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, 2017

 

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 x                    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 x

 

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

 

 

 

  

 

 

 
    

  

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 654 BILLION FOR THE SECOND QUARTER OF 2017 WHICH REPRESENTS AN INCREASE OF 7% COMPARED TO 1Q17 AND A DECREASE OF 11% COMPARED TO 2Q16.

 

·Net interest income was COP 2.6 billion and grew 8.3% compared to 2Q16. This growth is explained by an expansion of the net interest margin during the second part of 2016 and by higher volumes of peso-denominated loans. Net interest income grew 0.5% during the quarter.

 

·Net fees were COP 615 billion and increased by 8.0% compared to 2Q16. This growth was mainly driven by an increase in fees related to credit and debit cards, banking services, as well as trust services. Net fees decreased by 1.5% during the quarter.

 

·The annualized net interest margin for the quarter was 6.2%. The margin increased 10 basis point when compared to 2Q16 and decreased 10 basis points compared with the margin for 1Q17. The cuts in the reference rate by the Central Bank pressured the net interest margin during the quarter.

 

·Gross loans grew 8.5% when compared to 2Q16 and 4.0% during the quarter. This growth shows moderation in the credit demand in Colombia as well as a sustained growth in the Central America operations. Peso-denominated loans grew 10.3% when compared to 2Q16.

 

·Provision charges for the quarter were COP 790 billion and the coverage ratio for 90-day past due loans was 171%. These provisions aim to maintain a solid coverage ratio amid a challenging environment, as new past due loans totaled COP 926 billion for the quarter.

 

·Tier 1 ratio was 10.4% at June 30, 2017 and increased 194 basis points when compared to June 30, 2016. The capital adequacy ratio was 14.3%.

 

 

August 8, 2017. Medellin, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the second quarter of 2017[1]. For the quarter ended on June 30, 2017 (“2Q17”), Bancolombia reported consolidated net income of COP 654 billion, or COP 679.48 per share - USD 0.89 per ADR. This net income represents a 7.4% increase compared to the quarter ended on March 31, 2017 (“1Q17”) and a decrease of 11.0% compared to the quarter ended on June 30, 2016 (“2Q16”).

 

 

1. This report corresponds to the interim unaudited consolidated financial information of BANCOLOMBIA S.A. and its subsidiaries (“BANCOLOMBIA” or “The Bank”) which Bancolombia controls, amongst others, by owning directly or indirectly, more than 50% of the voting capital stock. This financial information has been prepared based on financial records generated in accordance with International Financial Reporting Standards – IFRS. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. The financial information for the quarter ended June 30, 2017 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.

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

Representative Market Rate, July 1, 2017 $3,050.43 = US$ 1

 

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BANCOLOMBIA: Summary of consolidated financial quarterly results

 

CONSOLIDATED BALANCE SHEET      
AND INCOME STATEMENT Quarter Growth
(COP million) 2Q16 1Q17 2Q17 2Q17/1Q17 2Q17/2Q16
ASSETS          
Net Loans  140,059,861  145,331,160  150,747,014 3.73% 7.63%
Investments    12,701,160    15,146,243    15,273,122 0.84% 20.25%
Other assets    35,638,296    36,264,595    37,684,231 3.91% 5.74%
Total assets  188,399,317  196,741,998  203,704,367 3.54% 8.12%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits  114,586,083  124,496,843  128,476,933 3.20% 12.12%
Other liabilities    53,367,551    50,194,786    52,144,322 3.88% -2.29%
Total liabilities  167,953,634  174,691,629  180,621,255 3.39% 7.54%
Non-controlling interest      1,108,505      1,183,988      1,252,130 5.76% 12.96%
Shareholders' equity    19,337,178    20,866,381    21,830,982 4.62% 12.90%
Total liabilities and shareholders' equity  188,399,317  196,741,998  203,704,367 3.54% 8.12%
           
Interest income      3,892,103      4,202,956      4,227,227 0.58% 8.61%
Interest expense     (1,459,686)     (1,581,650)     (1,593,836) 0.77% 9.19%
Net interest income      2,432,417      2,621,306      2,633,391 0.46% 8.26%
Net provisions        (628,469)        (774,458)        (789,735) 1.97% 25.66%
Fees and income from service, net         571,672         624,838         615,215 -1.54% 7.62%
Other operating income         339,063         353,401         367,191 3.90% 8.30%
Total Dividends received and equity method          33,833          32,418          21,105 -34.90% -37.62%
Total operating expense     (1,641,452)     (1,858,767)     (1,880,723) 1.18% 14.58%
Profit before tax      1,107,064         998,738         966,444 -3.23% -12.70%
Income tax        (362,900)        (366,685)        (281,050) -23.35% -22.55%
Net income before non-controlling interest         744,164         632,053         685,394 8.44% -7.90%
Non-controlling interest         (21,411)         (23,299)         (31,855) 36.72% 48.78%
Net income before Descontinued Operations         722,753         608,754         653,539 7.36% -9.58%
Discontinued Operations Net Income          10,306                 -                    -    0.00% -100.00%
Net income         733,059         608,754         653,539 7.36% -10.85%
           
PRINCIPAL RATIOS   Quarter   As of
  2Q16 1Q17 2Q17 2Q16 2Q17
PROFITABILITY          
Net interest margin (1) from continuing operations 6.09% 6.31% 6.16% 5.86% 6.23%
Return on average total assets (2) from continuing operations 1.53% 1.25% 1.31% 1.17% 1.28%
Return on average shareholders´ equity (3) 15.19% 11.44% 12.29% 11.56% 11.83%
EFFICIENCY          
Operating expenses to net operating income 48.23% 51.18% 51.71% 51.20% 51.45%
Operating expenses to average total assets 3.43% 3.80% 3.77% 3.57% 3.79%
Operating expenses to productive assets 4.04% 4.48% 4.40% 4.23% 4.43%
CAPITAL ADEQUACY          
Shareholders' equity to total assets  10.26% 10.61% 10.40% 10.26% 10.40%
Technical capital to risk weighted assets  13.16% 14.46% 14.34% 13.16% 14.34%
KEY FINANCIAL HIGHLIGHTS          
Net income per ADS from continuing operations              1.03              0.88              0.89              1.59              1.72
Net income per share $COP from continuing operations          751.44          632.91          679.48        1,159.75        1,312.39
P/BV ADS (4)              1.27              1.33              1.50              1.27              1.50
P/BV Local (5) (6)              1.18              1.21              1.40              1.18              1.40
P/E (7) from continuing operations              8.18            10.84            12.07            10.60            12.50
ADR price            34.92            39.87            44.55            34.92            44.55
Common share price (8)          23,800          26,260          31,780          23,800          31,780
Weighted average of Preferred Shares outstanding  961,827,000  961,827,000  961,827,000  961,827,000  961,827,000
USD exchange rate (quarter end)        2,919.01        2,885.57        3,050.43        2,919.01        3,050.43

 

(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.

 

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1.BALANCE SHEET

 

1.1.Assets

 

As of June 30, 2017, Bancolombia’s assets totaled COP 203,704 billion, which represents an increase of 3.5% compared to 1Q17 and of 8.1% compared to 2Q16.

 

During the quarter, the COP depreciated 5.71% versus the USD and over the past 12 months, it depreciated 4.50%.

 

The increase in total assets during the quarter is largely explained by the growth in the loan portfolio and reverse repurchase agreements.

 

1.2.Loan Portfolio

 

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

 

(COP Million) Amounts in COP Amounts in USD converted to COP Amounts in USD (thousands) Total
(1 USD = 3050.43 COP) 2Q17 2Q17/1Q17 2Q17 2Q17/1Q17 2Q17 2Q17/1Q17 2Q17 2Q17/1Q17
Commercial loans            71,533,106 2.71%            39,482,388 4.59%            12,943,220 -1.07%          111,015,493 3.37%
Consumer loans            16,773,487 4.49%              9,079,994 6.60%              2,976,628 0.83%            25,853,481 5.22%
Mortgage loans            11,076,757 3.33%              9,197,384 6.81%              3,015,111 1.04%            20,274,141 4.88%
Small business loans                651,521 0.45%                437,573 11.78%                143,446 5.74%              1,089,093 4.71%
Interests paid in advance                    1,417 -2.85%                   (1,417) -2.88%                      (465) -8.13%                         (0) 0.00%
Gross loans          100,036,288 3.05%            58,195,921 5.29%            19,077,940 -0.40%          158,232,208 3.87%

 

The quarter 2Q17 shows an increase in gross loans of 4.0% when compared to 1Q17. Peso-denominated loans grew 10.3% and the growth in dollar-denominated loans was 0.9%, compared to 2Q16. In comparison with 2Q16, total gross loans grew 8.5%.

 

As of June 30, 2017, our operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala, represented 26% of total gross loans.

 

Gross loans denominated in currencies other than COP, originated by our operations in Central America and the offshore operation of Bancolombia Panama as well as the USD denominated loans in Colombia, accounted for 37% and increased 5.3% during 2Q17 (when expressed in COP), explained mainly by the depreciation of the COP against the USD during the quarter.

 

Total reserves (allowances in the balance sheet) for loan losses increased by 7.0% during the quarter and totaled COP 7,485 billion, equivalent to 4.7% of gross loans at the end of the quarter.

 

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

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO           % of total loans
(COP million) 2Q16 1Q17 2Q17 2Q17/1Q17 2Q17/2Q16
Commercial    104,107,043    107,398,707    111,015,493 3.37% 6.64% 70.2%
Consumer      21,731,606      24,571,455      25,853,481 5.22% 18.97% 16.3%
Mortgage      19,041,337      19,330,932      20,274,141 4.88% 6.47% 12.8%
Microcredit           978,331        1,040,089        1,089,093 4.71% 11.32% 0.7%
Interests received in advance            (22,337)                       -                          -    0.00% -100.00% 0.0%
Total loan portfolio    145,835,980    152,341,183    158,232,208 3.87% 8.50% 100.0%
Allowance for loan losses       (5,776,119)       (7,010,023)       (7,485,194) 6.78% 29.59%  
Total loans, net    140,059,861    145,331,160    150,747,014 3.73% 7.63%  

 

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1.3.Investment Portfolio

 

As of June 30, 2017, Bancolombia’s net investment portfolio totaled COP 15,273 billion, increasing 1.0% from the end of 1Q17 and 20.3% from the end of 2Q16. The investment portfolio consists primarily of debt securities, which represent 68.0% of Bancolombia’s total investments and 5.1% of assets at the end of 2Q17.

 

At the end of 2Q17, the debt securities portfolio had a duration of 18.1 months and a weighted average yield to maturity of 5.13%. The reduction in the portfolio’s weighted average yield to maturity is partially explained by the interest rate cuts that occurred in Colombia.

 

1.4.Goodwill and intangibles

 

As of 2Q17, Bancolombia’s goodwill and intangibles totaled COP 6,778 billion, increasing 5.5% compared to 1Q17. This variation is explained by the depreciation of the COP against the USD during the quarter.

 

1.5.Funding

 

As of June 30, 2017, Bancolombia’s liabilities totaled COP 180,621 billion, increasing 3.4% from the end of 1Q17 and 7.5% compared to 2Q16.

 

Deposits by customers totaled COP 128,477 billion (or 71.1% of liabilities) at the end of 2Q17, increasing 3.2% during the quarter and 12.1% over the last 12 months. The net loans to deposits ratio was 117% at the end of 2Q17.

 

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

 

 

Funding mix 2Q16 1Q17 2Q17
COP Million          
Checking accounts    20,612,607 13%    20,213,911 12%    20,212,416 12%
Saving accounts    44,690,042 29%    49,294,251 30%    50,142,758 30%
Time deposits    48,178,387 31%    53,584,352 33%    56,974,773 34%
Other deposits      3,888,370 2%      5,621,646 3%      5,664,360 3%
Long term debt    18,102,041 12%    18,098,431 11%    18,298,359 11%
Loans with banks    20,416,321 13%    17,212,856 10%    18,523,104 11%
Total Funds  155,887,768 100%  164,025,447 100%  169,815,770 100%

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 2Q17 was COP 21,831 billion, increasing 5.0% or COP 965 billion, compared to the COP 20,866 billion reported at the end of 1Q17. This increase is explained by the earnings generated during the quarter and the depreciation of the COP versus the USD.

 

Bancolombia’s capital adequacy ratio was 14.34% in 2Q17.

 

Bancolombia’s capital adequacy ratio was 534 basis points above the minimum 9% required by the Colombian regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 10.40%, 590 basis points above the regulatory minimum of 4.5%. The tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 7.52% at the end of 2Q17.

 

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In the last months, Bancolombia has generated capital organically due to the appropriation of earnings in March 2017 and to the efficient allocation of capital in different products, at the same time Bancolombia has reduced the VaR consumption across several segments. The annual increase in the RWA is mainly explained by the growth in the loan portfolio.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS            
Consolidated (COP millions) 2Q16 % 1Q17 % 2Q17 %
Basic capital (Tier I)     13,916,753 8.46%     17,798,470 10.53%     18,110,213 10.40%
Additional capital (Tier II)      7,731,554 4.70%      6,626,701 3.92%      6,864,575 3.94%
Technical capital (1)     21,648,307       24,425,171       24,974,788  
Risk weighted assets including market risk   164,485,160     168,947,148     174,199,865  
CAPITAL ADEQUACY (2)   13.16%   14.46%   14.34%

(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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2.INCOME STATEMENT

Net income totaled COP 654 billion in 2Q17, or COP 679.48 per share - USD 0.89 per ADR. This net income represents an increase of 7.4% compared to 1Q17 and a decrease of 11.0% compared to 2Q16. Bancolombia’s annualized ROE for 2Q17 was 12.3%.

 

2.1.Net Interest Income

 

Net interest income totaled COP 2,633 billion in 2Q17, 0.5% more than that reported in 1Q17, and 8.3% higher than the figure for 2Q16. During the quarter, the performance of Net Interest Income was flat due to the cuts in the reference rate of 75 basis points by the Central Bank during the quarter that pressured the Net interest Margin and offset the impact of loan growth on our net interest income.

 

During 2Q17, the investment, interest rate derivatives and repos portfolio generated COP 172 billion.

 

Net Interest Margin

 

The annualized net interest margin decreased to 6.2% in 2Q17. The annualized net interest margin for investments was 2.3%, and the annualized net interest margin of the loan portfolio was 6.5%.

 

Despite higher volumes in the peso-denominated loan portfolio, the cuts in the reference rate by the Central Bank pressured the loans interest margin, generating a contraction of 10 basis points, during the quarter.

 

Annualized Interest      
Margin 2Q16 1Q17 2Q17
Loans' Interest margin 6.4% 6.6% 6.5%
Debt investments' margin 2.8% 3.2% 2.3%
Net interest margin 6.1% 6.3% 6.2%

 

 

Total funding cost decreased during 2Q17, due to the reduction of long-term debt. Savings and checking accounts represented the same proportion of the total cost of funding as in 1Q17, and the annualized average weighted cost of deposits was 3.50% in 2Q17, increasing 5 basis point compared to 1Q17 and 35 basis points compared to 2Q16.

 

Average weighted      
funding cost 2Q16 1Q17 2Q17
Checking accounts 0.00% 0.00% 0.00%
Saving accounts 2.01% 2.37% 2.46%
Time deposits 5.67% 5.79% 5.71%
Total deposits 3.15% 3.45% 3.50%
Long term debt 7.20% 6.66% 6.43%
Loans with banks 2.55% 2.76% 2.53%
Total funding cost 3.50% 3.68% 3.65%

 

2.2.Fees and Income from Services

 

During 2Q17, net fees and income from services totaled COP 615 billion, decreasing 1.5% compared to 1Q17, and increasing 8.0% compared to 2Q16. The positive annual performance in fees compared with 2Q16 is due to higher volumes of transactions and the good performance of credit and debit cards, banking services and trust services.

 

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Fees from asset management and trust services increased 8.0% compared to 1Q17 and 24.1% compared to 2Q16, due to an increase in the assets under management. Fees from credit and debit cards decreased 3.0% compared to 1Q17 and increased 5.3% compared to 2Q16. Fees from our bancassurance business increased 20.4% compared to 1Q17 and 3.1% with respect to 2Q16, thanks to the continuation of cross-selling initiatives led by our sales teams.

 

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

 

ACCUMULATED CREDIT CARD BILLING % 2017
(COP millions) May-16 May-17 Growth Market Share
Bancolombia VISA     1,933,852     2,636,545 36.34% 9.84%
Bancolombia Mastercard     1,999,686     2,341,448 17.09% 8.74%
Bancolombia American Express     1,596,106     1,590,891 -0.33% 5.94%
Total Bancolombia     5,529,644     6,568,884 18.79% 24.51%
Colombian Credit Card Market   23,632,126   26,798,296 14.10%  
         
CREDIT CARD MARKET SHARE % 2017
(Outstanding credit cards) May-16 May-17 Growth Market Share
Bancolombia VISA         632,550         763,790 20.75% 4.59%
Bancolombia Mastercard         786,212         872,089 10.92% 5.24%
Bancolombia American Express         620,027         596,033 -3.87% 3.58%
Total Bancolombia     2,038,789     2,231,912 9.47% 13.41%
Colombian Credit Card Market   15,772,280   16,642,628 5.52%  

Source: Superintendencia Financiera de Colombia

 

2.3.Other Operating Income

 

Total other operating income was COP 367 billion in 2Q17, increasing by 4.0% compared to 1Q17, and by 8.3% compared to 2Q16.

 

Revenues from the operating leases totaled COP 136 billion in 2Q17, decreasing by 2.2% compared to 1Q17 and increasing by 15.3% compared to those reported in 2Q16.

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The principal balance for past due loans (those that are overdue for more than 30 days) totaled COP 6,521 billion at the end of 2Q17 and represented 4.3% of total gross loans, increasing by 8.3% compared to 1Q17, when past due loans represented 4.1% of total gross loans. During 2Q17, Charge-offs totaled COP 424 billion.

 

The coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 104.6% at the end of 2Q17, decreasing compared to 106.6% at the end of 1Q17.The coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 84.3% at the end of 2Q17, increasing slightly from 84.2% at the end of 1Q17.

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 926 billion in 2Q17. During the quarter, the deterioration of loans increased mainly in the commercial segment as well as some deterioration in SMEs. Provision charges (net of recoveries) totaled COP 790 billion in 2Q17, compared to COP 774 billion in 1Q17 and COP 628 billion in 2Q16. Provisions as a percentage of the average gross loans were 2.0% for 2Q17.

 

Bancolombia maintains a strong balance sheet supported by an adequate level of loan loss reserves. Allowances for loan losses totaled COP 6,819 billion, or 4.5% of total loans at the end of 2Q17, up from 4.4% of total loans at the end of 1Q17.

 

 

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The following tables present key metrics related to asset quality:

 

ASSET QUALITY As of 
(COP millions) 2Q16 1Q17 2Q17
Total 30-day past due loans 4,357,450 6,018,555 6,520,508
Allowance for loan losses (1) 5,288,410 6,414,376 6,818,600
Past due loans to total loans  3.10% 4.10% 4.27%
“C”, “D” and “E” loans as a percentage of total loans 4.71% 5.19% 5.29%
Allowances to past due loans 121.36% 106.58% 104.57%
Allowance for loan  losses as a percentage of “C”, “D” and “E” loans 79.93% 84.16% 84.26%
Allowance for loan losses as a percentage of total loans 3.76% 4.37% 4.46%

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

 

PDL Per Category     30 days
  % Of loan Portfolio 2Q16 1Q17 2Q17
Commercial loans 70.2% 2.01% 3.12% 3.19%
Consumer loans 16.3% 4.95% 5.27% 5.72%
Microcredit 0.7% 8.24% 12.39% 13.47%
Mortgage loans  12.8% 6.86% 7.43% 7.69%
PDL TOTAL    3.10% 4.10% 4.27%
         
PDL Per Category     90 days
  % Of loan Portfolio 2Q16 1Q17 2Q17
Commercial loans 70.2% 1.49% 1.97% 2.40%
Consumer loans 16.3% 2.46% 2.50% 2.81%
Microcredit 0.7% 5.08% 7.48% 8.65%
Mortgage loans* 12.8% 2.66% 2.98% 3.10%
PDL TOTAL    1.94% 2.38% 2.60%

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

 

LOANS AND FINANCIAL LEASES CLASSIFICATION 2Q16 1Q17 2Q17
(COP millions)            
¨A¨ Normal 130,365,722 89.4% 135,738,495 89.1% 140,153,577 88.6%
¨B¨ Subnormal 8,415,578 5.8% 8,355,456 5.5% 9,287,343 5.9%
¨C¨ Deficient 3,276,828 2.3% 3,832,868 2.5% 3,816,028 2.4%
¨D¨ Doubtful recovery 2,310,354 1.6% 2,389,739 1.6% 2,831,080 1.8%
¨E¨ Unrecoverable 1,467,499 1.0% 2,024,625 1.3% 2,144,180 1.4%
Total 145,835,980 100.0% 152,341,183 100.0% 158,232,208 100.0%
Loans and financial leases classified as C, D and E            
as a percentage of total loans and financial leases 4.84%   5.41%   5.56%  

 

2.5.Operating Expenses

 

During 2Q17, operating expenses totaled COP 1,881 billion, increasing 1.2% with respect to 1Q17 and increasing 15.0% with respect to 2Q16.

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 767 billion in 2Q17, decreasing 3.0% compared to 1Q17 and increasing 13.0% compared to 2Q16.

 

During 2Q17, administrative expenses totaled COP 718 billion, increasing 17.0% compared to 1Q17, explained by seasonal factors and accelerated payments of contracts in progress during 2017. The growth in administrative expenses was 10.4% as compared to 2Q16.

 

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Depreciation and amortization expenses totaled COP 117 billion in 2Q17, decreasing 2.4% compared to 1Q17 and 1.1% compared to 2Q16.

 

As of June 30, 2017, Bancolombia had 30,771 employees, owned 1,087 branches, 5,439 ATMs, 8,887 banking agents and served more than 11 million customers.

 

2.6.Taxes

 

Income tax expense was COP 281 billion for 2Q17, decreasing 23.4% when compared to the income tax registered in 1Q17 and 23.0% compared to 2Q16.

 

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3.CENTRAL AMERICA

The following table summarizes the financial statements of our operations in Central America.

 

BANISTMO- PANAMA

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 2Q16 1Q17 2Q17 2Q17/1Q17 2Q17/2Q16
ASSETS          
Net Loans    20,242,560    20,852,542    22,455,631 7.69% 10.93%
Investments     2,007,916      2,346,794      2,319,278 -1.17% 15.51%
Other assets     3,628,122      3,255,955      3,559,302 9.32% -1.90%
Total assets    25,878,598    26,455,291    28,334,211 7.10% 9.49%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits    17,622,472    19,018,367    19,889,085 4.58% 12.86%
Other liabilities     5,710,750      4,790,394      5,471,294 14.21% -4.19%
Total liabilities    23,333,222    23,808,761    25,360,379 6.52% 8.69%
Shareholders' equity     2,545,375      2,646,531      2,973,832 12.37% 16.83%
Total liabilities and shareholders' equity    25,878,598    26,455,291    28,334,211 7.10% 9.49%
           
Interest income        336,366        359,070        375,474 4.57% 11.63%
Interest expense       (112,514)       (124,981)       (132,208) 5.78% 17.50%
Net interest income        223,853        234,089        243,265 3.92% 8.67%
Net provisions         (94,709)         (60,937)          53,089 -187.12% -156.06%
Fees and income from service, net          39,835          43,745          53,577 22.48% 34.50%
Other operating income            2,689            1,970            3,216 63.26% 19.61%
Total operating expense       (154,768)       (150,057)       (122,426) -18.41% -20.90%
Profit before tax          16,900          68,810        230,722 235.30% 1265.22%
Income tax           (1,504)         (10,956)         (56,574) 416.38% 3661.60%
Net income          15,396          57,854        174,149 201.01% 1031.13%

 

BANCO AGRíCOLA- EL SALVADOR

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 2Q16 1Q17 2Q17 2Q17/1Q17 2Q17/2Q16
ASSETS          
Net Loans     8,310,039      8,413,413      8,979,136 6.72% 8.05%
Investments        800,999        532,360        486,303 -8.65% -39.29%
Other assets     3,133,079      3,881,880      3,711,472 -4.39% 18.46%
Total assets    12,244,117    12,827,653    13,176,911 2.72% 7.62%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits     8,053,119      8,705,596      8,989,096 3.26% 11.62%
Other liabilities     2,706,148      2,666,316      2,621,702 -1.67% -3.12%
Total liabilities    10,759,267    11,371,912    11,610,798 2.10% 7.91%
Shareholders' equity     1,484,850      1,455,741      1,566,114 7.58% 5.47%
Total liabilities and shareholders' equity    12,244,117    12,827,653    13,176,911 2.72% 7.62%
           
Interest income        218,474        212,740        192,260 -9.63% -12.00%
Interest expense         (58,846)         (64,712)         (61,145) -5.51% 3.91%
Net interest income        159,628        148,028        131,115 -11.43% -17.86%
Net provisions         (30,397)         (30,899)         (34,619) 12.04% 13.89%
Fees and income from service, net          38,737          36,664          44,153 20.43% 13.98%
Other operating income               (31)            1,107            1,689 52.50% -5519.08%
Total operating expense       (104,863)         (97,519)       (105,827) 8.52% 0.92%
Profit before tax          63,074          57,381          36,510 -36.37% -42.12%
Income tax         (15,987)         (20,436)         (10,475) -48.74% -34.48%
Net income          47,088          36,945          26,035 -29.53% -44.71%

 

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GRUPO AGROMERCANTIL HOLDING – GUATEMALA

 

CONSOLIDATED BALANCE SHEET        
AND INCOME STATEMENT Quarter Growth
(COP million) 2Q16 1Q17 2Q17 2Q17/1Q17 2Q17/2Q16
ASSETS          
Net Loans     7,557,202      8,282,921      8,608,671 3.93% 13.91%
Investments     1,705,438      1,603,335      1,858,021 15.88% 8.95%
Other assets     1,893,948      1,926,094      1,967,098 2.13% 3.86%
Total assets    11,156,588    11,812,350    12,433,791 5.26% 11.45%
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits     7,704,834      8,056,406      8,465,417 5.08% 9.87%
Other liabilities     2,204,800      2,509,526      2,624,674 4.59% 19.04%
Total liabilities     9,909,634    10,565,933    11,090,090 4.96% 11.91%
Non-controlling interest          19,468          19,108          19,714 3.17% 1.26%
Shareholders' equity     1,227,486      1,227,309      1,323,987 7.88% 7.86%
Total liabilities and shareholders' equity    11,156,588    11,812,350    12,433,791 5.26% 11.45%
           
Interest income        182,805        214,666        211,071 -1.67% 15.46%
Interest expense         (81,976)         (87,423)         (87,241) -0.21% 6.42%
Net interest income        100,830        127,242        123,830 -2.68% 22.81%
Net provisions           (3,505)         (29,417)         (31,313) 6.45% 793.38%
Fees and income from service, net          15,052          24,840          24,394 -1.80% 62.06%
Other operating income           (8,536)          10,108          12,751 26.15% -249.39%
Total operating expense         (77,140)       (107,749)       (105,685) -1.92% 37.00%
Profit before tax          26,701          25,025          23,977 -4.19% -10.20%
Income tax                 (8)           (3,145)           (8,096) 157.41% 102793.78%
Net income before non-controlling interest          26,693          21,879          15,881 -27.42% -40.51%
Non-controlling interest             (729)              (895)              (919) 2.64% 26.04%
Net income          25,964          20,984          14,962 -28.70% -42.37%


 

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4.RECENT DEVELOPMENTS

 

 

·April 19, 2017, Bancolombia entered into an agreement with Almacenes Exito S.A. for the creation of a new loyalty program for its clients called “Puntos Colombia”. Going forward, Puntos Colombia will be the loyalty program through which the clients of both companies, and of other allies related to the program, will accumulate and redeem points on the loyalty ecosystem. Puntos Colombia will replace the existing loyalty programs of Bancolombia and Grupo Exito.

 

The program Puntos Colombia will begin during the first half of 2018 and will be managed by an independent company located in Colombia, which is 50% owned by Banca de Inversion Bancolombia S.A Corporacion Financiera, a subsidiary of Bancolombia. The capital investment made by the subsidiary in the new Company is equivalent to COP $9,000 million, which will be paid within the next 12 months.

 

·

May 1st, 2017, Bancolombia S.A. (“Bancolombia”) (NYSE: CIB) announced that it has filed its annual report on Form 20-F for the year ended December 31, 2016 with the U.S. Securities and Exchange Commission (the “SEC”). The annual report can be downloaded from the SEC website

https://www.sec.gov/Archives/edgar/data/1071371/000114420417023550/0001144204-17-023550-index.htm

 

 

 

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5.BANCOLOMBIA Company Description (NYSE: CIB)

 

GRUPO BANCOLOMBIA is a full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 11 million customers. GRUPO BANCOLOMBIA delivers its products and services via its regional network comprised of: Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore and local (Banistmo S.A.) banking subsidiaries in Panama, Guatemala, Cayman and Puerto Rico. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, among others.

 

Contact Information

 

Bancolombia’s Investor Relations

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

E-mail: IR@bancolombia.com.co

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

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

 

 

 

 

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BALANCE SHEET       Growth    
(COP million) Jun-16 Mar-17 Jun-17 jun-17 / mar-17 jun-17 / jun-16 % of Assets % of Liabilities
ASSETS              
Cash and balances at central bank        13,431,742        15,047,380        14,771,666 -1.83% 9.98% 7.25%  
Interbank borrowings          1,287,396          2,403,587          2,159,604 -10.15% 67.75% 1.06%  
Reverse repurchase agreements and other similar secured lend          1,839,198             933,844          2,134,230 128.54% 16.04% 1.05%  
Financial assets investment        12,701,160        15,146,243        15,273,122 0.84% 20.25% 7.50%  
Derivative financial instruments          2,122,042          1,629,255          1,678,633 3.03% -20.90% 0.82%  
Loans and advances to customers      145,835,980      152,341,183      158,232,208 3.87% 8.50% 77.68%  
Allowance for loan and lease losses        (5,776,119)        (7,010,023)        (7,485,194) 6.78% 29.59% -3.67%  
Investment in associates and joint ventures             538,424          1,371,488          1,445,207 5.38% 168.41% 0.71%  
Goodwill and Intangible assets, net          6,523,651          6,422,749          6,778,314 5.54% 3.90% 3.33%  
Premises and equipment, net          3,170,050          3,019,732          3,092,817 2.42% -2.44% 1.52%  
Investment property          1,573,143          1,617,160          1,649,433 2.00% 4.85% 0.81%  
Prepayments             272,021             300,682             269,678 -10.31% -0.86% 0.13%  
Tax receivables             833,042             739,231             699,825 -5.33% -15.99% 0.34%  
Deferred tax             651,250             727,225             723,770 -0.48% 11.14% 0.36%  
Assets held for sale and inventories          2,191,534             251,814             288,732 14.66% -86.83% 0.14%  
Other assets          1,204,803          1,800,448          1,992,322 10.66% 65.36% 0.98%  
Total assets      188,399,317      196,741,998      203,704,367 3.54% 8.12% 100.00%  
LIABILITIES AND SHAREHOLDERS' EQUITY              
LIABILITIES               
Deposit by customers      114,586,083      124,496,843      128,476,933 3.20% 12.12% 63.07% 71.13%
Interbank Deposits             461,598             726,366             997,415 37.32% 116.08% 0.49% 0.55%
Derivative financial instrument          1,768,256          1,248,707          1,203,097 -3.65% -31.96% 0.59% 0.67%
Borrowings from other financial institutions        19,954,723        16,486,490        17,525,689 6.30% -12.17% 8.60% 9.70%
Debt securities in issue        18,102,041        18,098,431        18,298,359 1.10% 1.08% 8.98% 10.13%
Preferred shares             552,414             539,361             553,426 2.61% 0.18% 0.27% 0.31%
Repurchase agreements and other similar secured borrowing          2,783,323          4,217,317          4,517,374 7.11% 62.30% 2.22% 2.50%
Liabilities relating to assets held for sale          1,865,349                       -                          -    0.00% -100.00% 0.00% 0.00%
Current tax             714,805             430,101             650,930 51.34% -8.94% 0.32% 0.36%
Deferred tax          1,465,720          1,848,570          1,877,018 1.54% 28.06% 0.92% 1.04%
Employees benefit plans             133,115             449,189             714,583 59.08% 436.82% 0.35% 0.40%
Other liabilities          5,566,207          6,150,254          5,806,431 -5.59% 4.32% 2.85% 3.21%
Total liabilities      167,953,634      174,691,629      180,621,255 3.39% 7.54% 88.67% 100.00%
SHAREHOLDERS' EQUITY              
Share Capital             480,914             480,914             480,914 0.00% 0.00% 0.24%  
Additional paid-in-capital          4,857,454          4,857,454          4,857,454 0.00% 0.00% 2.38%  
Appropriated reserves          7,148,158          9,049,252          9,065,570 0.18% 26.82% 4.45%  
Retained earnings          4,913,717          4,134,418          4,771,639 15.41% -2.89% 2.34%  
Accumulated other comprehensive income (loss), net of tax          1,936,935          2,344,343          2,655,405 13.27% 37.09% 1.30%  
Stockholders’ equity attributable to the owners of the parent company        19,337,178        20,866,381        21,830,982 4.62% 12.90% 10.72%  
Non-controlling interest          1,108,505          1,183,988          1,252,130 5.76% 12.96% 0.61%  
Total liabilities and equity      188,399,317      196,741,998      203,704,367 3.54% 8.12% 100.00%  

 

 

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INCOME STATEMENT As of Growth       Growth
(COP million) Jun-16 Jun-17 jun-17 / jun-16 2Q 16 1Q 17 2Q 17 2Q 17 / 1Q 17 2Q 17 / 2Q 16
Interest income and expenses                
Interest on loans and financial leases                
Commercial      3,749,039      4,075,163 8.70%      1,924,667      2,029,581      2,045,582 0.79% 6.28%
Consumer      1,400,178      1,809,789 29.25%         735,775         872,418         937,371 7.45% 27.40%
Small business loans         112,502         117,745 4.66%           57,581           60,550           57,195 -5.54% -0.67%
Mortgage         983,680         985,250 0.16%         495,909         499,423         485,827 -2.72% -2.03%
Leasing         936,876      1,057,989 12.93%         490,123         535,607         522,382 -2.47% 6.58%
Interest income on loans and financial leases      7,182,275      8,045,936 12.02%      3,704,055      3,997,579      4,048,357 1.27% 9.30%
Interest income on overnight and market funds           11,662           11,559 -0.88%             5,720             5,015             6,544 30.49% 14.41%
Interest and valuation on Investment                
Debt investments, net           86,999           81,489 -6.33%           43,969           41,768           39,721 -4.90% -9.66%
Net gains from investment activities at fair value through income statement                
Debt investments         338,800         366,975 8.32%         165,140         189,260         177,715 -6.10% 7.61%
Derivatives          (50,761)          (27,096) -46.62%          (13,367)            (5,033)          (22,063) 338.37% 65.06%
Repos            (8,876)          (51,555) 480.84%          (12,244)          (22,642)          (28,913) 27.70% 136.14%
Others                511             2,875 462.62%            (1,170)            (2,991)             5,866 296.12% 601.37%
Total Net gains from investment activities at fair value through profit and loss         279,674         291,199 4.12%         138,359         158,594         132,605 -16.39% -4.16%
Total Interest and valuation on investments           366,673         372,688 1.64%         182,328         200,362         172,326 -13.99% -5.49%
Total interest and valuation      7,560,610      8,430,183 11.50%      3,892,103      4,202,956      4,227,227 0.58% 8.61%
Interest expense                
Borrowing costs        (348,759)        (350,606) 0.53%        (181,518)        (179,317)        (171,289) -4.48% -5.64%
Overnight funds            (2,822)            (8,476) 200.35%            (1,399)            (3,866)            (4,610) 19.24% 229.52%
Debt securities in issue        (671,506)        (598,929) -10.81%        (330,100)        (306,491)        (292,438) -4.59% -11.41%
Deposits     (1,754,490)     (2,180,842) 24.30%        (917,413)     (1,072,879)     (1,107,963) 3.27% 20.77%
Preferred Shares Dividends          (29,156)          (29,156) 0.00%          (14,065)          (15,091)          (14,065) -6.80% 0.00%
Other interest (expense)          (21,961)            (7,477) -65.95%          (15,191)            (4,006)            (3,471) -13.35% -77.15%
Total interest expense     (2,828,694)     (3,175,486) 12.26%     (1,459,686)     (1,581,650)     (1,593,836) 0.77% 9.19%
Net interest margin and valuation income on financial instruments before impairment on loans and financial leases and off balance sheet credit instruments       4,731,916      5,254,697 11.05%      2,432,417      2,621,306      2,633,391 0.46% 8.26%
Credit impairment charges on loans and advance and financial leases     (1,279,538)     (1,754,029) 37.08%        (685,665)        (863,290)        (890,739) 3.18% 29.91%
Recovery of charged-off loans         137,808         167,366 21.45%           75,988           72,155           95,211 31.95% 25.30%
Credit impairment charges on off balance sheet credit instruments          (26,513)           22,470 184.75%          (18,792)           16,677             5,793 -65.26% 130.83%
Total credit impairment charges, net     (1,168,243)     (1,564,193) 33.89%        (628,469)        (774,458)        (789,735) 1.97% 25.66%
Net interest margin and valuation income on financial instruments after impairment on loans and financial leases and off balance sheet credit instruments      3,563,673      3,690,504 3.56%      1,803,948      1,846,848      1,843,656 -0.17% 2.20%
Fees and comission income                
Banking services         390,895         431,949 10.50%         200,306         207,466         224,483 8.20% 12.07%
Credit and debit card fees and commercial establishments         541,166         578,882 6.97%         271,149         293,460         285,422 -2.74% 5.26%
Brokerage           12,635           11,430 -9.54%             6,804             5,335             6,095 14.25% -10.42%
Acceptances, Guarantees and Standby letters of credits           25,178           26,829 6.56%           12,704           14,025           12,804 -8.71% 0.79%
Trust         143,004         172,040 20.30%           71,877           82,860           89,180 7.63% 24.07%
Bancassurance         163,067         171,638 5.26%           90,974           77,861           93,777 20.44% 3.08%
Payments and Collections         108,715         104,274 -4.08%           57,031           55,340           48,934 -11.58% -14.20%
Others         205,343         225,593 9.86%         103,770         108,811         116,782 7.33% 12.54%
Fees and comission income      1,590,003      1,722,635 8.34%         814,615         845,158         877,477 3.82% 7.72%
Fees and comission expenses                
Banking services        (173,741)        (189,751) 9.21%          (92,672)          (93,287)          (96,464) 3.41% 4.09%
Others        (279,160)        (292,831) 4.90%        (150,271)        (127,033)        (165,798) 30.52% 10.33%
Fees and comission expenses        (452,901)        (482,582) 6.55%        (242,943)        (220,320)        (262,262) 19.04% 7.95%
Total fees and comissions, net      1,137,102      1,240,053 9.05%         571,672         624,838         615,215 -1.54% 7.62%
Other operating income                
Derivatives FX contracts           46,116          (17,410) -137.75%          (23,399)          (14,623)            (2,787) -80.94% -88.09%
Net foreign exchange         133,491         202,612 51.78%         106,654           97,211         105,401 8.42% -1.17%
Hedging          (18,201)            (2,812) -84.55%            (4,216)                 (27)            (2,785) 10214.81% -33.94%
Operating leases         235,054         274,449 16.76%         117,671         138,761         135,688 -2.21% 15.31%
Gains (or losses) on sale of assets           24,607           11,477 -53.36%           11,843             7,233             4,244 -41.32% -64.16%
Other reversals                671             1,264 88.38%                278                674                590 -12.46% 112.23%
Others         281,090         251,012 -10.70%         130,232         124,172         126,840 2.15% -2.60%
Total other operating income         702,828         720,592 2.53%         339,063         353,401         367,191 3.90% 8.30%
Dividends received, and share of profits of equity method investees                 
Dividends           22,286           16,745 -24.86%           10,306           11,137             5,608 -49.65% -45.59%
Equity investments           52,015          (39,910) -176.73%           10,996             2,006          (41,916) -2189.53% -481.19%
Equity method           23,372           76,688 228.12%           12,531           19,275           57,413 197.86% 358.17%
Total dividends received, and share of profits of equity method investees            97,673           53,523 -45.20%           33,833           32,418           21,105 -34.90% -37.62%
Total operating income, net      5,501,276      5,704,672 3.70%      2,748,516      2,857,505      2,847,167 -0.36% 3.59%

 

  15

 

 

 
    

 

 

INCOME STATEMENT As of Growth       Growth
(COP million) Jun-16 Jun-17 jun-17 / jun-16 2Q 16 1Q 17 2Q 17 2Q 17 / 1Q 17 2Q 17 / 2Q 16
Operating expenses                
Salaries and employee benefits     (1,192,344)     (1,254,962) 5.25%        (609,646)        (644,019)        (610,943) -5.14% 0.21%
Bonuses        (187,735)        (302,138) 60.94%          (72,257)        (145,810)        (156,328) 7.21% 116.35%
Other administrative and general expenses     (1,222,107)     (1,333,291) 9.10%        (650,161)        (615,291)        (718,000) 16.69% 10.43%
Tax contributions and other tax burden        (280,238)        (440,243) 57.10%        (135,689)        (216,085)        (224,158) 3.74% 65.20%
Impairment, depreciation and amortization        (270,271)        (236,251) -12.59%        (118,005)        (119,533)        (116,718) -2.35% -1.09%
Others expenses        (117,683)        (121,385) 3.15%          (55,694)          (60,263)          (61,122) 1.43% 9.75%
Equity Tax        (144,710)          (51,220) -64.61%                   -             (57,766)             6,546 111.33% 0.00%
Total operating expenses     (3,415,088)     (3,739,490) 9.50%     (1,641,452)     (1,858,767)     (1,880,723) 1.18% 14.58%
Profit before tax      2,086,188      1,965,182 -5.80%      1,107,064         998,738         966,444 -3.23% -12.70%
Income tax        (913,748)        (647,735) -29.11%        (362,900)        (366,685)        (281,050) -23.35% -22.55%
Profit for the year from continuing operations      1,172,440      1,317,447 12.37%         744,164         632,053         685,394 8.44% -7.90%
Non-controlling interest          (56,966)          (55,154) -3.18%          (21,411)          (23,299)          (31,855) 36.72% 48.78%
Net income attributable to equity holders of the Parent Company      1,115,474      1,262,293 13.16%         722,753         608,754         653,539 7.36% -9.58%
Net Income from discontinued operations            14,951                   -    -100.00%           10,306                   -                      -    0.00% -100.00%
Net income      1,130,425      1,262,293 11.67%         733,059         608,754         653,539 7.36% -10.85%

 

  16

 

 

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 08, 2017      By:   /s/  JAIME ALBERTO VELÁSQUEZ B.                      
    Name:   Jaime Alberto Velásquez B.  
    Title:   Vice President of Strategy and Finance