Poised to perform in good times and bad
Bolstered by years of investment in its digital infrastructure, Bancolombia says it is well
positioned to weather volatility.
The bank’s management is keenly aware that a more challenging market lies ahead for Latin
Ameri-can banks – but says that it is well prepared to keep delivering robust performance as
the cycle turns.
In the first half of 2022, Bancolombia, which wins this year’s award for Bank of the Year –
Colombia, posted ROE of 18.2% for the 12 months to end-June 2022, and 22.6% for the
second quarter alone. Profits in the second quarter were 137% higher in the same period of
2021, boosted by a recovery of credit, particularly in consumers loans, which grew 25.3% on a
But inflation, higher interest rates and political uncertainties may make it harder for such
performance to repeat in the year ahead.
“We will feel the impact of the changes in the economic environment in 2023,” says Juan
Carlos Mora Uribe, the CEO of Bancolombia.
Mora says that NPL ratios have not yet become a concern for the bank and have even
improved in 2022. He also believes that the bank’s investment in recent years – in particular in
digitalization — will help it navigate cyclical macroeconomic challenges.
“The growth of digital banking has contributed to increase bank penetration, and now more
than 90% of all Colombians have access to financial products,” Mora says. “Clients learned
during the pandemic how important digitalization is, as they did not have other options. Now
they use digital services in a recurrent way.”
The impact of digitalization is reflected in the contribution of Nequi, a digital bank developed
in house that has amassed more than 14 million clients and that has already started to provide
loans, reaching 140,000 transactions in 2022. Digital wallet A La Mano, for its part, has 6.5
million users and has also started to grant loans. A system that allows payments by QR code
has 1.3 million users, between consumers and retailers, and performed more than 100 million
digital transactions by October.
Another pilar of Bancolombia strategy is sustain-able finance, and Mora says that the firm is
eager to help promote financial inclusion, the development of sustainable cities, electric
mobility and the circular economy.
“We offer loans to companies that are linked to sustainability indicators,” Mora says. “We
have provided them to companies in sectors like food, cement and telecoms. If the borrower
meets some carbon emission targets, the interest rate is lower.”