Q3 2025 Bancolombia SA Earnings Call
Good morning, ladies and gentlemen, and welcome to the group of Cyprus Bank Columbia, third quarter 2025 earnings conference. Call my name is Latta and I will be your operator for today's call.
At this time, all participants are needless and only mode.
Following the prepared remarks, that will be a question and answer session there. Any question and answer session. If you have a question, please press star, then the 1 on your touchtone keypad please note that this conference is being recorded.
Please note that with the 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, future filings, and press releases, or verbally, address matters that invoke 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 described in our reports filed with the SEC.
With us today is Juan Carlos, ma chief executive officer, Mr. Mardis bottero wolf, Chief strategy and financial officer Mr. Rodrigo preto Chief risk officer. Mrs, Catalina Dobbin, investor relations, and capital markets director and Mrs. Laura clavo, Chief Economist. I will now turn the call over to Mr. Juan Claus warter chief executive officer
Thank you, Mr. Juan Carlos. You may begin.
Good morning.
Welcome to group proceeds third quarter results conference call.
To begin. Please go to slide 2.
Group of core results, demonstrate strong operational execution, and highlight the company's capacity to navigate an increasingly competitive market within a complex macro economic context.
Net income, grew nearly 20% in the quarter and 43% year-over-year.
By resilient margins and a sharp decline in provision charges.
This reflects continued improvements in asset quality and the effectiveness of our credit freeze policy, as we will further elaborate.
Nominal long growth was flat during the quarter impacted by a nearly 4% peso appreciation.
Adjusting for effects.
Effects long road will have reached 1.2% quarter over quarter.
Not only Consumer loans, continue gaining traction. Paving the way for higher yields ahead.
Furthermore, I am pleased to report that making achieved a positive net income in September.
Reflecting robust, operational performance.
Although, it is premature to confirm break. Even at this stage, this development represents an important milestone in Nikki's path towards sustained profitability.
Which we anticipate will be reached by the first quarter of next year.
Also, the share buyback program, we launched in mid July is making good progress.
Enhancing our way performance and boosting key evaluation metrics as we will further discuss.
Overall.
In all 4 geographies.
Also of note, group of service is Standalone. Double leverage ratio was 106%.
Which implies not only strong credit worthiness, but also room for further Leverage.
Overall.
Results. Demonstrate the effectiveness of our business model and robust, operational capabilities.
Together with the new corporate structure, on the holding company, we are well, positioned to deliver sustained value creation for our shareholders.
Now, please proceed to slide 3.
The execution of our share buyback program has been very successful.
soon after obtaining shareholders approval in our region to buy up to 1.35 trillion pesos in a 1 year period we started as executing on July 17th
under scoring our commitment to delivering results.
As of September 30th, approximately 27% of the total authorized we purchase amount was completed.
This includes around 7.3 million shares which is close to 1% of the total shares outstanding.
Of the share report. Purchased 50.4% were preferred shares.
41.6% were ADRs and 8% were common shares.
We saw a strong positive price reaction throughout the quarter.
Along with higher price to book and price to earnings ratios. For both common and preferred shares. Indicating the market value is aligned more closely with fundamentals.
The execution of the program remains fully aligned with our Capital allocation strategy and with the capacity, of each type of shares to absorb volume in line with its liquidity.
Please proceed to slide 4.
The recent.
Increase in the price of the company share shows that a consistent upward Trend began following the announcement of the new holding company in October of last year.
Since then, the common share has increased by 69% the preferred share by 65% and the are by 86%.
This performance indicates the markets assessment of the value creation potential in our new corporate structure and its expectations regarding our capacity to maintain earnings growth and manage cap capital to achieve total returns for shareholders.
Now, please proceed to slide 5.
The launch of bribie was completed smoothly and bank Columbia necking now account for 52% of All Digital Keys registered in bre,
Additionally, 68% of system, participants are clients of group of cities reflecting ongoing efforts to secure a significant position in the market.
In the first 2 weeks of operation, approximately 70 million transactions were processed.
Amounting to ?7.2 trillion in flows, within the group of services, with a net positive cash flow reported between inflows and outflows throughout the Bre ecosystem.
Results. Follow a recent pilot conducted on a private Hospital, which facilitated client, preparation and early adoption of digital Keys, a step in transitioning to bra,
Despite the briefing is launched initial operational outcomes under the new interoperable. Bra framework suggests potential indicators of Group Policy position in the sector.
I will now turn the presentation over to Lara klaviyo Chief Economist who will provide an overview of the market economic landscape.
Loba.
Thank you, Juan Carlos.
Now, please turn to slide 7.
Those in Latin America are increasingly positioning themselves as a gravitational hub for foreign capital amid global volatility and trade tensions.
Capital inflows into the region. Are being driven by attractive real interest rate, differentials profitable carry trade opportunities and the front loading of remittances overall the Region's proven macroeconomic stability, characterized by solid demand declining inflation and lower unemployment has outweighed fiscal concerns,
Nevertheless fiscal consolidation remains a key challenge for many countries in the region.
The Colombian economy, sustained its recovery through the third quarter supported by robust, domestic demand improving household confidence and the resilient labor market.
Economic activity likely expanded at an annual rate of 2.4% during the third quarter, consistent with our full-year GDP forecast of 2.6% and our 3% growth projection for 2026. Leading sectors such as entertainment, agriculture, and retail continue to contribute to overall growth. While construction is expected to gradually strengthen in the coming months, growth momentum appears resilient despite global volatility and domestic uncertainty, both on the fiscal and political fronts.
On the monetary side convergence toward the inflation target has proven more challenging than anticipated with inflation, holding steady above 5% driven by Rising housing, and utility costs.
Risks to price convergence are mounting due to higher minimum wage expectations for 2026, potential demand-side pressure, and growing fiscal dominance. Consequently, we expect the central bank to keep rates on hold through the remainder of the year and to resume monetary easing in 2026, reaching an estimated end-of-year policy rate of 8.25%.
In the coming months, we will closely monitor inflation data and minimum wage negotiations maintaining a biased toward persistent inflation and therefore higher for longer interest rates.
Now, please turn to slide 8.
Turning to Central America, economic activity has demonstrated, notable resilience, despite headwinds, from potential remittance slowdowns and global trade tensions. El Salvador is expected to grow, 2.2% this year, supported by household consumption, foreign investment and tourism. Guatemala is projected to expand 3.6% driven by robust domestic demand and stronger expert performance.
Finally, we have revised upward. Our Panama growth forecast to 4.1% for 2025 with the economy poised to benefit from continued investment in infrastructure tourism and Global Supply Chain Logistics.
I will now hand over the presentation to Mauricio Barrow, who will provide further insights into the Q3 2025 results. Mauricio.
Thank you Laura. Please go to slide 10.
During the third quarter, our loan portfolio experienced a slight deceleration. In nominal terms partly due to a 3.6%. Appreciation of the Colombian Peso adjusting for FX long growth would have reached 1.2% quarterly and 5.9% annually, demonstrating resilience despite the slow economic environment across our markets
Consumer loans were the main driver of growth during the quarter underscoring. The effectiveness of our targeted strategy to reactivate originations among the higher risk profiles.
Notably marketing campaigns designed to stimulate demand contributed to robust growth in credit card usage. Complemented by Nikki's Dynamic performance in credit origination
Meanwhile, mortgages registered another quarter of a strong growth, which represents an annual growth of 11%.
Please go to slide 11.
Our Central American operations continue to play a key role in diversifying, both credit risk and currency exposure across the loan portfolio. At the end of the quarter credit portfolio in US Dollars represented 31%.
When analyzing by operations on a currency. Neutral basis, Bank, Columbia Elites nominal loan growth, followed by bomb and bankruptcy.
In retail has been moderate.
Has maintained steady expansion with balanced performance this quarter across corporate and Retail segments. The latter driven by personal loans and credit cards and supported by solid asset quality.
in contrast Banos more reported a slight, quarterly contraction mainly due to a risk appetite adjustments on mortgages
Please go to slide 12.
Our deposits posted a nominal, 0.5% contraction in the quarter equivalent to a 0.7% increase. When excluding ethics
On an annual basis, nominal growth was 8.3%.
I would like to highlight the 16% annual growth of savings accounts because of its impact on total cost of funding.
From a loans to deposit ratio perspective, all operations have room to fund long growth with their own resources, except for Bono that has efficiently Diversified, its funding sources different from deposits.
Please proceed to a slight 13.
From a funding mix perspective time, deposits, keep yielding share to savings accounts. Further enhancing our competitive cost of funding.
as a matter of fact, even though reference rates in Colombia have remained unchanged,
since April, we were able to decrease our cost of deposits during the quarter by 13 basis points to around 4%.
Which coupled with a decreasing cost of other sources of funding contributed to the overall, decrease in the cost of liabilities.
Looking ahead, we expect to maintain a low cost of funding supported by our ability to attract granular, stable deposits, and the execution of a set of tools to manage interest rates exposure as we will discuss next.
Please go to a slide number 14.
Given our asset sensitive position. We have implemented, a 3-fold strategy to manage interest rate exposure on our deposit base in Columbia,
Aimed at mitigating, the impact of future rate cuts on our name to preserve overall profitability.
First, we have significantly increased the share of retail client deposits driven by growth in online time deposits.
As shown in the upper left chart over the year, the share of the institutional deposits.
Was nearly offset with online time deposit, which carry lower, interest rates and have shorter tenor.
As a result over the last year, we have been able to reduce centers in such way that over 20% of total time, deposits mature, within 90 days in More than 70% within 12 months.
That is 11 points more than a year ago. Clearly enabling a faster repricing across a balance that accounts for 35% of our total funding mix.
third, we recently started executing a series of interest rate swaps in order to hedge interest rate risk by converting fixed rate deposits into floating
Further increase in our balance of sensitive to interest rate liabilities.
As shown on the lower left chart, as of September, 21% of former fixed-rate deposits...
Have been hedged.
Moreover.
From an income perspective, we designed a successful portfolio strategy to allocate the liquidity. Surpluses we have been running with over the past year with a return that has offset some of the pressure on the lending name.
Please go to a slide 15.
As a matter of fact, net interest income Rose by 1.5% during the quarter primarily driven by a 12.5% increase in interest and valuation income.
Reported by the appreciation of our Securities portfolio.
Effective liquidity Management in short-term money market instruments in higher income from derivative sales and distribution activities.
On the other hand, a 2.3% decline in interest expense partially offset the 1.2% contraction in interest income from loans.
Despite a marginal increase in overall loan balances.
this was primarily due to lower mortgage yields, which are indexed to floating rates,
As a result, the name remained the stable at 6.6% underscoring the strength of our competitive advantage in low cost deposits.
Which continued to offset the impact of lower loan yields as previously discussed.
When broken down by entity, Bank agriculture stands out with an increased margin from higher lending and investment yields, coupled with lower funding costs.
On the other hand, ban maintains, a stable name performance, whereas bani is more interest expenses increase this quarter due to a base effect, from the previous quarter related to an adjustment on interest expenses on a real state lease agreement.
Please proceed to a slide 16.
Net fee income increased 3.3% over the quarter mainly explained by the positive trend of serve throughout the year in Investment Banking and Trust Services.
Related to the execution of financing projects, with corporate clients and larger volume of assets under management.
Particularly in Collective Investments schemes and private Equity Funds.
To a lesser extent, collection services, credit and debit card payments, and banking services contributed to the quarterly growth due to an increase in transactional values.
In Bank insurance, we recently strengthened our alliance with Surah to enhance the distribution of insurance policies.
This initiative is expected to drive free income growth, going forward.
Please proceed to a slide 17.
Furthermore, I'd like to refer to the good progress. We continue achieving in scaling, our complimentary businesses, which are key to reinforcing our competitive advantage.
1 P delivered an outstanding quarter in terms of active user engagement growing 42% during the quarter and achieving a 61% increase year-over-year.
We are encouraged by the progress in transaction value, and average revenue per active customer, which reflects in the product successful Market, penetration and its growth potential.
Similarly, gaining traction with its digital assets value, proposals are growing close to 50% in active users and 63% in transactions during the quarter.
On the other hand, Nike continued to demonstrate a strong momentum, adding 1.2 million active users and a steady increase in transaction volumes in the quarter. This reinforces its leadership in digital engagement and support its strengths towards profitability as we will discuss next.
Please go to a slide 18.
On the back of this strong client engagement, Necchi achieved an activity ratio of over 80%, measured in terms of users that made at least one transaction within a one-month period.
Also of note is the rising adoption of Niki among small entrepreneurs, alongside individual users to support their business operations.
These clients typically generate a higher volume of monetary transactions, which translates into consistent growth in both the number and average tickets across the platform.
Growth having to financially income that accumulates 77 annual growth explained in turn by an impressive, 2.3 times expansion of its loan book.
On the other hand, it maintains a sound deposit balance of P5.5 trillion, slightly below last quarter due to seasonality effects.
Next is a strong operating performance continues to drive a sustained increase in our pack which in turn enables aesthetical dilution explaining the positive bottom line outcome for September.
Thus, we remain confident that Nikki will consolidate this trend in the coming months reaching its first full Break, Even quarter by.
Q1 of 2026.
Please go to a slide 19.
In line with the positive trend of service throughout the year, quality continued to improve during the quarter across all key indicators.
From a new past you loan perspective, the balance of loans that became delinquent during the quarter, have a significant reduction compared to the average of previous quarters.
Moreover, all loans categories, showed improvements in both 30-day and 90-day, Pooh loan rates. Except for commercial loans, which experienced a slight increase in the 90-day ratio compared to the same period last year.
These ratios improved even as the loan portfolio remained flat during the quarter, meaning there was no dilutive effect.
Consistently the breakdown by stages continues to reflect a positive trend with a sustaining increase in stage 1 loans.
In a corresponding decline, in a stage 3 loans over the past 12 months.
Please go to a slide 20.
Furthermore, from an expected loss perspective, net Provisions amounted to 800 billion pesos at 24% quarterly drop.
In close to 48% annual contractions, the reduction was primarily driven by 2 key factors, the solid performance of the retail and SMS portfolios in Colombia in a provision release of 266 billion resulting from updates to parameters in macroeconomic variables.
These positive developments more than offset, the increase of served in the corporate segment, which was impacted by 2 non sector related clients.
As a result, the quarterly annualized cost of risk declined. 211.2% marking its lowest level in the past year.
When broken down by entities only vanqua posted a higher cost of risk during the quarter explained by its deliberate strategy to grow on Consumer loans which contributes to higher returns adjusted by risk.
All other individual operations, reported a stable or declining cost of risk. Driven by overall improvements in asset quality and the release of Provisions following updates to risk parameters.
Please go to a slide 21.
Operating expenses decreased 2.4% during the quarter, explained by a combination of efficiency strategies.
For the first time in the in the last year labor expenses posted a decline during a quarter.
This effort was primarily focused on salaries and benefits, even as bonus provisions increased in line with the financial forecast for year-end.
On a yearly basis. Expenses are growing at 7.6% primarily driven by it related costs.
The seasonal effect related to last year's bonus, provision and a rise in other taxes.
By uh, 1 of ring shooter, claimed recorded last quarter.
Please proceed to a slide 22.
Net income posted a strong 20% growth quarterly and 43% growth annually. Driven by an overall good operational performance across all geographies mainly underpinned on resilient margins, higher fees and lower cost of risk.
As a result, these quarters are already increased to 20.4%, primarily supported by Bancolombia's strong standalone return of 26.6%, as the operation represents 48% of the group's equity.
Moreover.
Early in Banis move, have a strong rebound. Posting a 15.2% for the period accounting for 12% of total equity,
Ban, which accounts for 8% of total Equity recorded and narrowly expansion of 7.3%.
Meanwhile banquete representing 7% of total Equity further improved, its Roi to 20.1% during the quarter reaffirming its sustained capacity for Value creation.
Now, please proceed to slide 23.
Group shareholders Equity, Rose 2.6% over the quarter.
Mainly driven by net income generation which more than offset the reduction in appropriated reserves from the share buyback program.
On the other hand, the Tier 1 ratio for Bancolombia Standalone, as of September, closed at 11.8%, reflecting an 80 basis point increase over the quarter.
and 148 basis points over the year on a performer basis, reflecting strong organic capital generation.
Consistently Bank, Colombia's total solvency reached, 14.1% growing 68 basis points during the quarter and 110 basis points during the year on a performance basis.
With this, I will now hand the presentation back to Juan Carlos.
1. Thank you, Mauricio.
Please proceed to slide 24.
Year to date group of civil has originated 55 trillion pesos as part of its business with purpose strategy.
bringing a commodity total 344 trillion pesos in 2020 toward the
760 trillion pesos; gold set 2030.
Additionally M, Columbia Finance of the second phase of the tunnel, the oriente through a sustainable infrastructure loan.
Manism market and Milestone by issue in the first sustainable bowling in Panama's, local security Market with idb invest serving as the anchor investor for up to 75 million.
This initiative is intended to drive, meaningful progress in climate action and in case Financial inclusion for women entrepreneurs.
Please refer to slide 26.
For the 2025 year end Outlook long road has been revised to approximately 3.5%.
primarily due to reduced commercial lending activity and updated foreign exchange assumptions reflecting an anticipated lower rate,
Net of FX year-over-year, long growth will be around 6%.
With interest rates currently exceeding previous projections, the net interest margin is estimated at 6.5%.
The cost of risk.
Expected to be in the range of 1.5 to 1.7.
Indicating continued improvements in asset quality.
Operational efficiency is projected to be around 50%.
The return on equity has been adjusted to around 17%.
Of approximately 7% with the net interest margin expected between 6.3% and 6.5%.
The cost of risk is anticipated to be within the 1.61 to 1.80 range. Operational efficiency is forecast to be roughly 50%, and return on equity is projected to be between 16% and 17%.
Please proceed to slide 27.
Conclude, I would like to emphasize 3 primary takeaways.
First.
Group of service. Successful launch of bre demonstrates. Our capacity to anticipate market, trends, adapt, effectively, and remain competitive. In a dynamic environment.
Second, our comprehensive interest rate risk management. Continues to be instrumental in mitigating the effects of lower interest rates.
and lastly, the initial
Progress of our share buyback strategy under scores our enduring commitment to delivering long-term value to our shareholders.
This bring us to the end of our third quarter results. Presentation, we are now available to address. Any questions, you may have
Thank you. We will now conduct a question and answer session.
You would like to ask a question. Please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press *2 if you would like to remove yourself from the queue. Once again, that's *1 to ask a question at this time.
1 moment while we pull for our first question.
Our first question comes from Brian Flores with City Bank, please proceed.
Hi team. Uh good morning, thank you for the opportunity and and also congratulations on the results. I wanted to ask you on the sustainability on the funding side, right? You you you seem to be reducing
Uh, your costs consistently, also, it seems to us that, uh, you have done so while gaining market share. So, if you could, you know, uh, guide us through what initiatives are driving these, and if they are sustainable.
And then also because it seems like it's sustainable. If we could see uh maybe upward revisions to the sustainable levels that you have been guiding given that also across not only Columbia, but all the regions. We seem to be seeing better levels of our way.
Thank you.
Thank you. Uh, Brian.
Let me, let me give you an overview on your two questions and then I’ll pass to my issue to give you more details.
Regarding the, the sustainability of our cost of funds. I want to emphasize that we have been building an structural advantage in particularly in the Colombian Market. But we have been replicated the model in the, in the other markets.
It's, we have been developing a very robust digital offer.
But also we have a physical presence through a network of branches. And also banking agents, that allow us to have uh uh a deposit base that is very
It is uh these birds with a small amount so we can manage and handle the the cost of funds uh much better. We have been working very hard on on having that diverse uh source of funding uh
Also we have been working on on being the platform of for many Colombians in in the case of bank Columbia and in other markets. So we we firmly believe that it's a a
structural advantage that we have been building through now more than 10 years with with our different. Uh, with with an approach that is a hybrid between a strong digital.
Just to, to give you.
Uh, additional or, or regarding your second question about Roe. We have been improving the, the guidance on our in. Now we for 7 for 2025, we are around 17% and also, in for, uh, 26. We we are between 16 and 17, uh, we will continue working on on improving our profitability, but we think that with that kind of, that guidance is achievable. It's based on, on, on, as I mentioned, some structural, uh,
Position that that we have.
We will work all always to have an upside possibility of of increasing that that Roi. But I think that you current conditions, that's an arrow that we can. We can achieve Mauricio, any additional comments.
right and as as well, Carlos
mentioned, we have been working and investing a lot in our value proposition in, in order to keep the flows within our ecosystem and to maintain transactional, stable and low cost funding. Uh, so that's, uh, that should be sustainable. Now, what you see in the decrease in the cost of funding gradually, that may come to a limit because we have been
Mean, uh, defending the margin, the decreasing interest rates, and its effects in the asset side while, uh, lowering the cost of funding. But, uh, that's, uh, going to get to a limit. Now, a total cost of deposit is 4% and that level uh, should remain around those levels going forward.
A perfect Superior. Thank you, thank you.
Brother.
The next question comes from Tito with Goldman Sachs, please proceed.
Hi, good morning, and thank you for the call. Uh, I'm taking my questions, uh, 2 questions if I can 1 just on, yeah, as we get closer to the presidential elections next year, just give us an update on kind of latest expectations on the elections kind of where things stand and any visibility. I know it's still a little bit early but I think, you know, as we get closer to the policy more and more questions about that. Uh, and then second question is, and congrats on the, the strong results, uh, and your efficiency guidance for next year, you mentioned around 50%, you're a little bit better than that. This quarter, I mean good performance uh, on expenses but just in in you know, I know Nim is coming down a little bit next year as we come down. So it's potentially something.
Some pressure from that but just on expense growth further, potential improvements in efficiency as in normalizes, just to help us. Think about um, you know, where they can still be some efficiency gains. Thank you.
Thank you, Tito.
Politics.
I mean, even though now, there is a lot of conversations and, uh, and a lot of noise are all politics in Colombia. Still. We think that, uh, particularly presidential elections, which the the first round will be in in May, it's still far away. So still we need
A lot of things are going to happen between now and probably January, January in January, we will know.
Better how, uh, to uh, or to create much better who are really the the candidates that are well positioned.
To be, or, or to have possibilities on that first, first round What? Er,
Had happened in, in the in the past month is that the the left, uh, left this part is they, they had their primaries and they elected a candidate. So, uh, in that sector, they have now a figure that
if we see it now it will probably we will run until until the first the first round other than that. There is not a lot of clarity on who are going to be those candidates that will have a a chance on on, on, on First. And first on that and just to emphasize I mean, we need to wait.
To see how.
Uh, will be positioned and and January will be a good moment to assess that that, uh, how how those uh candidates are positioning. March will be a, a, a checking Point. Uh, March, we will have, um,
Elections for congress, uh, and it's probably there will be another primary at that moment. Uh, that will pick candidates. So,
Let's look for January and March as the datelines in which we will have more clarity on how the first round is shaping up and who the candidates are with the most possibilities to advance to the runoff.
Run.
And regarding efficiency. Yeah, our guidance for 26 is around 50.
We are committed to improve that.
But uh there are some structural issues that we need to to solve and I going to pass to Mauricio to give you more more detail on that detail.
Yeah, and I did before.
Commenting on on efficiency. I would like to go back to your comment on, on Nim, our guidance for Nim is in a range between 6.3 and 6.5. Our Baseline is to maintain the, the levels of nim. Now that the market is incorporating, the fact that the Central Bank, may not decrease interest rates as expected. So the ranch incorporates H that reality, whether the Central Bank, decreases interest rates, or not now,
the effect of that in efficiency levels is, uh,
1 mentioned, we are guiding for
50%. That's not the level we feel comfortable with. We would like to see a ratio of approximately 45%. And just to give you more color on how to reach that level.
we have created a, uh,
A project inside the bank with different tracks.
trying to optimize, uh,
Expenses. So we have a track of channels, we have a track of operations, we're working on means of payments. We're working on the productivity automation, uh, the whole structure of collections. So we, we are really taking it, uh, seriously. But there are some structural, uh, facts that we have in the country that may not allow us to go to levels around 40 or figures that, you may see in other countries,
Okay, no, that's super helpful. Thank you. Um, my video. And
Thank you, Tito.
The next question comes from, Daniel vas with software, please proceed.
Everyone, uh, thanks the thanks for the opportunity to make some questions, uh, super helpful. Also, the plumbing preliminary guidance. Uh, I want to touch base on the loan growth of 7%. If you could uh, just detail bit more where, um, it could be better than another, for example, like breakdown between Colombia and other regions and also,
If it's more relevant in any division, maybe commercial customer or mortgage. That's that's the first question. And and the second 1 uh, on your new PDL very, very good job there, could you detail a bit more? What could be like, your
Uh, a more healthy or a more sustainable level for the new PDL going forward. I think you recorded almost like 50% drop quarter quarter of a quarter. Uh, but like, working our models here to, to understand the sustainable level to work going forward. It will be very grateful to hear about what has changed and what would be the this level. Thank you.
Thank you, Daniel, uh, long road for for 20 206.
A particularly in Colombia, uh, a better economic activity. And if we break down in Colombia, I mean, I'm, I'm sorry in in CIS, the, the total, uh, the total growth of 7% in the different loan books. Uh, we are expecting commercial loans to grow around 6.2%.
Consumer to be around 10%. So we, we will continue seeing a demand on, on, on Consumer loans.
And mortgages around 6 2%.
Before passing the your question to my izzio. Let me give you some color regarding the pdls.
uh, definitely the
The credit risk has been behaving better than we were expecting in 2025. And that's, uh, that in part explains, uh, the, the good results that we uh, are having in particularly in the in the third quarter.
Body. And the levels that we have today are not levels that are far away from what we consider the mid long-term.
Uh, level, and if we translate that into the cost of risk, uh, the cost of risk for the quarter was particularly low. Uh, but for us we think it's, it's, it's clear achievable to have a cost of risk in 2026 with the around 1.6 1.7 when our range is 1.6 1.8. Uh, but with that, we can we can have the profitability that we are, that we are foreseeing. So the levels are are coming down because of better behavior in particular in Colombia and in in other countries. Also the only case is El Salvador in which we have a a higher mpls but that's we were we were expecting that because we are now growing more on a on a Consumer loans, in Salvador and and the equation on between profitability and risk is going to
as values or we, we will looking for that in Panama, we don't see much growth
Uh, in an an an Guatemala. It's also Dynamic, but I I will pass your question to to Marissa to give you additional uh color on on on that.
and,
I I would say um Bank Columbia is is a very good proxy of what's going to happen with long growth in group of commercial loans. In Colombia. We're expecting pretty much the same figure for Columbia and and groups, which is around 6.2 6.3. In mortgages Columbia is, is pushing the number upward because Columbia is expected to grow above 10%,
and and some of the countries in Central America are not supposed to be as Dynamic, but
In Consumer loans, something that you should take into account is that we are already considering in our base numbers, ah, the split, um, the spinoff of nexi that we announced last night. So Nikki is, of course, going to be much more Dynamic that the different banks.
the long road figure the guidance for Nike for next year is
A more than 50% were, uh, working with 56%. And that's why Consumer loans in bank Columbia would grow 5%. Whereas groups Consumer loans will grow at 10%,
Super clear. I think, thanks, thanks for the the answer.
Thank you, Danielle.
The next question comes from Carlos. Gomez with HSBC, please proceed.
In Colombia or it applied also to Panama because we see that the provisions in Panama are negative. Uh and could you tell us what tax rate you apply?
To both again Colombia and or or whatever other geographies that you have been applying. So that would be our first question. Uh, we want to to get a grasp about how much this represented for your earnings. The second is a broader question, I mean, we see that there have been some movements in the Colombian banking system, um, mergers acquisition or disposals transfers, uh, you now have a more flexible structure, uh, which is been imitated, I guess that is that is that shows how good it is. Um, so you have you can do more things
Are you going to do more things and are you a more willing buyer or seller of assets? Uh, depending on geography or depending on prices? Thank you.
Uh, thank you, Carlos.
It is important to notice that the model of calibration. It's something that we do on a regular basis. I mean, it's it's something that
At least. Every year, we, we recalibrate models to the, the idea is that the models reflect the risk situation of the different portfolios. So, it's not something that we did this time for a particular reason reason, other than we do it.
Regularly, as I mentioned, at least, at least 1 1 a year 1, once a year.
So,
That process is for the whole uh, C is not just 1, Columbia. It's it's in all bands.
H.
And reflects.
the current situation of the uh, long books which
Uh have uh, have improved in in basically, in in all countries.
So what the models are are are reflecting is is that Improvement on on credit risk?
the, the tax rate that we have as, as a
Previous is around 28%, uh, and that differs in in, in, in the country the statutory rates are are very different in in different countries. Maybe you could give you more more color, uh,
In a moment or or what is? Yeah. The, the, the tax framework for every country is is very different. So, I, I would say, if, if you, if you want to model a Colombian results with a tax rate of around 30%, El El Salvador, maybe 22%.
A Guatemala around 10 Banos Mo with 16% that, that would do it. And, but the most important thing is that overall the tax rate for group of should be modeled at around 28%.
And regarding your, your question about our new corporate structure. As we mentioned, several times we have
uh,
Some the the motivations that that we had to evolve to this holding structure was a more efficient uh use and and Capital Management uh also the clarity of of the structure with the holding company uh and and and the different institutions 1 supervised and regulated entities or not and and the flexibility that add our structure and and we create this structure precisely to have that flexibility. And and to your question, if we are buyers or sellers, we, we will continue to continuously assess opportunities. And, and in that sense we will, uh, undertake whatever it's better for the future of, of group of service in terms of profitability new businesses. So, we will be buyers and sellers in the future. In the, in the meantime, we will, we will add businesses.
And we will improve our structure cuts.
Okay. Um,
Thank you for that, going back to the taxes. Sorry, I understand that the tax rate effective tax rate for each of the countries is this. Uh, but in terms of the remodeling, I mean, the remodeling in Columbia, for instance, you have a marginal tax rate of 40%. Presumably when you had changes in the provisions that goes at the 40% rate. Could you tell us more or less, how much of these 266 million in reversal went to Colombia and went to the other countries?
Okay, give us a few seconds. We we will take a look at the specific numbers and we'll get back to you later.
but, but let me, let me say this Carlos, the the tax effect of the
Provision expenses.
Is marginal on the results of of group of cities. It's not something that uh change materially the the the results there are provisions.
As we have Provisions, every every quarter and the tax treatment of of each country, it's it's different. In the case of Columbia, for example, for for tax purposes. Uh, there have some deductions and other deductions of of those of those Provisions but uh that uh that charge of that.
What happened around the, the recalibration of the models and the and the uh, Provisions, uh, resulting from from that recalibration, it is not doesn't have a material effect on, on, on taxes, and Marissa has now some additional information? Yeah. Uh, the exact numbers is out of those 2 6 6. 7 5,
From the countries in Central Central America which account for approximately 28%. So uh it's a good proxy of how the General Revenue of group of services.
Very clear. Thank you.
Regardless.
Fernandez with JP Morgan please proceed.
Thank you, congrats also on the results. Uh, 2 questions on, on my side here. Uh, the first is regarding the buyback, right? You have been very active, uh, the shares have rebounded, uh, lately. So I just want to understand, how do you see this? Like, Are You full committed to deliver the missing? I don't know. 75%, that is missing, uh, or now that the shares are, you know, a little bit higher. Maybe it's more about dividends a little bit, less about by back. So, just trying to understand how do you feel like, buy backs versus valuation and, you know, opportunity of cash on that and also on the BuyBacks? I think it's it's related to to Carlos questions on inorganic m&a. Now, you have a, a stronger currency. Right? We may discuss your Roi if the shares are are available or not. But the shares are worth more. So so just trying to understand, how do you see your shares as a vehicle for, you know, uh, m&a. Like
In the past when you did this thing from Earth, Acquisitions? Can you remind us if those were cash or if you use shares back then? So, just trying to understand a little bit, how do you see your own shares as a, as a as a, an option for for consolidation in in Columbus eventually and then a second question, regarding Nike and Brady? I, I think we didn't explore much in the call yet but, you know, Nike break even in the month, I think that's very good news. Um, I would like to understand a little bit. How do you see the, the profitability through the map for Nike? Any, any match because you can share on on how big this can be on the group Roes or anything like this. And how to think about Brad because I I, I like a lot of the market share you have on payments. I think that's a, a very nice number. So if you can talk a little bit, how may I keep everybody? They talk to each other. I think that's also a topic that we we can learn more from from you. Thank you.
Thank you, Jory.
we are, we are
Very satisfied with the with the results of of our buyback program, I think it has been evolving very well and and miso will will give you in a in a moment more more information about about that.
and regarding,
so we have all all flexible, big flexibility to uh
A ball. But what what is, what is clear for us? Is that
We created this structure. I mentioned with with several goals, but 1 of them was given as flexibility to grow and and that growth will come from from different aspects in different in different regions. So we will be continued. But now we have all the flexibility. All the tools.
And, and we think strategic Clarity on on, uh, which ways? We, we, we go.
Some words about Neti. We are very very very pleased with the evolution of making making. It's it's having a very good performance particularly uh on on, on the long book of of make is growing.
At a very Dynamic base. Uh, you saw that now our our artwork, uh it's it's continue growing. The CTS is, is declining. So we are adding more more more possibilities of of profitability.
so, we are very confident that this, uh, that now that we
had a, a break, even in the past September, we will we will continue in that Trend and we will continue adding profitability for for Neti will come, uh, uh, a new, uh, Milestone Nikki. We will separate next year, from from bank Columbia, and we will operate as an stand alone, entity that will happen h.
The second semester of of, uh, next next year. So we are confident that with the evolution that we have. Uh, we have in the, the, the numbers that make you achieving the number of active users that we have the level of deposits. How the long book is performing? Uh, we will, we will, uh, uh,
Be profitable uh, in in 2026. Uh, uh uh, for sure. And
Regarding Prix.
The introduction of bre I think it's it's a it's a good leverage for next. Next now it's uh it's leading the transactions in uh in the B system and what is
Better for us is that we are uh net positive in terms of, uh, flows. So it's more money coming into naked at the money that is going out so that shows the the power of Naki as a as a platform that more than 22 million Colombians use used today. So we are confident that the introduction of of bra will add capabilities and possibilities to our to our customers in in making and so far. We are, we are very happy with the with the developments around around bra. I don't know if, if you want to add something or regarding the first question or or the other, the other questions that and jury had. Yeah. Hi jury. Uh, regarding your question about BuyBacks. Just just to, to remind everybody that
1 of the things that came with the creation of group of series was the need and the opportunity to to optimize Capital. So we have been working in both fronts, very firmly, both the operational front and the capital optimization front in that front. Specifically, we have the buyback program. And as, you know, we have an approval to execute in 1 year up to 1.35 trillion pesos
but that's, that's a cap is not a commitment for us to execute the whole program.
International markets in 1, in the local markets. So they, they have the, the framework to execute and, and they go and tap, the market, according to market conditions, the pricing conditions,
No, thank you. Thank you me. Thank you. And congrats again, I guess for me to shareholder return, like your dominance and payments, many, many good things in addition to discussing, you know, cost of risking low or not. I I, I like some of the, the trend here. So, congrats again. Thank you.
Thank you. Thank you, Jude.
The next question comes from Andre Stow. We sent in their. Please proceed.
Good morning, thank you for the presentation. Um, I want to go a little bit deeper on on the um discussion about uh Niki revenue on the on the role of of lending uh when when I see your slide uh 18, I see that pretty much at this point. Uh what you have is 50% Financial income, 50% fee income, I would like to understand out of this uh Financial income. How much of that is represented by floating uh the the 1, the money that you keep uh
Via transactions. And and how much is is actual actually coming from uh, interest income um, from lending. And and if you can help us understand a little bit, uh, what are the, um, economics uh, of of, that lending, uh, be that in terms of research, just a name or give us a sense of what is the, the average, um, loan yield and the average cost of raised that you are expecting to have, uh, now that this is going to be a relevant factor for uh, Bank Columbia growth in uh, 2026.
Uh, thank you Andreas. Again, we we are
Very satisfied with the, with the evolution of of Nikki. And, and particularly we, we started uh,
Landing Nikki at the beginning of of 2024 and the and the evolution. Uh, now uh, we have
uh,
close to 600 uh thousand. Uh,
Customers of of, of that at taking loans, the average loan. Uh, it's around 2,000 2 2,500 pesos,
And the, the interest rate that we are charging on those. Uh, loans are very close to, uh, the, the maximum rate that we can charge, which is around 25%. So if it's a little bit lower than that, uh, but it's, it's at that, at that, at that range, uh,
before we pass your question to Mauricio, I want to uh,
emphasize that what we are expecting is that
the uh portion of financial income will uh will increase. Uh, now as as you notice is 1602 and and and what 81, but since we will continue growing uh our long book that Financial uh income will continue to to grow the deposit based of of Nikki. It's it's relevant. We have more than 5 billion peso 5 trillion pesos actually on on on deposits and I I st. Stable, that level of of deposits and, and growing as, as as as I mentioned, in the question of of Fury about bra is, is even even grow its growing in this new,
Competitive environment. Yeah, Andreas, as you can see, um, total revenue for for Nikki, is pretty much split it between the income and financial income. And if you double click on financial income, you will see that.
Approximately half of that is from the Investment Portfolio and half of that is from the loan portfolio and that's basically because the the loan to deposit ratio is still at very low levels. It's around 24/25
Um, as a percentage of total deposits and the total revenue mix will change having uh Financial income more weight every time and uh, a mix. Uh um
An evolution between income from investments and income from loans. But what we plan to do is, once we report the fourth quarter figures, we will have more clarity on the plans for Nike in 2026, in terms of the spin-off. We will also have a better breakdown in guidance for Nike and how the year is going to look. So, be aware of that.
Yeah. That that would be very helpful. Uh, uh. Uh, the question uh, regarding the, the economics in in landing. Um, I was, I was going to, uh, also wanted to get a sense of what is the cost of risk that you are expecting, um, from these loans. Okay? Yeah, yeah, sorry. That, that we didn't didn't didn't address that that part. I mean, the the partial loans. Now are behaving, uh, are behaving better than expected. We follow the, uh,
very closely, of course, uh, the the performance of, of the of the portfolio in terms of of risk, uh,
But new loans are the 30th day basis. It's around uh 7% 6%.
And the the cost of risk, uh, that we are expecting it is below below 5%, so, uh, and and those, those we are inside those parameters, even even better. So we continue reply, recalibrating our models and our growth rate will be uh, determined by how we will be uh, or how we evaluate the performance of of the vintages. But so far, what we are seeing is that even the the new vintages are are performing better than the the the, the, the older vintages. So, uh, with that economics, I mean with the, with the interest rate around, 205% or 24%, the cost of funds that is very low. Is the the funds. I remind you that the the
The funds, uh, in Nikki comes totally from, uh, savings accounts with a very, very, very low cost of cost of funds.
And with that cost of of risk, uh, we can we can have a, a good profitability on on, on the on this business.
Uh, you mentioned uh currently 600,000 uh customers with with loans in Aki uh in your expectation. For 2026. Uh uh how how much that number is going to grow.
Andreas. That's, that's a very interesting picture that that we will share with Market. Uh, when we present the 4 quarter results,
Very nice. Thank you, ma'am. And thank you.
No, thank you, Andre.
Thank you. At this time. I would like to turn the call back over to Mr. Juan, Carlos Mota for closing comments.
Thank you, everyone. Everyone. Everyone for participating in this, uh, third quarter, uh, call results. Uh, we are, we are
Happy with the results. I mean, we have a stronger income and and return on Equity that it's uh it's improving Consumer loans, are getting traction, which is positive for our team. We continue defending the name. Uh the the Milestone of Nike achieving uh Break Even point is very important. And from there we think that we
Can develop even more this platform in which we believe we have a big, big, big opportunities and the the solid progress of our share by. But it's it's, it's very, it's very good. So we will continue on on this direction and we will expect, uh, uh,
I hope to uh see you on our floor quarter uh conference call results. Thank you very much and have a good day.
Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.