Grupo Cibest S.A.

Good morning, ladies and gentlemen, and welcome to Banco Columbia's first quarter 2024 earnings conference call. My name is Daryl, 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 touchtone 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 risks and uncertainty. Consequently, these 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 described in our reports filed with the SEC. With us today are Mr. Juan Carlos Mora, Chief Executive Officer, Mr. Julian Mora, Chief Corporate Officer, Mr. Jose Humberto Acosta, Chief Financial Officer, Mr. Rodrigo Prieto, Chief Risk Officer, This is Catalina Tobon, Investor Relations and Capital Markets Director, and this is Laura Clavijo, 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 Bancolombia's first quarter results conference call. Please turn to slide two. During the first quarter of the year, Colombia encountered economic challenges marked by elevated interest rates and reduced consumer confidence. Despite subsequent declines in inflation and interest rates, consumer demand and investments remain restrained. Nevertheless, by utilizing our commercial expertise and conducting comprehensive risk assessments, We accomplished a notable 2.5% quarterly loan growth. However, this growth is offset by a 2.6 annual contraction resulting from the substantial appreciation of the peso by 17.3% during the quarter. Efforts to reduce credit deterioration resulted in a notable 24% decrease in provision expenses compared to the previous quarter. Consequently, the cost of risk for the reporting period was recorded at 2%. Additionally, An 8% quarter-over-quarter reduction in operating expenses contributed to achieve a net income of 1.7 trillion pesos, representing an approximate 15% increase compared to the preceding quarter. However, it is worth noting that this figure still reflects a 3% decline year-over-year. Furthermore, the efficiency ratio decreased to 46%. ROE rebounded to 17%, and our capital position remains robust, with a total solvency ratio of 12.3% and a core equity tier one ratio of 10.4%. The Central American banks and offshore operations sustained their positive performance, contributing to the overall group's results and diversification strategy. On the other hand, we believe that the declining trend on inflation in Colombia will solidify in the coming months, facilitating a gradual reduction in interest rates. This should stimulate a recovery in credit demand and alleviate the pressure on asset quality. We expect that there will be opportunities for credit growth in agribusiness, mining, and public administration sectors because of the government's advancement on public policy programs. This growth is expected to partially offset the slowdown that is being experienced in the construction, manufacturing, and retail sectors. However, It is important to note that there are still concerns regarding the progress of regulatory changes in the health sector, as well as the performance of the energy sector, which is currently facing challenges due to the El Nino phenomenon. It is important to acknowledge that our involvement in the healthcare industry is relatively small. with our services reaching over 11,400 clients, which constitutes only 1.6% of Bancolombia's independent loan portfolio. On the business development front, we are pleased to share the recent launch of Wenya, a Bancolombian investment in a digital asset company. Wenya is registered in Bermuda and has been granted a Class F license by the Bermuda Monetary Authority. By utilizing innovative technology, Wenya serves as a bridge between traditional financial system and the expanding digital economy. Initially, Colombian residents will be able to engage in the buying, selling, converting, receiving, and sending of digital assets such as Bitcoin, Ether, and USDC in a swift and secure manner. This initiative aims to empower individuals with an interest in the digital assets realm to confidently diversify their investment portfolios. This innovative solution is framed within rigorous compliance with regulatory standards and internal control policies, including Know Your Customer, Know Your Transaction, and Travel Rule, ensuring comprehensive stewardship and confidence among all parties involved. After these highlights of our first quarter results, I am pleased to introduce our chief economist, Laura Clavijo, who will provide further insights into the macroeconomic landscape. Laura?

Thank you, Juan Carlos. Please go to slide three.