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• Net Income for Q4 2024: COP1.7 trillion, reflecting an 11% increase.

• Net Income for 2024: COP6.3 trillion, a 2.5% increase.

• Return on Equity (ROE) for Q4 2024: 15.7%.

• Return on Equity (ROE) for 2024: 15.8%.

• Net Interest Margin for Q4 2024: 6.4%.

• Net Interest Margin for 2024: 6.8%.

• Cost of Risk for Q4 2024: 1.35%.

• Cost of Risk for 2024: 2.1%.

• Operating Expense Increase for 2024: 5.3%.

• Dividend Proposed for 2024: COP3.8 trillion, a 10.3% increase.

• Loan Portfolio Growth for 2024: 10% increase.

• Deposit Growth for 2024: 13% increase.

• Effective Tax Rate for 2024: 28%.

• Shareholders' Equity Growth for 2024: 14.3% increase.

• Core Equity Tier One Ratio: 11.89%.

• Warning! GuruFocus has detected 2 Warning Sign with CIB.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BanColombia SA (NYSE:CIB) reported a net income of COP1.7 trillion for the quarter, reflecting an 11% increase due to resumed loan growth and reduced provision expenses.

• The return on equity for the quarter increased to 15.7%, with a net income for the year reaching COP6.3 trillion, boosting shareholders' equity by 14.3%.

• The company announced a proposed dividend of approximately COP3.8 trillion, representing a 10.3% year-over-year increase, with a payout ratio of 60%.

• BanColombia SA (NYSE:CIB) holds a strong market position in Colombia, leading in commercial and consumer loan segments and holding over 25% of total deposits in the country.

• The company is making significant progress in establishing Gruppo C, a new holding company, with approvals from Central American regulators and ongoing processes with the Colombian regulator.

Negative Points

• Net interest income from loans and financial leases decreased by 2.5% during the quarter and 4.1% during the year due to monetary policy pressures.

• Banistmo's net income dropped 56%, resulting in a 4.5% ROE for the year due to lower net interest income and higher provision expenses.

• Operating expenses increased 13.4% compared to the previous quarter, driven by higher IT, cybersecurity, and marketing expenses.

• The cost to income ratio increased to 49% compared to 45% the previous year, due to lower operating income growth and limited expense dilution.

• The effective tax rate for the year was 28%, higher than the 24% recorded in 2023, due to the higher contribution of the Colombian operation to the group's consolidated net income.

Q & A Highlights

Q: Can you explain how the new holding structure will impact capital management and the potential for a buyback program? A: Juan Carlos Mora Uribe, CEO: The new holding structure allows us to manage capital more efficiently, assigning the right capital for different operations without being subject to the same requirements as the banks. This optimization will enable better returns on equity. Regarding the buyback program, the current market valuation will not alter our plans. Once the structure is in place, we will propose a buyback program to the shareholders. Rodrigo Prieto Uribe, VP of Risk Management, added that the target capital levels for each bank will remain the same, and the excess capital will flow to the holding company, allowing for dividend distribution and buyback programs depending on market conditions.