Grupo Cibest S.A.

Good morning, ladies and gentlemen, and welcome to Bancolombia's third quarter 2021 earnings conference call. My name is Claudia, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. During the question-and-answer session, if you have a question, please press star then 1 on your touch-tone phone. Please note that this conference is being recorded. Please note that this conference call will include forward-looking statements, including statements related to our future performance, capital position, credit-related expenses and credit losses. All forward-looking statements, whether made in this conference call, in future filings, in press releases or verbally, address matters that involve risk and uncertainty. Consequently, there are factors that could cause actual results to differ materially from those indicated in such statements, including changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by our targeted clients, changes in business strategy, and various other factors that we describe in our reports filed with the SEC. With us today is Mr. Juan Carlos Mora, Chief Executive Officer, Mr. Mauricio Rosillo, Chief Corporate Officer, Mr. Jose Humberto Acosta, Chief Financial Officer, Mr. Rodrigo Prieto, Chief Risk Officer, Mr. Carlos Rudd, Investor Relations Director, and Mr. Juan Pablo Espinoza, Chief Economist. I will now turn the call over to Mr. Juan Carlos Mora, Chief Executive Officer. Mr. Juan Carlos, you may begin.

Good morning and welcome to our conference call for the third quarter 2021. I hope all of you and your families are safe and healthy. The Colombian economy continues recovering at a pace better than expected. According to our latest estimates, GDP could grow close to 10% in 2021. And for 2022, we expect a soft landing to a moderate expansion of around 3.6%. The main drivers behind this forecast are the resilient performance of internal demand, particularly private consumption, which will remain dynamic as more households, especially those with the highest incomes, return to pre-COVID spending levels. We also expect private investment to recover. Exports to accelerate and the sectors that were severely hit by the pandemic to go back to 2019 levels. All these were partly compensated by the moderation in global growth and a gradual withdrawal of the fiscal and monetary series. The main risks to our view are the uncertainties surrounding the electoral cycle and eventual new way COVID-19 cases. This positive trend of the economy is reflected in the bank's results, which we consider positive for the first quarter. Given that the trend of a better than expected economic recovery not only applies for Colombia, but in all the geographies where we have presence. Before getting to the details, I want to highlight some key topics. The loan book grew 3.3% compared in the previous quarter. The fees grew 9% in the quarter. Core equity tier one on the full Basel III was 11.8%. and the net income for the quarter was $943 billion. Provision charges for the quarter were $514 billion, down 18% when you compare with the second quarter of 2021, mainly driven by better economic forecasts and the end of UB's program in Colombia and Panama. Our digital platforms, Neki and Bansalonga-Lamano, continue to grow at a selling pace, adding both 14 million clients and 1.4 trillion pesos in deposits. Digital transactions represent 85% of the total transactions and digital sales, 44% of total sales. We continue to grow in our ecosystem strategy after the first year of successful operations. It is already positioned as one of the most relevant in the country, with more than 8 million visits. At this point, I want to turn the presentation to Juan Pablo Espinoza, who will further elaborate on the performance of the Colombian economy. Juan Pablo? Thank you, Juan Carlos. Now, I will ask you to go to slide number three in the presentation. Let me start by saying that traditional analysis has failed to predict and measure accurately the effects that the pandemic has had on the economy. Instead, the development of new ways of understanding economic reality has gained momentum. Most of these advances are based on the use of data. At Bank Colombia, we have been pioneers of this emerging trend in the local financial industry. Our proprietary analytical tools and our large sample of banking transactions allows us to have a comprehensive real-time picture of the state of the Colombian economy. In the first place, our now-casting tracker of overall activity, which follows closely Dan's official figures, points to a year-on-year growth in the third quarter of 14.1%, higher than than latest consensus estimate of 9.2%. A significant contributor to this growth is domestic demand, which according to Bancolombia's cardholder purchases has been accelerating in the past few months. For instance, in the first 20 days of October, these transactions grew 20% compared to 2020 and 8% relative to 2019. Moreover, The graph at the bottom left shows that the volume of deposits to corporate banking accounts by sector and firm size relative to pre-pandemic levels. These figures are good at anticipating sectoral performance, and they are signaling that important contributors to GDP, such as retail, manufacturing, and agriculture sectors, expanded at a strong pace in the third quarter. Furthermore, SMEs revenues are recovering faster than those of large firms. Finally, the number of payroll payments processed through Bancolombia's accounts, which is a proxy for formal labor demand, accelerated during the last quarter. This suggests that the labor market is already reacting to the rebounding economic activity. In turn, this would allow unemployment rate to decline further towards the end of the year. All in all, our indicators point to a widespread and consistent improvement of the Colombian economy after the disruptions caused by the national strike and the reduction of COVID cases. This bodes well for full year 2021 growth expectations, which currently stand at 10%.

Now, let me turn the presentation back to Juan Carlos. Thank you, Juan Pablo.