MEDELLIN, Colombia, Nov. 9 /PRNewswire-FirstCall/ -- Bancolombia S.A. reports consolidated net income of 321.2 billion Colombian pesos ("COP") for the quarter ended September 30, 2009 ("3Q09") or COP 408 per share -- U.S. $0.85 per ADR. Net income for 3Q09 increased 27% as compared to the results for the quarter ended June 30, 2009 ("2Q09") and decreased 12% as compared to the results for the quarter ended September 2008 ("3Q08"). Bancolombia's annualized return on average shareholders' equity ("ROE") for 3Q09 was 20.1%, improving from 16.5% in 2Q09.
For the first nine months of 2009, net income totaled COP 885.4 billion (COP 1,124 per share -- USD 2.33 per ADR), decreasing 11% as compared to the same period last year.
The main components of revenue presented mixed results in 3Q09:
-- Net interest income totaled COP 849.2 billion, decreasing 8% as compared to 2Q09 driven by lower loan volumes and lower margins resulting from lower market interest rates.
-- Net fees and income from services totaled COP 368.6 billion, down 3% as compared to 2Q09.
-- On the positive side, other operating income totaled COP 102.4 billion, significantly higher than the COP 20 billion for 2Q09. Bancolombia notes that it finished amortizing the effects generated by methodology changes in the valuation of derivatives in 2Q09.
-- Overall, total revenue amounted to COP 1,320 billion, remaining stable as compared to COP 1,326 billion for 2Q09.
Bancolombia ended 3Q09 with COP 60,087 billion in assets, down 5% as compared to 2Q09. Assets denominated in currencies other than COP (primarily U.S. dollars "USD") represented 26% of total assets by the end of 3Q09. Therefore, the 10% appreciation of the COP against the U.S. dollar during 3Q09 explained, to an extent, the reduction in assets. Nonetheless, loan volumes were lower than expected in 3Q09. COP-denominated loans decreased 4.3% while USD-denominated loans remained flat during 3Q09. This performance is explained by higher than anticipated prepayments on corporate loans motivated by increased activity of non-financial firms in the domestic and international debt markets. Additionally, credit demand remained weak due to low levels of economic activity, further contributing to the sluggish performance of volumes.
On a positive note, the pace of asset deterioration slowed down for the second consecutive quarter. The increase in past due loans before charge-offs for 3Q09 was COP 192.2 billion, down from COP 237.9 billion and COP 389 billion for 2Q09 and 1Q09 respectively. Consequently, and helped by recoveries, net provision charges were significantly lower in 3Q09, totaling COP 168 billion, half the amount of charges for 2Q09. Despite the lower deterioration, past due loans ("PDLs"), those overdue more than 30 days, represented 4.1% of gross loans, up from 3.9% in 2Q09. The PDL increase was primarily driven by the loan portfolio reduction presented in 3Q09.
Above all, Bancolombia maintained a strong balance sheet during 3Q09. The Bank's reserves for loan losses represented 5.5% of total loans by the end of 3Q09 while coverage, measured by the ratio of allowances for loans and accrued interest losses to past due loans (overdue more than 30 days) ended the quarter at 135%. Likewise, the Bank's capital ratio increased during 3Q09. Capital adequacy (tier 1 + 2 capital ratio) finished at 13.8% in 3Q09, considerably higher than the 11.4% presented in 3Q08.
Sergio Restrepo Executive VP Tel.: (574) 4041424 Jaime A. Velasquez Financial VP Tel.: (574) 4042199 Juan E. Toro IR Manager Tel.: (574) 4041837
Bancolombia S.A.
CONTACT: Sergio Restrepo, Executive VP, +011-574-404-1424, or Jaime A.
Velasquez, Financial VP, +011-574-404-2199, or Juan E. Toro, IR Manager,
+011-574-404-1837, all of Bancolombia
Web site: http://www.bancolombia.com.co/
