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Net Income: COP197.4 billion, 4.5% lower than the previous quarter.
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Return on Equity (ROE): 5%, 27 basis points lower than the previous quarter.
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Return on Assets (ROA): 0.6%.
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Net Interest Margin (NIM): 4.5%.
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Fee Income Ratio: 27.6%, 2.1 percentage points higher than in the first quarter.
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Efficiency Ratio (Cost to Income): 53.5%.
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Cost to Assets Ratio: 2.6%.
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Gross Loans: COP104 trillion.
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Deposits: COP100.6 trillion, a 5.5% quarterly increase.
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30-day PDLs: Increased by 7 basis points to 6.3%.
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90-day PDLs: Increased by 27 basis points to 4.6%.
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Net Cost of Risk: Decreased by 82 basis points to 2.1%.
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Total Assets: COP145.4 trillion, a 6.8% annual growth and a 4.6% quarterly increase.
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Total Funding: COP125.5 trillion, an 8% annual increase and a 4.8% quarterly growth.
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Equity: COP16 trillion, a 2.3% annual increase and a 3.1% quarterly increase.
Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Banco De Bogota SA (BOG:BOGOTA) gained 42 basis points in loan market share between December and June, indicating growth in a challenging environment.
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The consumer loan portfolio showed positive figures in PDLs and cost of risk, reflecting the effectiveness of tighter consumer loan policies.
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The bank issued senior sustainable bonds worth COP500 billion in the local market, with strong investor appetite and a bid-cover ratio of 2.9 times.
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Digital transactions increased by 7% compared to the previous quarter, driven by innovative solutions like Transfiya, QR codes, and PSE.
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Sustainability efforts saw significant progress, with green loans reaching COP4.3 trillion, a 62% increase since December 2023.
Negative Points
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Profitability deteriorated slightly, with net income attributable to shareholders decreasing by 4.5% compared to the previous quarter.
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Loan quality deteriorated, with 30-day PDLs increasing by 7 basis points to 6.3% and 90-day PDLs increasing by 27 basis points to 4.6%.
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The Panamanian loan portfolio decreased by 1.5% in dollar terms, indicating challenges in that market.
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Net foreign exchange losses amounted to COP137.2 billion, attributed to the net cost of derivatives assigned to liabilities in dollars.
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The cost-to-income ratio increased to 53.5%, 4.3 percentage points higher than the previous quarter, due to a decrease in total income.
Q & A Highlights
Q: Hi, thank you for having my question. I would like to have more color on the net foreign exchange losses, COP137.2 billion. Why was it so much? Thank you. A: Hi, Julian. This is Javier. So regarding your first question, please bear in mind that our FX position is mostly balanced, so the COP137 billion you’re referring are not precisely a foreign exchange loss, but rather the net cost of derivatives assigned to liabilities in dollars that do not have a hedge in the asset side. We consider that this net cost will decrease in 2025 as interest rate in pesos will fall faster than rates in dollars. Thank you.
Q: Do you already have expectations on 2025 results? Thank you. A: Hi again, Julian, and thank you for that second question. We don’t have a guidance for 2025 yet, since we’re just beginning our budgeting process. What we could say right now is that we aim to keep improving in terms of NIM, cost of risk and overall profitability, and we will disclose those figures in the next call.
Q: Can you please repeat your expectations for ROE for 2024? Thank you. A: Of course, Julian. Our guidance for ROAE for 2024 is arranged between 6% and 7%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.