CIB — Grupo Cibest S.A.

Summary of Grupo Cibest Bancolombia Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: COP 1.5 trillion, down 16% year-over-year due to a one-off wealth tax; normalized income would be COP 1.8 trillion.
• Return on Equity (ROE): 15% overall; Bancolombia at 19%, BAM at 16.2%, and Banagricola at 20.5%.
• Net Interest Margin (NIM): Increased from 6.8% to 7.0%, driven by higher yields and asset-sensitive profile.
• Cost of Risk: 1.9%, above guidance of 1.6%-1.8%, reflecting macroeconomic provisions.
• Loan Portfolio Growth: Gross loans up 2.1% quarter-over-quarter; annual growth of 9.6% net of FX.
• Deposits: Grew 2.8% quarter-over-quarter and 10.4% year-over-year, with time deposits leading growth.

2. Strategic Updates and Business Highlights

• Nequi Spinoff: Progressing towards an independent license to enhance value and profitability; expected to be completed by Q3 2026.
• Banistmo Sale: On track for closure in Q2 2026, with proceeds earmarked for capital instruments and digital investments.
• Dividend and Buyback Program: COP 4.3 trillion dividend approved; new buyback program of COP 1.35 trillion initiated for 2026.
• Digital Growth: Nequi and Wompi showing strong performance; Nequi reported COP 6.8 trillion in deposits and is expected to contribute around COP 30 million in net profit for the year.

3. Forward Guidance and Outlook

• GDP Growth: Colombia's GDP growth forecast revised to 2.9% for 2026, down from 3.2%.
• Interest Rates: Expected to remain high due to inflation pressures, with a policy rate forecast of 12.75% by year-end.
• Loan Growth Guidance: Maintained at 7%-8% for the year, with expectations of 50% growth for Nequi.
• NIM Guidance: Adjusted to 7%-7.2% for 2026.
• Cost of Risk Guidance: Expected to be at the upper end of the 1.6%-1.8% range.

4. Bad News, Challenges, or Points of Concern

• Wealth Tax Impact: The one-off wealth tax significantly affected net income.
• Asset Quality Concerns: Increase in new past due loans, particularly in consumer loans and mortgages, raising caution over asset quality.
• Macroeconomic Risks: High inflation (projected at 6.4%) and geopolitical uncertainties affecting economic stability.
• Sovereign Rating Downgrade: S&P downgraded Colombia's sovereign rating to BB-, indicating increased borrowing costs and reduced investor confidence.

5. Notable Q&A Insights

• Political Outlook: Upcoming presidential elections with a likely runoff; left-leaning candidate currently leading in polls, which could impact economic policies.
• NIM Trends: Interest rates expected to remain high into 2027, supporting NIM expansion but indicating potential future pressure on margins.
• Nequi's Performance: Administrative net income for Nequi in Q1 was around $7 million, with expectations of $30 million for the year.
• Deposits Strategy: Growth attributed to increased transactionality and digital platform usage rather than aggressive pricing strategies.

This summary encapsulates the key points from Grupo Cibest's Q1 2026 earnings call, highlighting both achievements and challenges faced by the company in a complex economic environment.