May 6, 2014 (www.investorideas.com newswire) Bancolombia's 1Q14 financial results
1Q14's net total loans were COP 87.3 trillion, +26.9% YoY and +2.3% QoQ. The annual growth was explained, 16.5% by the contribution of Banistmo (formerly HSBC Panama) and 10.4% by the organic growth of the existing operation before the consolidation of Banistmo. 1Q14's net total loans came slightly below our estimates (-0.7% surprise).
Net interest income in the same period was COP 1,45 trillion, +3.58% YoY. 1Q14's NIM was 5.54%, 124bp below 1Q13's. However NIM, was 20bp above 4Q13. Net interest income was 0.3% above our estimates.
Total loans' quality indicator was 3.2% at the end of 1Q14, higher than 1Q13's (3.00%). This increase is explained by tighter regulations applied to Banistmo's loans past due.
Operating expenses showed a slow growth that surprised us positively. 1Q14's operating expenses totaled COP 1,17 trillion, decreasing 2.9% with respect to 4Q13 and increasing 7.4% with respect to 1Q13. 1Q14's efficiency indicator (ex-goodwill) was 54.2% 418bp below 4Q13's.
1Q14's Net income increased 3.2%YoY to COP 508 billion. The annualized Return on Equity (ROAE) was 12.0% for 1Q14, well below the 15.6% of 1Q13. 1Q14's net income was 8% above our estimates and 7% above the market's.
Finally, Bancolombia's capital adequacy ratio was 13.66%, 305 bp above the 10.61% for 4Q13 and 330 bp below the 16.96% at the end of 1Q13. The quarterly increase in the capital adequacy was due to the new capital, proceeds from the issuance of shares.
These statements consolidate Banistmo operations (HSBC Panama) since November of 2013, making the numbers not comparable with previous quarters.
Overall, we consider 1Q14's results as slightly positive. The surprise came mainly from the operating expenses. Nonetheless, it is important to highlight, as we had mentioned before, that the benefits from Banistmo's transaction will not be reflected in the short term and Bancolombia's profitability indicators should remain low. We remember these statements consolidate Banistmo operations (HSBC Panama) since November of 2013, making the numbers not comparable with 1Q13.
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