6-K 1 v447347_6k.htm FORM 6-K

 

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 August, 2016

 

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-                    .

 

 

 

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF 733 BILLION FOR THE SECOND QUARTER OF 2016, WHICH REPRESENTS AN INCREASE OF 84% COMPARED TO THE PREVIOUS QUARTER AND AN INCREASE OF 6% COMPARED TO THE SECOND QUARTER OF 2015.

 

·Net interest income grew 37.2% compared to 2Q15. This strong growth is explained by higher volumes in the loan portfolio and by an expansion of the net interest margin, which increased 70 basis points in the last year.

 

·The net interest margin was 6.1% for the quarter. This result is supported by the balance sheet’s sensibility to hikes in the interest rates, the successive increases in the reference rate by the central bank, higher rates commanded on new loans, as well as, good performance in investments that ultimately improved the margin from 5.6% to 6.1% in the quarter.

 

·Net fees increased by 12.4% compared to 2Q15. This solid growth was mainly driven by an increase in fees related to banking services, credit and debit cards, and distribution of insurance products through the bank’s network. This growth is mainly explained by a higher number of transactions.

 

·Tier 1 increased during the quarter to 8.5%. The capital adequacy ratio was 13.16%, which indicates that Bancolombia has enough reserves and capital to maintain its operation and develop its business plan.

 

·Efficiency for 2Q16 was 48.2%, improving compared to 1Q16. Higher net interest income as well as a tighter control on the growth of expenses led to an improvement in efficiency for the quarter.

 

August 18, 2016. Medellin, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the second quarter of 20161. For the quarter ended on June 30, 2016 (“2Q16”), Bancolombia reported consolidated net income of COP 733 billion, or COP 751.4 per share - USD 1.03 per ADR. This net income represents 84.5% increase compared to the quarter ended on March 31, 2016 (“1Q16”) and 6.3% compared to the quarter ended on June 30, 2015 (“2Q15”).

 

All data, results, and analyses shown in this report, treat Tuya S.A. as a discontinued operation. For this reason, Bancolombia does not consolidate this operation in its consolidated financial statements and makes reference to it through a separate line on its Balance Sheet and Income Statement.

 

 

1. This report corresponds to the interim unaudited consolidated financial statements of BANCOLOMBIA S.A. and its subsidiaries (“BANCOLOMBIA” or “The Bank”) which Bancolombia controls, amongst others, by owning directly or indirectly, more than 50% of the voting capital stock. These financial statements have been prepared in accordance with International Financial Reporting Standards – IFRS. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. The statements of income for the quarter ended June 30, 2016 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 CHANGES IN THE BANK’S ACCOUNTING POLICIES: Beginning on January 1, 2015, the financial statements of BANCOLOMBIA are being prepared under IFRS. BANCOLOMBIA’s first IFRS financial statements will cover the year ending in 2015. 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, July 1, 2016 $2,919.01 = US$ 1

 

1

 

BANCOLOMBIA: Summary of consolidated financial quarterly results

 

CONSOLIDATED BALANCE SHEET            
AND INCOME STATEMENT  Quarter   Growth 
(COP million)  2Q15   1Q16   2Q16   2Q16/1Q16   2Q16/2Q15 
ASSETS                         
Net Loans   116,512,730    139,432,678    140,059,861    0.45%   20.21%
Investments   12,774,812    15,040,851    12,701,160    -15.56%   -0.58%
Other assets   28,975,786    36,911,252    35,638,296    -3.45%   22.99%
Total assets   158,263,328    191,384,781    188,399,317    -1.56%   19.04%
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits   97,540,528    117,399,796    115,047,681    -2.00%   17.95%
Other liabilities   42,121,701    54,200,764    52,905,953    -2.39%   25.60%
Total liabilities   139,662,229    171,600,560    167,953,634    -2.13%   20.26%
Non-controlling interest   515,767    1,100,018    1,108,505    0.77%   114.92%
Shareholders' equity   18,085,332    18,684,203    19,337,178    3.49%   6.92%
Total liabilities and shareholders' equity   158,263,328    191,384,781    188,399,317    -1.56%   19.04%
                          
Interest income   2,707,759    3,668,507    3,892,103    6.10%   43.74%
Interest expense   (935,430)   (1,369,008)   (1,459,686)   6.62%   56.04%
Net interest income   1,772,329    2,299,499    2,432,417    5.78%   37.24%
Net provisions   (414,707)   (539,774)   (628,469)   16.43%   51.55%
Fees and income from service, net   508,518    565,430    571,672    1.10%   12.42%
Other operating income   310,524    363,765    339,063    -6.79%   9.19%
Total Dividends received and equity method   75,779    63,840    33,833    -47.00%   -55.35%
Total operating expense   (1,354,037)   (1,773,636)   (1,641,452)   -7.45%   21.23%
Profit before tax   898,406    979,124    1,107,064    13.07%   23.23%
Income tax   (209,626)   (550,848)   (362,900)   -34.12%   73.12%
Net income before non-controlling interest   688,780    428,276    744,164    73.76%   8.04%
Non-controlling interest   (9,042)   (35,555)   (21,411)   -39.78%   136.79%
Net income before Descontinued Operations   679,738    392,721    722,753    84.04%   6.33%
Discontinued Operations Net Income   9,585    4,645    10,306    121.87%   7.52%
Net income   689,323    397,366    733,059    84.48%   6.34%

 

       Quarter       As of 
PRINCIPAL RATIOS  2Q 15   1Q 16   2Q 16   2Q15   2Q16 
PROFITABILITY                         
Net interest margin (1) from continuing operations   5.43%   5.65%   6.09%   5.50%   5.86%
Return on average total assets (2) from continuing operations   1.77%   0.81%   1.53%   1.70%   1.17%
Return on average shareholders´ equity (3)   15.56%   8.10%   15.19%   14.87%   11.56%
EFFICIENCY                         
Operating expenses to net operating income   50.83%   54.21%   48.23%   52.76%   51.20%
Operating expenses to average total assets   3.50%   3.72%   3.43%   3.68%   3.57%
Operating expenses to productive assets   4.12%   4.42%   4.04%   4.36%   4.23%
CAPITAL ADEQUACY                         
Shareholders' equity to total assets   11.43%   9.76%   10.26%   11.43%   10.26%
Technical capital to risk weighted assets   13.67%   12.96%   13.16%   13.67%   13.16%
KEY FINANCIAL HIGHLIGHTS                         
Net income per ADS from continuing operations   1.10    0.54    1.03    1.75    1.59 
Net income per share $COP from continuing operations   712.59    408.31    751.44    1,351.93    1,159.75 
P/BV ADS (4)   1.49    1.32    1.27    1.49    1.27 
P/BV Local (5) (6)   1.42    1.27    1.18    1.42    1.19 
P/E (7) from continuing operations   9.57    15.39    8.18    10.09    10.60 
ADR price   43.00    34.18    34.92    43.00    34.92 
Common share price (8)   26,700    24,700    23,800    26,700    23,800 
Weighted average of Preferred Shares outstanding   961,827,000    961,827,000    961,827,000    961,827,000    961,827,000 
USD exchange rate (quarter end)   2,598.68    3,000.63    2,919.01    2,598.68    2,919.01 

 

(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.

 

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1.BALANCE SHEET

 

1.1.Assets

 

As of June 30, 2016, Bancolombia’s assets totaled COP 188,399 billion, which represents a decrease of 1.6% compared to 1Q16 and an increase of 19.0% compared to 2Q15. The consolidation of BAM at the end of 2015 contributes with 7.0% of the total asset’s annual growth (37% of marginal growth).

 

During the quarter, the COP appreciated 2.7% versus the USD and depreciated 12.3% over the past 12 months. The decrease in total assets is largely explained by the reduced value of loans denominated in dollars that represent fewer pesos when converted and a reduction in the position of investment and derivatives.

 

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 = 2919.01 COP)  2Q16   2Q16/1Q16   2Q16   2Q16/1Q16   2Q16   2Q16/1Q16   2Q16   2Q16/1Q16 
Commercial loans   65,731,495    2.64%   38,376,060    -4.50%   13,146,944    -1.83%   104,107,555    -0.11%
Consumer loans   13,409,022    4.61%   8,322,584    -0.76%   2,851,167    2.01%   21,731,606    2.48%
Mortgage loans   10,901,942    4.43%   8,138,883    0.93%   2,788,234    3.75%   19,040,825    2.90%
Small  business loans   652,003    6.46%   326,328    4.38%   111,794    7.30%   978,331    5.76%
Interests paid in advance   (22,337)   2.72%   -    100.00%   -    100.00%   (22,337)   2.72%
Gross loans   90,672,034    3.17%   55,163,434    -3.13%   18,897,994    -0.42%   145,835,980    0.69%

 

The quarter 2Q16 shows an increase in gross loans of 0.7%. In the quarter the consumer, mortgage and small business segments increased while the commercial segment slightly decreased. In addition, in comparison with a year ago, total gross loans grew 20.3%. Of this annual growth, 6.3% (31% of marginal variation) is explained by the incorporation of BAM.

 

Gross loans denominated in currencies different from COP product of our operation in El Salvador, Panama and Guatemala accounted for 37.8% at the end of 2Q16.

 

Total reserves (allowances in the balance sheet) for loan losses increased by 6.9% during 2Q16 and totaled COP 5,776 billion, equivalent to 4.0% 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                        
(COP million)  2Q15   1Q16   2Q16   2Q16/1Q16   2Q16/2Q15   % of total loans 
Commercial   86,529,972    104,222,799    104,107,555    -0.11%   20.31%   71.4%
Consumer   18,307,774    21,204,782    21,731,606    2.48%   18.70%   14.9%
Mortgage   15,634,121    18,503,948    19,040,825    2.90%   21.79%   13.1%
Microcredit   753,175    925,065    978,331    5.76%   29.89%   0.7%
Interests received in advance   (22,528)   (21,747)   (22,337)   2.71%   -0.85%   0.0%
Total loan portfolio   121,202,514    144,834,847    145,835,980    0.69%   20.32%   100.0%
Allowance for loan losses   (4,689,784)   (5,402,169)   (5,776,119)   6.92%   23.16%     
Total loans, net   116,512,730    139,432,678    140,059,861    0.45%   20.21%     

 

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1.3.Investment Portfolio

 

As of June 30, 2016, Bancolombia’s net investment portfolio totaled COP 12,701 billion, decreasing 15.6% compared to the figure reported in 1Q16 and 0.6% compared to 2Q15. The investment portfolio consists primarily of debt securities, which represent 67.1% of Bancolombia’s total investments and 4.5% of assets at the end of 2Q16. The decrease in the portfolio, during the quarter, is due to a decision to reduce the impact of interest rate hikes and aims to keep the duration at historically low levels.

 

At the end of 2Q16, the investments in debt securities had a duration of 18.5 months and a yield to maturity of 7.32%.

 

1.4.Goodwill and intangibles

 

As of 2Q16, Bancolombia’s goodwill and intangibles totaled COP 6,524 billion, decreasing 2.3% compared to 1Q16. This variation is explained by the appreciation of the COP against the USD during the quarter.

 

1.5.Funding

 

As of June 30, 2016, Bancolombia’s liabilities totaled COP 167,954 billion, decreasing 2.1% with respect to 1Q16 and increasing 20.3% compared to 2Q15. Of this annual growth, 7.1% (35% of marginal variation) is explained by the incorporation of BAM.

 

Deposits by customers totaled COP 114,586 billion (or 68.2% of liabilities) at the end of 2Q16, decreasing 1.9% during the quarter and increasing 17.9% over the last 12 months. The net loans to deposits ratio (including borrowings from domestic development banks) was 116% at the end of 2Q16, which marks an increase in comparison to the 113% reported in 1Q16.

 

Bancolombia’s funding strategy during the last months has been to extend the average life of time deposits and promote saving accounts in the consumer segment in order to keep the funding cost to the minimum. The objective is to build and maintain ample liquidity and increase the sensibility in the balance sheet to hikes in the interest rates, which has been reflected in higher net interest margin. This strategy, added to the Central Bank’s rate hikes, increased the cost of deposits during the quarter.

 

Funding mix  2Q15   1Q16   2Q16 
COP Million                    
Checking accounts   17,852,471    14%   21,894,531    14%   20,612,607    13%
Saving accounts   39,136,638    30%   46,863,823    29%   44,690,042    29%
Time deposits   39,165,003    30%   46,788,999    29%   48,178,387    31%
Other deposits   4,135,788    3%   5,023,147    3%   3,888,370    2%
Long term debt   15,127,037    12%   18,586,652    12%   18,102,041    12%
Loans with banks   15,161,308    12%   20,441,690    13%   20,416,321    13%
Total Funds   130,578,245    100%   159,598,842    100%   155,887,768    100%

 

1.6.Shareholders’ Equity and Regulatory Capital

 

Shareholders’ equity at the end of 2Q16 was COP 19,337 billion, increasing 3.5% or COP 653 billion, with respect to the COP 18,684 billion reported at the end of 1Q16.

 

Bancolombia’s capital adequacy ratio was 13.16% in 2Q16. This figure highlights the company’s solid capital position.

 

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Bancolombia’s capital adequacy ratio was 416 basis points above the minimum 9% required by the Colombian regulator, while the basic capital ratio (Tier 1) to risk weighted assets was 8.46%, 396 basis points above the regulatory minimum of 4.5%. The tangible capital ratio, defined as shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 6.91% at the end of 2Q16.

 

In the last months, Bancolombia has generated capital organically due to the appropriation of earnings and to the best allocation of capital in different products, at the same time Bancolombia has reduced the VaR consumption in several segments.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS                        
Consolidated (COP millions)  2Q15   %   1Q16   %   2Q16   % 
Basic capital (Tier I)   11,020,242    8.16%   13,741,047    8.20%   13,916,753    8.46%
Additional capital (Tier II)   7,425,582    5.50%   7,985,639    4.76%   7,731,554    4.70%
Technical capital (1)   18,445,824         21,726,686         21,648,307      
Risk weighted assets included market risk   135,079,386         167,605,948         164,485,160      
CAPITAL ADEQUACY (2)        13.66%        12.96%        13.16%

 

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

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

 

5

 

2.INCOME STATEMENT

 

Net income totaled COP 733 billion in 2Q16, or COP 751.4 per share - USD 1.03 per ADR (excluding discontinued operations). This net income represents an increase of 84.5% compared to 1Q16 and 6.3% compared to 2Q15. This increase in net income, in the quarter, is explained by an increase in the net interest income, as well as, the normalization of tax on wealth. Bancolombia’s annualized ROE for 2Q16 was 15.2%.

 

2.1.Net Interest Income

 

Net interest income totaled COP 2,432 billion in 2Q16, 5.8% more than that reported in 1Q16, and 37.2% higher than the figure for 2Q15. Higher volumes in loans and interest margins drove the positive annual performance of this line. Of this annual increase in revenue, BAM contributes 6.0% (16% of marginal variation). The quarterly performance is explained by an improvement in the net interest margin.

 

During 2Q16, the investment, interest rate derivatives and repos portfolio generated COP 182 billion.

 

Net Interest Margin

 

The annualized net interest margin increased to 6.1% in 2Q16. The annualized net interest margin for investments was 2.8%, lower than the 3.0% of 1Q16 and the annualized net interest margin of the loan portfolio was 6.4%, growing 50bp compared to 1Q16.

 

The re-pricing of existing loans and the origination of new loans at higher rates were the factors that drove the net interest margin expansion during the quarter.

 

Annualized Interest            
Margin  2Q15   1Q16   2Q16 
Loans' Interest margin   6.0%   5.9%   6.4%
Debt investments' margin   -0.5%   3.0%   2.8%
Net interest margin   5.4%   5.6%   6.1%

 

The funding cost increased during 2Q16 due to the increase in the reference rate of the Colombian Central Bank. Savings and checking accounts remained the same as a proportion of the total cost of funding presented last quarter, and the annualized average weighted cost of deposits was 3.15% in 2Q16, increasing 36 basis points compared to 1Q16.

 

Average weighted            
funding cost  2Q15   1Q16   2Q16 
Checking accounts   0.00%   0.00%   0.00%
Saving accounts   1.35%   1.77%   2.01%
Time deposits   4.42%   5.13%   5.67%
Total deposits   2.34%   2.79%   3.15%
Long term debt   6.24%   7.18%   7.20%
Loans with banks   1.97%   2.54%   2.58%
Total funding cost   2.76%   3.27%   3.54%

 

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2.2.Fees and Income from Services

 

During 2Q16, net fees and income from services totaled COP 572 billion, increasing 1.1% with respect to 1Q16 and 12.4% with respect to 2Q15. The positive performance in fees is due to higher volumes of transactions and the outstanding performance of banking services, credit and debit cards and bancassurance.

 

Fees from credit and debit cards increased 0.4% compared to 1Q16 and 7.0% compared to 2Q15. Fees from asset management and trust services increased 1.0% compared to 1Q16 and 9.7% compared to 2Q15. Fees from our bancassurance business increased 26.2% compared to 1Q16, due largely to seasonal variations, and 32.3% with respect to 2Q15, thanks to the successful cross-selling initiatives led by our sales teams.

 

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

 

ACCUMULATED CREDIT CARD BILLING  %   2016 
(COP millions)  May-15   May-16   Growth   Market Share 
Bancolombia VISA   1,450,041    1,933,852    33.37%   9.08%
Bancolombia Mastercard   1,684,889    1,999,686    18.68%   9.39%
Bancolombia American Express   1,651,998    1,596,106    -3.38%   7.50%
Total Bancolombia   4,786,928    5,529,644    15.52%   25.97%
Colombian Credit Card Market   18,192,153    21,292,010    17.04%     
                     
CREDIT CARD MARKET SHARE  %   2016 
(Outstanding credit cards)  May-15   May-16   Growth   Market Share 
Bancolombia VISA   530,166    632,550    19.31%   5.61%
Bancolombia Mastercard   684,295    786,212    14.89%   6.98%
Bancolombia American Express   692,764    620,027    -10.50%   5.50%
Total Bancolombia   1,907,225    2,038,789    6.90%   18.09%
Colombian Credit Card Market   10,202,533    11,267,243    10.44%     

 

Source: Superintendencia Financiera de Colombia

 

2.3.Other Operating Income

 

Total other operating income was COP 339 billion in 2Q16, decreasing by 6.8% compared to 1Q16, and growing by 9.2% with respect to 2Q15.

 

Revenues aggregated in the operating leases line totaled COP 118 billion in 2Q16, increasing by 0.2% compared to 1Q16 and 26.0% compared to those reported in 2Q15.

 

2.4.Asset Quality, Provision Charges and Balance Sheet Strength

 

The capital balance for past due loans (those that are overdue for more than 30 days) totaled COP 4,357 billion at the end of 2Q16 and represented 3.1% of total gross loans, showing a slight increase compared to 1Q16. During 2Q16, the restructuring of Conalvias Construcciones SAS took place and is no longer considered overdue. However, the allowance related to this client is still on the Balance sheet. Charge-offs totaled COP 313 billion in 2Q16.

 

The coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 121.4% at the end of 2Q16, increasing compared to 106.2% in 1Q16. Likewise, the coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 80.0% at the end of 2Q16, decreasing with respect to the 85.9% reported in 1Q16.

 

7

 

The deterioration of the loan portfolio (new past due loans including charge-offs) was COP 24 billion in 2Q16, showing a decrease of 97.0% mainly explained by the restructuring of Conalvias Construcciones SAS. Provision charges (net of recoveries) totaled COP 628 billion in 2Q16. Provisions as a percentage of the average gross loans were 1.7% for 2Q16.

 

Bancolombia maintains a strong balance sheet supported on an adequate level of loan loss reserves. Allowances for loan losses totaled COP 5,288 billion, or 3.8% of total loans at the end of 2Q16. This proportion is slightly higher than the 3.5% presented at the end of 1Q16.

 

The following tables present key metrics related to asset quality:

 

ASSET QUALITY  As of 
(COP millions)  2Q15   1Q16   2Q16 
Total 30-day past due loans   3,761,653    4,645,700    4,357,450 
Allowance for loan losses (1)   4,578,033    4,934,311    5,288,410 
Past due loans to total loans   3.19%   3.33%   3.10%
“C”, “D” and “E” loans as a percentage of total loans   3.87%   4.11%   4.71%
Allowances to past due loans   121.70%   106.21%   121.36%
Allowance for loan  losses as a percentage of “C”, “D” and “E” loans   100.42%   85.95%   79.93%
Allowance for loan losses as a percentage of total loans   3.89%   3.54%   3.76%

 

(1) Allowances are reserves for the principal of loans.

 

PDL Per Category          30 days 
   % Of loan Portfolio   2Q15   1Q16   2Q16 
Commercial loans   71.7%   1.9%   2.39%   2.01%
Consumer loans   15.1%   4.5%   4.83%   4.95%
Microcredit   0.7%   8.6%   8.40%   8.24%
Mortgage loans *   12.5%   6.7%   6.83%   6.86%
PDL TOTAL        3.10%   3.33%   3.10%

 

PDL Per Category          90 days 
   % Of loan Portfolio   2Q15   1Q16   2Q16 
Commercial loans   71.7%   1.4%   1.67%   1.49%
Consumer loans   15.1%   2.3%   3.07%   3.30%
Microcredit   0.7%   5.5%   5.18%   5.08%
Mortgage loans   12.5%   3.2%   2.62%   2.66%
PDL TOTAL        1.80%   2.01%   1.94%

 

* Mortgage loans that were overdue were calculated for past due loans for 120 days instead of 90 days.

 

LOANS AND FINANCIAL LEASES CLASSIFICATION  2Q15   1Q16   2Q16 
(COP millions)                        
¨A¨ Normal   106,537,991    90.48%   125,295,403    89.80%   125,679,281    89.38%
¨B¨ Subnormal   6,652,523    5.65%   8,504,797    6.09%   8,311,814    5.91%
¨C¨ Deficient   1,953,865    1.66%   2,524,384    1.81%   3,193,474    2.27%
¨D¨ Doubtful recovery   1,727,909    1.47%   1,626,057    1.17%   2,161,634    1.54%
¨E¨ Unrecoverable   877,204    0.74%   1,590,147    1.13%   1,260,812    0.90%
Total   117,749,492    100.00%   139,540,789    100.00%   140,607,016    100.00%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases   3.87%        4.11%        4.71%     

 

2.5.Operating Expenses

 

During 2Q16, operating expenses totaled COP 1,641 billion, decreasing 7.4% with respect to 1Q16 and increasing 21.2% with respect to 2Q15. The decrease in the quarter is explained by the tax on wealth that is not caused for 2Q16 and a decrease in bonus plan payments. Of this annual increase in personnel expenses, BAM contributes 6.1% (29% of the marginal increase).

 

8

 

Personnel expenses (salaries, bonus plan payments and compensation) totaled COP 682 billion in 2Q16, decreasing 2.3% compared to 1Q16 and increasing 23.5% compared to 2Q15. Of this annual growth in personnel expenses, BAM contributes 6.7% (29% of the marginal increase).

 

During 2Q16, administrative expenses totaled COP 650 billion, increasing 13.7% compared to 1Q16 and 23.4% as compared to 2Q15. Of this annual growth in administrative expenses, BAM Contributes 3.0% (13% of the marginal increase).

 

Depreciation and amortization expenses totaled COP 118 billion in 2Q16, decreasing 22.5% compared to 1Q16 and increasing 14.5% compared to 2Q15.

 

As of June 30, 2016, Bancolombia had 34,699 employees, owned 1,173 branches, 5,256 ATMs, and served more than 11 million customers.

 

2.6.Taxes

 

The income tax was COP 363 billion, which represented a 34.1% decrease compared to 1Q16, and 73.1% increase compared to 2Q15.

 

For 2Q16, the FX rate had less volatility, which lead to a lesser impact in the income tax provision.

 

9

 

3.RECENT DEVELOPMENTS

 

·April 22, 2016, Bancolombia S.A. (“Bancolombia”) (NYSE: CIB) announces that it has filed its annual report on Form 20-F for the year ended December 31, 2015 with the U.S. Securities and Exchange Commission (the “SEC”).

 

·May 31, 2016, Bancolombia announces that the process for the sale of 100% of its minority stake in Cifin S.A. was concluded. This sale, which took place as a transaction between various financial institutions as sellers, including Bancolombia, and TransUnion Netherlands II B.V., as buyer, was announced to the market last February 9, 2016. Bancolombia received on the date the sum of COP 21,667,858,544.75 for the sale of 35,264 remaining shares

 

·June 20, 2016, the Board of Directors of Bancolombia S.A and Leasing Bancolombia S.A Compañia de Financiamiento, approved the initiation of a merger process pursuant to which Bancolombia will acquire its subsidiary specialized in the leasing business.

 

The merger, which seeks to take advantage of the synergies and complementarities between both companies, as well as looking for efficiencies and a better value proposal to Grupo Bancolombia´s clients, is expected to close during the third quarter of 2016.

 

10

 

4.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 11 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 and local (Banistmo S.A.) banking subsidiaries in Panama, Guatemala, 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 / (574) 4043917.

E-mail: IR@bancolombia.com.co

Contacts: Alejandro Mejia (IR Manager) / Camilo Arbelaez (Analyst) / Juliana Álvarez (Analyst)

Website: http://www.grupobancolombia.com/wps/portal/about-us/corporate-information/investor-relations/

 

11

 

BALANCE SHEET              Growth         
(COP million)  Jun-15   Mar-16   Jun-16  

Jun- 16 /

Mar-16

  

Jun-16 /

Jun-15

  

% of

Assets

  

% of

Liabilities

 
ASSETS                                   
Cash and balances at central bank   10,771,960    14,577,824    13,431,742    -7.86%   24.69%   7.13%     
Interbank borrowings   1,087,203    1,504,929    1,287,396    -14.45%   18.41%   0.68%     
Reverse repurchase agreements and other similar secured lend   1,236,053    1,148,346    1,839,198    60.16%   48.80%   0.98%     
Investments   12,774,812    15,040,851    12,701,160    -15.56%   -0.58%   6.74%     
Derivative financial instruments - Assets   1,354,933    2,350,871    2,122,042    -9.73%   56.62%   1.13%     
Loans and advances to customers   121,202,514    144,834,847    145,835,980    0.69%   20.32%   77.41%     
Allowance for loan and lease losses   (4,689,784)   (5,402,169)   (5,776,119)   6.92%   23.16%   -3.07%     
Investment in associates and joint ventures   1,300,574    531,794    538,424    1.25%   -58.60%   0.29%     
Goodwill and Intangible assets   4,933,553    6,676,098    6,523,651    -2.28%   32.23%   3.46%     
Premises and equipment   2,694,491    3,151,168    3,170,050    0.60%   17.65%   1.68%     
Investment property   1,261,018    1,548,778    1,573,143    1.57%   24.75%   0.84%     
Prepayments   230,391    256,196    272,021    6.18%   18.07%   0.14%     
Tax receivables   727,901    704,181    833,042    18.30%   14.44%   0.44%     
Deferred tax   459,257    648,981    651,250    0.35%   41.81%   0.35%     
Assets held for sale   1,724,518    2,144,757    2,191,534    2.18%   27.08%   1.16%     
Other assets   1,193,934    1,667,329    1,204,803    -27.74%   0.91%   0.64%     
Total assets   158,263,328    191,384,781    188,399,317    -1.56%   19.04%   100.00%     
LIABILITIES AND SHAREHOLDERS' EQUITY                                   
LIABILITIES                                   
Deposit by customers   97,208,199    116,805,706    114,586,083    -1.90%   17.88%   60.82%   68.22%
Interbank Deposits   332,329    594,090    461,598    -22.30%   38.90%   0.25%   0.27%
Derivative financial instrument - Liabilities   1,106,328    1,990,850    1,768,256    -11.18%   59.83%   0.94%   1.05%
Borrowings from other financial institutions   14,828,979    19,847,600    19,954,723    0.54%   34.57%   10.59%   11.88%
Debt securities in issue   15,127,037    18,586,652    18,102,041    -2.61%   19.67%   9.61%   10.78%
Preferred shares   551,401    538,348    552,414    2.61%   0.18%   0.29%   0.33%
Repurchase agreements and other similar secured borrowing   3,081,701    3,764,794    2,783,323    -26.07%   -9.68%   1.48%   1.66%
Tax liabilities   324,900    594,371    714,805    20.26%   120.01%   0.38%   0.43%
Deferred tax liabilities   776,156    1,389,287    1,465,720    5.50%   88.84%   0.78%   0.87%
Employee pension plan   136,146    130,643    133,115    1.89%   -2.23%   0.07%   0.08%
Liabilities relating to assets held for sale   1,417,174    1,845,726    1,865,349    1.06%   31.62%   0.99%   1.11%
Other liabilities   4,771,879    5,512,493    5,566,207    0.97%   16.65%   2.95%   3.31%
Total liabilities   139,662,229    171,600,560    167,953,634    -2.13%   20.26%   89.15%   100.00%
SHAREHOLDERS' EQUITY                                   
Capital   480,914    480,914    480,914    0.00%   0.00%   0.26%     
Additional paid-in-capital   4,857,454    4,857,454    4,857,454    0.00%   0.00%   2.58%     
Appropriate reserves   6,006,764    7,097,545    7,148,157    0.71%   19.00%   3.79%     
Retained earnings   5,969,300    4,231,281    4,913,717    16.13%   -17.68%   2.61%     
Cumulative other comprehensive income   770,900    2,017,009    1,936,936    -3.97%   151.26%   1.03%     
Stockholders’ equity attributable the owners of the parent company   18,085,332    18,684,203    19,337,178    3.49%   6.53%   10.26%     
Non-controlling interest   515,767    1,100,018    1,108,505    0.77%   114.92%   0.59%     
Total liabilities and stockholders' equity   158,263,328    191,384,781    188,399,317    -1.56%   19.04%   100.00%     

 

12

 

INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Jun-15   Jun-16   Jun-16 / Jun-15   2Q 15   1Q 16   2Q 16   2Q16 / 1Q16   2Q16 / 2Q15 
Interest income and expenses                                        
Interest on loans                                        
Commercial   2,549,027    3,749,039    47.08%   1,296,029    1,824,372    1,924,667    5.50%   48.50%
Consumer   1,117,607    1,400,178    25.28%   558,949    664,403    735,775    10.74%   31.64%
Small business loans   88,360    112,502    27.32%   45,534    54,921    57,581    4.84%   26.46%
Mortgage   677,838    983,680    45.12%   354,635    487,771    495,909    1.67%   39.84%
Leasing   760,415    936,876    23.21%   383,957    446,753    490,123    9.71%   27.65%
Total Interest on loans   5,193,247    7,182,275    38.30%   2,639,104    3,478,220    3,704,055    6.49%   40.35%
Overnight and market funds   6,192    11,662    88.34%   3,389    5,942    5,720    -3.74%   68.78%
Investment                                        
Debt investments, net   23,318    86,999    273.10%   10,839    43,030    43,969    2.18%   305.66%
Net gains from investment activities at fair value through income statement                                        
Debt investments   221,433    338,800    53.00%   82,439    173,660    165,140    -4.91%   100.32%
Derivatives   (14,626)   (50,761)   247.06%   4,662    (37,394)   (13,367)   -64.25%   -386.72%
Repos   (46,592)   (8,876)   -80.95%   (23,964)   3,368    (12,244)   -463.54%   -48.91%
Other   (12,377)   511    104.13%   (8,710)   1,681    (1,170)   -169.60%   -86.57%
Total Net gains from investment activities at fair value through profit and loss   147,838    279,674    89.18%   54,427    141,315    138,359    -2.09%   154.21%
Total interest on investment securities   171,156    366,673    114.23%   65,266    184,345    182,328    -1.09%   179.36%
Total interest income   5,370,595    7,560,610    40.78%   2,707,759    3,668,507    3,892,103    6.10%   43.74%
Interest expense                                        
Borrowing costs   (196,542)   (348,759)   77.45%   (95,138)   (167,241)   (181,518)   8.54%   90.79%
Overnight funds   (3,860)   (2,822)   -26.89%   (1,730)   (1,423)   (1,399)   -1.69%   -19.13%
Debt securities in issue   (473,093)   (671,506)   41.94%   (238,247)   (341,406)   (330,100)   -3.31%   38.55%
Deposits   (1,089,796)   (1,754,490)   60.99%   (568,364)   (837,077)   (917,413)   9.60%   61.41%
Preferred Shares Dividends   (29,156)   (29,156)   0.00%   (14,065)   (15,091)   (14,065)   -6.80%   0.00%
Other interest (expense)   (27,701)   (21,961)   -20.72%   (17,886)   (6,770)   (15,191)   124.39%   -15.07%
Total interest expense   (1,820,148)   (2,828,694)   55.41%   (935,430)   (1,369,008)   (1,459,686)   6.62%   56.04%
Net interest income   3,550,447    4,731,916    33.28%   1,772,329    2,299,499    2,432,417    5.78%   37.24%
Loan loss provisions   (768,752)   (1,279,538)   66.44%   (438,179)   (593,873)   (685,665)   15.46%   56.48%
Recovery of charged-off loans   99,888    137,808    37.96%   70,780    61,820    75,988    22.92%   7.36%
Other assets impairment   (51,950)   (26,513)   -48.96%   (47,308)   (7,721)   (18,792)   143.39%   -60.28%
Total net provisions   (720,814)   (1,168,243)   62.07%   (414,707)   (539,774)   (628,469)   16.43%   51.55%
Net interest income after provision, net   2,829,633    3,563,673    25.94%   1,357,622    1,759,725    1,803,948    2.51%   32.88%
Fees and other service income                                        
Banking services   292,184    390,895    33.78%   148,197    190,589    200,306    5.10%   35.16%
Credit and debit card fees   484,856    541,166    11.61%   253,465    270,017    271,149    0.42%   6.98%
Brokerage   11,541    12,635    9.48%   6,805    5,831    6,804    16.69%   -0.01%
Acceptances, Guarantees and Standby letters of credits   21,950    25,178    14.71%   10,659    12,474    12,704    1.84%   19.19%
Trust   130,823    143,004    9.31%   65,527    71,127    71,877    1.05%   9.69%
Bancassurance   122,298    163,067    33.34%   68,782    72,093    90,974    26.19%   32.26%
Payments and Collections   96,202    108,715    13.01%   49,774    51,684    57,031    10.35%   14.58%
Other   159,150    205,343    29.02%   85,703    101,573    103,770    2.16%   21.08%
Total Fees and other service income   1,319,004    1,590,003    20.55%   688,912    775,388    814,615    5.06%   18.25%
Fees and other service expenses                                        
Banking services   (135,482)   (173,741)   28.24%   (67,593)   (81,069)   (92,672)   14.31%   37.10%
Other   (209,022)   (279,160)   33.56%   (112,801)   (128,889)   (150,271)   16.59%   33.22%
Total Fees and other service expenses   (344,504)   (452,901)   31.46%   (180,394)   (209,958)   (242,943)   15.71%   34.67%
Total fees and income from services, net   974,500    1,137,102    16.69%   508,518    565,430    571,672    1.10%   12.42%
Other operating income                                        
Derivatives FX contracts   100,724    46,116    -54.22%   51,335    69,515    (23,399)   -133.66%   -145.58%
Net foreign exchange   90,010    133,491    48.31%   35,801    26,837    106,654    297.41%   197.91%
Hedging   (6,382)   (18,201)   185.19%   1,505    (13,985)   (4,216)   -69.85%   -380.13%
Operating leases   195,900    235,054    19.99%   93,349    117,383    117,671    0.25%   26.05%
Gains (or losses) on sale of assets   4,892    24,607    403.00%   (8,647)   12,764    11,843    -7.22%   236.96%
Other reversals   1,736    671    -61.35%   670    393    278    -29.26%   -58.51%
Other income   282,612    281,090    -0.54%   136,511    150,858    130,232    -13.67%   -4.60%
Total other operating income   669,492    702,828    4.98%   310,524    363,765    339,063    -6.79%   9.19%
Dividends received and equity method                                        
Dividends   20,209    22,286    10.28%   10,242    11,980    10,306    -13.97%   0.62%
Equity investments   57,528    52,015    -9.58%   47,325    41,019    10,996    -73.19%   -76.76%
Equity method   51,939    23,372    -55.00%   18,212    10,841    12,531    15.59%   -31.19%
Total Dividends received and equity method   129,676    97,673    -24.68%   75,779    63,840    33,833    -47.00%   -55.35%
Total income   4,603,301    5,501,276    19.51%   2,252,443    2,752,760    2,748,516    -0.15%   22.02%

 

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INCOME STATEMENT  As of   Growth               Growth 
(COP million)  Jun-15   Jun-16   Jun-16 / Jun-15   2Q 15   1Q 16   2Q 16   2Q16 / 1Q16   2Q16 / 2Q15 
Operating expenses                                        
Salaries and employee benefits   (938,219)   (1,192,344)   27.09%   (469,076)   (582,698)   (609,646)   4.62%   29.97%
Bonuses   (137,134)   (187,735)   36.90%   (83,284)   (115,478)   (72,257)   -37.43%   -13.24%
Administration and general expenses   (1,009,015)   (1,222,107)   21.12%   (526,739)   (571,946)   (650,161)   13.68%   23.43%
Contributions and other tax burden   (228,234)   (280,238)   22.79%   (118,604)   (144,549)   (135,689)   -6.13%   14.41%
Provision, depreciation and amortization   (213,091)   (270,271)   26.83%   (103,069)   (152,266)   (118,005)   -22.50%   14.49%
Other expenses   (116,469)   (117,683)   1.04%   (53,265)   (61,989)   (55,694)   -10.16%   4.56%
Tax on wealth   (159,963)   (144,710)   -9.54%   -    (144,710)   -    -100.00%   0.00%
Total operating expenses   (2,802,125)   (3,415,088)   21.87%   (1,354,037)   (1,773,636)   (1,641,452)   -7.45%   21.23%
Profit before tax   1,801,176    2,086,188    15.82%   898,406    979,124    1,107,064    13.07%   23.23%
Income tax   (467,892)   (913,748)   95.29%   (209,626)   (550,848)   (362,900)   -34.12%   73.12%
Net income before non-controlling interest   1,333,284    1,172,440    -12.06%   688,780    428,276    744,164    73.76%   8.04%
Non-controlling interest   (32,960)   (56,966)   72.83%   (9,042)   (35,555)   (21,411)   -39.78%   136.79%
Net income before Discontinued Operations   1,300,324    1,115,474    -14.22%   679,738    392,721    722,753    84.04%   6.33%
Discontinued Operations Net Income   20,900    14,951    -28.46%   9,585    4,645    10,306    121.87%   7.52%
Net income   1,321,224    1,130,425    -14.44%   689,323    397,366    733,059    84.48%   6.34%

 

14

 

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:  August 18, 2016 By:   /s/  JAIME ALBERTO VELÁSQUEZ B.
    Name:   Jaime Alberto Velásquez B.
    Title:   Vice President of Strategy and Finance