Bancolombia achieved the remarkable feat of growing its business despite facing one of the toughest operating environments in years.
The bank provided more loans in the first half of 2023 than one year before and closed the 12-month period with a significant increase in the number of clients.
It did so while the Colombian economy languished with an expected GDP growth of just 1.2% in 2023, compared to 7.3% last year, according to BBVA Research.
The banking sector has not been exempted from the impact of this lackluster performance. According to Superintentencia Financiera de Colombia, the financial markets regulator, the sector as a whole in the first half of 2023 posted profits 47% lower than 12 months prior.
Bancolombia succeeded in outperforming the market by a significant margin, though, as its profits in the Colombian market were 23.3% lower than in the first six months of 2022. Investment income has been the main drag on performance, while commissions and fees were 13.6% higher than the year before.
At the same time, the performance of the credit portfolio remained positive in the period, as the total volume of loans increased by almost 10%. Loans to business clients helped to keep the total portfolio on the rise, while Bancolombia tightened lending criteria for individuals, which led to a drop in volume of 27.6% in one year.
This conservative approach helped keep NPL ratios only slightly higher than 12 months earlier, closing the period at 2.6%, one of the lowest among the main Colombian banks.
In the same period, the bank’s number of clients in Colombia grew from 22,800 to 24,500 for corporate banking, from 2.3 million to 2.6 million among SMEs, and from 15.5 million to 16.3 million in the retail segment for individuals. Bancolombia closed the first half with an annualized ROE of 14.5% and an efficiency ratio of 41.3%, down from 45.7% in June 2022.