Near & Strong


BIG FOUR Bancolombia remains Colombia’s largest bank in terms of total assets, reporting $56.40 billion in 1Q2013, up 5.34% on the $53.54 billion reported at end-2012, and 22.45% up in […]


Bancolombia remains Colombia’s largest bank in terms of total assets, reporting $56.40 billion in 1Q2013, up 5.34% on the $53.54 billion reported at end-2012, and 22.45% up in year-on-year terms. The bank’s deposits rose to $36.71 billion, up 29.21% over a 12-month period, while total liabilities also saw strong growth of 24.26% year-on-year to $50.14 billion. The bank reported a net interest margin (NIM) of 6.78% in 1Q2013, up on the 6.50% shown at end-2013, while the return on average assets (ROAA) ratio stood at 1.99%, down slightly from the 2.12% seen in 1Q2012. It had a strong capital adequacy ratio (CAR) of 16.96% in 1Q2013, up from 15.77% at end-2012, while the percentage of non-performing loans (NPLs) stood at a low 1.83%. Bancolombia boasts over 7 million customers spread across Colombia, El Salvador, Panama, the Cayman Islands, and Puerto Rico. As of 1Q2013, the bank had 994 branches, 25,150 employees, and 3,871 ATMs. In February 2013, Bancolombia agreed to buy HSBC’s assets in Panama for $2.1 billion, increasing its regional presence. The bank’s subsidiary in El Salvador—Banagricola—is the largest in the country. The bank also has a strong presence in brokerage, investment banking, factoring, asset management, leasing, and other financial services. The bank is a part of Medellí­n-based Grupo Empresarial Antioqueño (GEA), one of Colombia’s largest conglomerates.

Banco de Bogotá reported total assets of $43.84 billion in 1Q2013, showing annual growth of 13.6%, down slightly on the end-2012 figure. Total deposits were at $27.35 billion in 1Q2013, also down slightly on the year-end figure, though up 10.2% in year-on-year terms. Total liabilities were at $39.46 billion, up 13.4% on the 1Q2012 figure. NPLs stood at a conservative 1.6%, while the CAR was a respectable 15.2%. The bank reported an ROAA of 3.4% in 1Q2013, NIM was at 6.6%, while the return on average equity (ROAE) was a strong 23.9%. The bank has a significant retail focus, with some 11.4 million customers, while the employee head count was at 36,208. Branch numbers stood at 1,260, and it offers 2,697 ATM points through its network. Net interest income showed solid 21% growth annually, reflecting the healthy performance of its loan and investment portfolios. Banco de Bogotá’s majority shareholder, Grupo Aval (64.4%), also has majority interests in the banking sector through Banco Popular, Banco de Occidente, and Banco AV Villas, giving it around a one-third market share. Banco de Occidente reported total assets of $13.39 billion for end-2012, up some 15% over the year, while total deposits were at $8.10 billion.

Davivienda has been on a rapid domestic and overseas expansion program, snapping up HSBC’s operations in El Salvador, Costa Rica, and Honduras for $829.7 million. The bank reported net assets of $27.08 billion in 1Q2013, up 5.1% on the end-2012 figure, though up a more impressive 32.3% in year-on-year terms. Total deposits grew 3.6% over the quarter to $17.02 billion, while total loans showed a comfortable growth of 3.4% (31.1% over the year) to $18.54 billion. Total liabilities rose by 5.5% over 1Q2013 to $24.10 billion, representing 35.4% in year-on-year terms. Davivienda reported a year-on-year NIM of 15.6%, while net income jumped by 53.8% over the same period, thanks to the addition of net income streams from its new Central America operations. The bank’s ROAE was 13.2% over the period, while it had a CAR of 14.75%. Davivienda reported that it now has a customer base of 6.5 million through its operations in six countries, 738 branches, and 15,633 employees. The bank’s main shareholder is Group Bolí­var. Davivienda has a large presence in the retail market, and is strong in mortgage segment, though has activities across the financial spectrum. Efraí­n Enrique Forero Fonseca, President of Davivienda, sees the bank’s potential growth in the underbanked sections of Colombia’s population, “Our specialization in mainly low-income mortgages allows us to be closer to the base of the pyramid.”

BBVA Colombia is considered to be the fourth largest bank in the sector by assets, though its results are consolidated under BBVA’s South America unit. In 1Q2013, the bank reported strong growth of 14.8% in lending in year-on-year terms, with the consumer segment contributing with a 27% expansion. In an interview with Óscar Cabrera Izquierdo, Executive President of BBVA Colombia, he stated that the bank had some 13% of the consumer and retail market, and a lower 7% of the SME market nationally. The bank has set itself an aggressive expansion policy until 2015. “We expect to double our branch network in the country, as well as increase our body of staff in the next three years, and we foresee an investment of about $500 million,” Cabrera told TBY. He reported growth of some 8%-9% for the bank’s overall operations in Colombia, setting it on target to further penetrate the country’s under-banked population. “Banking penetration rates in Colombia are relatively low as compared to other countries in the region, and that’s because of the country’s particular geography, infrastructure, and business,” he explained.


The issue of improving banking penetration is a large one on the minds of many in the local banking industry. Francisco Estupiñán Heredia, President of Banco Agrario de Colombia, sees the situation as particularly acute in regional areas. If we look closer at the agriculture sector in particular, we see that only 20% of current agriculture GDP (6%) uses financing tools from the banking sector, whereas around 50% of the population is dependent on the agriculture sector,” he said. The use of modern mobile phone technology to bridge the gap is seen as one method to reach rural areas. “Mobile phone penetration rates in the country are far above 100%; Colombia has 44 million inhabitants and there are around 48 million mobile phones,” Marí­a Mercedes Gómez R., President of micro finance provider Bancamí­a told TBY. “These technologies bring us closer to our customers and offer opportunities for institutions like ours.” However, although the use of technology may help bridge the gap, educating the population about the use of financial instruments is also seen as key. Marí­a Mercedes Cuellar López, President of Asobancaria, supports government moves to establish more non-banking correspondents, which now number some 26,000 across the country. However, others see that the banks also need to be educated about the opportunities available in the under-banked population. “I honestly think that commercial banks do not know much about the consumer segment at the base of the pyramid,” Efraí­n Otero Álvarez, President of Banco de Occidente told TBY. Whatever the case, the hopes for continued growth in Colombia’s banking industry seem well justified.