MEDELLIN, Colombia, Aug. 3 /PRNewswire-FirstCall/ -- Today, BANCOLOMBIA S.A. ("BANCOLOMBIA" or the "Bank") announced its financial results for the second quarter of fiscal year 2009, ended June 30, 2009.(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") fell 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 was 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.
The complete consolidated earnings report for 2Q09 can be found on Bancolombia's Investor Relations website at http://www.grupobancolombia.com/InvestorRelations.
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 other 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$
(1) This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. ("BANCOLOMBIA") and its affiliates of which it owns, directly or indirectly, more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of 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 http://www.sec.gov/.
Sergio Restrepo Executive VP Tel.: (574) 4041424 Jaime A. Velasquez Financial VP Tel.: (574) 4042199 Juan Esteban Toro IR Manager Tel.: (574) 4041837
BANCOLOMBIA S.A.
CONTACT: Sergio Restrepo, Executive VP, +011-5744041424, or Jaime A.
Velasquez, Financial VP, +011-574-4042199, or Juan E. Toro, IR Manager,
+011-574-4041837, all of Bancolombia
Web site: http://www.bancolombia.com.co/
