(1) Defined as net interest income divided by monthly average interest-earning assets. (2) Net income divided by monthly average assets. (3) Net income divided by monthly average shareholders' equity. (4)  Defined as ADS price divided by ADS book value. (5)  Defined as share price divided by share book value. (6)  Share prices on the Colombian Stock Exchange; (7) Defined as market capitalization divided by annualized quarter results. (8)  Prices at the end of the respective quarter. (9) Common and preferred.

 

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	4Q09

1.	CONSOLIDATED BALANCE SHEET

1.1.

Assets

As of December 31, 2009, Bancolombia’s assets totaled COP 61,864 billion, representing an increase of 3% as compared to 3Q09 and flat as compared to 4Q08.

COP-denominated assets totaled COP 46,473 at the end of 4Q09, increasing 4% as compared to 3Q09 and 5% as compared to 4Q08. Assets denominated in currencies other than COP (primarily USD) represented 25% of total assets (or USD 7.5 billion) at the end of 4Q09, and decreased 6% and 3% as compared to 3Q09 and 4Q08 respectively.

Net loans and financial leases accounted for 64% of assets as of the end of 4Q09, decreasing from the 69% they represented at the end of 4Q08, while net investment securities increased to 14% from 12% of total assets at the end of 2008.

1.2.	Loan Portfolio

As of December 31, 2009, Bancolombia’s gross loans totaled COP 42,042 billion, flat over the quarter but decreasing 6% as compared to the same period in 2008.  COP-denominated loans totaled COP 31,716 at the end of 4Q09, slightly decreasing over the quarter and the year (-1.1% QoQ and -0.7% YoY variations).

Loans denominated in U.S. dollars represented 25% of total loans, or USD 5,051 million, at the end of 4Q09, decreasing 3% and 11% as compared to 3Q09 and 4Q08 respectively. Loans volume performance is primarily explained by the significantly increased activity of corporations in debt capital markets and the low level of credit demand experienced during 2009.

Dynamic bond issuance activity of local firms in the domestic and international debt markets was a key driver of loans volume performance in 2009. It is estimated that COP 13,694 billion were issued in Colombia in 2009, 2.4 times the amount issued in 2008. Non-financial firms issued COP 6,630 billion, which represents COP 5,309 billion in excess of the amount issued by them in 2008. Such strong issuance activity, explained to a large extent by a rebound in activity from historically low levels during the previous two years, caused higher than anticipated loan prepayment activity and lower general credit demand within the corporate segment.

In addition, tougher economic conditions also weighed on credit demand. Neither Colombia nor El Salvador were immune from the global economic downturn that took place in 2009: Colombia’s economy is expected to have grown close to zero growth in 2009, while El Salvador´s economy is expected to have contracted more than 2.5% during the year. As a result, credit demand remained subdued.  Specifically, U.S. dollar-denominated lending activity was impacted by lower financing needs due to lower international trade flows affecting our clients’ businesses and also by a less dynamic economic environment in El Salvador where our loans are all dollar-denominated as the country’s economy is dollarized.

Corporate loans ended 2009 at COP 20,319 billion, or 48% of loans, decreasing 2% during 4Q09 and 9% as compared to 4Q08. Retail and SMEs loans totaled COP 12,783 billion, or 30% of total loans, of which COP 6,889 billion were consumer loans (16% of total loans).  Retail and SMEs loans increased 1% in 4Q09, but decreased 5% as compared to 4Q08. In contrast, mortgage lending activity remained dynamic, driven mainly by the Colombian government’s housing subsidy program that was implemented in April 09 as well as by lower long-term interest rates in Colombia. Taking into account securitized loans, mortgages increased 4% over the quarter and 9% over the year (Bancolombia securitized mortgage loans for COP 154 billion in 4Q09 and a total of COP 833 billion during 2009 in the local market).

 

 

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	4Q09

Above all, during 2009 Bancolombia maintained a strong balance sheet through the adequate coverage of its loan portfolio. Reserves for loan losses totaled COP 2,432 billion or 5.8% of total loans. For further explanation regarding coverage of the loan portfolio and credit quality trends, please see Section 2.4 “Provision Charges, Asset Quality and Balance Sheet Strength” of this report.

The following table summarizes Bancolombia’s total loan portfolio:

 

LOAN PORTFOLIO		As of												Growth
(COP millions)		31-Dec-08				30-Sep-09				31-Dec-09				Dec-09/Sep-09				Dec-09/Dec-08
CORPORATE
Working capital loans			19,332,292				18,554,910				18,500,267				-0.29	%			-4.30	%
Loans funded by
domestic development banks			1,022,764				681,931				527,937				-22.58	%			-48.38	%
Trade Financing			1,768,964				1,332,765				1,205,175				-9.57	%			-31.87	%
Overdrafts			63,508				104,263				50,602				-51.47	%			-20.32	%
Credit Cards			42,366				37,538				35,452				-5.56	%			-16.32	%
TOTAL CORPORATE			22,229,894				20,711,407				20,319,433				-1.89	%			-8.59	%
RETAIL AND SMEs
Working capital loans			4,138,373				4,203,293				4,306,083				2.45	%			4.05	%
Personal loans			4,287,515				3,739,370				3,788,972				1.33	%			-11.63	%
Loans funded by
domestic development banks			896,282				816,660				801,721				-1.83	%			-10.55	%
Credit Cards			2,518,991				2,321,921				2,392,580				3.04	%			-5.02	%
Overdrafts			229,212				259,565				189,026				-27.18	%			-17.53	%
Automobile loans			1,320,409				1,256,513				1,203,874				-4.19	%			-8.83	%
Trade Financing			123,826				101,140				100,860				-0.28	%			-18.55	%
TOTAL RETAIL AND SMEs			13,514,608				12,698,462				12,783,116				0.67	%			-5.41	%
MORTGAGE			3,391,326				3,279,715				3,469,424				5.78	%			2.30	%
FINANCIAL LEASES			5,506,742				5,396,877				5,470,001				1.35	%			-0.67	%
Total loans and financial leases			44,642,570				42,086,461				42,041,974				-0.11	%			-5.83	%
Allowance for loan losses and financial leases			(2,134,360	)			(2,297,314	)			(2,431,667	)			5.85	%			13.93	%
Total loans and financial leases, net			42,508,210				39,789,147				39,610,307				-0.45	%			-6.82	%

1.3.	Investment Portfolio

As of December 31, 2009, Bancolombia’s net investment securities totaled COP 8,915, increasing 10% and 22% as compared to 3Q09 and 4Q09 respectively. Net investment securities are primarily investments in debt securities (bonds), which represented 95% of Bancolombia’s net investment securities portfolio and 13.6% of total assets at the end of 4Q09, up from 11.1% of assets at the end of 4Q08.

1.4.

Funding

As of December 31, 2009, Bancolombia’s liabilities totaled COP 54,832 billion, increasing 3% as compared to 3Q09, but decreasing 1% as compared to 4Q08. During 2009, the Bank maintained a solid liquidity position. The ratio of net loans to deposits (including borrowings from development banks) was 88% at the end of 4Q09, which compares favorably to the 96% ratio in 4Q08.

During 4Q09, deposits increased their participation in the funding mix, representing 77% of liabilities, up from the 75% and 73% they represented in 3Q09 and 4Q08 respectively. Deposits totaled COP 42,149 billion, increasing 4% during the quarter and also during the year. In line with the year end’s greater liquidity, demand deposits increased 11% during the quarter, reaching COP 23,818 billion, or 57% of deposits, while time deposits decreased their relative size in the funding mix to 43% from 47% in 3Q09.

 

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DEPOSITS MIX
COP Billion		4Q08				%				3Q09				%				4Q09				%
Checking accounts			7,301,050				18.1	%			7,044,059				17.5	%			8,224,948				19.5	%
Time deposits			18,652,738				46.2	%			18,802,887				46.6	%			18,331,488				43.5	%
Savings deposits			13,997,070				34.7	%			14,119,894				35.0	%			15,143,781				35.9	%
Others			433,542				1.1	%			380,021				0.9	%			449,113				1.1	%
Total Deposits			40,384,400								40,346,861								42,149,330

1.5.	Shareholders’ equity and regulatory capital

Shareholders’ equity amounted to COP 7,033 billion at the end of 4Q09, increasing 7% and 15% as compared to 3Q09 and 4Q08 respectively. The increase in shareholders’ equity was driven primarily by the Bank’s operating results.

Bancolombia’s capital ratio decreased to 13.2% at the end of 2009 from 13.8% at the end of 3Q09, although it ended the year considerably higher than the 11.2% presented at the end of 2008. The quarterly decrease is explained by regulatory adjustments that increased the impact of financial derivatives on risk weighted assets.

Bancolombia’s capital ratio was 423 basis points above the minimum required by Colombia´s regulator, while the basic capital ratio (tier 1) was 10.40% and the tangible capital ratio, which is equal to shareholder´s equity minus goodwill and intangible assets divided by tangible assets, was 9.85% at the end of 2009.

 

TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (COP millions)		Dec-08				%				Sep-09				%				Dec-09				%
Basic capital (Tier I)			4,971,755				8.95	%			5,765,332				10.92	%			5,726,318				10.40	%
Additional capital (Tier II)			1,273,869				2.29	%			1,523,844				2.88	%			1,559,978				2.83	%
Technical capital (1)			6,245,624								7,289,176								7,286,296
Risk weighted assets included market risk			55,542,485								52,802,821								55,084,655
CAPITAL ADEQUACY (2)			11.24	%							13.80	%							13.23	%

 

(1) Technical capital is the sum of basic and additional capital.

(2) Capital adequacy is technical capital divided by risk weighted assets.

 

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	4Q09

 

2.	INCOME STATEMENT

Net income for 4Q09 totaled COP 371 billion or COP 471 per share-USD $0.92 per ADR. Net income for 4Q09 increased 16% as compared to 3Q09 and 26% as compared to 4Q08. Bancolombia’s annualized ROE for 4Q09 was 21.8% improving from 20.1% in 3Q09.
 

For the year 2009, net income totaled COP 1,257 billion (COP 1,595 per share-USD 3.12 per ADR), decreasing 3% as compared to 2008. Bancolombia’s ROE for 2009 was 19.6%.
 

2.1.	Net Interest Income

Net interest income totaled COP 1,042 billion in 4Q09, increasing 23% as compared to 3Q09. For the year 2009, net interest income totaled COP 3,802 billion, increasing 7% as compared to 2008. Fourth quarter’s net interest income performance was driven by higher interest from investment securities and net interest margins.
 

Interest on investment securities

Interest on investment securities increased significantly in 4Q09 totaling COP 308 billion, increasing 139% and 166% as compared to 3Q09 and 4Q08 respectively. In 4Q09 interest on investment securities was driven by better performance of the debt securities portfolio driven by higher bond’s prices, and by the positive non-recurring effects produced by the reclassification of the Bank’s investment in the private capital fund Fondo Inmobiliario Colombia and the recording of residual income generated by the pools of securitized mortgages.

In 4Q09, the Bank reclassified its investment in the private capital fund Fondo Inmobiliario Colombia (“the fund”), a fund that purchases and manages investment in real estate assets, as part of the trading category. As a result, interest income from investment securities was positively impacted by income of COP 100 billion related to the greater market value of the fund’s units in 4Q09. In addition, in December 2009, and in accordance with adjustments required by accounting regulation, the Bank recorded the net present value (“NPV”) of residual income generated by the pools of securitized mortgages. Under the terms of the mortgage securitization transaction documents, Bancolombia is entitled to receive any residual income generated by the pool of mortgages after complete payment of the pool’s debt services and administrative charges. Therefore, the Bank proceeded to incorporate into the value of its mortgage backed securities, the net present value of the expected estimated residual income which takes into account performance assumptions based on historical statistical data. As a result, interest income from investment securities was positively impacted by income of COP 58 billion related to the greater value of the NPV residual calculation.

For the year 2009, interest on investment securities totaled COP 729 billion, or 11% of total interest income, increasing 69% as compared to 2008. After deducting non-recurring events, interest on investment securities increased 32% in 2009 as compared to 2008. This performance is primarily explained by a larger investment portfolio during 2009 (the Bank’s investment portfolio grew 22% in 2009). Positive mark-to-market valuation driven by the bond price rally that took place in 2009 also explains the good performance, though to a lesser extent. During 2009, Bancolombia did not significantly increase its risk appetite in bond markets and maintained its focus on pursuing diverse and stable earnings sources.

Net Interest Margin

Recurring annualized net interest margin, or that resulting after deducting non-recurring income on investment securities, reached 6.7% in 4Q09, increasing from the 6.3% in 3Q09, although considerably lower than the 7.5% presented in 4Q08. During 4Q09, net interest margin was boosted by lower funding cost which more than offset the pressure produced by additional interest rate cuts.  

 

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	4Q09

 

During 4Q09, total interest expense decreased 18% due to a lower funding cost and a more favorable funding mix. Funding cost decreased significantly during 4Q09 as a result of liability re-pricing efforts undertaken throughout the quarter and the changes in the funding mix composition. The annualized average weighted cost of deposits reached 3.36% in 4Q09, down from 4.15%    in 3Q09 and 5.56% in 4Q08.

 

Deposits' weighted
average cost		4Q08				3Q09				4Q09
Checking accounts			0.73	%			0.59	%			0.49	%
Time deposits			7.76	%			6.31	%			5.33	%
Savings accounts			5.18	%			2.94	%			2.44	%
Total deposits			5.56	%			4.15	%			3.36	%

For the year 2009, recurring net interest margin was 6.7%, decreasing from 7.4% in 2008. This decrease is explained by the lower interest rate environment in Colombia. Throughout 2009, the Colombian Central Bank, in an effort to support economic activity, reduced its overnight lending rate by 650 basis points, an unprecedented and rapid move (most of which took place in the first half of 2009) that resulted in a repo rate of 3.5%. Consequently, interest rates across the economy followed a downward trend. In general, interest rates decreases impact Bancolombia’s interest on loans as a significant portion of the Bank’s loan portfolio has variable rates.

2.2.	Fees and Income from Services

During 4Q09, net fees and income from services continued their positive performance totaling COP 391 billion, increasing 6% and 8% as compared to 3Q09 and 4Q08 respectively. In particular, credit and debit card annual fees, the biggest contributor to total fees, increased 5% QoQ and 18% YoY driven by the 5.3% growth in traditional credit card billing during the year.

On the other hand, collection and payment fees also performed well, increasing 5% QoQ and 20% YoY, while fees from fiduciary activities continued their solid performance, contributing COP 48 billion in fees during the quarter and increasing 14% QoQ and 60% YoY, driven by an increment in assets under management and in the number of trusts in general.

For the year 2009, net fees and income from services totaled COP 1,506 billion, increasing 15% as compared to the same period last year. This increase was driven primarily by the solid performance of credit and debit card annual fees, fiduciary activities, and collection and payments fees.

The following table summarizes Bancolombia’s participation in the credit card business in Colombia:

 

ACCUMULATED CREDIT CARD BILLING										%				2009
(COP millions)		Dec-08				Dec-09				Growth				Market Share
Bancolombia VISA			1,738,186				1,753,163				0.86	%			8.09	%
Bancolombia Mastercard			2,232,799				2,314,469				3.66	%			10.68	%
Bancolombia American Express			1,532,476				1,730,273				12.91	%			7.98	%
Total Bancolombia			5,503,462				5,797,905				5.35	%			26.75	%
Colombian Credit Card Market			20,982,247				21,671,825				3.29	%
Source: Credibanco y Redeban multicolor

 

 

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	4Q09

 

CREDIT CARD MARKET SHARE										%				2009
(Outstanding credit cards)		Dec-08				Dec-09				Growth				Market Share
Bancolombia VISA			314,221				312,164				-0.65	%			5.97	%
Bancolombia Mastercard			362,287				354,936				-2.03	%			6.79	%
Bancolombia American Express			322,603				350,984				8.80	%			6.71	%
Total Bancolombia			999,111				1,018,084				1.90	%			19.47	%
Colombian Credit Card Market			5,328,110				5,228,295				-1.87	%
Source: Credibanco y Redeban multicolor

 

2.3.	Other Operating Income

Total other operating income amounted to COP 132 billion in 4Q09, increasing 29% as compared to 3Q09, although 30% lower than the figure for 4Q08. The year over year decrease is explained by non-recurring events reported in 4Q08, when the Bank recorded non-recurring gains on the sale of its interest in Multienlace S.A.. As part of this transaction, the Bank recorded gains on sales of investment securities for COP 56 billion in 4Q08.

Bancolombia usually hedges its currency exposure by establishing an opposite position in its derivative portfolio. Accordingly, exchange rate movements tend to have an opposite effect on the line item for derivative financial instruments compared to the effect produced on the line item of net foreign exchange gains. In 4Q09, the combined revenue of net foreign exchange gains and derivative financial instruments totaled COP 69 billion, increasing from the COP 21 billion in 3Q09.

Communication, postage, rent and others (primarily comprising income related to operating leases and commercial discounts) totaled COP 40 billion in 4Q09, decreasing 5% over the quarter, although increasing 17% as compared to 4Q08.

For the year 2009, total other operating income was COP 381 billion, substantially lower than the COP 650 billion reported in 2008. It is important to note that full-year 2009 other operating income incorporates non-recurring charges of COP 123 billion (charges incurred during the first half of 2009) related to the reduction in the carrying value of derivatives resulting from regulatory changes in the methodology used to value derivatives3. On the other hand, the sale of Bancolombia´s interest in Multienlace S.A. positively impacted the other operating income line item in 2008. As part of this transaction, the Bank recorded non-recurring gains on sales of investment securities for COP 92 billion in the fiscal year 2008.

2.4.	Asset Quality, provision charges and balance sheet strength

For the third consecutive quarter the increase in the amount of past due loans (“PDLs”) before charge-offs declined, amounting to COP 116 billion in 4Q09, down from COP 192 billion for 3Q09, COP 238 billion for 2Q09 and 389 billion for 1Q09. On the other hand, net loans’ charge-offs totaled COP 229 billion in 4Q09, increasing from COP 189 billion in charge-offs for 3Q09. All in all, PDLs totaled COP 1,627 billion at the end of 4Q09, down from COP 1,740 billion in 3Q09.  Consequently, the past due loan ratio, or loans overdue more than 30 days divided by gross loans, decreased to 3.9% in 4Q09 from 4.1% in 3Q09, although it was still higher than the 3.6% in 4Q08.

Despite signs of stability on delinquencies, loans classified as C, D and E, those categories of appreciable or higher risk, increased during the quarter and reached COP 2,149 billion or 5.1% of loans driven by a persistently weak employment environment and slow economic activity. Accordingly, credit cost remained elevated.

  

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3 The  Colombian Superintendency of Finance issued external circulars 025, 030, 044 and 063 (the “2008 External Circulars”) establishing new guidelines for the valuation of derivatives and structured products. In accordance with the 2008 External Circulars, BANCOLOMBIA adopted the methodology by which it values its portfolio of derivatives and structured products. As a result of this change, BANCOLOMBIA s balance sheet and financial results were impacted by a reduction in the carrying value of derivatives totaling COP. 145 billion in the 2008 fiscal year and COP 123 billion in 2009 fiscal year.

 

 

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	4Q09

Provision charges (net of recoveries) for 4Q09 totaled COP 301 billion, increasing as compared to the COP 168 billion for 3Q09, but decreasing 37% as compared to COP 475 billion for 4Q08.  On a relative basis, annualized provision charges for 4Q09 represented 2.9% of average loans, considerably lower than the 4.4% in 4Q08.

For the year 2009, provision charges (net of recoveries) totaled COP 1,153 billion increasing 2% as compared to the provision charges for 2008. On a relative basis, net provisions for 2009 represented 2.6% of average loans, decreasing from 2.8% in 2008. In addition, net loans’ charge-offs totaled COP 932 billion for the full-year 2009, increasing 70% from 548 COP billion in 2008.

Overall, Bancolombia maintains a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,432 billion, or 5.8% of total loans, increasing as compared to the 4.8% of total loans as of December 31, 2008, while coverage, measured by the ratio of allowances for loans losses to PDLs (overdue 30 days), reached 149% at the end of 4Q09, increasing significantly from 132% in 3Q09 and 131% in 4Q08. Likewise, coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E was 113% at the end of 2009.

The following tables present key metrics for asset quality:

 

ASSET QUALITY
( COP millions)						As of								Growth
		Dec-08				Sep-09				Dec-09					4Q 09 / 3Q 09				4Q 09 / 4Q 08
Total performing past due loans (1)			735,470				739,019				659,894				-10.71	%			-10.28	%
Total non-performing past due loans			888,535				1,001,225				967,368				-3.38	%			8.87	%
Total past due loans			1,624,005				1,740,244				1,627,262				-6.49	%			0.20	%
Allowance for loan losses			2,134,360				2,297,314				2,431,667				5.85	%			13.93	%
Past due loans to total loans			3.64	%			4.13	%			3.87	%
Non-performing loans as a percentage of total loans			1.99	%			2.38	%			2.30	%
“C”, “D” and “E” loans as a percentage of total loans			3.98	%			4.77	%			5.11	%
Allowances to past due loans (2)			131.43	%			132.01	%			149.43	%
Allowance for loan losses as a percentage of “C”, “D” and “E” loans (2)			120.20	%			114.48	%			113.12	%
Allowance for loan losses as a percentage of non-performing loans (2)			240.21	%			229.45	%			251.37	%
Allowance for loan losses as a percentage of total loans			4.78	%			5.46	%			5.78	%
Percentage of performing loans to total loans			98.01	%			97.62	%			97.70	%

 

(1)  “Performing” past due loans are loans upon which the Bank continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.

 

(2)  Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.

PDLs Per Category
		% Of loan Portfolio				4Q08				3Q09				4Q09
Commercial loans			61.9	%			2.5	%			3.1	%			2.9	%
Consumer loans			16.4	%			5.9	%			6.0	%			5.4	%
Microcredit			0.5	%			12.3	%			8.7	%			8.5	%
Mortgage loans			8.3	%			8.4	%			9.4	%			9.0	%
Finance leases			13.0	%			3.0	%			3.9	%			3.3	%
TOTAL LOAN PORTFOLIO							3.64	%			4.13	%			3.87	%

 

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LOANS AND FINANCIAL LEASES CLASSIFICATION
( COP millions)		As of 31-Dec-08								As of 30-Sep-09								As of 31-Dec-09
¨A¨ Normal			40,650,096				91.0	%			38,740,999				92.0	%			38,180,626				90.8	%
¨B¨ Subnormal			2,216,831				5.0	%			1,338,726				3.2	%			1,711,661				4.1	%
¨C¨ Deficient			576,557				1.3	%			660,039				1.6	%			703,054				1.7	%
¨D¨ Doubtful recovery			871,893				2.0	%			975,590				2.3	%			1,105,441				2.6	%
¨E¨ Unrecoverable			327,193				0.7	%			371,107				0.9	%			341,192				0.8	%
Total			44,642,570				100	%			42,086,461				100	%			42,041,974				100	%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases			4.0	%							4.8	%							5.1	%

2.5.	Operating expenses

During 4Q09, operating expenses totaled COP 732 billion, increasing 5% as compared to 3Q09, and presenting almost no variation as compared to 4Q08.

Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 300 billion in 4Q09, increasing 8% as compared to 3Q09 and 3% as compared to 4Q08. Such performance was primarily driven by higher bonus plan payments related to Bancolombia’s variable compensation program in which compensation is determined taking into account the economic value added by the firm.

Administrative and other expenses increased 4% during 4Q09, totaling COP 368 billion. On a yearly basis, administrative and other expenses decreased 1% as compared to 4Q08.

For the year 2009, operating expenses totaled COP 2,826 billion, increasing 10% as compared to 2008. Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 1,145 billion in 2009, increasing 6% as compared to 2008. This performance was primarily driven by the combined effect of larger headcount and wage increments during 2009, which off-set lower bonus plan payments and compensation in 2009 vs. 2008.

Administrative and other expenses totaled COP 1,418 billion in 2009, increasing 12% as compared to 2008 driven by increased fees paid in connection with software development and IT upgrades, greater collection efforts, greater costs associated to deposit insurance and larger assumed taxes and tariffs.

Depreciation expense totaled COP 185 billion in 2009, increasing 31% as compared to 2008. This increase was driven by the growth in the depreciation of assets that are part of the operating lease business of Bancolombia. In particular, COP 70 billion or 38% of the year’s depreciation expense is associated with operating lease assets.

 

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3.	BANCOLOMBIA Company Description (NYSE:  CIB)

Bancolombia is a full service financial institution incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 6.9 million customers. Bancolombia delivers its products and services via its regional network comprised of Colombia´s largest non-government owned banking network, El Salvador´s leading financial conglomerate (Banagricola S.A.), off-shore banking subsidiaries in Panama, Cayman and Puerto Rico, as well as an agency in Miami. Together, Bancolombia and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, pension fund administration, and insurance, among others.

Contact Information

Bancolombia’s Investor Relations

Phone: (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Juan E Toro V (IR Manager) /Catalina Botero S. (Analyst)

Website: http://www.grupobancolombia.com/relacioninversionistas/

 

11

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	4Q09

 

BALANCE SHEET														Last
(COP millions)		Dec-08				Sep-09				Dec-09				Quarter				Annual
ASSETS
Cash and due from banks			3,870,927				4,601,766				4,983,569				8.30	%			28.74	%
Overnight funds sold			1,748,648				978,919				2,388,790				144.02	%			36.61	%
Total cash and equivalents			5,619,575				5,580,685				7,372,359				32.10	%			31.19	%
Debt securities			6,840,596				7,984,665				8,436,244				5.66	%			23.33	%
Trading			2,385,564				2,655,122				3,037,819				14.41	%			27.34	%
Available for Sale			2,000,588				2,171,216				2,175,494				0.20	%			8.74	%
Held to Maturity			2,454,444				3,158,327				3,222,931				2.05	%			31.31	%
Equity securities			503,861				221,811				580,214				161.58	%			15.15	%
Trading			331,398				40,055				330,840				725.96	%			-0.17	%
Available for Sale			172,463				181,756				249,374				37.20	%			44.60	%
Market value allowance			-66,181				-80,953				-101,545				25.44	%			53.44	%
Net investment securities			7,278,276				8,125,523				8,914,913				9.71	%			22.49	%
Commercial loans			28,068,731				26,412,840				26,011,915				-1.52	%			-7.33	%
Consumer loans			7,532,649				6,821,966				6,888,615				0.98	%			-8.55	%
Microcredit			143,122				175,063				202,019				15.40	%			41.15	%
Mortgage loans			3,391,326				3,279,715				3,469,424				5.78	%			2.30	%
Finance lease			5,506,742				5,396,877				5,470,001				1.35	%			-0.67	%
Allowance for loan losses			-2,134,360				-2,297,314				-2,431,667				5.85	%			13.93	%
Net total loans and financial leases			42,508,210				39,789,147				39,610,307				-0.45	%			-6.82	%
Accrued interest receivable on loans			559,981				462,082				384,542				-16.78	%			-31.33	%
Allowance for accrued interest losses			-54,323				-51,041				-45,937				-10.00	%			-15.44	%
Net total interest accrued			505,658				411,041				338,605				-17.62	%			-33.04	%
Customers' acceptances and derivatives			272,458				227,406				205,367				-9.69	%			-24.62	%
Net accounts receivable			828,817				701,113				806,885				15.09	%			-2.65	%
Net premises and equipment			1,171,117				1,254,126				992,041				-20.90	%			-15.29	%
Foreclosed assets, net			24,653				50,821				80,668				58.73	%			227.21	%
Prepaid expenses and deferred charges			132,881				170,478				185,811				8.99	%			39.83	%
Goodwill			1,008,639				819,624				855,724				4.40	%			-15.16	%
Operating leases, net			726,262				818,010				843,054				3.06	%			16.08	%
Other			1,093,850				1,357,638				922,265				-32.07	%			-15.69	%
Reappraisal of assets			612,683				781,832				736,366				-5.82	%			20.19	%
Total assets			61,783,079				60,087,444				61,864,365				2.96	%			0.13	%
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Non-interest bearing			5,723,460				4,844,472				6,307,780				30.21	%			10.21	%
Checking accounts			5,289,918				4,464,451				5,858,667				31.23	%			10.75	%
Other			433,542				380,021				449,113				18.18	%			3.59	%
Interest bearing			34,660,940				35,502,389				35,841,550				0.96	%			3.41	%
Checking accounts			2,011,132				2,579,608				2,366,281				-8.27	%			17.66	%
Time deposits			18,652,738				18,802,887				18,331,488				-2.51	%			-1.72	%
Savings deposits			13,997,070				14,119,894				15,143,781				7.25	%			8.19	%
Total deposits			40,384,400				40,346,861				42,149,330				4.47	%			4.37	%
Overnight funds			2,564,208				1,094,900				1,342,201				22.59	%			-47.66	%
Bank acceptances outstanding			56,935				28,393				47,609				67.68	%			-16.38	%
Interbank borrowings			2,077,291				791,410				1,152,918				45.68	%			-44.50	%
Borrowings from domestic development banks			3,870,634				3,099,527				2,886,232				-6.88	%			-25.43	%
Accounts payable			1,688,402				1,850,319				1,656,154				-10.49	%			-1.91	%
Accrued interest payable			400,902				488,626				411,796				-15.72	%			2.72	%
Other liabilities			589,501				495,942				665,893				34.27	%			12.96	%
Bonds			3,643,486				4,208,832				4,173,622				-0.84	%			14.55	%
Accrued expenses			255,183				764,771				239,400				-68.70	%			-6.18	%
Minority interest in consolidated subsidiaries			135,292				323,159				106,381				-67.08	%			-21.37	%
Total liabilities			55,666,234				53,492,740				54,831,536				2.50	%			-1.50	%
SHAREHOLDERS' EQUITY
Subscribed and paid in capital			393,914				393,914				393,914				0.00	%			0.00	%
Retained earnings			4,911,107				5,244,860				5,601,028				6.79	%			14.05	%
Appropiated			3,620,464				4,359,414				4,344,178				-0.35	%			19.99	%
Unappropiated			1,290,643				885,446				1,256,850				41.95	%			-2.62	%
Reappraisal and others			860,784				918,356				1,004,293				9.36	%			16.67	%
Gross unrealized gain or loss on debt securities			-48,960				37,574				33,594				-10.59	%			168.62	%
Total shareholder's equity			6,116,845				6,594,704				7,032,829				6.64	%			14.97	%

 

12

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	4Q09

 

INCOME STATEMENT		As of								Growth																Growth
(COP millions)		Dec-08				Dec-09				Dec-08/Dec-09				4Q 08				3Q 09				4Q 09				4Q 09/3Q 09				4Q 09/4Q 08
Interest income and expenses
Interest on loans			4,999,520				4,901,366				-1.96	%			1,426,604				1,140,070				1,061,033				-6.93	%			-25.63	%
Interest on investment securities			431,589				728,558				68.81	%			115,929				128,875				307,931				138.94	%			165.62	%
Overnight funds			106,208				74,869				-29.51	%			31,226				15,794				13,498				-14.54	%			-56.77	%
Leasing			776,426				722,905				-6.89	%			211,096				165,031				151,859				-7.98	%			-28.06	%
Total interest income			6,313,743				6,427,698				1.80	%			1,784,855				1,449,770				1,534,321				5.83	%			-14.04	%
Interest expense
Checking accounts			39,257				43,211				10.07	%			12,089				10,242				9,316				-9.04	%			-22.94	%
Time deposits			1,256,742				1,376,567				9.53	%			349,967				317,873				247,352				-22.19	%			-29.32	%
Savings deposits			589,718				450,865				-23.55	%			176,389				103,790				89,315				-13.95	%			-49.36	%
Total interest on deposits			1,885,717				1,870,643				-0.80	%			538,445				431,905				345,983				-19.89	%			-35.74	%
Interbank borrowings			74,792				47,650				-36.29	%			25,330				6,561				5,469				-16.64	%			-78.41	%
Borrowings from domestic development banks			344,900				252,842				-26.69	%			92,662				53,923				44,800				-16.92	%			-51.65	%
Overnight funds			166,129				94,099				-43.36	%			51,698				16,642				9,844				-40.85	%			-80.96	%
Bonds			281,803				360,182				27.81	%			91,660				91,564				86,723				-5.29	%			-5.39	%
Total interest expense			2,753,341				2,625,416				-4.65	%			799,795				600,595				492,819				-17.94	%			-38.38	%
Net interest income			3,560,402				3,802,282				6.79	%			985,060				849,175				1,041,502				22.65	%			5.73	%
Provision for loan and accrued interest losses, net			(1,263,405	)			(1,317,846	)			4.31	%			(520,072	)			(190,865	)			(358,770	)			87.97	%			-31.02	%
Recovery of charged-off loans			108,143				214,251				98.12	%			40,035				53,646				78,886				47.05	%			97.04	%
Provision for foreclosed assets and other assets			(46,297	)			(98,437	)			112.62	%			(13,909	)			(32,366	)			(27,007	)			-16.56	%			94.17	%
Recovery of provisions for foreclosed assets and other assets			68,392				48,658				-28.85	%			19,282				1,818				6,154				238.50	%			-68.08	%
Total net provisions			(1,133,167	)			(1,153,374	)			1.78	%			(474,664	)			(167,767	)			(300,737	)			79.26	%			-36.64	%
Net interest income after provision for loans
and accrued interest losses			2,427,235				2,648,908				9.13	%			510,396				681,408				740,765				8.71	%			45.14	%
Commissions from banking services and other services			238,918				258,180				8.06	%			60,733				58,912				68,573				16.40	%			12.91	%
Electronic services and ATM fees			86,070				58,944				-31.52	%			22,820				13,744				14,776				7.51	%			-35.25	%
Branch network services			104,010				110,837				6.56	%			28,297				27,698				29,743				7.38	%			5.11	%
Collections and payments fees			157,281				187,348				19.12	%			41,901				48,075				50,460				4.96	%			20.43	%
Credit card merchant fees			32,215				28,200				-12.46	%			11,910				7,259				7,134				-1.72	%			-40.10	%
Credit and debit card annual fees			446,647				548,820				22.88	%			118,825				134,156				140,206				4.51	%			17.99	%
Checking fees			67,963				69,544				2.33	%			17,104				17,816				17,293				-2.94	%			1.11	%
Fiduciary activities			98,799				172,259				74.35	%			30,196				42,426				48,200				13.61	%			59.62	%
Pension plan administration			87,826				96,678				10.08	%			27,068				20,690				24,489				18.36	%			-9.53	%
Brokerage fees			54,742				45,966				-16.03	%			12,149				12,061				15,593				29.28	%			28.35	%
Check remittance			26,148				25,812				-1.28	%			7,203				6,581				6,333				-3.77	%			-12.08	%
International operations			47,962				46,836				-2.35	%			15,512				16,263				3,633				-77.66	%			-76.58	%
Fees and other service income			1,448,581				1,649,424				13.86	%			393,718				405,681				426,433				5.12	%			8.31	%
Fees and other service expenses			(134,939	)			(143,151	)			6.09	%			(32,718	)			(37,081	)			(35,526	)			-4.19	%			8.58	%
Total fees and income from services, net			1,313,642				1,506,273				14.66	%			361,000				368,600				390,907				6.05	%			8.28	%
Other operating income
Net foreign exchange gains			113,584				(216,411	)			-290.53	%			80,184				(150,887	)			51,124				133.88	%			-36.24	%
Derivative financial instruments			142,431				265,969				86.74	%			(21,708	)			172,270				17,971				-89.57	%			182.79	%
Gains(loss) on sales of investments on equity securities			92,125				584				-99.37	%			55,630				71				(25	)			-135.21	%			-100.04	%
Securitization income			41,080				53,784				30.93	%			9,523				14,281				12,341				-13.58	%			29.59	%
Dividend income			39,586				24,045				-39.26	%			89				3,184				89				-97.20	%			0.00	%
Revenues from commercial subsidiaries			101,730				96,605				-5.04	%			25,293				23,762				20,968				-11.76	%			-17.10	%
Insurance income			13,948				12				-99.91	%			6,449				(2,060	)			(10,106	)			390.58	%			-256.71	%
Communication, postage, rent and others			105,958				156,088				47.31	%			33,856				41,731				39,565				-5.19	%			16.86	%
Total other operating income			650,442				380,676				-41.47	%			189,316				102,352				131,927				28.90	%			-30.31	%
Total income			4,391,319				4,535,857				3.29	%			1,060,712				1,152,360				1,263,599				9.65	%			19.13	%
Operating expenses
Salaries and employee benefits			928,997				1,034,942				11.40	%			269,478				258,027				257,271				-0.29	%			-4.53	%
Bonus plan payments			125,393				90,341				-27.95	%			17,680				15,065				37,340				147.86	%			111.20	%
Compensation			23,539				19,725				-16.20	%			4,558				3,988				5,513				38.24	%			20.95	%
Administrative and other expenses			1,268,982				1,418,145				11.75	%			368,806				351,871				366,411				4.13	%			-0.65	%
Deposit security, net			52,151				74,228				42.33	%			12,557				18,743				16,846				-10.12	%			34.16	%
Donation expenses			26,653				3,506				-86.85	%			21,840				711				1,402				97.19	%			-93.58	%
Depreciation			141,133				185,027				31.10	%			40,365				47,747				47,006				-1.55	%			16.45	%
Total operating expenses			2,566,848				2,825,914				10.09	%			735,284				696,152				731,789				5.12	%			-0.48	%
Net operating income			1,824,471				1,709,943				-6.28	%			325,428				456,208				531,810				16.57	%			63.42	%
Goodwill amortization (1)			73,149				69,231				-5.36	%			34,804				15,614				15,320				-1.88	%			-55.98	%
Non-operating income (expense)
Other income			172,550				198,761				15.19	%			78,498				62,663				16,924				-72.99	%			-78.44	%
Minority interest			(18,511	)			(15,081	)			-18.53	%			(5,361	)			(8,632	)			4,294				149.75	%			180.10	%
Other expense			(140,662	)			(105,529	)			-24.98	%			(21,985	)			(33,753	)			(15,446	)			-54.24	%			-29.74	%
Total non-operating income			13,377				78,151				484.22	%			51,152				20,278				5,772				-71.54	%			-88.72	%
Income before income taxes			1,764,699				1,718,863				-2.60	%			341,776				460,872				522,262				13.32	%			52.81	%
Income tax expense			(474,056	)			(462,013	)			-2.54	%			(47,323	)			(139,674	)			(150,858	)			8.01	%			218.78	%
Net income			1,290,643				1,256,850				-2.62	%			294,453				321,198				371,404				15.63	%			26.13	%

 

13

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	BANCOLOMBIA S.A. (Registrant)
Date:  March 1, 2010	By:	/s/  JAIME ALBERTO VELÁSQUEZ B.
		Name:	Jaime Alberto Velásquez B.
		Title:	Vice President of Finance

 

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