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January 22, 2008 |
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BANCOLOMBIA: Says Loan Growth to Decelerate to 17.9% This Year Bancolombia said in a report that net loan growth in Colombia would slow down by 17.9% by the end of this year. Colombia's total lending increased 25.9% to COP108 trillion in November 2007, from November 2006, Business News Americas relates, citing figures from financial regulator Superfinanciera. Bancolombia told BNamericas that it expected last year to end with a 24.4% yearly growth rate in lending, while activity would slow down in all segments. BNamericas notes that consumer lending "is a more pro-cyclical portfolio." It absorbs an eventual deceleration in the economy faster than other segments. Gross growth would drop over 10 percentage points to 21.2% at year-end. The Colombian central bank implemented in May 2007 measures to control loan growth in that segment, which was increasing at 40% plus rates at the time. The bank also wanted to prevent inflationary pressures. Bancolombia told BNamericas that corporate lending would "halve" growth to 12% this year, due to an expected deceleration in economic activity in the second half of 2008 and higher comparison base. Meanwhile, mortgage loan growth would decline 15 percentage points to 4.05% by December 2008 due to a higher comparison base and bigger size of those loans. Bancolombia is Colombia's largest full-service financial institution, formed by a merger of three leading Colombian financial institutions. Bancolombia's market capitalization is over US$5.5 billion, with US$13.8 billion asset base and US$1.4 billion in shareholders' equity as of Sept. 30, 2006. Bancolombia is the only Colombian company with an ADR level III program in the New York Stock Exchange. * * * As reported in the Troubled Company Reporter-Latin America on June 27, 2007, Moody's Investors Service changed the outlook to positive from stable on its Ba3 long-term foreign currency deposit ratings and Ba1 long-term foreign currency subordinated bond rating for Bancolombia, S.A. As reported in the Troubled Company Reporter-Latin America on May 4, 2007, Fitch Ratings downgraded and removed from Rating Watch Negative Bancolombia's long-term and short-term local currency Issuer Default Ratings and Individual rating: -- Individual rating to 'C/D' from 'C'; -- Local currency long-term IDR to 'BB+' from 'BBB-'; and -- Local currency short-term rating to 'B' from 'F3'; In addition, Fitch affirmed these ratings: -- Foreign currency long-term IDR at 'BB+'; -- Foreign currency short-term rating at 'B'; and -- Support rating at '3'. Fitch says the rating outlook is stable. |
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