CIB — Grupo Cibest S.A.

Summary of Grupo Cibest Bancolombia Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: COP 3.8 trillion for the year, impacted by a noncash impairment charge of COP 3.4 trillion from the sale of Banistmo. Excluding this, net income would have been COP 7.3 trillion, yielding a return on equity (ROE) of 17.2%.
• Annual ROE: Reported at 9.1%, with a pro forma ROE of 24% for Bancolombia.
• Loan Portfolio: Declined by 8.3% due to accounting impacts; however, growth would have been 2.1% without these effects.
• Deposits: Contracted by 5.2%, but grew 4.5% when adjusted for accounting impacts.
• Net Interest Income: Decreased by 5.3% annually, but increased by 1% excluding accounting impacts.
• Cost of Risk: Annual cost of risk was 1.8%, with expectations of 1.6% to 1.8% for 2026.

2. Strategic Updates and Business Highlights

• Digital Businesses: Nequi and Wompi reached breakeven, contributing to long-term profitability. Nequi's loan portfolio grew by 174% to COP 1.6 trillion.
• Dividends: Proposed dividend of COP 4.3 trillion, reflecting a 14.6% annual growth, exceeding inflation by 950 basis points.
• Share Buyback Program: Approximately 32% of the authorized amount has been executed, with plans for continued buybacks aligned with market conditions.
• Corporate Structure: The transformation into Grupo Cibest has improved capital allocation and market confidence, evidenced by significant share price appreciation.

3. Forward Guidance and Outlook

• 2026 Guidance: Anticipates loan growth of 7% to 8%, a net interest margin (NIM) of 6.8% to 7%, and ROE between 18% and 18.5%. The effective tax rate is projected at approximately 28%.
• Macroeconomic Factors: Expected inflation of 6.4% and rising interest rates pose challenges but are factored into the guidance.

4. Challenges and Points of Concern

• Macroeconomic Risks: High inflation and interest rates could pressure asset quality and increase the cost of risk. The Colombian economy faces uncertainty from potential new taxes and public debt issues.
• Regulatory Uncertainty: Potential emergency taxes and mandatory lending requirements from the government could impact profitability and operational flexibility.
• Loan Portfolio Decline: The significant drop in the loan portfolio raises concerns about growth sustainability and market competitiveness.

5. Notable Q&A Insights

• Asset Quality Concerns: Management acknowledged the need to monitor asset quality closely amid rising inflation and interest rates, with a focus on managing the cost of risk effectively.
• Capital Allocation Strategy: There is flexibility in capital management, with plans to invest in digital ventures while maintaining shareholder returns. Future investments in Nequi, Wompi, and Wenia were highlighted.
• Tax Uncertainty: Management discussed the complexities surrounding tax regulations, indicating a potential upside or downside risk depending on forthcoming government decisions.
• Political Landscape: The upcoming elections and their potential impact on economic policy were discussed, with management expressing cautious optimism about navigating the political environment.

This summary encapsulates the key aspects of Grupo Cibest's Q4 2025 earnings call, highlighting both achievements and challenges as the company navigates a complex economic landscape.