Banco Davivienda (PFDAVVNDA) Q4 2024 earnings summary

Executive summary

• 2024 showed improvement over 2023, with positive trends in the second half and a clear recovery in key metrics, despite ongoing challenges from interest rates and macroeconomic uncertainty.

• Gross loans grew 7.0% year-over-year and 3.3% sequentially, reaching COP 145.5 trillion, with commercial and mortgage segments driving growth.

• Net profit for 4Q24 was COP 163 billion, up 48.7% sequentially, but the full year ended with a net loss of COP 90 billion, a 75.9% decrease year-over-year.

• The bank is focused on operational efficiency, digital transformation, and customer experience, with a selective growth strategy for 2025.

• Integration of Scotiabank’s operations in Colombia, Panama, and Costa Rica is expected to close in the second half of 2025, enhancing scale and capabilities.

Financial highlights

• Loan portfolio reached COP 145.5 trillion, up 7% year-over-year, driven by commercial and mortgage growth.

• Net interest margin (NIM) closed at 5.65%, up 17 bps annually, but below guidance due to regulatory cap rate changes.

• Cost of risk improved to 3.57%, down 78 bps year-over-year, mainly from better consumer portfolio quality.

• Fourth quarter profit was COP 163 billion; full-year ROE was slightly negative at -0.58%.

• CET1 ratio ended at 10.95%, supported by second-half profits and capital efficiency initiatives.

Outlook and guidance

• 2025 loan book growth expected at 6%-8%, with commercial and consumer portfolios growing 7%-9%, and mortgages 4%-6%.

• Asset quality to improve, with PDL ratio targeted at 3.5%-4.7% by year-end.

• NIM guidance for 2025 is 5.6%-5.8%; cost of risk expected to drop to 2.4%-2.6%.

• Non-financial income to grow 4%-10%; profits expected to rise 5%-6%; ROE guidance is 2.4%-7.5%.

• Guidance excludes the impact of the Scotiabank integration.