Q4 2024 Bancolombia SA Earnings Call
Good morning, ladies and gentlemen, and welcome to Banco Columbia Fourth quarter 2024 earnings Conference call. My name is Christine and I'll be your operator for today's call.
At this time all participants are in a listen only mode.
Following the prepared remarks, there'll be a question and answer session.
During the question and answer session. If you have a question. Please press Star then one on your Touchtone phone.
Please note that this conference is being recorded.
Please note that this conference call will include forward looking statements, including statements related to our future performance capital position credit related expenses and credit losses.
All forward looking statements whether made in this conference call in future filings in press releases or verbally address matters that involve risk and uncertainty. Consequently, there are factors that could cause actual results to differ materially from those indicated in such statements, including changes in general economic and business conditions.
Changes in currency exchange rates and interest rates.
Introduction of competing products by other companies lack of acceptance of new products or services by our targeted clients changes in business strategy and various other factors that we describe in our reports filed with the SEC.
Speaker Change: With us today is Mr. Juan Carlos Mora, Chief Executive Officer.
Maurice Portera: Mr. Maurice Portera, Wolfe, Chief strategy and financial Officer Mr.
Maurice Portera: Mr Rodrigo Prieto, Chief risk officer.
Catalina: Mrs Catalina too long Investor Relations and capital markets director.
Laura: And Mrs. Mrs. Laura Club E O Chief economist.
Speaker Change: I will now turn the call over to Mr. Juan Carlos Mora, Chief Executive Officer.
Speaker Change: Mr. Juan Carlos you may begin.
Speaker Change: Good morning.
Speaker Change: Welcome to Bancolombia as for quarter results Conference call.
Speaker Change: Please go to slide two.
Speaker Change: In a challenging fiscal landscaping, Colombia, the year 2024 concluded with a positive economic trends presenting moderate growth there.
Speaker Change: This growth was facilitated by decreasing inflation and reductions in interest rates.
Speaker Change: Which consequently led to an increase in household consumption.
Speaker Change: Net income for the quarter amounted to 1.7 trillion basis, reflecting an 11% increase primarily due to resume loan growth across all segments and a significant reduction in provision expenses.
Speaker Change: These resulted in a quarterly annualized cost of risk a slow us one point, 35%.
Speaker Change: Offsetting the decline in interest income associated with a lower yielding loan portfolio.
Speaker Change: Thereby reducing the net interest margin to six 4% for the quarter.
Speaker Change: Overall, the return on equity for the quarter increased to 15, 7%.
Speaker Change: Net income for the year was 6.3 trillion pesos.
Speaker Change: Two 5% increase.
Speaker Change: Which boosted shareholders' equity by 14, 3% and resulted in a 15.
Speaker Change: 8% Roe.
Speaker Change: In evaluating these positive on what performance we identified three key factors that explain these results.
Speaker Change: First our unparalleled capabilities and assets liability and Treasury management.
Speaker Change: Which have enabled us to maintain high net interest margins on an asset sensitive portfolio despite significant rate cuts.
Speaker Change: Effectively supplemented by a strong contribution from the investment portfolio.
Speaker Change: Second the robustness of our well calibrated risks Morris, which allow us to manage credit risk with greater efficiency.
Speaker Change: Third our rigorous cost control strategies implemented throughout the year, resulting in an annual operating expenses increase of only five 3%.
Speaker Change: Slightly above the annual inflation rate.
Speaker Change: Following these strong results, we announced to the market yesterday, our proposed dividend to be submitted for shareholders' approval amounting to approximately three eight trillion pesos, which represents attain falling 3% year over year increase equivalent.
Speaker Change: Two more than 500 basis points above inflation, and achieving a payout ratio of 60%.
Speaker Change: The dividend will be paid in one installment of 3900 pesos per share on April 1st 2025, aiming to enhance value distribution to our shareholders.
Speaker Change: Lastly, I would like to inform you.
Speaker Change: You heard that we are making significant progress with our corporate evolution towards the establishment of Grupo serious.
Speaker Change: Our new holding company.
Speaker Change: Obtain the necessary approvals from all Central American regulators and are continuing to advance in the process with the Colombian regulator.
Speaker Change: Our goal is to complete this transaction by the second quarter of 'twenty to 'twenty five.
Speaker Change: I'll now turn the presentation over to Laura Coffey, who our chief economist, who will offer an analysis of the macroeconomic environment louder. Thank.
Speaker Change: Thank you Juan Carlos now if you could please turn to slide three.
Speaker Change: The Colombian economy expanded at an annual rate of one 7% during 2024 slightly below our one 8% growth expectation confirming an ongoing economic recovery, especially as compared to 2023 GDP growth of just 0.7%.
Speaker Change: A deeper look at the composition of growth tells a story of better than expected performance from specific sectors, such as agriculture Entertainment, which expanded at an annual rate of eight 1%, but that mean nonetheless lose momentum in 2025.
Speaker Change: And your welding activity from other key sectors, such as mining manufacturing and housing continue to reflect the challenges that the economy's still faces.
Speaker Change: On a more positive note the final quarter confirmed an uptick in retail sales and consumer demand for durable goods is taking a turn towards the positive for example vehicle sales grew at an annual rate of 7%.
Speaker Change: Indeed, a more constructive macroeconomic framework has enabled an upswing in both sentiment and growth inflation continued its downward trend towards the end of your mark to five 2%. The monetary policy rate closed at 925% and unemployment has subdued close to 10% historically.
Speaker Change: So your average.
Speaker Change: Moving forward the global setting places a backdrop of a mounting inflationary challenges and monetary policy caution.
Speaker Change: These headwinds coincide with local inflationary pressures such as that of the above expected minimum wage set for this year the physical debate around compliance of the fiscal rule also necessary expenditure cuts them instead of flexibility and an overall acceleration of government get back to a 60%.
Speaker Change: Of GDP level.
Speaker Change: Consequently inflation expectations are being pushed higher we expect inflation to reach 4% in 2025.
Speaker Change: In addition, the central bank will be adopting a more cautionary approach.
Speaker Change: Despite the challenges ahead signs of an economic recovery or more widespread as a macro scenario brings tailwind and we confirm our view of a two 6% year in growth forecast for 2025.
Juan Carlos: Now please let me turn the presentation back to Juan Carlos who will present Bancolombia <unk> quarterly performance.
Juan Carlos: Thank you Laura.
Juan Carlos: Please proceed to slide four.
Speaker Change: Before discussing the quarterly and year end results I will provide an overview of our market position in Colombia and Central America.
Speaker Change: This is based on our significant presence in the region, reflecting our focus on our integrated client centric approach, which is important in the current competitive environment.
Speaker Change: Starting with Colombia. It is notable that we hold a strong position in both the loan portfolio and deposits market share.
Speaker Change: In the loan book, we lead in the commercial and consumer segments and our second in mortgages.
Speaker Change: Additionally, we launched a reduced rate mortgages loans program.
Speaker Change: Salting and a 15% year over year expansion in our mortgage portfolio in Colombia.
Speaker Change: Regardless the policy.
Speaker Change: On Colombia holds over a quarter of the total deposits in the country.
Speaker Change: Utilizing both physical and digital channels.
Speaker Change: We also maintain a leading position in terms of executed transactions within the country, securing a 31% share of credit card transaction value, 40% and debit card transactions and an impressive 80% in the number of monetary transactions through our digital channels.
Speaker Change: This significantly contribute to our consistent ability to preserve our market share in deposits year over year.
Speaker Change: In the Central America market, we hold a significant presence with approximately 25% of loans and deposits in Banco Agricola in El Salvador.
Speaker Change: In Panama, our need small ranked second with around 14% in loans and deposits given the more competitive environment.
Speaker Change: What the MLR there is a potential for growth as bomb currently holds 10% of the loans and 80% of the deposits in the country.
Speaker Change: Yeah, both of statements describe our position as a strong regional franchise based on Universal Bank model, which currently serves abroad.
Speaker Change: Diversified base of our 30 million customers in Colombia.
Speaker Change: <unk> 3 million in Central America.
Speaker Change: The results achieved in the year 2024, which differs significantly from system wide results, particularly in terms of NIM cost of risk on our own E reflect our competitive advantage is our clear strategy and our readiness to address both traditional.
Speaker Change: Our new competitors as well as regulatory.
Speaker Change: Yes.
Speaker Change: Please proceed to slide five.
Speaker Change: Continuing with the strategy overview I will now discuss the progress made on our second value driven pillar.
Speaker Change: Which leverage our digital capabilities and multichannel platform.
Speaker Change: Recently, we launched the two jealous program a solution that enables bancolombia and Nicky customers.
Speaker Change: Easily select their keys for instance.
Speaker Change: Free money transfer to other savings accounts checking accounts or low value create deposits among the eight entities participating in this initiative.
Speaker Change: Our overall approach of the program is three fold.
Speaker Change: First facilitating the movement of flows secondly, strengthening bancolombia and nicky's ecosystem with seamless.
Speaker Change: Reliable experience and carefully deepening our understanding of customers by having greater traceability of flows.
Robert: Well Robert a decade, we have invested in developing an innovative multichannel an interoperable platform.
Joan: Joan we now serve six out of 10, colombians through bancolombia or making with over 30 million customers, we manage 33% of the country's payrolls handle 90% of interoperable QR payments for merchants.
Joan: We processed 75% of payments be a transfer job on 85% of international remittances.
Joan: We firmly believe that interoperability and hate this financial inclusion foster market competitiveness and promote economic growth.
Joan: Therefore, we are taking the lead in addressing this by inviting other market participants to join this initiative, which are awesome.
Joan: As.
Joan: <unk> of their bravery immediate payment system.
Joan: Additionally, we are educating customers on how the keys will function within our nation's financial system.
Joan: These combined with our established presence in the transactional space and a stable customer base provides an opportunity to improve inter operable features within our payments infrastructure and pursue distribution and cross selling initiatives.
Joan: I will now turn the presentation over to <unk>, who will present further details on the fourth quarter 2024 results Mauricio.
Mauricio: Thank you Juan Carlos Please go to slide six.
Mauricio: The resulting 2024 for the regional operations were mixed on.
Mauricio: On the one hand, Banco agricola and installed aboard registered and not really close to 21% on the back of an increased volume of consumer loans.
Mauricio: It kept expanding in new market niches, coupled with a reduction in cost of funding.
Mauricio: Button achieved net income growth, which resulted in an eight 1% ROA supported by loan growth.
Mauricio: All segments driving higher interest income generation.
Mauricio: Surely provisions dropped 21% during the year due to the release of provisions associated to certain corporate clients.
Mauricio: On the other hand, Bernice, mostly net income dropped 56%, resulting in a $4 five Roe for the year.
Mauricio: Due to a lower net interest income and higher provision expense.
Mauricio: Let's now proceed to slide seven.
Mauricio: Continuing with the slow but positive trend the loan portfolio recorded the largest quarterly expansion with three 7% increase which represents a 10% increase over the year, leaving behind the contraction dynamics of 2023.
Mauricio: Home lending posted the largest growth both on a quarterly and an annual basis.
Mauricio: Use the interest rate program has fostered demand among individuals in Colombia and helped to stimulate a recovery in the real estate sector.
Mauricio: There was also a significant growth of 11, 5% in commercial loans due to decide any incentives to boost credit demand among our corporate clients.
Mauricio: On the other hand.
Mauricio: The consumer loan book is slightly increased on a quarterly basis accumulating a modest two 3% during the year driven mainly by the positive dynamics of unsecured lending in El Salvador and credit card loans in Guatemala.
Mauricio: Please go to slide eight.
Mauricio: Deposits picked up seven 4% in the quarter, mainly explained by a seasonal effect us corporate and public entities typically increase their balances.
Mauricio: Individuals also hold more liquidity on year end.
Mauricio: It all bases.
Mauricio: <unk> increased 13% outpacing loan growth and was driven mainly by the operations in Colombia and in standby mode.
Mauricio: In the case of Colombia. This explains to a large extent the ample liquidity held throughout the year.
Mauricio: When breaking down by type of the policy the aggregate balance of site deposits remained pretty stable year over year. However, I would like to highlight that saving deposits in Colombia grew close to 14% on a quarterly and an annual basis, reflecting the <unk>.
Mauricio: <unk> capacity to attract and maintain low cost funding sources, even as competition evolves.
Mauricio: On the other hand.
Mauricio: Time deposits intentionally grew at a moderate 1% in the quarter, reducing the annual pace of growth compared to sight deposits. These growth has been driven by short term online time deposits, which keeps attracting retail clients.
Mauricio: Now our overall funding cost dropped by 23 basis points during the quarter and 118 basis points during the year.
Mauricio: Partially offsetting the NIM compression related to the central bank reference rate cuts.
Mauricio: Okay.
Mauricio: Please proceed to slide nine.
Mauricio: Net interest income from loans and financial leases decreased by two 5% during the quarter and four 1% during the year.
Mauricio: Due to the monetary policy mention before that kept exerting pressure.
Mauricio: Asset sensitive loan book.
Mauricio: Okay.
Mauricio: Regarding margin sensitivity, we continue to adapt our assets and liabilities of strategies to remain well position. According to the interest rate cycle.
Mauricio: Depicted on the upper right hand side of the graph in the last 12 months, we have been able to decrease the net sensitivity to interest rates. Despite the increase in non sensitive too.
Mauricio: Two interest rate liabilities, which in turn is explained by the growth on sight deposits, which by definition.
Mauricio: Our low cost source of funding that provide to non core to our overall cost.
Mauricio: Also I would like to highlight the positive performance of our investment portfolio during the entire year.
Mauricio: Which by virtue of a skilled asset liability management strategies increased earnings from valuation of financial instruments, and the sale of their EBIT of securities to clients contributing to overall interest income generation.
Mauricio: On the other hand, the net interest margin for the quarter was $6 four per cent equivalent.
Mauricio: We're up 42 basis point reduction and six 8% for the full year, implying at 20 basis points contraction as anticipated.
Mauricio: Blaine by the lower yielding portfolio, partially compensated with the investment portfolio income.
Mauricio: Please proceed to slide 10.
Mauricio: Fee income increased four 4% over the quarter due to a higher volume of transactions associated through year end seasonality.
Mauricio: And better results on bank assurance as consumer credit originations accelerated towards the end of the year.
Mauricio: No well no narrow basis net fee income increased five 6% explained mainly by an increase in interchange fees through debit and credit cards, given a higher transaction volume.
Mauricio: And increasing banking service fees associated with the use of electronic and digital services.
Mauricio: And an increase in asset management fees.
Mauricio: On the other hand fees.
Mauricio: <unk> expenses increased 13% year over year.
Mauricio: Mainly due to higher credit and debit card royalties after.
Mauricio: Our higher transactional volumes.
Mauricio: Third party collections.
Mauricio: And increased banking EGEN costs attributable to more transactions and new agents.
Mauricio: The fee income ratio remained relatively stable, reaching almost 19% as a proportion of the total net operating income.
Mauricio: Please go to slide 11.
Mauricio: Continuing with the positive trend of syrups.
Mauricio: Since June loan deterioration kept the receding during the fourth quarter as reflected on the declining space.
Mauricio: As new loan formation.
Mauricio: Accordingly for 2024.
Mauricio: Tipping point in terms, so far asset quality.
Mauricio: Consistent with that both net provision expense for the quarter amounted to 930 billion pesos, a significant 41% decrease quarter over quarter.
Mauricio: Due to the better performance across all segments.
Mauricio: And the sale of distressed assets.
Mauricio: Also there was a 444 billion pesos provision release in the quarter as the consumer portfolio expected losses dropped.
Mauricio: And see durable and the macroeconomic variables that you see the model have turned more promising.
Mauricio: Hence cost of risk for the quarter fell to 143%.
Mauricio: On an annual perspective net provision expenses closed at.
Mauricio: 5.5 trillion, which represents a 27% annual contraction on the back of the better performance of the consumer segment throughout the year.
Mauricio: Coupled with our more than $1 billion and provision releases as the overall risk perspective has become increasingly positive.
Mauricio: Enough to compensate the growth.
Mauricio: SME and corporate.
Mauricio: All in all cost of risk for the year reached.
Mauricio: Two 1%.
Mauricio: In terms of asset quality.
Mauricio: Total past due loans presented at quarterly and annually improvement in terms of 30 days past due loans preserving an ample coverage ratio.
Mauricio: 112%.
Mauricio: Whereas it's been 90 days past due loans ratio decreased quarterly as collections efforts diminish over time, yet, allowing for a 159% coverage.
Mauricio: From unexpected loss perspective loan senior stage, one increased throughout the year as per the better risk outlook, whereas the stage three increase due to the actual deterioration of a specific corporate clients.
Mauricio: All in all the coverage ratio for stage two in stage three loans reached 41% providing comfortable coverage to the loan book.
Mauricio: We expect that as the economy turns more dynamic in sectors, such as construction and retail sales because the SME loan portfolio should perform better.
Mauricio: Please go to slide 12.
Mauricio: Operating expenses increased 13, 4% compared to the previous quarter.
Mauricio: Expansion associated to our year end seasonal effect.
Mauricio: Consisting of higher IP and cyber security related expenses.
Mauricio: As well as marketing expenses, which were partially compensated with an 8% drop.
Mauricio: Tax provision release.
Mauricio: Moreover.
Mauricio: Personal expenses grew eight 6% due to higher bonus provisions at yearend results were better than expected.
Mauricio: However, when analyzed on an annual basis operating expenses grew our slowest.
Mauricio: 43% well below the 12, 43% of the Colombian minimum on what relation Kris.
Mauricio: Nine 2% inflation of 2023, which were the basis of our own 75% of the group's expenses in 2024.
Mauricio: The positive annual result was possible due to our disciplined cost control program implemented throughout the year aiming at capturing the efficiency on six key areas, which in turn reinforced our culture of efficiency and productivity.
Mauricio: Notwithstanding the above when measure on there the cost to income ratio.
Came in at 49% compared to the 45% of the previous year, given the lower pace of operating income growth the limited expense dilution.
Mauricio: Please proceed to slide 13.
Mauricio: Okay.
Mauricio: The effective tax rate for the year was 28% higher than the 24% recorded in 2023 provided a higher contribution of the Colombian operation to the group's consolidated net income.
Mauricio: All in all net income reached six three trillion pesos in 2024, increasing two 5% with an annual return on equity of 15, 8%, which is <unk>.
Mauricio: <unk> for the loonie translates into an outstanding return on tangible equity of 20%.
Mauricio: Reflecting the balance sheet, a strong operational and financial performance.
Mauricio: Now please proceed to slide 14.
Mauricio: Shareholders equity grew six 5% in the quarter and more than 14% in the year explained by the generation of net income.
Mauricio: Well as currency depreciation.
Mauricio: Core equity tier one ratio and then at 11, 89%.
Mauricio: 32 basis points increase over the quarter, well above the basal III minimum requirement.
Mauricio: Total solvency decreased 60 basis points to $13 75.
Mauricio: On the back of a lower tier two as per the redemption of the 2029 subordinated bonds executed in mid December.
Mauricio: Based on our proven strong capital origination and the loan growth forecast, we are confident capital ratios will remain well above the minimum providing room for a 60% payout ratio, which results in an attractive yield balancing all of ours.
Mauricio: As stakeholders interest.
Mauricio: With this I will now hand, the presentation back to Juan Carlos for the final remarks Juan Carlos.
Juan Carlos: Thank you Mauricio.
Juan Carlos: Please proceed to slide 15.
Juan Carlos: By the end of the year.
Juan Carlos: <unk> originated.
Juan Carlos: 32 trillion Colombian pesos on there our business with purposeful strategy, bringing the total to 197 trillion things 2020, and moving towards the goal of 500 trillion by 2030.
Juan Carlos: We attended Cop 16 on biodiversity, showing our commitment to financing environmental preservation unsustainable development projects.
Juan Carlos: In 2024, we score 85 out of 100 in the Dow Jones Sustainability Index ranking first in America.
Speaker Change: Please refer to slide 16.
Speaker Change: Lastly, I will share our updated guidance for 2025.
We anticipate.
Speaker Change: Consolidated loan growth of five 6%, which is slightly below previous projections due to the increase in loan growth observed in the fourth quarter of last year.
Speaker Change: Thereby adjusting the baseline.
Speaker Change: We project, our net interest margin of approximately six 2% contingent.
Speaker Change: Contingent upon the central bank's rate cutting pace.
Speaker Change: The cost of risk is expected to be between one 9% and two 1% with an efficiency ratio in the vicinity of 51%.
Speaker Change: Additionally, we forecast.
Speaker Change: Return on equity of around 14% and the core equity tier one ratio ranging from 11.
Speaker Change: <unk> to 11, 5%.
Speaker Change: With this we conclude our presentation on the fourth quarter results. We are now ready to address any questions you may have.
Speaker Change: Thank you we will now begin the question and answer session. If you have a question. Please press Star then one on your Touchtone phone.
Speaker Change: If you wish to be removed from the queue. Please press the star and the number two.
Speaker Change: If you were using a speakerphone you may need to pick up the handset before pressing the star keys.
Speaker Change: Once again, if you have a question. Please press star one on your Touchtone phone.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Thank you. Our first question comes from the line of Brian Flores with Citi. Please proceed with your question.
Brian Flores: Hi team good morning, and congratulations on the results I wanted to expand a bit and ask you one on how capital be utilized with the new holding structure.
So firstly I know there is some perhaps work with Q1 that could be utilized wanted to to ask you. If you could remind us how this can happen.
Brian Flores: And then a second question is on your payout ratio.
Brian Flores: Tim do you have a you know.
Brian Flores: A higher valuation right now and we know you announced plans to maybe start a buyback.
Speaker Change: Program, we've seen this new structure.
Speaker Change: Just wanted to check to check with you if the new valuation levels modify.
Speaker Change: Naturally with the new payout ratio modify your plans on.
Speaker Change: On the buyback program.
Speaker Change: You very much.
Speaker Change: Thank you Brian.
Speaker Change: Let me.
Speaker Change: The address your two questions and then a pause.
Speaker Change: To your.
Speaker Change: Question to Maui Shaw to see if he has any additional comments regarding regarding capital.
Speaker Change: <unk>.
Speaker Change: Regulatory to have in mind that the evolution of our corporate structure allow us to manage capital.
Speaker Change: Much more efficient.
Speaker Change: Theyre holding structure allow us to.
Speaker Change: Assign the right capital for the different operations.
The banks will have to comply with.
Speaker Change: I'm, sorry, the requirement of capital, but the holding company.
Speaker Change: It is not subject to those requirements. So it allow us to manage it.
Speaker Change: Very efficiently our our capital what we have.
Speaker Change: Once we have the structure in place is that we will assign the needed capital with the buffers.
Speaker Change: Consider reasonable but optimize that.
Speaker Change: Use of capital that allow us to.
Speaker Change: Yeah.
Speaker Change: Have better returns on equity and that's related to your second question the payout ratio on the current valuation of the of this stock.
Speaker Change: What is happening.
Speaker Change: And the market is not going to modify what we have in mind regarding.
The ability that we will have with the with the evolution of our corporate structure.
Speaker Change: You have a buyback.
Speaker Change: Our our shares so on on that.
Speaker Change: Would that valuation that we have now.
Speaker Change: We feel we will.
Speaker Change: Once we have the structure in place we will propose to the shareholders' meeting.
Speaker Change: The buyback share buyback program Mauricio I don't know if you have any additional comments on Brian's questions. Yes.
Speaker Change: Hi, Brian.
Speaker Change: We're thinking about CET, one it's important to take into account that the TARP.
Speaker Change: Good leverage for each of device.
Speaker Change: We remain the same so we still be thinking about 11%.
Speaker Change: And to 11, 5% target at year end for each of the banks.
Speaker Change: In the case of cut that we'd go to the to the holding no in.
Speaker Change: In terms of the buyback program.
Juan Carlos: As Juan Carlos C U E.
Juan Carlos: It's a tool mainly used by the financial groups issuers into war. So so we still want to have it and we will approach the market.
Juan Carlos: Building on pricing conditions, but that's definitely something that we will continue to to.
Juan Carlos: Proposed and implement gradually depending on market conditions.
Speaker Change: Thank you Juan Carlos I'm, originally and if I may just a very quick follow up.
Speaker Change: The 60% payout ratio.
Speaker Change: Do you think we could on the US analysts did you sit on projected for.
Speaker Change: 'twenty five 'twenty six 'twenty seven or do you think this is more of a temporary tool you are using thank you.
Speaker Change: So the way, we think about payout is not necessarily as a percentage of net income when we say 60% is a result of the way we come up with the number.
Speaker Change: So the right way.
Speaker Change: To think about that is the capital levels of the operating companies, so having a target capital level of at least 11% at year end.
Speaker Change: What youre going to see is the excess capital flowing to the holding company and that holding company, we have an ample space to distribute.
Speaker Change: Dividend according to the Dublin leverage debt.
Speaker Change: <unk> only two 103, 105% so what you should be able to predict in the models.
Speaker Change: It's an ordinary dividend growing slightly in real terms at least is lightly but in real terms.
Speaker Change: No the buyback the buyback program.
Speaker Change: The defense not only on market conditions, but on capital levels, but even ordinary dividends.
Speaker Change: We be growing at least in real terms.
Speaker Change: Yeah.
Speaker Change: Super clear thank you.
Speaker Change: Thank you Brian.
Speaker Change: Yeah.
Speaker Change: Our next question comes from the line of Beatrice <unk> with Goldman Sachs. Please proceed with your question.
Beatrice: Hi, everyone. Good morning, Thank you for taking my question.
I have two questions on my side. The first one is regarding loan growth. So your guidance is for loan growth around five six this year, which is a bit lower than Colombian nominal GDP I would like to know if that is mostly explained by either lower demand or by lower growth in the central American countries.
Beatrice: Where you operate and if you expect loan growth to catch up to nominal GDP growth at some point.
Beatrice: And my second question is regarding Nike. So we had good performance there in four Q you know almost 1 million new active users.
Beatrice: Good loan portfolio growth in Nike and APAC, surpassing one dollar.
Beatrice: If you could give us any color on the strategy, how it's going.
Beatrice: What what are your plans to increase monetization and also when you expect the operation to be profitable.
Beatrice: Thank you for your interest for your questions.
Beatrice: The first one regarding loan growth.
Beatrice: We are cautious on loan growth, we need to balance the or risk appetite.
Beatrice: We need to be careful.
Beatrice: With the current conditions the GDP.
Beatrice: As you mentioned.
Beatrice: It will grow.
Beatrice: We hired during 2025, we estimate that go to be around two 6%.
Beatrice: And in real terms as you mentioned is close to probably 665% and our loan growth.
Beatrice: Yes.
Beatrice: The combined loan books is around five 2% we are expecting the commercial book too.
Beatrice: The growth.
Beatrice: A little lower.
Beatrice: We expect.
Beatrice:
Beatrice: Mortgages.
Beatrice: To moderate a little bit the growth. So we are on the conservative side regarding regarding.
Beatrice: Loan growth and we are going to focus on quality.
Beatrice: We are.
Beatrice: We are forecasting a well.
Beatrice: While we have seen a cost of risk.
Beatrice: And on the vicinity of around two 1%. So we will prefer to be cautious on regarding <unk>.
Beatrice: Loan growth Thats why we are our guidance is.
Beatrice: It looks.
Beatrice: Lower in terms of.
Nominal nominal GDP.
Beatrice: Guarding Nicky you're cyclical question as.
Beatrice: As you mentioned.
Beatrice: <unk> continues to perform very well it continues growing.
Beatrice: We are now close to 22 million.
Beatrice: Customers want figure that I like a lot.
Beatrice: 23%.
Beatrice: Active customers.
Beatrice: Customers so they use.
Beatrice: Nikki for their day to day operation So that shows that Mickey it is freely.
Beatrice: It is useful for those for those customers. So we continue growing as you mentioned, we continue including.
Beatrice: Growing our loan loan book and Nikki is growing on a healthy way, even though we need to be careful also with risk studies continues you continue to grow so what we see is that we will have.
Beatrice: Yes.
Beatrice: During this year, our development and continued loan growth or income will continue to grow and with different.
Beatrice: Fees coming from different products.
Beatrice: And we feel or we continue thinking that we will reach.
Beatrice: Our profitability.
Beatrice: Profitability or at least.
Beatrice: We will be in a level in which our income on our.
Beatrice: Our expenses are going to be in the similar magnitude by the beginning of 2025 so.
Beatrice: 2026, I'm sorry <unk>.
Beatrice: 26, beginning of sentences exalt.
Beatrice: Happy with the development of Nike, how it's evolving.
Beatrice: Our presence in the market. It's it's a it's very good.
Beatrice: That's very clear thank you.
Beatrice: Thank you very much.
Speaker Change: As a reminder, if you would like to ask a question press star.
Beatrice: Star then the one on your telephone.
Speaker Change: Our next question comes from the line of Alonso Aramburu with BTG. Please proceed with your question.
Alonso Aramburu: Yes, hi, good morning, and thank you for the call. So two questions. So just a follow up on your recent comment about Nicky can you give us some color as to where the fees coming from our.
Speaker Change: Based on the presentation I think roughly about 40% of op income comes from fees.
Speaker Change: And second can you just comment as well on the performance in Panama.
Speaker Change: It has been in the mid single digit smell for a few years what are your expectations for it to turn around and to potentially get to a double digit Roe.
Speaker Change: Thank you.
Alonso Aramburu: Thank you Alonso.
Speaker Change: The fees.
Speaker Change: Nick you are coming from from different sources, we are we.
Speaker Change: We have.
Speaker Change: Different.
Speaker Change: Services, including some regarding tool transportation, but also insurance, but also remittances.
Speaker Change: So they come from different sources.
Speaker Change: <unk> fees.
But.
Speaker Change: The main income in the future of Nick is going to come from interest income.
Speaker Change: That's what we are doing building our.
Speaker Change: Alone alone book, So we continue adding new services.
Speaker Change: One D on the marketplace.
Speaker Change: Mickey.
Speaker Change: But.
Speaker Change: We will.
Speaker Change: Move to outdoors.
Speaker Change: The profitability will be or our loan loan book.
Speaker Change: Complemented by but the fee income that we.
Speaker Change: We'll continue to grow to grow so it's a mix.
Speaker Change: Of remittances effects transportation fees.
Speaker Change: It's coming from.
Speaker Change: Specialty <unk> services.
Speaker Change: The insurance Bank assurance.
Speaker Change: You said that.
Speaker Change: Verify source of Av.
Our fee income.
Speaker Change: Yeah.
Speaker Change: Regarding your second question Mauricio.
Speaker Change: Yeah, Hi, Alonso.
Speaker Change: Yes.
Speaker Change: <unk> posted a 4% ROE in 2024, that's the note.
Speaker Change: Narrow that you should be thinking about for coming years. They are with barneys more should go up to double digits, but.
It is a.
Speaker Change: Challenging.
Speaker Change: Now.
Speaker Change: Due to the competitive landscape. However, we have been doing.
Speaker Change: A lot of work in terms of operational I D.
Speaker Change: And building our value proposal, there is competitive enough to be able to gain.
Speaker Change: Traction into gained momentum in that market to be able to deliver higher Roe.
Speaker Change: A R.
Speaker Change: To be able to get close to that cost of equity.
Speaker Change: Bonnie.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Julian is CK with <unk>. Please proceed with your question.
Speaker Change: Yes.
Speaker Change:
Speaker Change: Hi, everyone and thank you for my question I have two questions. The first is regarding E M.
Speaker Change: The dividend I would like to know the rationale to change their statement of the of the dividend and the previous <unk>.
Speaker Change: Do you have any in Dorian.
Speaker Change: Every quarter and now you're paying one.
Speaker Change: And then if there is something related with critical suite our.
Speaker Change: And your main shareholder liquidity.
Speaker Change: And then second question is regarding.
Speaker Change: The information will be available after the creation of Cypress I mean.
Speaker Change: I'll start the Saudi basically maybe all analysts we are gonna do the valuation to some of the sum of the parts. So I would like to Tonight, we will have information.
Speaker Change: Related our Colombian operation, we already happened disappointing attendance you bought for example, Central America or even next year won't be too to have a more precise value of bancolombia in terms of projections on everything else I think there's so much.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Regarding your first question.
Speaker Change: We are paying the dividend and <unk>, which we don't use to do it in that way just because we are in the process of.
Speaker Change: Evolving as our new corporate structure. So you have to understand that bancolombia as we know it today is a company that distributes dividend and we will have our shareholders' meeting on March then we will create a new entity that is going to be the listed company. So we are in that transfer.
Speaker Change: So if we if we are going to.
That is the dividend and different installments.
Speaker Change: B in a different structure. So that's why we are doing that in one store.
Speaker Change: In April when Bancolombia still is the listed company and the holding company then we will evolve is very soon.
Speaker Change: In the next month to our new structure, we will be at Ciber, and we will now operate under that.
Speaker Change: Corporate structure, so it's not regarding any particular investor of Bancolombia.
Speaker Change: It doesn't cost any relation with any condition. It's because we are evolving we are having a new corporate structure.
Speaker Change: H D Korean company that is leased and it's the whole company is going to evolve to be a commercial bank.
Speaker Change: And we will have a new a new holding company that we will now.
Speaker Change: Now operator, that's the only reason why we are just paying the.
Speaker Change: The dividend one and one.
Speaker Change: This format.
Speaker Change: So quick question Mauricio.
Speaker Change: Hi, Juliana and just to follow up on that.
You you should not.
Speaker Change: Think about it.
Speaker Change: That way of distributing ordinary dividends going forward.
Speaker Change: While we plan to do next year.
Speaker Change: To go back a series of distributing dividend. It will go back to the quarterly installment now regarding your second question.
Speaker Change: The way, we are going to disclose.
Speaker Change: In the numbers. The result is going to start in the second quarter of the year if everything goes.
Speaker Change: E Commerce.
Speaker Change: Plan.
Speaker Change: Fourth quarter results will be Cyrus results, and youre going to be able to see each of the countries with all the businesses.
Speaker Change: They are responsible for so Colombia will not only be bulk Colombia, it will be the consolidated operations in Colombia, including a.
Speaker Change: Kept on market.
Speaker Change: CBRE and also.
Speaker Change: The offshore subsidiaries, that's going to be Colombia, and then the same for the other countries we really.
Speaker Change: These flows figures for each of them. So that you can do some of the parts valuation for the holidays and let me let me answer that one off that's one of the main goals that we have with Cypress, it's to have more transparency on our reporting. So as you mentioned, we will be reporting each operations at Berkeley.
Speaker Change: Bear in mind that for example, Colombia, we will report on that.
Speaker Change: In a standard international Standalone accounting not Colombian standards are those that you have on the on the Colombian superintendency. So there will be some differences on the on the Colombian.
Speaker Change: Operation reporting.
Speaker Change: But but we will we will report the different operations separately. So you can have a better view of the different operations down there on their side.
Speaker Change: Hi.
Speaker Change: Yeah.
Speaker Change: There's only underneath your question Julien.
Speaker Change: No.
Speaker Change: Perfect. Thank you so much.
Speaker Change: Thank you we have no further questions at this time I'd like to turn the floor back over to management for closing comments.
Speaker Change: Thank you everybody for been replacing.
Speaker Change: Presenting this conference call.
Speaker Change: We are.
Speaker Change: Confidence.
Speaker Change: Our operations under the new evolution order, the new corporate structure.
Speaker Change: As I mentioned transparency, we don't allow us to much more efficiently or our capital and will produce positive results.
Speaker Change: No.
Speaker Change: Our next report will be for the first quarter of 2025 under the current structure by as Mauricio mentioned, our second quarter.
Speaker Change: The report, we expect to be on the new.
Speaker Change: The new corporate structure, if everything goes as planned. So again. Thank you very much for attending this conference call and I wish you a very good day.
Speaker Change: This concludes today's conference. Thank you for participating you may now disconnect.
Speaker Change: Yeah.