Bancolombia Full-Year 2020 Net Income Plummets 91% on Covid-19 Crisis
Medellin-based multinational banking giant Bancolombia announced February 24 that its full-year 2020 net income fell 91% year-on-year, to COP$276 billion (US$77 million), down from COP$3.1 trillion (US$917 million) in 2019.
As for fourth quarter (4Q) 2020, Bancolombia posted a net loss of COP$266 billion (US$74 million), down from COP$878 billion (US$260 million) in 4Q 20219, according to the company.
As for its Colombia national operations, Bancolombia posted a 4Q 2020 net loss of COP$253 billion (US$71 million) here, a huge reversal from 4Q 2019 positive net income of COP$397 billion (US$111 million) in Colombia.
Corporate-wide, gross loans in 4Q 2020 totaled COP$191 trillion (US$53.6 billion), up 5% from 4Q 2019 but declining by 3.7% during the last quarter. Colombian peso-denominated loans in 3Q 2020 grew 5.8% when compared to 4Q 2019, according to the company.
Loan provision charges for the last quarter were COP$2 trillion (US$561 million), up 20% compared to third-quarter (3Q) 2020, while the coverage ratio for 90-day past due loans was 213.2%.
“This level of provisions was largely explained by the deterioration of the consumer portfolio, Covid-19 and the update of macroeconomic variables in our expected losses models,” according to Bancolombia.
Meanwhile, Bancolombia continued to boost its electronic banking strategy in 2020 “with a robust growth in its mobile platforms. As of December 31, 2020, the bank has 9.4 million digital accounts, 4.6 million users in ‘Bancolombia a la Mano’ and 4.8 million in ‘Nequi,’” according to the company.
“Shift of sales to digital channels continues to grow. During 2020, Bancolombia managed to distribute more than 3 million products through its web and mobile platforms, which represents 44% of the total sales completed in all channels,” the company added.
As of December 31, 2020, company operations at 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 the operations in Central America, the offshore operation of Bancolombia Panama, Puerto Rico and the U.S. dollar-denominated loans in Colombia, accounted for 32.3% and decreased by 12% during 4Q 2020 (when expressed in COP),” according to the company.
“Total reserves — allowances in the balance sheet — for loan losses increased by 9.9% during the latest quarter and totaled COP$16.6 trillion [US$4.65 billion], equivalent to 8.7% of gross loans at the end of the quarter,” the company added.
At year-end 2020, Bancolombia’s net investment portfolio totaled COP$29.5 trillion (US$8.3 billion), up 6.6% from 3Q 2020 and up 75.7% from 4Q 2019.
Liabilities at year-end 2020 totaled COP$227.4 trillion (US$63.8 billion), down 3.7% from the end of 3Q 2020 but up 9.7% compared to 4Q 2019, according to the bank. Deposits by customers totaled COP$180 trillion (US$50.5 billion), equal to 79.5% of liabilities, at year-end 2020 — down 1.5% when compared to 3Q 2020 but up 15% compared to year-end 2019.
“The net loans-to-deposits ratio was 96.7% at the end of 4Q 2020, decreasing when compared to 100% at the end of 3Q 2020,” but “Bancolombia’s liquidity position continues to be adequate. During 4Q 2020, total funding cost indicates the undertaken efforts to sustain a high share of deposits over the total funding mix,” the company concluded.
