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Colombian Banking Review Jun-14 Results - The long-expected pickup in NIM

August 19, 2014 (www.investorideas.com newswire) Loan growth decreased slightly to 14.4% y/y, as a result of a decline in the pace of growth of commercial lending (+13.4% y/y), while consumer lending (+12.5% y/y) maintained its growth rate. Mortgages (including securitizations) are still the most dynamic credit line, with a 17.8% y/y increase.

The most important fact on this update is the material increase in NIM during the month, as the effects of the upward shift in the yield curve last year were finally normalized as we were expecting. As a result, the sector’s ROAE improved 43 bps m/m closing at 12.5%. Despite this increase in profitability, ROAE remains low against history as a result of low rates, efficiency shocks from M&A activity and capital injections to strengthen ratios due to acquisitions, and the implementation of the new regulatory framework in Aug-13. In terms of rates we highlight that the recent hikes in CB policy rate will affect positively NIM due to the asset-sensitivity of the industry, but strong competition could limit a significant expansion.

Regards,
Credicorp Capital

La información contenida en este mensaje es confidencial y para conocimiento exclusivo del destinatario. La información y opiniones contenidas en este mensaje pertenecen únicamente al remitente, excepto cuando en el cuerpo del mensaje se establezca lo contrario y el remitente esté autorizado para enviar dicha información con carácter definitivo y oficial de Credicorp Capital. La información relacionada con su cuenta, los extractos, informes financieros y de productos, sólo será vinculante en la medida en que sea remitida por los canales y en los formatos que Credicorp Capital determine. Las opiniones, conclusiones o cualquier otra clase de información contenida en este correo no relacionadas con los fines del negocio de Credicorp Capital, deben entenderse como personales y bajo ninguna circunstancia son avaladas por Credicorp Capital. Si usted ha recibido este mensaje por error por favor proceda a eliminarlo, y notificar al remitente. De cualquier manera, usted no debe usar, divulgar, revelar, distribuir, imprimir, copiar o adulterar en forma parcial o total este mensaje. Credicorp Capital no se hace responsable por la eventual transmisión de virus o programas dañinos por este medio. Credicorp Capital, no se responsabiliza por eventuales daños o alteraciones como consecuencia de la recepción o uso del presente mensaje.

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