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Uneven Balance for Colombian Banks in 2023


Colombian banks 2023
Uneven balance for Colombian banks in 2023 – Credit: Josep Freixes / Colombia One

Colombian banks have achieved uneven results in 2023. According to a report by the Financial Superintendency of Colombia, the public entity that regulates the operation of banking entities in the country, with a cut-off last October, the assets of the banks grew with respect to September, although twelve of them presented important losses. At the top of the loss-making ranking is Davivienda, with losses of almost five hundred billion pesos, which represents a drop of 143.7%, closely followed by Banco Popular.

The assets of the financial system in October totaled 2,804.4 trillion Colombian pesos, a figure which is 19.5 trillion pesos higher than that recorded in September. However, 2023 was a year in which Colombia experienced a significant economic slowdown, with negative results in recent months that put the economy on the verge of economic recession.

In addition, the high interest rates that the central bank has maintained during practically the entire year have caused a drastic decrease in the lending activity of Colombian banks.

Uneven balance

The ten banks with the highest profits were: Bancolombia, with 4,979 billion pesos; Banco de Bogotá, with 967,847 million; Citibank, with 684,569 million; Banco de Occidente, with 293. 216 million; BBVA Colombia, with 244,418 million; Banco GNB Sudameris, with 84,539 million; BTG Pactual, with 51,428 million; Itaú, with 25,189 million; Banco Caja Social, with 19,726 million and Banco Finandina, with 14,246 million. Of these, half are domestic and the rest foreign capital.

On the other hand, the banks that recorded losses were: Davivienda, with -491,951 million pesos; Popular, with -321,899 million; Scotiabank Colpatria, with -287,567 million; Banco Falabella, with -162,567 million; AV Villas, with -119,224 million; Lulo Bank -80,374 million and MiBanco -57,076 million. Other national entities such as Bancamía S.A., with -5,804 million, Banco W, with -5,387 million, Bancoomeva, with -3,944 million and Banco Mundo Mujer, with -1,015 million complete the list.

Behavior of bank debt

The Superfinanciera report also revealed that the gross debt with banks in October 2023 closed at 686 trillion pesos, which is 1.12 trillion pesos more than the figure of 684 trillion pesos recorded in September. Compared to twelve months ago, this represents an increase of 27 trillion pesos.

The overdue portfolio, i.e. the debt that has passed its due date for collection, is at 35.16 trillion pesos, which is 1.74 trillion pesos higher than in September 2023. Compared to twelve months earlier, the increase is 10.67 trillion pesos.

The other side of the coin is offered by Bank of the Republic, which exercises the central bank functions in Colombia. The issuing entity announced that, for November 2023, it recorded earnings of 7.4 trillion, exceeding the annual projections by 7.2 trillion.

Hope for lower interest rates

At the last meeting of the Board of Directors of Bank of the Republic in 2023, it was agreed for the first time in seven months to lower the interest rate by 25 points, setting it at 13%. Although it is still very high, the expectations of experts, and of the central bank itself, is that during 2024 interest rates will continue to fall.

“The board of directors reiterates that today’s decision is consistent with the objective of bringing inflation towards its 3% target, and reaffirms that future decisions will depend on the new information available,” announced the central bank’s statement after its December meeting.

This is the hope of businessmen, bankers and the Colombian government. With cheaper credit, it is expected that consumption will be reactivated and that credit life, the main banking business, will rebound this year.

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