Bancolombia Full-Year 2021 Net Income Jumps 31% Year-on-Year

Medellin-based multinational banking giant Bancolombia reported February 22 a that its full-year 2021 net income jumped 31% year-on-year, to COP$4.1 trillion (US$1.04 billion).

Fourth-quarter (4Q) 2021 net income soared to COP$1.44 trillion (US$365 million), up from a COP$266 billion (US$67 million) net loss in 4Q 2020.

Annualized return on equity (ROE) for full-year 2021 was 14%, while gross loans grew 15.1%, to COP$220 trillion (US$55.8 billion) – even up 9.6% once excluding currency-exchange effects.

In Colombia, the loan portfolio grew 11.7% year-on-year, “largely explained by the performance in the second half. Retail and mortgages gained share during the year within the consolidated loan book, representing 22% and 14% respectively,” according to Bancolombia.

Meanwhile, “30-day past-due loans were 4.05% [of the total book], a gradual reduction based on better asset quality, lower deterioration, and the growth in charge-offs during 2021. Charge-offs grew 86%, mainly explained by run-offs covered under relief” provisions, according to Bancolombia.

Loan provision charges for 4Q 2021 dropped 67.8% year-on-year, to COP$2.4 trillion (US$609 million), “primarily due to macroeconomic improvements, as well as a better performance of customers,” according to the company.

Shareholders’ equity rose 21% year-on-year, to COP$32.2 trillion (US$8.1 billion), “largely explained by the generation of profits during the year,” according to the company.

As for electronic banking, “Bancolombia has made a significant progress in its digital strategy during 2021. The bank has 6.5 million active digital clients in the mobile retail app, as well as 15.9 million accounts in its financial inclusion platforms — 5.9 million users in ‘Bancolombia a la Mano’ and 10 million in ‘Nequi,’” according to the company.

Colombia’s Rebound Key

Loans in Colombia grew 3.9% in 4Q 2021 versus 3Q 2021, and also rose 11.7% year-on-year, according to the company.

The improvements came “as an effect of the economic reactivation in the country,” thanks to Colombia’s record-setting 10.6% growth in gross domestic product (“PIB” in Spanish initials) for full-year 2021, Bancolombia noted.

“In balance, the commercial portfolio showed an increase of COP$9.1 trillion [US$2.3 billion], highlighting the good performance of peso-denominated loans and the foreign currency portfolio, which was impacted by the 16% depreciation of the Colombian peso [against the U.S. dollar] during the year.

“Mortgage loans accounted for over 31% of growth for the retail segment, an increase of COP$2.4 trillion [US$609 million], driven by a better dynamic in the real estate business that was reflected in the higher levels of originations during the year,” the company added..

Central America Operations

At the end of 4Q 2021, Banco Agricola operations in El Salvador, Banistmo in Panama and BAM in Guatemala represented 28% of total gross loans, according to Bancolombia.

“Gross loans denominated in currencies other than COP — generated by operations in Central America, the international operation of Bancolombia Panamá, Puerto Rico and the US dollar-denominated loans in Colombia — accounted for 35% of the portfolio, and grew 6.8% in the quarter (when expressed in COP),” according to the company.

“BAM in Guatemala reported a growth in its portfolio of 3.2% (calculated in U.S. dollars) largely attributed to the performance on the retail side.

“Banistmo [in Panama] reported an increase of 0.2% (calculated in U.S. dollars), with a positive performance in the commercial portfolio with originations growing during 4Q 2021.

“Lastly, Banco Agricola [El Salvador] reported a contraction of 0.9% during the quarter (calculated in U.S. dollars), basically because of prepayments on the commercial side greater than disbursements,” the company added.