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Banking sector boosts Jan profits 35%

Bnamericas Published: Thursday, March 05, 2009
Colombia's banking sector posted combined earnings of 370bn pesos (US$144mn) in the first month of 2009, a 35% increase compared to January of last year, financial regulator Superfinanciera said in a report. Locally owned banks saw earnings rise 36% to 239bn pesos, led by Bancolombia (NYSE: CIB) with a 56.1bn-peso profit. Profits at foreign owned banks jumped 66% to 57.4bn pesos, with the local unit of Spain's BBVA (NYSE: BBV) leading the pack with earnings of 26.8bn pesos. The banking sector's net loans totaled 127tn pesos at end-January, an increase of 16.7% from the same time in 2008, with the past-due loan ratio worsening to 4.4% from 3.3%. Going forward, credit costs for Colombian banks should remain relatively high while margins will be pressured this year, Bancolombia CEO Jorge Londoño recently told a conference call. "We could expect some gradual margin contraction as part of a new accommodative interest rate scenario," he said. The central bank made a surprise 100-basis points rate cut on Feb 27, bringing the interbank rate to 8% and marking the third straight reduction. Colombian banks' combined assets and equity stood at 220tn pesos and 27.3tn pesos, respectively, as of end-January, according to Superfinanciera.

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