Bancolombia 3Q 2018 Net Income Jumps 20.5% Year-on-Year
Medellin-based banking giant Bancolombia announced November 7 that its third quarter (3Q) 2018 net income rose 20.5% year-on-year, to COP$543 billion (US$172 million).
However, this positive year-on-year result in 3Q 2018 was offset by an 8.2% decline in net income compared to 2Q 2018.
“Gross loans [in 3Q 2018] grew by 4.0% when compared to 3Q 2017 and 0.9% during the quarter. This annual growth shows moderation in the credit demand in Colombia,” according to Bancolombia.
Colombian peso-denominated loans grew 5.8% in 3Q 2018 versus 3Q 2017.
“Net interest income was COP$2.57 trillion [US$813 million] for 3Q 2018, increasing by 0.6% when compared to 3Q 2017. This positive performance is mainly explained by the growth in the loan book [as] net interest income increased by 0.9% during the [latest] quarter,” according to the company.
“The annualized net interest margin for the quarter was 5.8%. The margin decreased by 10 basis points during the quarter and registered the same number when compared to 3Q 2017, mainly affected by the reductions in the reference rate in Colombia that were reflected in the repricing of the loan portfolio.
“Provision charges for the quarter were COP$1.0 trillion [US$316 million] and the coverage ratio for 90-day past due loans was 160.7%. Provision charges increased by 4.3% when compared to 3Q 2017 and by 3.8% compared to 2Q 2018.
“These provisions allow us to maintain a solid coverage ratio amid a challenging environment [even as] new past-due loans totaled COP$847 billion [US$267 million] for the quarter.
“Net fees were COP$631 billion [US$199 million] and increased by 4.1% compared to 3Q 2017. This growth was mainly driven by an increase in fees related to credit and debit cards and trust services, [although] net fees decreased by 2.1% during the quarter,” the bank added.
Bancolombia “maintains a strong balance sheet supported by an adequate level of loan loss reserves,” according to the company. Allowances for the principal for loan losses were 5.7% of total loans at the end of 3Q 2018, increasing as compared to 2Q 2018, the company added.