UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November, 2013

 

Comission File Number 001-32535

 

Bancolombia S.A.

(Translation of registrant’s name into English)

 

Cra. 48 # 26-85

Medellín, Colombia

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ                    Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(2):___

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨                    No þ

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    .

 

 
 

 

        

3Q13 

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET
INCOME OF COP 324 BILLION FOR THE THIRD QUARTER OF 2013 (COP 380 PER SHARE - USD 0.80
PER ADR), WHICH REPRESENTS A DECREASE OF 25% COMPARED TO THE SAME QUARTER LAST YEAR.

 

·Net loans increased 3.3% compared to 2Q13 and 21.2% compared to 3Q12. This quarterly growth confirms the sustained credit demand in Colombia during the last twelve months.
·Past due loans as a percentage of total loans remain low in 3Q13. 30 days (or more) past due loans as a percentage of total gross loans was 2.7%. Loan deterioration during 3Q13 was COP 202 billion, and net provision charges for past due loans and foreclosed assets totaled COP 289 billion, which represents 1.5% of gross loans when annualized.
·Deposits increased 2.3% compared to 2Q13 and 28.3% compared to 3Q12. Net loans to deposits ratio ended the quarter at 98.3% and the weighted average cost of deposits was 2.7%, lower than the 2.9% reported for 2Q13.
·The balance sheet remains strong. Loan loss reserves represented 4.7% of total gross loans and 175% of past due loans at the end of 3Q13. The capital adequacy ratio ended the quarter at 15.3% (Tier 1 of 10.1%).

 

November 5, 2013. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the third quarter of 2013.

 

For the quarter ended on September 30, 2013 (“3Q13”), Bancolombia reported consolidated net income of COP 324 billion, or COP 380 per share - USD 0.80 per ADR, which represents an increase of 54.5% as compared to the results for the quarter ended on June 30, 2013 (“2Q13”) and a decrease of 25.4% as compared to the results for the quarter ended on September 30, 2012 (“3Q12”).

 

Bancolombia ended 3Q13 with COP 113,668 billion in assets, 4.1% higher than those at the end of 2Q13 and 22.0% greater than those at the end of 3Q12. At the same time, liabilities totaled COP 101,669 billion, increasing 4.3% as compared to the figure presented in 2Q13 and 23.9% as compared to 3Q121.

 

 

 

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 Superintendencia Financiera de 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 September 30, 2013. The statements of income for the quarter ended September 30, 2013 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 www.sec.gov.

 

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 others 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 October 1, 2013 $1, 908,29 = US$ 1

 

1
 

 

        

3Q13 

 

BANCOLOMBIA: Summary of consolidated financial quarterly results2

 

CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT  Quarter   Growth 
(COP millions)  3Q12   2Q13   3Q13   3Q13/2Q13   3Q13/3Q12 
ASSETS                         
Loans and financial leases, net   61,655,867    72,358,715    74,727,617    3.27%   21.20%
Investment securities, net   13,396,499    14,046,375    14,523,348    3.40%   8.41%
Other assets   18,141,824    22,748,146    24,417,371    7.34%   34.59%
Total assets   93,194,190    109,153,236    113,668,336    4.14%   21.97%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits   56,138,482    70,378,379    72,013,506    2.32%   28.28%
Non-interest bearing   7,667,495    9,510,749    9,217,936    -3.08%   20.22%
Interest bearing   48,470,987    60,867,630    62,795,570    3.17%   29.55%
Other liabilities   25,910,241    27,100,198    29,655,143    9.43%   14.45%
Total liabilities   82,048,723    97,478,577    101,668,649    4.30%   23.91%
Shareholders' equity   11,145,467    11,674,659    11,999,687    2.78%   7.66%
Total liabilities and shareholders' equity   93,194,190    109,153,236    113,668,336    4.14%   21.97%
                          
Interest income   1,979,102    1,802,954    1,979,128    9.77%   0.00%
Interest expense   750,441    767,385    758,928    -1.10%   1.13%
Net interest income   1,228,661    1,035,569    1,220,200    17.83%   -0.69%
Net provisions   (267,820)   (365,580)   (289,233)   -20.88%   8.00%
Fees and income from service, net   449,099    494,470    460,540    -6.86%   2.55%
Other operating income   248,585    136,649    217,172    58.93%   -12.64%
Total operating expense   (1,073,974)   (1,118,147)   (1,143,502)   2.27%   6.47%
Goodwill amortization   (11,488)   (12,452)   (12,745)   2.35%   10.94%
Non-operating income, net   (2,662)   1,830    (4,687)   -356.12%   76.07%
Income tax expense   (136,185)   37,387    (123,820)   -431.18%   -9.08%
Net income   434,216    209,726    323,925    54.45%   -25.40%

 

  Quarter   As of 
PRINCIPAL RATIOS  3Q12   2Q13   3Q13   Sep-12   Sep-13 
PROFITABILITY                    
Net interest margin (1)   6.64%   4.69%   5.27%   6.57%   5.55%
Return on average total assets (2)   1.94%   0.79%   1.16%   1.90%   1.30%
Return on average shareholders´ equity (3)   15.89%   7.24%   10.95%   15.79%   11.66%
EFFICIENCY                         
Operating expenses to net operating income   56.35%   67.84%   60.92%   56.54%   60.24%
Operating expenses to average total assets   4.85%   4.26%   4.15%   4.77%   4.29%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   11.96%   10.70%   10.56%   11.96%   10.56%
Technical capital to risk weighted assets   16.61%   17.21%   15.30%   16.61%   15.30%
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS (USD)   1.13    0.51    0.80           
Net income per share $COP   509.75    246.21    380.27           
P/BV ADS (4)   2.05    1.99    1.95           
P/BV Local (5) (6)   2.02    1.93    1.91           
P/E  (7)   13.04    27.15    17.83           
ADR price  (8)   59.71    56.50    57.54           
Common share price  (8)   26,400    26,400    26,900           
Shares outstanding  (9)   851,827,000    851,827,000    851,827,000           
USD exchange rate (quarter end)   1,800.52    1,929.00    1,908.29           

 

 

 

(1) Defined as net interest income divided by monthly average interest-earning assets. (2) Net income divided by monthly average assets. (3) Net income divided by monthly average shareholders' equity. (4) Defined as ADS price divided by ADS book value. (5) Defined as share price divided by share book value. (6) Share prices on the Colombian Stock Exchange; (7) Defined as market capitalization divided by annualized quarter results. (8) Prices at the end of the respective quarter. (9) Common and preferred.

 

2
 

 

        

3Q13 

 

1.BALANCE SHEET

 

1.1.Assets

 

As of September 30, 2013, Bancolombia’s assets totaled COP 113,668 billion, which represents an increase of 4.1% compared to 2Q13 and an increase of 22.0% compared to 3Q12.

 

The increase in assets presented for the quarter is mainly explained by the increase in the loan and leasing portfolio, which represented 66% of total assets at the end of 3Q13.

 

It is highlighted the growth of operating leases, which increased 8.0% during the quarter compared to 2Q13 and 40.8% compared to 3Q12.

 

1.2.Loan Portfolio

 

The following table shows the composition of Bancolombia’s investments and loans by type and currency:

 

(COP Million)  Amounts in COP   Amounts in USD converted to COP   Amounts in USD (thousands)   Total 
(1 USD = 1908.29 COP)      3Q13/2Q13   3Q13/3Q12       3Q13/2Q13   3Q13/3Q12       3Q13/2Q13   3Q13/3Q12       3Q13/2Q13   3Q13/3Q12 
Net investment securities   9,760,804    3.03%   7.10%   4,762,544    4.15%   11.20%   2,495,713    5.28%   4.92%   14,523,348    3.40%   8.41%
Gross Loans   60,759,868    4.62%   21.60%   17,657,102    -1.11%   18.98%   9,252,840    -0.03%   12.26%   78,416,970    3.27%   21.00%
Commercial loans   34,053,056    5.10%   23.64%   13,510,775    -1.30%   19.39%   7,080,043    -0.23%   12.65%   47,563,831    3.20%   22.41%
Consumer loans   11,767,607    3.32%   15.69%   2,347,499    0.99%   15.16%   1,230,158    2.08%   8.66%   14,115,106    2.93%   15.60%
Small  business loans   365,784    2.91%   24.24%   27,672    -8.48%   -13.56%   14,501    -7.48%   -18.44%   393,456    2.02%   20.53%
Mortgage loans   6,254,739    5.81%   31.99%   838,870    -0.06%   10.81%   439,593    1.03%   4.55%   7,093,609    5.08%   29.07%
Finance lease   8,318,682    3.71%   15.20%   932,286    -3.99%   33.71%   488,545    -2.94%   26.16%   9,250,968    2.88%   16.83%
Allowance for loan losses   (3,353,738)   3.76%   20.30%   (335,615)   -1.99%   -7.83%   (175,872)   -0.93%   -13.03%   (3,689,353)   3.21%   17.05%
Net total loans and fin. leases   57,406,130    4.67%   21.68%   17,321,487    -1.09%   19.65%   9,076,968    -0.01%   12.89%   74,727,617    3.27%   21.20%
Operating leases, net   2,734,470    8.47%   43.08%   91,664    -3.63%   -4.99%   48,035    -2.58%   -10.36%   2,826,134    8.03%   40.77%
Total assets   83,387,634    11.46%   14.93%   30,280,702    -11.81%   46.70%   15,867,977    -10.86%   38.41%   113,668,336    4.14%   21.97%
Total deposits   58,290,644    3.12%   31.66%   13,722,862    -0.91%   15.65%   7,191,183    0.16%   9.12%   72,013,506    2.32%   28.28%
Total liabilities   72,143,926    12.69%   15.63%   29,524,723    -11.76%   50.21%   15,471,822    -10.80%   41.73%   101,668,649    4.30%   23.91%

 

The most relevant aspects regarding the evolution of the loan portfolio during 3Q13 were:

 

·          The growth of consumer and commercial loans in Colombia during 3Q13 indicate a sustained credit demand.

 

·          Net loans in USD correspond to loans originated in Colombia (USD 4,751 million, 52%), El Salvador (USD 2,554 million, 28%) and other countries (USD 1,772 million, 20%). USD denominated loans represented 23% of total loans as of 3Q13.

 

·          COP appreciated 1.1% versus USD during 3Q13 and depreciated 6.0% in the last twelve months.

 

·          Mortgage loans denominated in COP presented a dynamic performance. The dynamism of mortgage lending in Colombia is explained by the lower long-term interest rates, as well as by the Colombian government’s interest rate subsidy programs. On the other hand, the mortgage balance denominated in USD from our operation in El Salvador grew 1.0% during the quarter, and 4.5% in the past 12 months.

 

·          Financial leases, of which 90% are denominated in COP, increased 3.7% during the quarter and 15.2% as compared to 3Q12. Operating leases, net of depreciation, increased 8.0% during 3Q13 and 40.8% in the last 12 months. These two products are mainly used by enterprises in order to finance equipment, commercial real estate and commercial vehicles.

 

3
 

 

        

3Q13 

 

When analyzing the loan portfolio according to the customer categories established by Bancolombia in order to manage its commercial strategy (see table below), it becomes clear that consumer and SMEs loans lead the growth during 3Q13, as they increased 3.2% with respect to 2Q13. This increase is explained by higher demand for working capital and investments by the SMEs and an increase in personal loans. Corporate loans increased by 3.1% compared to 2Q13, indicating a sustained credit demand in order to finance their investment projects. This is the segment that contributes the most to the nominal growth of the total loan book

 

Total reserves (allowances in balance sheet) for loan losses increased by 3.2% during 3Q13 and totaled COP 3,689 billion, or 4.7% of gross loans at the end of the quarter. For further explanation regarding coverage of the loan portfolio and credit quality trends, see section “2.4. Asset Quality, Provision Charges and Balance Sheet Strength”.

 

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO      As of       Growth   % of Total   Category 
(COP million)  Sep-12   Jun-13   Sep-13   3Q13/2Q13   3Q13/3Q12   loans   Category 
CORPORATE                                   
Working capital loans   25,872,273    32,718,281    34,072,869    4.14%   31.70%   43.45%   92.47%
Funded by domestic development banks   249,920    389,885    417,679    7.13%   67.13%   0.53%   1.13%
Trade Financing   3,860,333    2,432,002    2,076,044    -14.64%   -46.22%   2.65%   5.63%
Overdrafts   157,974    170,709    239,602    40.36%   51.67%   0.31%   0.65%
Credit Cards   46,648    40,109    42,252    5.34%   -9.42%   0.05%   0.11%
TOTAL CORPORATE   30,187,148    35,750,986    36,848,446    3.07%   22.07%   46.99%   100.00%
RETAIL AND SMEs                                   
Working capital loans   7,753,835    9,322,914    9,534,830    2.27%   22.97%   12.16%   37.80%
Personal loans   6,712,358    7,666,519    7,850,183    2.40%   16.95%   10.01%   31.12%
Loans funded by   domestic development banks   832,491    929,072    1,086,850    16.98%   30.55%   1.39%   4.31%
Credit Cards   3,610,242    3,895,562    4,041,083    3.74%   11.93%   5.15%   16.02%
Overdrafts   296,761    308,903    315,850    2.25%   6.43%   0.40%   1.25%
Automobile loans   1,897,105    2,209,482    2,284,997    3.42%   20.45%   2.91%   9.06%
Trade Financing   103,973    106,883    110,153    3.06%   5.94%   0.14%   0.44%
TOTAL RETAIL AND SMEs   21,206,765    24,439,335    25,223,946    3.21%   18.94%   32.17%   100.00%
MORTGAGE   5,495,774    6,750,612    7,093,610    5.08%   29.07%   9.05%   100.00%
FINANCIAL LEASES   7,918,069    8,992,355    9,250,968    2.88%   16.83%   11.80%   100.00%
Total loans and financial leases   64,807,756    75,933,288    78,416,970    3.27%   21.00%   100.00%   100.00%
Allowance for loan losses   (3,151,889)   (3,574,573)   (3,689,353)   3.21%   17.05%          
Total loans and financial leases, net   61,655,867    72,358,715    74,727,617    3.27%   21.20%          

 

1.3.Investment Portfolio

 

As of September 30, 2013, Bancolombia’s net investment portfolio totaled COP 14,523 billion, 3.4% higher than that reported in 2Q13 and 8.4% higher when compared to that reported in 3Q12. The investment portfolio consisted primarily of debt investment securities, which represented 91% of Bancolombia’s total investments and 12% of assets at the end of 3Q13. Investments denominated in USD totaled USD 2,496 million and represented 33% of the investment portfolio.

 

Additionally, the Bank had COP 1,057 billion in net mortgage backed securities, which represented 7.3% of the investment portfolio. At the end of 3Q13, the duration of the debt securities portfolio was 13.1 months and the yield to maturity was 4.2%.

 

1.4.Goodwill

 

As of 3Q13, Bancolombia’s goodwill totaled COP 574 billion (from acquisitions prior to HSBC Panamá), decreasing 3.2% compared to the amount reported in 2Q13 and decreasing 3.3% compared to 3Q12. This variation is explained by the amortization of goodwill reported during the past year (under COL GAAP, goodwill is amortized within a maximum period of 20 years), by the elimination of the goodwill related to Asesuisa (which was sold in September 2012) and by the variation of the Colombian peso versus the dollar. As of September 30, 2013, Bancolombia’s goodwill included USD 283 million related mostly to the acquisition of Banagrícola in 2007.

 

4
 

 

        

3Q13 

  

1.5.Funding

 

As of September 30, 2013, Bancolombia’s liabilities totaled COP 101,669 billion, increasing 4.3% compared to 2Q13 and 23.9% compared to 3Q12. The ratio of net loans to deposits (including borrowings from domestic development banks) was 98% at the end of 3Q13, remaining stable compared to that reported in 2Q13, and decreasing compared to the 104% reported in 3Q12.

 

Deposits totaled COP 72,014 billion (or 71% of liabilities) at the end of 3Q13, increasing 2.3% during the quarter and 28.3% over the last 12 months. CDs represented 31% of deposits in 3Q13. Bancolombia´s funding strategy is meant to improve the liquidity position and to encourage checking accounts at no cost and term deposits while keeping costs at a reasonable level. This strategy allowed the bank to reduce the cost on deposits of the bank during the quarter. The ultimate goal is to defend the net interest margin.

 

Funding mix  3Q12   2Q13   3Q13 
COP Million                    
Checking accounts   9,331,522    12%   11,802,856    13%   11,664,539    12%
Saving accounts   21,557,907    28%   30,295,202    33%   29,406,525    30%
Time deposits   24,518,283    32%   27,609,690    30%   30,227,429    31%
Other deposits   730,770    1%   670,631    1%   715,013    1%
Long term debt   12,263,830    16%   12,777,016    14%   12,331,172    13%
Loans with banks   8,725,155    11%   9,138,439    10%   12,509,301    13%
Total Funds   77,127,467    100%   92,293,834    100%   96,853,979    100%

 

At the end of 3Q13, Bancolombia had outstanding bonds for USD 3,740 million in international markets and for COP 5,194 billion in local markets. The maturities of these bonds range from 2 to 10 years.

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 3Q13 was COP 12,000 billion, increasing 2.8% or COP 854 billion, with respect to the 11,145 billion reported at the end of 3Q12.

 

Bancolombia’s capital adequacy ratio was 15.3%, 191 basis points below the 17.21% for 2Q13 and 131 basis points below the 16.96% at the end of 3Q12. This annual decrease in the capital adequacy was due to the implementation in Colombia of a new capital regulation for banks, which increased deductions from the tier 1 calculation.

 

Bancolombia’s capital adequacy ratio was 630 basis points above the minimum level required by Colombia’s regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 10.1% and the tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 9.7% at the end of 3Q13.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS           
Consolidated (COP millions)  3Q12³   %   2Q13³   %   3Q 13   % 
Basic capital (Tier I)   9,079,209    10.90%   10,705,116    11.73%   9,522,134    10.12%
Additional capital (Tier II)   4,759,609    5.71%   5,006,810    5.48%   4,873,451    5.18%
Technical capital (1)   13,838,818         15,711,926         14,395,585      
Risk weighted assets included market risk   83,340,596         91,303,089         94,070,332      
CAPITAL ADEQUACY (2)   16.61%        17.21%        15.30%     

 

(1) Technical capital is the sum of basic and additional capital.

(2) Capital adequacy is technical capital divided by risk weighted assets.

(3) Capital adequacy ratios for 3Q12 and 2Q13 are calculated according to the capital rules existing until August 2013

 

5
 

 

        

3Q13 

 

2.INCOME STATEMENT

 

Net income totaled COP 324 billion in 3Q13, or COP 380 per share - USD 0.80 per ADR, which represents an increase of 54.5% compared to 2Q13 and a decrease of 25.4% compared to 3Q12. Bancolombia’s annualized ROE was 11% for 3Q13, and 11.7% for the first three quarters of 2013.

 

2.1.Net Interest Income

 

Net interest income totaled COP 1,220 billion in 3Q13, 17.8% higher than that reported in 2Q13, and 0.7% lower than the figure for 3Q12. The annual decrease in net interest income was mainly due to lower returns in the securities portfolio in 3Q13.

 

During 3Q13, the investment portfolio recovered the losses generated in the 2Q13 and generated COP 95 billion. The strategy for the last two quarters has been to reduce the volatility of the portfolio and its duration.

 

Net Interest Margin

 

Annualized net interest margin ended 3Q13 at 5.3%. The annualized net interest margin for investments was -0.4% due to lower returns of the Colombian public debt securities, and the annualized net interest margin for loans, financial leases and overnight funds was 6.2%.

 

The rate cuts in the Colombian Central Bank Rate in late 2012 and early 2013 put pressure on margins and led them to decrease.

 

Annualized Interest                                    
Margin  3T11   4Q11   1Q12   2Q12   3Q12   4Q12   1Q13   2Q13   3Q13 
Loans' Interest margin   6.6%   6.7%   6.8%   7.0%   7.1%   6.9%   6.6%   6.4%   6.2%
Debt investments' margin   4.2%   1.2%   4.1%   4.1%   4.0%   2.9%   8.0%   -5.1%   -0.4%
Net interest margin   6.3%   5.9%   6.5%   6.6%   6.6%   6.3%   6.8%   4.7%   5.3%

 

The funding cost decreased during 3Q13 due to the rate cuts and management of the liabilities structure. Checking accounts and time deposits slightly decreased their share; however, the annualized average weighted cost of deposits was 2.7% in 3Q13, decreasing compared to the 2.9% for 2Q13 and the 3.5% for 3Q12.

 

Average weighted            
funding cost  3Q12   2Q13   3Q13 
Checking accounts   0.24%   0.26%   0.24%
Time deposits   5.55%   4.74%   4.42%
Saving accounts   2.86%   2.22%   2.03%
Total deposits   3.47%   2.87%   2.69%
Long term debt   6.59%   6.06%   6.12%
Loans with banks   5.18%   4.32%   3.27%
Total funding cost   4.12%   3.45%   3.21%

 

6
 

 

        

3Q13 

 

2.2.Fees and Income from Services

 

During 3Q13, net fees and income from services totaled COP 461 billion, 6.9% lower than those reported in 2Q13 and 2.5% higher compared to those reported in 3Q12. Fees from credit and debit cards increased 1.1% with respect to 2Q13 due to higher volume of transactions. Fees from banking services decreased 7.8% compared to 2Q13 because in 3Q13 there was not income from advisory services in structuring capital markets operations, which were dynamic in 2Q13; however increased 5.2% with respect to 3Q12; this line includes fees from insurance distribution throughout the distribution networks in Colombia and in El Salvador. Fees from brokerage services decreased 48.3% in 3Q13 as compared to 2Q13 and 9.9% as compared to those in 3Q12 because during 3Q13 there was not income from the primary distribution of Colombian issuers' securities, which were dynamic as well in 2Q13.

 

The following table summarizes Bancolombia’s participation in the credit card business in Colombia:

 

ACCUMULATED CREDIT CARD BILLING          %   2013 
(COP millions)  Aug-12   Aug-13   Growth   Market Share 
Bancolombia VISA   1,633,903    1,830,276    12.02%   7.55%
Bancolombia Mastercard   1,927,947    2,240,251    16.20%   9.25%
Bancolombia American Express   2,406,927    2,603,837    8.18%   10.75%
Total Bancolombia   5,968,777    6,674,364    11.82%   27.55%
Colombian Credit Card Market   21,738,018    24,227,373    11.45%     

 

CREDIT CARD MARKET SHARE          %   2013 
(Outstanding credit cards)  Aug-12   Aug-13   Growth   Market Share 
Bancolombia VISA   408,875    446,145    9.12%   5.05%
Bancolombia Mastercard   422,953    555,321    31.30%   6.29%
Bancolombia American Express   617,347    670,632    8.63%   7.60%
Total Bancolombia   1,449,175    1,672,098    15.38%   18.94%
Colombian Credit Card Market   8,141,431    8,829,434    8.45%     

 

2.3.Other Operating Income

 

Total other operating income was COP 217 billion in 3Q13, 59.9% higher than that in 2Q13, and 12.6% lower than in 3Q12. Income from foreign exchange gains and derivatives denominated in foreign currencies increased in the quarter due to the net effect of the active and passive positions the bank had in foreign currency. Especially, the decrease in the exchange rate during the quarter impacted the value of long-term debt in U.S. dollars causing gains in this particular line.

 

During 3Q13 the bank received 7.3 billion in dividends from companies in which Bancolombia and its subsidiaries have interests, especially from Sura Asset Management (COP 3.9 billion) and Concesiones CCFC Ltda. (COP 3.2 billion).

 

Revenues aggregated in the communication, rent and others line totaled COP 123.2 billion in 3Q13, which is 7.2% higher as compared to 2Q13 and 40.4% higher as compared to those in 3Q12. This line includes revenues from commercial discounts and operating leases payments, which have increased as the operating leasing business grows.

 

7
 

 

        

3Q13 

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 202 billion in 3Q13, which represented 0.3% of the loan portfolio at the beginning of the quarter, decreasing with respect to the COP 237 billion in 3Q12. Consumer and small and medium enterprises loans were the leading contributors to this deterioration.

 

Past due loans (those that are overdue for more than 30 days) totaled COP 2,104 billion at the end of 3Q13, representing 2.7% of total gross loans. The PDL ratio decreased from the 2.8 % in 2Q13 and the 2.9% reported for 3Q12. Loan charge-offs totaled COP 195 billion in 3Q13.

 

Provision charges (net of recoveries) totaled COP 289 billion in 3Q13. Provision charges for the quarter were impacted by the loan growth, which explains approximately 50% of the total charge. These contra cyclical provisions are associated to the origination of new loans. Provisions as a percentage of the average gross loans were 1.5% for 3Q13 and 1.72% for the first three quarters of the year.

 

Bancolombia maintains a strong balance sheet supported on an adequate level of loan loss reserves. Allowances for loan losses totaled COP 3,689 billion, or 4.7% of total loans at the end of 3Q13. This proportion slightly decreased with respect to the 4.71% presented at the end of 2Q13, and with respect to the 4.86% for 3Q12. The coverage measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 175% at the end of 3Q13. Likewise, the coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 120% at the end of 3Q13, increasing with respect to the 118% reported in 2Q13 and decreasing compared to the 123% in 3Q12.

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY      As of       Growth 
( COP millions)  Sep-12   Jun-13   Sep-13   3Q13/2Q13   3Q13/3Q12 
Total performing past due loans (1)   631,234    737,978    692,137    -6.21%   9.65%
Total non-performing past due loans   1,266,205    1,359,555    1,411,940    3.85%   11.51%
Total past due loans   1,897,439    2,097,533    2,104,077    0.31%   10.89%
Allowance for loans interest losses   3,151,889    3,574,573    3,689,353    3.21%   17.05%
Past due loans to total loans   2.93%   2.76%   2.68%          
Non-performing loans as a percentage of total loans   1.95%   1.79%   1.80%          
“C”, “D” and “E” loans as a percentage of total loans   3.97%   3.98%   3.91%          
Allowances to past due loans (2)   166.11%   170.42%   175.34%          
Allowance for loan  losses as a percentage of “C”, “D” and “E” loans (2)   122.64%   118.29%   120.33%          
Allowance for loan losses as a percentage of non-performing loans (2)   248.92%   262.92%   261.30%          
Allowance for loan losses as a percentage of total loans   4.86%   4.71%   4.70%          
Percentage of performing loans to total loans   98.05%   98.21%   98.20%          

 

(1)     "Performing" past due loans are loans upon which Bancolombia continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.

 

(2)Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.

 

8
 

 

        

3Q13 

 

PDL Per Category (30 days)                
   % Of loan Portfolio   3Q12   2Q13   3Q13 
Commercial loans   60.66%   1.61%   1.51%   1.55%
Consumer loans   18.00%   5.41%   4.92%   4.80%
Microcredit   0.50%   9.27%   10.08%   10.30%
Mortgage loans   9.05%   7.24%   6.58%   6.13%
Finance lease   11.80%   2.34%   2.69%   2.31%
PDL TOTAL   100.00%   2.93%   2.76%   2.68%

 

PDL Per Category (90 days)                
   % Of loan Portfolio   3Q12   2Q13   3Q13 
Commercial loans   60.66%   1.03%   1.03%   1.09%
Consumer loans   18.00%   2.47%   2.50%   2.42%
Microcredit   0.50%   5.98%   6.88%   7.27%
Mortgage loans   9.05%   2.93%   2.92%   2.81%
Finance lease   11.80%   1.03%   1.25%   1.33%
TOTAL LOAN PORTFOLIO   100.00%   1.47%   1.52%   1.54%

 

LOANS AND FINANCIAL LEASES CLASSIFICATION  Sep-12   Jun-13   Sep-13 
( COP millions)                    
¨A¨ Normal   60,081,279    92.70%   70,294,732    92.57%   73,087,284    93.20%
¨B¨ Subnormal   2,156,397    3.33%   2,616,759    3.45%   2,263,565    2.89%
¨C¨ Deficient   968,140    1.49%   1,222,720    1.61%   1,292,074    1.65%
¨D¨ Doubtful recovery   885,701    1.37%   1,113,603    1.47%   1,045,062    1.33%
¨E¨ Unrecoverable   716,239    1.11%   685,474    0.90%   728,985    0.93%
Total   64,807,756    100.00%   75,933,288    100.00%   78,416,970    100.00%
    62249473    1    72188142    1    75933288    100.01%
Loans and financial leases classified as C, D and E                              
as a percentage of total loans and financial leases   3.97%        3.98%        3.91%     

 

2.5.Operating Expenses

 

During 3Q13, operating expenses totaled COP 1,144 billion, increasing 2.3% with respect to 2Q13 and 6.5% with respect to 3Q12.

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 403 billion in 3Q13, decreasing 7.4 % as compared to 2Q13 and 2.2% as compared to 3Q12. The increase of salaries in the last 12 months is explained by the bank´s greater number of employees and the 2013 wage increases.

 

During 3Q13, administrative expenses totaled COP 577 billion, increasing 3.6% as compared to 2Q13 and 6.1% as compared to 3Q12. This variation during the year is mainly explained by higher rent expenses, higher taxes (other than income tax), higher amortization of capitalized expenses and higher expenses for maintenance of fixed assets.

 

Depreciation expenses totaled COP 111 billion in 3Q13, increasing 7.7% as compared to 2Q13 and 34.8% as compared to 3Q12. The increase in this type of expense is explained by the increase of operating leases from Leasing Bancolombia whose assets given on lease are depreciated.

 

At the end of 3Q13, Bancolombia had 25,978 employees, 1,016 branches and 3,948 ATMs.

 

9
 

 

        

3Q13 

 

3.BANCOLOMBIA Company Description (NYSE: CIB)

 

GRUPO BANCOLOMBIA is a full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 7 million customers. GRUPO BANCOLOMBIA delivers its products and services via its regional network comprised of: Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore banking subsidiaries in Panama, Cayman and Puerto Rico. Together, BANCOLOMBIA and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, among others.

 

Contact Information

 

Bancolombia’s Investor Relations

Phone: (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Alejandro Mejia (IR Manager) / Simon Botero (Analyst)

Website: http://www.grupobancolombia.com/investorRelations/

 

10
 

 

        

3Q13 

 

BALANCE SHEET                        
(COP million)  Sep-12   Jun-13   Sep-13   Last
Quarter		   Annual   % of
Assets		   % of
Liabilities		 
ASSETS                                   
Cash and due from banks   6,225,344    8,630,601    8,439,492    -2.21%   35.57%   7.42%     
Overnight funds and interbank loans   1,416,357    2,972,713    4,267,357    43.55%   201.29%   3.75%     
Total cash and equivalents   7,641,701    11,603,314    12,706,849    9.51%   66.28%   11.18%     
Debt securities   12,277,437    12,839,215    13,288,857    3.50%   8.24%   11.69%     
Trading   6,747,649    7,053,628    8,114,463    15.04%   20.26%   7.14%     
Available for Sale   1,688,318    1,740,869    1,555,171    -10.67%   -7.89%   1.37%     
Held to Maturity   3,841,470    4,044,718    3,619,223    -10.52%   -5.79%   3.18%     
Equity securities   1,138,169    1,215,697    1,241,511    2.12%   9.08%   1.09%     
Trading   346,982    383,499    412,532    7.57%   18.89%   0.36%     
Available for Sale   791,187    832,198    828,979    -0.39%   4.78%   0.73%     
Allowance for impairment   -19,107    -8,537    -7,020    -17.77%   -63.26%   -0.01%     
Net investment securities   13,396,499    14,046,375    14,523,348    3.40%   8.41%   12.78%     
Commercial loans   38,857,418    46,091,081    47,563,831    3.20%   22.41%   41.84%     
Consumer loans   12,210,066    13,713,567    14,115,106    2.93%   15.60%   12.42%     
Small business loans   326,429    385,673    393,456    2.02%   20.53%   0.35%     
Mortgage loans   5,495,774    6,750,612    7,093,609    5.08%   29.07%   6.24%     
Financial leases   7,918,069    8,992,355    9,250,968    2.88%   16.83%   8.14%     
Allowance for loan and financial lease losses   -3,151,889    -3,574,573    -3,689,353    3.21%   17.05%   -3.25%     
Net total loans and financial leases   61,655,867    72,358,715    74,727,617    3.27%   21.20%   65.74%     
Accrued interest receivable on loans and financial leases   611,900    582,416    622,991    6.97%   1.81%   0.55%     
Allowance for accrued interest losses   -55,269    -61,426    -61,803    0.61%   11.82%   -0.05%     
Net total interest accrued   556,631    520,990    561,188    7.72%   0.82%   0.49%     
Customers' acceptances and derivatives   701,983    702,833    598,237    -14.88%   -14.78%   0.53%     
Accounts receivable, net   1,118,616    1,159,338    1,538,437    32.70%   37.53%   1.35%     
Premises and equipment, net   1,471,153    1,496,494    1,569,253    4.86%   6.67%   1.38%     
Foreclosed assets, net   77,646    90,379    97,581    7.97%   25.67%   0.09%     
Prepaid expenses and deferred charges, net   738,995    615,468    547,638    -11.02%   -25.89%   0.48%     
Goodwill   592,935    592,667    573,608    -3.22%   -3.26%   0.50%     
Premises and equipment under operating leases, net   2,007,676    2,615,948    2,826,134    8.03%   40.77%   2.49%     
Other assets   2,396,326    2,399,332    2,419,752    0.85%   0.98%   2.13%     
Reappraisal of assets   838,162    951,383    978,694    2.87%   16.77%   0.86%     
Total assets   93,194,190    109,153,236    113,668,336    4.14%   21.97%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
DEPOSITS                                   
Non-interest bearing   7,667,495    9,510,749    9,217,936    -3.08%   20.22%   8.11%   9.07%
Checking accounts   6,936,725    8,840,118    8,502,923    -3.81%   22.58%   7.48%   8.36%
Other   730,770    670,631    715,013    6.62%   -2.16%   0.63%   0.70%
Interest bearing   48,470,987    60,867,630    62,795,570    3.17%   29.55%   55.24%   61.76%
Checking accounts   2,394,797    2,962,738    3,161,616    6.71%   32.02%   2.78%   3.11%
Time deposits   24,518,283    27,609,690    30,227,429    9.48%   23.29%   26.59%   29.73%
Savings deposits   21,557,907    30,295,202    29,406,525    -2.93%   36.41%   25.87%   28.92%
Total deposits   56,138,482    70,378,379    72,013,506    2.32%   28.28%   63.35%   70.83%
Overnight funds and interbank borrowings   3,434,718    686,903    2,185,843    218.22%   -36.36%   1.92%   2.15%
Bank acceptances outstanding and derivatives   502,487    565,049    455,051    -19.47%   -9.44%   0.40%   0.45%
Other interbank borrowings   2,070,347    4,673,159    6,338,644    35.64%   206.16%   5.58%   6.23%
Borrowings from development and other domestic banks   3,220,090    3,778,377    3,984,814    5.46%   23.75%   3.51%   3.92%
Accounts payable   2,141,548    2,393,235    1,882,304    -21.35%   -12.11%   1.66%   1.85%
Accrued interest payable   461,358    515,749    561,695    8.91%   21.75%   0.49%   0.55%
Other liabilities   681,712    779,438    780,879    0.18%   14.55%   0.69%   0.77%
Long-term debt   12,263,830    12,777,016    12,331,172    -3.49%   0.55%   10.85%   12.13%
Accrued expenses   1,053,613    854,505    1,057,542    23.76%   0.37%   0.93%   1.04%
Minority interest   80,538    76,767    77,199    0.56%   -4.15%   0.07%   0.08%
Total liabilities   82,048,723    97,478,577    101,668,649    4.30%   23.91%   89.44%   100.00%
SHAREHOLDERS' EQUITY                                   
Subscribed and paid in capital   425,914    425,914    425,914    0.00%   0.00%   0.37%     
Retained earnings   9,794,369    10,443,879    10,748,889    2.92%   9.75%   9.46%     
Appropiated   8,560,085    9,741,417    9,820,185    0.81%   14.72%   8.64%     
Unappropiated   1,234,284    702,462    928,704    32.21%   -24.76%   0.82%     
Reappraisal of assets   892,193    807,509    829,433    2.72%   -7.03%   0.73%     
Gross unrealized net gain on investments   32,991    -2,643    -4,549    72.12%   -113.79%   0.00%     
Total shareholder's equity   11,145,467    11,674,659    11,999,687    2.78%   7.66%   10.56%     

 

11
 

 

        

3Q13 

 

INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Sep-12   Sep-13   sep-13/sep-12   3Q12   2Q13   3Q13   3Q13/2Q13   3Q13/3Q12 
Interest income and expenses                                        
Interest on loans   4,444,555    4,909,261    10.46%   1,558,293    1,631,407    1,661,695    1.86%   6.64%
Interest on investment securities   557,509    390,132    -30.02%   209,796    (52,715)   95,030    280.27%   -54.70%
Overnight funds and interbank loans   18,015    17,930    -0.47%   3,105    4,375    6,375    45.71%   105.31%
Financial leases   607,596    661,678    8.90%   207,908    219,887    216,028    -1.75%   3.91%
Total interest income   5,627,675    5,979,001    6.24%   1,979,102    1,802,954    1,979,128    9.77%   0.00%
Interest expense                                        
Checking accounts   18,687    22,284    19.25%   6,149    7,849    7,377    -6.01%   19.97%
Time deposits   792,699    973,405    22.80%   304,428    319,163    319,342    0.06%   4.90%
Savings deposits   489,779    500,533    2.20%   157,713    165,656    151,586    -8.49%   -3.88%
Total interest on deposits   1,301,165    1,496,222    14.99%   468,290    492,668    478,305    -2.92%   2.14%
Interbank borrowings   41,184    46,501    12.91%   10,932    13,664    22,887    67.50%   109.36%
Borrowings from development and other domestic banks   161,438    164,756    2.06%   55,342    51,409    55,717    8.38%   0.68%
Overnight funds   69,028    41,991    -39.17%   34,347    18,098    9,965    -44.94%   -70.99%
Long-term debt   527,925    569,519    7.88%   181,530    191,546    192,054    0.27%   5.80%
Total interest expense   2,100,740    2,318,989    10.39%   750,441    767,385    758,928    -1.10%   1.13%
Net interest income   3,526,935    3,660,012    3.77%   1,228,661    1,035,569    1,220,200    17.83%   -0.69%
Provisions for loans and accrued interest losses and other receivables , net   (883,730)   (1,066,217)   20.65%   (303,808)   (402,305)   (326,879)   -18.75%   7.59%
Recovery of charged-off loans   123,624    161,984    31.03%   43,938    57,383    52,279    -8.89%   18.98%
Provision for foreclosed assets and other assets   (76,099)   (115,455)   51.72%   (29,666)   (36,627)   (32,281)   -11.87%   8.81%
Recovery of provisions for foreclosed assets and other assets   60,009    62,007    3.33%   21,716    15,969    17,648    10.51%   -18.73%
Total net provisions   (776,196)   (957,681)   23.38%   (267,820)   (365,580)   (289,233)   -20.88%   8.00%
Net interest income after provision for loans and accrued interest losses   2,750,739    2,702,331    -1.76%   960,841    669,989    930,967    38.95%   -3.11%
Commissions from banking services   325,135    364,933    12.24%   117,282    133,795    123,366    -7.79%   5.19%
Electronic services and ATM fees   54,279    57,945    6.75%   18,604    19,145    19,243    0.51%   3.43%
Branch network services   92,258    96,846    4.97%   31,422    32,862    34,696    5.58%   10.42%
Collections and payments fees   186,088    206,004    10.70%   65,542    72,595    71,232    -1.88%   8.68%
Credit card merchant fees   6,436    5,598    -13.02%   2,724    3,220    2,490    -22.67%   -8.59%
Credit and debit card fees   494,412    505,328    2.21%   165,266    169,085    170,889    1.07%   3.40%
Checking fees   54,776    52,608    -3.96%   17,952    18,227    17,577    -3.57%   -2.09%
Trust activities   153,724    158,948    3.40%   53,595    55,821    46,730    -16.29%   -12.81%
Brokerage fees   45,483    49,737    9.35%   12,927    22,519    11,651    -48.26%   -9.87%
Check remittances   16,354    16,027    -2.00%   5,407    5,429    5,618    3.48%   3.90%
International wire transfers   47,823    45,668    -4.51%   17,688    10,925    19,901    82.16%   12.51%
Fees and other service income   1,476,768    1,559,642    5.61%   508,409    543,623    523,393    -3.72%   2.95%
Fees and other service expenses   (164,207)   (168,304)   2.50%   (59,310)   (49,153)   (62,853)   27.87%   5.97%
Total fees and income from services, net   1,312,561    1,391,338    6.00%   449,099    494,470    460,540    -6.86%   2.55%
Other operating income                                        
Foreign exchange gain (loss), net   79,375    31,706    -60.06%   35,682    (39,729)   25,989    165.42%   -27.16%
Gains on forward contracts in foreign currency   43,934    19,707    -55.14%   5,857    (2,326)   23,802    1123.30%   306.39%
Gains on sales of investments in equity securities   84,363    (1,136)   -101.35%   83,018    1,994    (3,205)   -260.73%   -103.86%
Gains on sales of mortgage loans   35,455    25,835    -27.13%   7,515    12,114    5,703    -52.92%   -24.11%
Dividend income   45,860    54,605    19.07%   3,073    15,184    7,303    -51.90%   137.65%
Income from non-financial subsidiaries   110,706    107,288    -3.09%   44,929    34,483    34,349    -0.39%   -23.55%
Insurance income   -    -    0.00%   (19,290)   -    -    0.00%   -100.00%
Communication, postage, rent and others   237,153    344,330    45.19%   87,801    114,929    123,231    7.22%   40.35%
Total other operating income   636,846    582,335    -8.56%   248,585    136,649    217,172    58.93%   -12.64%
Total income   4,700,146    4,676,004    -0.51%   1,658,525    1,301,108    1,608,679    23.64%   -3.01%
Operating expenses                                        
Salaries and employee benefits   1,033,622    1,100,174    6.44%   343,230    369,906    370,876    0.26%   8.05%
Bonus plan payments   169,652    137,820    -18.76%   56,639    57,644    22,877    -60.31%   -59.61%
Indemnities benefits   29,625    25,570    -13.69%   12,302    7,577    9,250    22.08%   -24.81%
Administrative and other expenses   1,511,769    1,668,163    10.35%   544,041    556,918    577,173    3.64%   6.09%
Insurance on deposits, net   76,364    101,354    32.72%   25,773    18,791    48,446    157.81%   87.97%
Donation expenses   11,079    9,980    -9.92%   9,616    4,225    3,807    -9.89%   -60.41%
Depreciation   229,603    309,970    35.00%   82,373    103,086    111,073    7.75%   34.84%
Total operating expenses   3,061,714    3,353,031    9.51%   1,073,974    1,118,147    1,143,502    2.27%   6.47%
Net operating income   1,638,432    1,322,973    -19.25%   584,551    182,961    465,177    154.25%   -20.42%
Goodwill amortization (1)   34,525    40,545    17.44%   11,488    12,452    12,745    2.35%   10.94%
Non-operating income (expense)                                        
Other income   105,859    133,843    26.44%   28,640    33,990    48,712    43.31%   70.08%
Minority interest   (5,022)   (7,383)   47.01%   (1,098)   (1,266)   (4,901)   287.12%   346.36%
Other expense   (71,757)   (109,458)   52.54%   (30,204)   (30,894)   (48,498)   56.98%   60.57%
Total non-operating income   29,080    17,002    -41.53%   (2,662)   1,830    (4,687)   -356.12%   76.07%
Income before income taxes   1,632,987    1,299,430    -20.43%   570,401    172,339    447,745    159.80%   -21.50%
Income tax expense   (398,703)   (273,043)   -31.52%   (136,185)   37,387    (123,820)   -431.18%   -9.08%
Net income   1,234,284    1,026,387    -16.84%   434,216    209,726    323,925    54.45%   -25.40%

 

12
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BANCOLOMBIA S.A.
  (Registrant)
     
Date:  November 5, 2013 By: /s/  JAIME ALBERTO VELÁSQUEZ B.
    Name:  Jaime Alberto Velásquez B.
    Title: Vice President of Strategy
and Finance