 %     26.83 %
Loans funded by domestic development banks
    983,613       1,139,681       754,878       -33.76 %     -23.25 %
Trade Financing
    993,021       1,759,618       1,536,181       -12.70 %     54.70 %
Overdrafts
    227,848       106,149       108,467       2.18 %     -52.40 %
Credit Cards
    43,414       45,081       38,577       -14.43 %     -11.14 %
 
                             
TOTAL CORPORATE
    18,395,289       22,963,255       22,918,592       -0.19 %     24.59 %
 
                             
RETAIL AND SMEs
                                       
Working capital loans
    3,913,770       4,180,779       4,139,241       -0.99 %     5.76 %
Personal loans
    3,982,508       4,390,615       4,009,022       -8.69 %     0.67 %
Loans funded by domestic development banks
    807,006       887,381       841,001       -5.23 %     4.21 %
Credit Cards
    2,220,956       2,495,335       2,409,140       -3.45 %     8.47 %
Overdrafts
    306,272       300,937       305,275       1.44 %     -0.33 %
Automobile loans
    1,358,355       1,313,282       1,228,467       -6.46 %     -9.56 %
Trade Financing
    96,566       119,932       98,344       -18.00 %     1.84 %
 
                             
TOTAL RETAIL AND SMEs
    12,685,433       13,688,261       13,030,490       -4.81 %     2.72 %
 
                             
MORTGAGE
    3,149,911       3,521,499       3,271,842       -7.09 %     3.87 %
 
                             
FINANCIAL LEASES
    5,096,379       5,670,912       5,492,600       -3.14 %     7.77 %
 
                             
Total loans and financial leases
    39,327,012       45,843,927       44,713,524       -2.47 %     13.70 %
Allowance for loan losses and financial leases
    (1,616,521 )     (2,350,943 )     (2,329,824 )     -0.90 %     44.13 %
 
                             
Total loans and financial leases, net
    37,710,491       43,492,984       42,383,700       -2.55 %     12.39 %
 
                             
2.1.2. Investment Portfolio
As of June 30, 2009, BANCOLOMBIA’s net investment securities amounted to COP. 7,549 billion, representing a 9% decrease as compared to the end of 1Q09, and an increase of 22% as compared to the figures at the end of 2Q09. Net investment securities are primarily investments in debt securities, which represented 98% of BANCOLOMBIA’s net investment securities portfolio at the end of 2Q09 and 11.6% of total assets, down from 12.4% of assets represented at the end of 1Q09.

 

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2.2. Funding
As of June 30, 2009, BANCOLOMBIA’s liabilities reached COP 57,054 billion, decreasing 3% as compared to 1Q09 and increasing 16% as compared to 2Q08.
As a result of an expansionist monetary policy, the Colombian monetary market’s liquidity has remained adequate allowing the local capital markets to function properly. In fact, local bond issuances activity continued to be dynamic during 2Q09. During the first half of 2009 new corporate bonds issued in the local market accounted for COP 5.8 trillion, an amount approximately three times greater than that corresponding to bonds issued in the local market during 1H08.
Regardless of the type of currency, the Bank has maintained a solid liquidity position. In particular, the Bank continued to experience deposit growth in 2Q09, with deposits totaling COP 42,888 billion, an increase of COP 8,350 billion, or 24% as compared to 2Q08. COP denominated deposits, 71% of BANCOLOMBIA’s total deposits, increased 1% and 22% as compared to 1Q09 and 2Q08 respectively. During the last year, the Bank increased its market share of deposits within Colombia’s banking system from 18.5% in June 2008 to 19.7% in June 2009. In El Salvador, through its subsidiary Banco Agricola, the Bank increased its market share of deposits from 29.8% in June 2008 to 31.1% in June 2009.
With regard to the funding mix, non-interest bearing deposits decreased 1% over 2Q09 reaching COP 5,008 billion. On a yearly basis, non-interest bearing deposits increased 5% from the figure presented at the end of 2Q08. On the other hand, interest bearing deposits decreased 1% during 2Q09 as compared to 1Q09. Overall, time deposits slightly decreased their relative size in the funding mix to 50% from 51% in 1Q09, while demand deposits increased to 49% from 48% at the end of 1Q09.
U.S. dollar denominated deposits continued to grow, increasing 10% in 2Q09 as compared to 1Q09 (measured in U.S. dollars), as the Bank’s off-shore banking franchises continue to benefit from underlying growth, particularly from increasing client fund inflows and deposit growth in El Salvador. As a result of the solid performance of U.S. dollar denominated deposits, U.S. dollar interbank borrowings decreased 39% in 2Q09 as compared to 1Q09, while U.S. dollar denominated borrowing from domestic development banks decreased 43% in the same period.
Overall, as a result of the growth of deposits, the Bank’s liabilities structure has changed in the last year. As of June 30, 2009, deposits represented 75% of total liabilities, up from 70% at the end of 2Q08, while the ratio of net loans to deposits (including borrowings from development banks) remained stable at 92% at the end of 2Q09. On the other hand, liabilities in the form of bonds or notes amounted to COP 3,894 billion, a decrease of 2% as compared to 1Q09 while borrowing from domestic development banks and interbank borrowings line items decreased 11%.
                                                 
Deposits Mix                                          
COP Millions   Jun-08             Mar-09             Jun-09          
Checking accounts
    5,892,512       17.06 %     7,285,850       16.74 %     6,878,151       16.04 %
Time deposits
    16,097,667       46.61 %     22,165,667       50.94 %     21,508,359       50.15 %
Savings deposits
    12,150,236       35.18 %     13,644,258       31.36 %     14,133,895       32.96 %
Others
    397,939       1.15 %     419,414       0.96 %     367,951       0.86 %
 
                                   
Total deposits
    34,538,354       100.00 %     43,515,189       100.00 %     42,888,356       100.00 %
 
                                   

 

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2.3. Shareholders’ equity and regulatory capital
Shareholders’ equity amounted to COP 6,213 billion at the end of 2Q09, increasing from COP 6,078 billion at the end of 1Q09, driven primarily by the quarter’s results. On a yearly basis, shareholders’ equity increased 17.4% as compared to the end of 2Q08.
During 2Q09, the Bank’s capital adequacy slightly increased. Capital adequacy (tier 1+ 2 capital ratio) finished 2Q09 at 12.9%, up from 12.7% in 1Q09. Basic capital (tier 1) ratio at the end of 2Q09 was 10.0% while additional capital (tier 2) ratio was 2.9%.
                                                 
TECHNICAL CAPITAL RISK WEIGHTED ASSETS                                    
Consolidated (COP millions)   Jun-08     %     Mar-09     %     Jun-09     %  
Basic capital (Tier I)
    4,569,691       9.49 %     5,544,550       9.62 %     5,540,492       9.99 %
Additional capital (Tier II)
    1,122,139       2.33 %     1,792,719       3.11 %     1,632,250       2.94 %
Technical capital (1)
    5,691,830       11.82 %     7,337,270       12.73 %     7,172,742       12.94 %
Risk weighted assets included market risk
    48,139,875               57,657,657               55,434,962          
 
                                   
CAPITAL ADEQUACY (2)
    11.82 %             12.73 %             12.94 %        
 
                                   
     
(1)  
Technical capital is the sum of basic and additional capital.
 
(2)  
Capital adequacy is technical capital divided by risk weighted assets.

 

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3. INCOME STATEMENT
BANCOLOMBIA reported net income of COP 253.1 billion for the quarter ended June 30, 2009 (COP 321.29 per share or U.S. $0.60 per ADR) representing a decrease of 19% as compared to 1Q09 and a decrease of 33% as compared to 2Q08. The results are primarily explained by lower revenues (lower other operating income and net interest income, though slightly off-set by the good performance of fees) and provisions charges that remained high during 2Q09. On the positive side, operating expenses decreased 5% in 2Q09 as compared to 1Q09 and the Bank finished amortizing the reduction in the carrying value of derivatives during 2Q09, relating to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator.
For the 1H09, net income totaled COP 564.2 billion, decreasing 10.3% as compared to the 1H08.
ROE for 2Q09 is 16.5% while the ROE for the first six months of 2009 is 18.2%.
3.1. Effect of non-recurring items in results
The Bank’s results in 2Q09 and 2Q08 presented significant non-recurring items that affect the comparison basis between periods. The following is a summary of the most representative non-recurring events.
Other operating income line item was impacted by:
   
A positive non-recurring impact in the line item of sales of equity securities in 2Q08, as the Bank recorded gains on sales of investment securities of COP 37.1 billion related to the sale of its interest in Multienlace S.A.
   
A negative impact on the line item of income from derivative financial instruments in 2Q09 by a COP 62.9 billion charge related to rule changes concerning valuation methodologies for derivative instruments established by the Colombian regulator. As previously noted, the Bank finished amortizing the reductions related to such regulatory changes in 2Q09.
In 2Q08, the Bank recorded non operating income of COP 26.1 billion related to the compensation received in connection with the membership rights recognized by Visa International Service Association (“Visa International”) as a result of the initial public offering of VISA Inc.
3.2. Net Interest Income
During 2Q09, interest on loans reached COP 1,306 billion, decreasing 6% as compared to 1Q09, due to lower interest rates in the loan portfolio as a result of the decreasing interest rates environment in Colombia. During the last few months, the Colombian Central Bank has continued its expansionist monetary cycle in an effort to support economic activity in the current economic slowdown and due to a more favorable inflationary outlook for 2009. Specifically, the Colombian Central Bank’s overnight lending decreased 550 basis points since December 2008, of which 250 basis points were cut in 2Q09. By the end of 2Q09 the Colombian Central Bank’s overnight lending rate was 4.5%. The DTF has followed suit, falling 259 basis points during 2Q09 and reaching 5.54% in the week of June 29, 2009. Such a decrease in rates impacts a significant portion of BANCOLOMBIA’s loan portfolio that is indexed to DTF. On a yearly basis, interest on loans increased COP 131.8 billion in 2Q09, or 11.2% as compared to COP 1,174 billion recorded in 2Q08.

 

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Interest on financial leases reached COP 191.7 billion, decreasing 10.5% as compared to 1Q09 and increasing 1.6% as compared to 2Q08.
Interest on investment securities amounted to COP 137.7 billion, decreasing 10.6% in 2Q09 as compared to 1Q09 and increasing 1.6% as compared to 2Q08, driven by a more stable performance in the valuation of bonds in Colombia and a smaller average debt securities portfolio held during 2Q09.
Overall, total interest income was COP 1,653 billion during 2Q09, decreasing 8% as compared to 1Q09, while interest expense was COP 726.4 billion, decreasing 10% as compared to the previous quarter. Consequently, net interest income for 2Q09 totaled COP. 926.4 billion, decreasing 6% as compared to the previous quarter but 8% higher than net interest income for 2Q08. As a result of decreasing interest rates and their net effect in the net interest income, net interest margin was 6.7% for 2Q09, down from the 7.1% for 1Q09.
3.3. Fees and Income from Services
During 2Q09 net fees and income from services continued to perform well totaling COP 379.7 billion, which represents an increase of 3.5% as compared to 1Q09 and 27.0% as compared to 2Q08. Net fees and income from services were driven primarily by the solid performance of credit and debit card annual fees, fiduciary activities, commission from banking and other services and collection and payments fees.
In particular, credit and debit card annual fees were COP 137.3 billion, up 27% from 2Q08. Fees related to fiduciary activities outperformed its solid 1Q09 results reaching COP 42.7 billion, up 10% as compared to 1Q09, and almost doubling the results for 2Q08 (an increase of 93%). Commissions from banking services and other services were COP 69.0 billion, up 21% as compared with 2Q08. Collections and payments fees were COP 45.9 billion, increasing 19% as compared to 2Q08. Branch network services were COP 26.8 billion, up 7% from 2Q08. Pension plan administration fees were COP 25.3 billion, up 32% as compared to 2Q08. The remaining fee categories: checking, electronic services and ATM, international operations, brokerage, credit card merchant, check remittances fees had aggregated revenue of COP 69.5 billion, decreasing 9% as compared to 2Q08.
Fees and other service related expenses totaled COP 36.8 billion in 2Q09, increasing 9.2% as compared to 1Q09. On a yearly basis, fees and other service expenses decreased COP 10.7 billion, or 22.6% as compared to 2Q08.
The following table summarizes BANCOLOMBIA’s participation in the credit card business in Colombia:
                                 
ACCUMULATED CREDIT CARD BILLING                   %     2009  
(COP millions)   31/06/2008     31/06/2009     Growth     Market Share  
Bancolombia VISA
    807,371       845,281       4.70 %     8.24 %
Bancolombia Mastercard
    1,055,566       1,124,231       6.51 %     10.96 %
Bancolombia American Express
    691,620       818,916       18.41 %     7.98 %
Total Bancolombia
    2,554,557       2,788,427       9.16 %     27.18 %
 
                       
Colombian Credit Card Market
    9,929,899       10,259,263       3.32 %        
 
                       
Source: Credibanco y Redeban multicolor

 

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CREDIT CARD MARKET SHARE                   %     2009  
(Outstanding credit cards)   31/06/2008     31/06/2009     Growth     Market Share  
Bancolombia VISA
    305,780       306,966       0.39 %     5.87 %
Bancolombia Mastercard
    361,480       365,572       1.13 %     6.99 %
Bancolombia American Express
    273,378       324,541       18.72 %     6.20 %
Total Bancolombia
    940,638       997,079       6.00 %     19.05 %
 
                       
Colombian Credit Card Market
    5,265,859       5,232,858       -0.63 %        
 
                       
Source: Credibanco y Redeban multicolor
3.4. Other Operating Income
Total other operating income totaled COP 20.0 billion for 2Q09, decreasing 84.2% as compared to 1Q09 and 89.8% as compared to 2Q08. As explained, the other operating income line item was substantially affected by non-recurring events in 2Q09 and 2Q08, thereby affecting the comparison basis between periods. Please refer to Section 2.1. “Effect of non-recurring items in results” of this report for an explanation of these events.
The combined revenue related to net foreign exchange gains and derivative financial instruments totaled a negative COP 60.2 billion in 2Q09, decreasing COP 79.4 billion as compared to 1Q09 and COP 136.8 billion as compared to 2Q08. In particular, this combined revenue was impacted by the adoption during the second half of 2008 of certain rule changes concerning valuation methodologies for derivative instruments. These changes in valuation methodologies of derivatives were required by external circulars 025, 030, 044 and 063 issued by the Colombian Superintendency of Finance and resulted in a reduction in the carrying value of derivatives which negatively impacted the income from derivative financial instruments in COP 62.9 billion during 2Q09.
Communication, postage, rent and others (primarily comprising income related to operating leases and commercial discounts) totaled COP 38.4 billion in 2Q09, representing an increase of 44% as compared to 2Q08. Dividend income, primarily obtained from investments in non-subsidiaries totaled COP 4.2 billion, decreasing from COP 16.6 billion in 2Q08.
The remaining other operating income categories (i.e. gains(losses) on sales of investments on equity securities, securitization income, revenues from commercial subsidiaries and insurance income) had an aggregated revenue of COP 37.6 billion, decreasing COP 16.5 billion, or 31% as compared to 1Q09 due to lower insurance income during 2Q09. On a yearly basis, the remaining other operating income categories decreased COP 39.0 billion, or 51% as compared to 2Q08 due to the lower gains on sales of equity securities as in 2Q08 there was a positive non-recurring impact in such line item in connection with the Bank’s recorded gains on sales of investment securities of COP 37.2 billion related to the sale of interest in Multienlace S.A.
3.5. Provision charges
Provision charges totaled COP 345.0 billion in 2Q09, a 1.5% increase as compared to COP 339.9 billion for 1Q09. On a relative basis, annualized provision charges for 2Q09 represented 3.1% of average loans, a slight increase from 3.0% in 1Q09.
For an explanation of the trends driving the current level of provisions charges, please see Section 4 “Asset Quality & Balance Sheet Strength” of this report.
3.6. Operating expenses
During 2Q09, operating expenses totaled COP 681.3 billion, decreasing 5% as compared to 1Q09, but increasing 12% as compared to the figures for 2Q08.

 

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Administrative and other expenses decreased for the second consecutive quarter, totaling COP 333.7 billion in 2Q09, which represents a decrease of COP 32.5 billion, or 9%, as compared to 1Q09. On a yearly basis, administrative and other expenses increased 14% as compared to 2Q08 driven by increased fees paid in connection with software development and IT upgrades the Bank is currently undertaking.
Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 282.3 billion in 2Q09, decreasing 1% as compared to 1Q09 and increasing 4% as compared to 2Q08. Such performance has been primarily driven by lower bonus plan payments related to BANCOLOMBIA’s variable compensation program in which compensation is determined taking into account the economic value added by the firm.
Depreciation expense totaled COP 45.6 billion in 2Q09, up 47% as compared to 2Q08, driven by the growth in the depreciation of assets that are part of the operating lease business of BANCOLOMBIA. In particular, COP 15.8 billion or 33% of the quarter’s depreciation expense is associated with operating lease assets.
Despite decreasing expenses, efficiency, measured as the ratio of operating expenses to net operating income, experienced some deterioration as this ratio increased to 52.7% from 49.8% the previous quarter. Such deterioration is explained by the impact of lower revenues during 2Q09. However, operating expenses for the quarter ended June 30, 2009 represented 4.4% of total assets, a smaller proportion than the 4.6% as of the end of 2Q08.
4. Asset Quality and Balance Sheet Strength
As of June, 30, 2009 past due loans (“PDLs”), those overdue more than 30 days, amounted to COP. 1,737.1 billion, or 3.88%, of total loans decreasing from COP 1,829.9 billion, or 3.99% of total loans, in 1Q09. The lower level of PDLs as a percentage of total loans is explained primarily by higher charge-offs during 2Q09, although a milder increase in past due loans (before charge-offs) is also responsible for the improvement of such quality indicator. Net loans’ charge-offs during 2Q09 totaled COP 330.7 billion, representing an increase as compared to COP 182.8 billion in charge-offs during 1Q09. However, the pace of deterioration slowed during 2Q09 as compared to 1Q09; the increase of past due loans before charge-offs for 2Q09 was COP 237.9 billion, down COP 150.9 billion or 39% as compared to COP 388.7 billion presented for 1Q09.
During 2Q09, BANCOLOMBIA maintained a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,330 billion, or 5.2% of total loans, which is higher than the 5.1% of total loans as of March 30, 2009, while coverage, measured by the ratio of allowances for loans and accrued interest losses to PDLs reached 137.3% at the end of 2Q09, increasing from 131.7% in 1Q09 and 120.1% in 2Q08.

 

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The following tables present key metrics for asset quality:
                                         
ASSET QUALITY   As of     Growth  
(COP millions)   Jun-08     Mar-09     Jun-09     2Q 09 / 1Q 09     2Q 09 / 2Q 08  
Total performing past due loans (1)
    589,206       752,104       774,928       3.03 %     31.52 %
Total non-performing past due loans
    786,658       1,077,823       962,163       -10.73 %     22.31 %
Total past due loans
    1,375,864       1,829,927       1,737,091       -5.07 %     26.25 %
Allowance for loans and accrued interest losses
    1,652,491       2,409,784       2,385,645       -1.00 %     44.37 %
Past due loans to total loans
    3.50 %     3.99 %     3.88 %                
Non-performing loans as a percentage of total loans
    2.00 %     2.35 %     2.15 %                
“C”, “D” and “E” loans as a percentage of total loans
    3.34 %     4.18 %     4.00 %                
Allowances to past due loans (2)
    120.11 %     131.69 %     137.34 %                
Allowance for loan and accrued interest losses as a percentage of “C”, “D” and “E” loans (2)
    125.92 %     125.74 %     133.48 %                
Allowance for loan and accrued interest losses as a percentage of non-performing loans (2)
    210.06 %     223.58 %     247.95 %                
Allowance for loan and accrued interest losses as a percentage of total loans
    4.20 %     5.26 %     5.34 %                
Percentage of performing loans to total loans
    98.00 %     97.65 %     97.85 %                
     
(1)  
“Performing” past due loans are loans upon which the Bank continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.
 
(2)  
Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.
                                 
    PDL/ total loans as Of  
LOAN CLASSIFICATION   % Of loan Portfolio     30-Jun-08     31-Mar-09     30-Jun-09  
Commercial loans
    64.1 %     2.1 %     2.7 %     2.7 %
Consumer loans
    16.0 %     6.2 %     6.5 %     6.2 %
Microcredit
    0.3 %     10.2 %     12.8 %     10.6 %
Mortgage loans*
    7.3 %     7.5 %     8.9 %     9.3 %
Finance lease
    12.3 %     3.7 %     3.8 %     3.7 %
 
                       
TOTAL LOAN PORTFOLIO
    100.0 %     3.5 %     4.0 %     3.9 %
 
                       
                                                 
LOANS AND FINANCIAL LEASES CLASSIFICATION                  
(COP millions)   As of 30-Jun-08     As of 31-Mar-09     As of 30-Jun-09  
“A” Normal
    36,597,476       93.1 %     41,996,277       91.6 %     41,324,935       92.4 %
“B” Subnormal
    1,417,227       3.6 %     1,931,128       4.2 %     1,601,358       3.6 %
“C” Deficient
    374,663       1.0 %     587,394       1.3 %     574,681       1.3 %
“D” Doubtful recovery
    621,091       1.5 %     957,631       2.1 %     908,207       2.0 %
“E” Unrecoverable
    316,555       0.8 %     371,497       0.8 %     304,343       0.7 %
 
Total
    39,327,012       100 %     45,843,927       100 %     44,713,524       100 %
 
                                   
 
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases
    3.3 %             4.2 %             4.0 %        
 
                                   
5. BANCOLOMBIA Company Description (NYSE: CIB)
BANCOLOMBIA is a full service financial institution incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 6.4 million customers. BANCOLOMBIA delivers its products and services via its regional network comprised of Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore banking subsidiaries in Panama, Cayman and Puerto Rico, as well as an agency in Miami. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, pension fund administration, and insurance, among others.

 

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

 

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

 

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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: August 03, 2009  By:   /s/ JAIME ALBERTO VELÁSQUEZ B.    
    Name:   Jaime Alberto Velásquez B.   
    Title:   Vice President of Finance