Grupo Cibest (CIBEST) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 reached COP 1.5 trillion, up 4.3% quarter-over-quarter, with ROE at 15% and ROTE at 20%, driven by investment gains, lower provisioning, and controlled expenses.

• Deposit growth outpaced loan growth, supporting low funding costs and mitigating margin compression.

• Digital platforms, including Nequi, saw robust user and transaction growth, with Nequi reaching over 20 million clients and 1.3 billion transactions, and digital customer base expanding to 26.9 million accounts.

• Announced a new holding company, Grupo Cibeles, to enhance capital allocation, regulatory efficiency, and shareholder value, with completion targeted for mid-2025.

• Recognized for the tenth consecutive year as the company with the best reputation in Colombia.

Financial highlights

• Consolidated loan book expanded 0.5% in Q3 and 4.6% year-over-year, with commercial loans up 5.8% annually and consumer loans down 2.3%; mortgage loans led growth with a 2.1% quarterly and 9.3% annual increase.

• Deposits grew 0.7% in Q3 and 6.4% year-over-year, with time deposits showing the strongest growth.

• Net interest income was COP 5.15 trillion, down 0.7% sequentially, as lower loan yields were not fully offset by reduced funding costs; NIM compressed to 6.8%.

• Operating expenses rose 1.4% quarter-over-quarter and 3.2% year-over-year, with efficiency ratio improving to 47.7%.

• Shareholders’ equity increased 4.3% quarter-over-quarter and 9% year-over-year; core equity tier one ratio at 11.58%, total capital adequacy at 14.4%.

Outlook and guidance

• 2024 guidance: loan growth 6.5%, NIM ~6.8%, cost of risk ~2.2%, efficiency ratio ~50%, ROE ~15%, core equity tier one ratio ~11.7%.

• 2025 preliminary guidance: loan growth 7.2% (pesos), 1.3% (dollars), NIM ~6%, cost of risk ~2%, efficiency ~51%, ROE 13–14%.

• Net income for 2025 expected to be flat or slightly lower, with upside dependent on loan growth and NIM trajectory.

• Full impact of new corporate structure expected in 2026, with potential for improved ROE through capital optimization and share buybacks.

• Macroeconomic assumptions: 2024 GDP growth 1.8%, inflation 5.7–5.8%, policy rate 8.75%.