Bancolombia S.A. Announces Consolidated Financial Results for 1Q09

MEDELLIN, Colombia, May 7 /PRNewswire-FirstCall/ -- Bancolombia S.A. announces the following results:

SUMMARY

Bancolombia S.A. ("Bancolombia" or the "Bank") (NYSE: CIB) reported consolidated net income of Ps. 311.1 billion for the quarter ended March 31, 2009 ("1Q09") (Ps. 394.92 per share and U.S.$ 0.62 per ADR), representing an increase of 5.7% compared to the quarter ended December 31, 2008 ("4Q08") and 22.6% compared to the quarter ended March 31, 2008 ("1Q08").

The Bank's results in 1Q09 were mainly driven by a solid performance of revenues as net interest income totaled Ps. 985.2 billion, an increase of 23.70% as compared to 1Q08, while net fees and income from services reached a record Ps. 367.0 billion, increasing 19.6% as compared to 1Q08. The Bank's results were partially off-set by high credit costs as net provision charges totaled Ps. 339.9 billion in 1Q09, increasing 96.2% when compared to 1Q08, but decreasing 28.4% compared to 4Q08, and operating expenses that amounted to Ps. 716.7 billion, increasing 22.7% as compared to 1Q08.

During 1Q09, Bancolombia's management continued to focus on strengthening the Bank's capital position as well as its balance sheet. The Bank's efforts resulted in:

-- The Bank's capital position was strengthened; basic capital (tier 1) increased Ps. 573 billion, or 11.5%, as compared to the previous quarter due to higher appropriation of legal reserves and retained earnings; and additional capital (tier 2) increased Ps. 519 billion, or 40.7% as compared to 4Q08, driven by the successfully issuance and offering of subordinated notes in the local market for an aggregate principal amount of Ps. 400 billion on March 4, 2009. As a result, technical capital reached Ps. 7,337 billion while capital adequacy (Tier 1 + 2 Capital ratio) finished 1Q09 at 12.7%, up from the 11.2% presented the previous quarter.

-- The balance sheet was strengthened as allowances for loan losses increased to Ps. 2,351 billion by the end of 1Q09 (5.1% of total loans), while coverage, measured by the ratio of allowances for loans and accrued interest losses due to past due loans (overdue more than 30 days), ended 1Q09 at 131.7%.

During 1Q09 Bancolombia continued experiencing underlying business expansion:

-- Bancolombia continued experiencing a favorable evolution of deposit growth during the quarter, strengthening its solid liquidity position. As of March 31, 2009, Bancolombia's deposits reached Ps. 43,515 billion, increasing 7.7% as compared to 4Q08 and 30.7% as compared to 1Q08, while the ratio of net loans to deposits (including borrowings from development banks) decreased, reaching 92% at the end of 1Q09.

-- The Bank's efforts have resulted in market share gains in most of its operations. According to ASOBANCARIA (Colombia's national banking association), Bancolombia's market share as of March 31, 2009, was as follows: 21.7% of total loans, up from 21.4% compared to March 31, 2008, and 19.1% of total deposits, compared to 18.3% market share at the end of 1Q08. According to ABANSA (El Salvador's national banking association), the market share of Bancolombia's subsidiary Banco Agricola as of March 31, 2009 amounted to 30.1% of total loans, up from 28.6% as of March 31, 2008, and 30.4% of deposits, compared to 29.6% as of March 31, 2008.

The Bank experienced some asset deterioration during 1Q09. Past due loans (overdue more than 30 days) increased 12.7% during the quarter. As a result, the past due loans ratio increased from 3.6% in 4Q08 to 4.0% by the end of 1Q09.

Annualized return on average shareholders' equity ("ROE") for 1Q09 was 19.95%, a slight increase from the 19.80% annualized ROE presented in 4Q08 and 19.67% annualized ROE presented in 1Q08.

This report corresponds to the consolidated financial statements of Bancolombia and its affiliates of which it owns, directly or indirectly, more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of the Superintendency of Finance in Colombia, collectively COL GAAP. Bancolombia maintains accounting records in Colombian pesos, referred to herein as "Ps." or "COP". Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank's principal accounting policies in the quarter ended March 31, 2009. The statements of income for the quarter ended March 31, 2009 are not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties; consequently, there are or will be factors, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptances of new products or services by our targeted customers, changes in business strategy and various others factors, that could cause actual results to differ materially from those indicated in such statements. We do not intend, and do not assume any obligation, to update these forward-looking statements. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments.

Any reference to BANCOLOMBIA means the Bank together with its affiliates, unless otherwise specified.

    Representative Market Rate April 1, 2009: Ps. 2,544.24 = US$ 1
    Average Representative Market Rate 1Q09:  Ps. 2,417.75 = US$ 1

    Sergio Restrepo
    Executive VP
    Tel.: (574) 4041424

    Jaime A. Velasquez
    Financial VP
    Tel.: (574) 4042199

    Juan E. Toro
    IR Manager
    Tel.: (574) 4041837

SOURCE Bancolombia S.A.