Grupo Cibest S.A.

Good morning, ladies and gentlemen, and welcome to Banco Columbia's fourth quarter 2024 earnings conference call. My name is Christine, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Following the prepared marks, there will be a question and answer session. During the question and answer session, if you have a question, please press star, then the one 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 risk and uncertainty. 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. Maurice Portero-Wolf, Chief Strategy and Financial Officer, Mr. Rodrigo Prieto, Chief Risk Officer, Mrs. Catalina Tobon, Investor Relations and Capital Markets Director, and Mrs. 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. Welcome to Bancolombia's four-quarter results conference call. Please go to slide two. In a challenging fiscal landscape in Colombia, the year 2024 concluded with a positive economic trend presenting moderate growth. This growth was facilitated by decreasing inflation and reductions in interest rates, which consequently led to an increase in household consumption. Net income for the quarter amounted to 1.7 trillion pesos, reflecting an 11% increase primarily due to resumed loan growth across all segments and a significant reduction in provision expenses. This resulted in a quarterly annualized cost of risk as low as 1.35%, offsetting the decline in interest income associated with a lower yielding loan portfolio, thereby reducing the net interest margin to 6.4% for the quarter. Overall, the return on equity for the quarter increased to 15.7%. Net income for the year was 6.3 trillion pesos, a 2.5% increase, which boosted shareholders' equity by 14.3% and resulted in a 15.8% ROE. In evaluating this positive annual performance, we identified three key factors that explain these results. First, our own parallel capabilities in assets, liability, and treasury management, which have enabled us to maintain high net interest margins on an asset-sensitive portfolio despite significant rate cuts, effectively supplemented by a strong contribution from the investment portfolio. Second, the robustness of our well-calibrated risk models, which allow us to manage great risk with greater efficiency. There, our rigorous cost control strategy implemented throughout the year, resulting in an annual operating expenses increase of only 5.3%, slightly above the annual inflation rate. Following these strong results, we announced to the market yesterday our proposed dividend to be submitted for shareholders' approval, amounting to approximately 3.8 trillion pesos. which represents a 10.3% year-over-year increase equivalent to more than 500 basis points above inflation and achieving a payout ratio of 60%. The dividend will be paid in one installment of 3,900 pesos per share on April 1st, 2025, aiming to enhance value distribution to our shareholders. Lastly, I would like to inform you that we are making significant progress with our corporate evolution towards the establishment of Grupo Civist, our new holding company. We have obtained the necessary approvals from all Central American regulators and are continuing to advance in the process with the Colombian regulator. Our goal is to complete this transaction by the second quarter of 2025. I will now turn the presentation over to Laura Clavijo, our chief economist, who will offer an analysis of the macroeconomic environment. Laura.

Thank you, Juan Carlos. Now, if you could please turn to slide three. The Colombian economy expanded at an annual rate of 1.7% during 2024, slightly below our 1.8% growth expectation confirming an ongoing economic recovery, especially if compared to 2023's GDP growth of just 0.7%. A deeper look at the composition of growth tells a story of better-than-expected performance from specific sectors, such as agriculture and entertainment, which expanded at an annual rate of 8.1%, but that may nonetheless lose momentum in 2025. Underwhelming activity from other key sectors such as mining, manufacturing, and housing continue to reflect the challenges that the economy still faces. On a more positive note, the final quarter confirmed an uptick in retail sales, and consumer demand for durable goods is taking a turn towards the positive. For example, vehicle sales grew at an annual rate of 7%. Indeed, a more constructive macroeconomic framework has enabled an upswing in both sentiment and growth. Inflation continued its downward trend towards the end-of-year mark of 5.2%. The monetary policy rate closed at 9.25%, and unemployment has subdued close to 10%, a historically low year average. Moving forward, the global setting places a backdrop of amounting inflationary challenges and monetary policy caution. These headwinds coincide with local inflationary pressures, such as that of the above-expected minimum wage set for this year, the fiscal debate around compliance of the fiscal rule, also necessary expenditure cuts amidst the flexibility, and an overall acceleration of government debt back to a 60% of GDP level. Consequently, inflation expectations are being pushed higher. We expect inflation to reach 4% in 2025. In addition, the central bank will be adopting a more cautionary approach. Despite the challenges ahead, signs of an economic recovery are more widespread, as a macro scenario brings tailwinds, and we confirm our view of a 2.6% year-end growth forecast for 2025. Now, please let me turn the presentation back to Juan Carlos, who will present Bancolombia's quarterly performance.