Bancolombia S.A. - ADR

Strong quarter results, driven by credit growth; margins at record highs - Net income: COP 2tn in Q3; +10.5% YoY YTD. - NIM: 7.4% (record) supported by better funding/treasury normalization and loan book dynamics. - ROE: 21.7% for the quarter (solid profitability; driven by operating leverage and expense discipline). - Loan growth rebound: credit origination rebounded sharply, led by commercial loans as confidence improved.

Asset quality: cost of risk rose but within guidance; management flags potential follow-through risks - Cost of risk: 1.8% in Q3 (within guided range), mainly from higher consumer provisions and expected dynamics. - Delinquency: still well contained across portfolios; coverage solid (131% for 30dpd and 195% for 90dpd). - Forward-looking risk monitoring: - Post-earthquake: asset quality in affected areas currently “in line,” but management expects some deterioration potential as collections normalize. - El Niño exposure: concentrated in agribusiness/agro exporters; provisions already recognized, so no material additional impact expected.

2026–2027 guidance: loan growth revised up; profitability supported but macro uncertainty remains - 2026 loan growth outlook (revised up): from 7–8% to 8–9% (driven by stronger commercial demand). - 2027 loan growth: 9–10% (also led by commercial), conditional on an orderly fiscal adjustment. - 2027 profitability expectations: - NIM: 7.5–7.7% - Cost of risk: 1.9–2.1% (explicitly conservative due to growth + earthquake/El Niño effects) - Efficiency ratio: 46–47% - Earnings/ROE framing: management targets ~21–22% ROE in 2027; long-run ROE target around ~20% after rate/credit cycles normalize.