Grupo Cibest S.A.

Good morning, ladies and gentlemen, and welcome to Grupo Cebes, Bancolombia, first quarter 2026 earnings conference call.

My name is Paul, 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 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 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 Botero-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 and welcome to Grupo CIVEST's first quarter's conference call. Please turn to slide two. As anticipated, The start of the year in Colombia was characterized by a continued deterioration in fiscal conditions. Inflation pressures, increased uncertainty surrounding the implementation of economic emergency measures, and the escalation of the Middle East conflict, which has added volatility to an already stressed macroeconomic environment. Despite the complex backdrop, the Colombian economy continues to expand at a moderate pace, supported by robust private consumption, aimed at a stronger than expected labor market, and sustained public spending. As a result, GDP is estimated to have grown by 2.7% quarter on quarter. In this challenging context, we are pleased to report our first quarter results, which Net of the one-off wealth tax demonstrates the strength and adaptability of our business model across economic and credit cycles. Net income was 1.5 trillion pesos, down 16 from last year, due mainly to the wealth tax. This drop was partly upset by higher net interest margin and net fee income. Digital businesses continue to grow their share of total fee income. Deposits kept outpacing loan growth during the quarter, further consolidating our competitive advantage in accessing stable and low-cost funding. The quarterly annualized cost of risk stood at 1.9%, mainly due to higher macro risk provisions while asset quality remained solid across segments and geographies, reflecting good loan performance. All in all, ROE came at a 15%. NECI's spinoff from Bancolombia is progressing well, moving toward an independent license to boost its value proposition and profitability. The Banismo sale is advancing as planned for a second quarter close with proceeds allocated to intra-group capital instruments and digital platform investments to improve efficiency and support growth. These actions reflect our clear commitment to disciplined capital allocation and long-term value creation for our shareholders. Please go to slide three. In line with our dedication to increasing shareholder value, we are delighted that the shareholders meeting approve both the ordinary dividend distribution of 4.3 trillion pesos and the share buyback program set for 2026. The new program authorizes the repurchase of up to 1.35 trillion pesos and may be executed across all three shares classes over a period of up to three years and replaces the former 2025 program. providing greater flexibility and continuity. As of April 21st, 51% of the 2025 program amount was executed, totaling 12.7 million shares, equivalent to 1.3% of our total shares outstanding. As a matter of fact, the performance of the three classes of shares during the execution phase of the 2025 program was outstanding. The ADR rose 66%, followed by the common with 57% and the preferred with 47%. The decision to renew the program responds to two key objectives, to continue delivering value to our shareholders and to actively manage capital at the holding level, a flexibility enabled by Grupo CIVIS corporate structure. Execution under the new program will continue to be dependent to market conditions. Please go to slide four. Regarding our regional presence, I want to highlight how BAM remains a key strategic asset for Grupo CIVEST, given its ability to support scalable growth, improve capital efficiency, and expand the group regional banking footprint. Our strategy in Guatemala is centered on optimizing the balance sheet and business mix by reinforcing its value proposition to corporate and retail segments and encasing its cross-border loan book that currently represents 20% of its corporate loans. BAM is actively implementing Grupo Civis' digital ecosystem, including platforms such as Neki, Wampi, and Wenya, which enables innovation in payments, acquiring, and remittances. Overall, LAM plays a relevant role within Grupo CIVIS' long-term strategy, contributing to diversification and growth in a country with a constructive macroeconomic environment and a stable financial system. I will now hand over to Laura Clavijo, Chief Economist, for a summary of the macroeconomic landscape. Laura?

Thank you, Juan Carlos. If you could please turn to slide six. Colombia's economic outlook for 2026 points to a scenario of moderate but increasingly fragile growth, shaped by both domestic constraints and a challenging external environment. We expect GDP growth of 2.9% this year, a downward revision from earlier expectations of 3.2%, reflecting early signs of a soft start to the year. While the economy continues to expand, the composition of growth raises concerns about its sustainability and resilience. Domestic demand remains the primary engine of activity as well as public spending. Private consumption is expected to sustain momentum, supported by gradual improvements in real incomes, remittance flows, and still resilient labor market conditions. However, this growth mix is not without risks. Investment remains subdued, reflecting high financing costs, weakened business confidence, and elevated uncertainty amidst the electoral race. Externally, Colombia faces a more complex backdrop. Rising global trade tensions and persistent geopolitical risks are weighing on export dynamics and capital flows. Commodity prices, while still relatively supportive, are subject to heightened volatility, adding another layer of uncertainty for a resource-dependent economy. At the same time, tighter global financial conditions continue to constrain external financing. The recent rebound in inflation following the significant increase in the minimum wage has pressured short and medium-term inflation expectations. March headline inflation rose to 5.5% and core inflation reached 5.8% on account of a significant surge in services and food prices. We now expect inflation to reach 6.4% this year. Consequently, the central bank began a tightening cycle and has increased its policy rate by 200 basis points thus far. The monetary policy landscape has become increasingly complex in recent months, with tensions surmounting between the Minister of Finance and the Board on account of these rate hikes. Despite the political backdrop, the central bank board met again at the end of April and unanimously decided to hold rates steady at 11.25%. arguing the need to further assess inflation dynamics and external shocks. Our reading is that this pause will help ease tensions during the final months of this administration, but further tightening will be needed to rein in inflation. Hence, our end of year policy rate forecast of 12.75%. Finally, fiscal dynamics represent a central source of vulnerability. The fiscal deficit is projected to exceed 7% of GDP, reflecting both structural spending pressures and limited revenue flexibility. This trajectory raises concerns about debt sustainability and has already translated into higher sovereign risk premiums. S&P's recent downgrade of Columbia's sovereign rating to BB- underscores these challenges, signaling reduced investor confidence and increasing the cost of borrowing for both public and private sectors. Looking ahead, the medium-term outlook remains uncertain. The interplay between fiscal consolidation needs, monetary tightening, and external headwinds creates a complex policy environment. This environment calls for prudent risk management, close monitoring of credit quality, and a strategic focus on sectors and clients with stronger resilience. If you could please turn to slide seven. Economic conditions in Central America remain resilient. supported by country-specific drivers. In El Salvador, growth accelerated in 2025 on the back of a construction boom and strong domestic demand. However, momentum is expected to moderate in 2026 as remittance growth slows and global uncertainties intensify. Guatemala continues to benefit from solid performance in construction, financial services, trade, and real estate, although softer remittance flows and inflationary pressures could weigh on household demand. Finally, Panama stands out regionally, with GDP growth projected at 4%, supported by its role as a key logistics and services hub underpinned by canal-related activity. Now, please let me turn the presentation to Mauricio, who will present CBS quarterly performance.

Thank you, Laura. Please proceed to slide number nine. Our gross loan portfolio increased 2.1% over the quarter, equivalent to 2.7% net of FX. On an annual basis, it expanded by 9.6% net of FX, underscoring its resilience among a challenging macroeconomic environment, especially in Colombia. Commercial loans expanded by 2.4%, driven mainly by corporate clients. Mortgage loans continued the growth trend observed over the past two years, expanding by 2.5% over the quarter. The growth rate of mortgage portfolio began to moderate amid higher interest rates. Meanwhile, consumer loans expanded by 1%, reflecting our more prudent risk posture in Colombia, partially offset by the strong growth of NECI's loan portfolio which operates under a different risk approach aligned with its business model. Please proceed to slide number 10. Bancolombia and Banco Agricola continued to deliver strong credit dynamics during the quarter. The latter achieved robust commercial loan growth. Bancolombia Panama was the main contributor to growth in U.S. dollars, with its loan book expanding by 9.7% over the quarter. serving as an efficient cross-border loan book for all geographies. However, from a currency perspective, the loan book in US dollars slightly dropped to 20%, reflecting a faster growth in the Colombian peso loan book, coupled with the currency appreciation. Please proceed to slide 11. Deposits posted a nominal growth of 2.8% in the quarter, equivalent to a 3.4% net of FX. On an annual basis, nominal growth was 10.4% and 14.3% net of FX, in all cases outpacing loan growth. Time deposits led quarterly growth with a 6.5% expansion, surpassing the 2% increase in savings accounts as clients sought higher yielding products given the current rate environment. However, on an annual basis, savings accounts grew 16%, while time deposits increased at a more moderate pace of 5.3%. In Colombia, online time deposits grew 7.7%, driven by a strong demand in the retail segment. They now account for 51% of total time deposits and are a very relevant source of funding due to lower operating costs and better customer experience. At Banco Agricola and BAM, side deposits were the main driver of deposit growth, while time deposits declined in both operations during the quarter. Please proceed to slide 12. Our funding mix continued to reflect the strength of our side deposit base, which represents 58% of total funding. The cost of deposits increased slightly by six basis points during the quarter as a result of higher remuneration of savings accounts, yet remained at a very competitive level given the funding cost pressures. The aggregate balance of savings and checking accounts continue to expand in relative terms on an annual basis across Colombia, El Salvador, and Guatemala, reaffirming our ability to build and preserve a stable, low-cost funding base. Please proceed to slide 13. Net interest income increased by 7% during the quarter as a strong growth in interest income outpaced the increase in interest expenses. The lending NIM increased from 7.6% to 7.8%, mainly driven by higher balances and higher yields in Colombia due to our asset-sensitive profile. On the other hand, the investment NIM increased 1.5% to 1.8%, supported by higher yields in the debt investment portfolio as well as in short-term money market and derivative-related strategies on the back of a highly volatile market. Therefore, NIEM expanded by 20 basis points in the quarter from 6.8% to 7%. Please proceed to slide 14. fee income increased by 11.8%, while fee expenses decreased by 9.3%, primarily due to a reclassification effective January 2026 of certain customer service and collections related expenses into other administrative and general expenses. Consequently, net fee income grew by 30% year over year. Excluding this reclassification, fee expenses would have increased by 6.8%, while net fee income would have grown by 15.3% annually. By entity, BAM stood out for its growth in banking services and syndicated loan structuring fees. Overall, the fee income ratio remained relatively stable at 20% of total net operating income.

Please proceed to slide 15.

I would like to highlight the continued progress of our complementary businesses, which enhance our value proposition and competitive advantage in funding and fee income generation by combining the scale and the strength of our banking franchise with the agility and speed of our digital platforms. Wampy has reached break-even earlier than expected. reflecting its successful evolution from a payment gateway into a broader digital commerce platform, supported by a growing merchant base of more than 55,000 active merchants. An aggregator model that strengthens profitability through scale and strong transaction volumes, Wampy is a relevant player in the payment ecosystem. On the other hand, Wenya continues to advance as our digital infrastructure layer with solid growth in users and transactions, and the recent launch of USDW is strengthening cross-border digital and multi-currency capabilities across the ecosystem. Neki, in turn, remains the cornerstone of our digital strategy, expanding into small businesses through Neki Negocios, and advancing the rollout of the global account integrated with Wampi and Wenya to deepen synergies across users, merchants, and platforms. Together, these businesses operate as fast-moving, complementary platforms designed to accelerate innovation, reduce time to market, and unlock new sources of value fully aligned with Grupo CIDE's long-term strategy.

Please proceed to slide 16.

Taking a closer look at NECI, it continues to deliver solid operating momentum with sustained growth across users, transactionality, and balance sheet expansion. Activity levels remain high, and the share of monetized users continues to increase quarter over quarter, reflecting deeper engagement and broader use of value-added functionalities. Deposits closed the quarter at 6.8 trillion pesos, slightly below the previous quarter given the seasonality effect, yet showing strong resilience and reinforcing NECI's role as a leading digital transactional and savings platform with room to further scale lending. On the other hand, the loan portfolio continued to expand, driven by low-ticket loans, which are gaining relevance within the mix, driving higher margins adjusted by risk. Consistently with the growth in loan originations, cost of risk increased to 13.9% during the quarter. However, the 90-day past due loan fell to 3.3%, reflecting a normalization in high delinquency collection dynamics supported by enhanced recovery processes. Please proceed to slide 17. NECI continued to make progress in monetization with solid quarterly and annual income growth driven by portfolio expansion and improving loan mix and sustained growth in diversified fee income linked to higher transactional volumes. Importantly, ARPAC continues its upward trend while CTS keeps declining, reflecting the path to sustainable profitability. Looking ahead to 2026, we reaffirm our guidance, loans growing 50%, deposits increasing 10%, and total income growing 40%, highlighting NEC's importance within Grupo CIVES' long-term growth and value creation strategy. Please proceed to slide 18. Net provision expense amounted to 1.2 trillion pesos in the first quarter of 2026, representing a 16% quarterly decline on the back of an overall strong loan performance that fully offset a 248 billion pesos charge related to weaker macroeconomic outlook for Colombia in 2026 as a result of higher inflation, higher interest rates, and a lower GDP growth. Consistently, the quarterly cost of risk is still at 1.9% above our full-year guidance. However, we maintain our full-year guidance as we do not foresee additional charges related to macro inputs updates in the coming quarters. When broken down by segment, SMEs remain stable while consumer loan provisions increase at Bancolombia due to loan growth and seasonal effects. and at Banco Agricola as a result of lower collections during the quarter. Neither of these is considered indicative of a material deterioration in credit quality. Moreover, corporate and specific client provisions declined significantly, reflecting the preemptive measures implemented in the previous quarter. In terms of entities, Bancolombia led the quarterly decline followed by offshore operations and BAM, which posted its lowest provisioning expense in the last six quarters, reflecting a significant improvement in asset quality. By contrast, Banco Agricola recorded a moderate increase in provisioning during the quarter, in line with its strategy to expand into new client segments. Please proceed to slide 19. From a past due loan formation standpoint, the volume of loans becoming delinquent increased during the quarter, mainly concentrated on consumer loans and mortgages, as per the growth achieved over the last 12 months and the seasonal effect observed at the start of the year. Hence, the 30-day past due loan ratio of consumer and mortgages increased, whereas total past due loans for 30 and 90 days remained stable, reflecting a resilient portfolio despite the more challenging macroeconomic backdrop. Consistent with this performance, the stage distribution remained relatively stable during the quarter, yet it reflects the sustained increase in Stage 1 and declines in Stage 2 and 3 over the last year, suggesting a strong asset quality performance going forward. Please proceed to slide 20. Total operating expenses increased by 24% year over year, mainly reflecting the 374 billion Colombian pesos wealth tax accrual related to the second economic emergency decree. Excluding this impact, expense growth would have been 12.9%. After also adjusting for the reclassification of collection and customer service expenses effective January 2026, growth would have been 8.7%. BAM showed the most significant improvement supported by cost optimization initiatives posting an efficiency ratio of 44.5%, while Banco Agricola maintained its ratio below 48%. driven by stronger income growth related to expenses. All in all, the consolidated cost-to-income ratio rose to 54.5%, excluding the wealth tax. The consolidated efficiency ratio would have been 49.5%, in line with our guidance. Please turn to slide 21. Group of civil shareholders' equity fell 8.5% quarter over quarter, provided the 4.3 trillion pesos dividend payout that was approved at our annual general shareholders' meeting. Bancolombia's standalone total solvency ratio reached 13.1%, while its common equity tier one ratio stood at 11.1% as of March. The quarterly decline from 14.4% is explained by the reduction in Tier 1 driven by the 2.5 trillion Colombian pesos paid to Grupo CIBES. In turn, Banco Agricola's capital ratio closed at 13.6 and BAM at 12.5%, both of them well above minimum requirements. Please turn to slide 22. Net income reached 1.5 trillion pesos or 1.8 trillion pesos if we normalize the one of wealth tax accrual. From an operational perspective, the quarterly and annual results are very strong. As a result, consolidated ROE stood at 15% with Bancolombia posting a standalone ROE of 19%. Moreover, BAM recorded a strong ROE of 16.2%, clearly reflecting the merits of a set of strategic initiatives undertaken to capture efficiencies, boost income, and restore credit quality going forward. Banco Agricola, in turn, reached an ROE of 20.5%, reaffirming the strength of its business model and sustained efficiencies. With this, I will now hand the presentation back to Juan Carlos.

Thank you, Mauricio. Please turn to slide 23. Grupo CIVES continued to make good progress under its business with purpose strategy, reaching cumulative disbursements of 389 trillion pesos since 2020, equivalent to approximately 60% of its 648 trillion pesos goal for 2030. On the environmental front, Banco Agricola issued the first blue bond in the Salvadorian capital market to finance sustainable projects. Also of note, Grupo Civis released its first sustainability disclosure aligned with SASB, TCFD, and GRI standards, whereas BAM was recognized among the 250 companies with the best human talent in Central America, ranking third among Guatemalan companies. Please turn to slide 25. Consistently with the recent GRN 2026 macroeconomic update, which assumes a lower GDP growth rate of 2.9% and a central bank policy rate of 12.75%, we have adjusted some of our guidance items accordingly. We maintain our previous loan growth guidance of seven to eight percent as we continue seeing good demand in commercial segment in Colombia and El Salvador and a slight pickup in mortgages in Guatemala. With respect to NIM, we adjusted the range upwards to seven and seven point two percent given repricing dynamics and loan origination at the higher rates. We maintain the one point six to one point eight cost of risk range and as we have already anticipated the expected deterioration related to the macro backdrop and vintages are performing well. Also, efficiency remains at the same level of 49%. All in all, ROE guidance increases to a range between 19.5 to 20%. Please turn to slide 26. In conclusion, I would like to highlight that despite the current challenges in Colombia, We have developed a robust business model and risk management framework. These have demonstrated their capacity to adapt efficiently throughout varying macroeconomic cycles, as evidenced by our performance over recent years. Also, we are very encouraged with the potential embedded in synergies across our digital platforms that strengthen the value proposition and the channel ecosystem serving as a key driver of growth and profitability. And last, I want to reinforce that we have strong confidence in Columbia's robust institutional framework and in the orderly execution of the presidential elections. This concludes our presentation for today. We welcome any questions you may have at this point.

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

One moment, please, while we poll for questions. Thank you. Our first question is from Ernesto Gabilongo with Bank of America.

Thank you. Hi, good morning, Juan Carlos, Mauricio, and Catalina. Congrats on your results, and thanks for the opportunity to ask questions. My first question will be on the political outlook, so you can provide the latest update on the presidential elections, on the latest polls, and what would be the key dates to follow. My second question will be on your NIMS trends, especially for 2027. As you pointed out, we should expect a wider NIMS expansion this year because of higher rates. But just wondering, how should we think about interest rates next year? And also, how should we think about an in-trend in next year? And my last question will be on your sustainable ROE. For this year, you have said ROE could be between 19.5%, 20%. But how should we think about your sustainable ROE? Thank you.

Thank you, Ernesto. Regarding the political outlook, let me remind you the date. We will have the first round May 31st, so that's in three weeks. The runoff will be middle of June. And to remind you that if any candidate don't get at least 50%, there will be a runoff. Regarding polls, there have been several in the last two or three weeks with some results that vary on the numbers, but not on the essential of who is leading. And the candidate from the left is leading in all those polls with a range between 34% to 42%. So I think at this point, it's clear that the candidate from the left is leading the polls. On the other hand, the candidates that are with possibilities are Abelardo de la Espriella and Paloma Valencia. And depending on the polls, they are very tight or with a little difference in favor of Abelardo de la Espriella. So still, we are three weeks that, you know, in politics means a lot, but this last part of the election process is really important. But Today looks like there is going to be a second round and there will be a candidate from the left and one candidate from the right will go to that second round in mid-June. Regarding NIEM, as you mentioned, Ernesto, we updated our NIEM guidance to be between 7 and 7.2. That's because interest rates are going up in Colombia. And that will have an effect on our NIM. Regarding interest rates and next year interest rates, we are expecting the rates to remain high next year. As you know, we are expecting inflation to continue raising, and our guidance on inflation is to be 6.4% at the end of the year. And 2027 also will have an inflation that is going to be out of the range of the central bank, which is between 2% and 4%. So we think that the The interest rates will remain high during 2027 as the central bank will try to move the inflation into their target range. Regarding ROE, we also updated our ROE for 2026. as you mentioned, to be between 19.5 and 20. And your question regarding our sustainable ROE in the future, we think it's going to be between 18 and 20%. I don't know, Mauricio, if you want to complement something on these topics.

Ernesto, due to the interest rate landscape that Juan Carlos just described, we might be in the upper part of the range in 2027 also, but maybe looking at 2028 and going forward, it may go down to 18, to the lower part of that range as the margin becomes more in the long-term view that we have.

Excellent. Thank you very much, Juan Carlos and Marisa. If I may, just a last question on NECI. We have seen the great evolution of this business. You are already providing data on total income, financial income, fee income, cost to serve. So how much was NECI's net profit in Colombian pesos in this first quarter? And how much could it be contributing this year? And I don't know if you have, like, targets of how much could be contributing in the future. And also related to this one is on the NECI's ROE. for this quarter, if you can provide a little bit of how was it, and also if you have a target for the next years. Thank you.

Ernesto, regarding NECI, let me remind you that NECI is in Bancolombia's book. It's not a separate entity. What we do is we have some administrative numbers of NECI. As we announced, we are in the process of separating NECI as a different entity from Bancolombia, and that will be concluded by the third quarter of this year. So the numbers that we have regarding NECI are administrative numbers, and we will have separate numbers by the end of the year once NECI is a separate legal entity. With that, we are very happy with the NECI results. The dynamics are very positive. The development of NECI in terms of deposits, in terms of loans, in terms of usage, it's really, really positive. And we are disclosing part of that information So you have a sense. NECI, as we announced at the end of last year, it's now profitable and it's on the way of continuing that trend. So let me pass to Mauricio to give you additional information about NECI numbers.

Yeah, Ernesto, the administrative net income that we have for NECI during the first quarter is around $7 million. It should be around $30 million for the whole year. But it will start having a separate accounting from the moment it's separated. And we will be able to disclose more complete numbers from the third quarter of this year going forward.

Very helpful. Thank you very much, Juan Carlos and Mauricio.

Thank you, Rhett. Our next question is from Brian Flores with Citibank.

Hi, Tim. Thank you for the opportunity. I have two questions. The first one is a quick one here on the accounting treatment of the tax surcharge. I know based on the disclosure you made on the fourth quarter, you made a provision of around $150 billion, right, which was, I think, registered as a deferred tax asset recognition. So just wanted to get your thoughts on how is this recognized? Should we expect a reversal of this? I know there's no cash outflow, but I just wanted to understand if there's a re-measurement, if it's on the same magnitude. If you could give any insights on that one, I think that would be great. If you want, after that, I'll make my second question.

Hi, Brian.

Yes, indeed, we made a provision in the fourth quarter of last year of $150 billion because of the deferred tax recognizing the extra tax rate. since the court rejected the extra tax rate on April, that's going to be reversed during the second quarter of the year. So in the first quarter, you don't see anything of that, but you will see it in the second quarter. And remember that we were having two different decrees. That one was with the extra tax rate, and with no cash effect, as you mentioned. And the other one was the equity tax. The wealth tax. That one has already been accrued in the first quarter and paid in two installments. So we're done with that. And what's important to take into account was that the first decree was included in our guidance. Our second decree wasn't. But in net terms, we have a positive result because the first decree was going to account to 800 billion, whereas the second decree accounted for 374 billion pesos.

Perfect. And then, Mauricio, just a quick follow-up. So you mentioned it should flow or should be recognized in the second quarter. Is it expected to be in the same magnitude? What I mean is the $150 billion, or could it be different as you obviously update your assumptions here on the valuation of the asset?

It will be a little lower because we have already recognized month after month during the year. So it could be around 120. And the other 30 are already in the first quarter results.

Perfect. No, super clear.

For my second question here, it's on capital, right? Because we saw your equity falling slightly quarter over quarter. I think this is mostly explained by distributions and buybacks. So I just wanted to understand, I think the lowest level you have the reporting since you became a group is basically the pro forma 10.8, 10.9, right below the 11% of T1 ratio. So we wanted to understand where is your floor in terms of capital appetite here, just to think on the longer term.

Brian, so we have two different effects. We have the impairment from the sale of Banismo in the fourth quarter, And then we have the effect in the first quarter of the dividends declared. So both of them need to be accounted for at Grupo CIVES level. Now, at the operating level, all the banks have very ample capital ratios. And just to give you an idea, Bancolombia, it's... 13.1%, which is a very comfortable capital level, taken into account that is the first quarter after the dividends have been declared. So at the holding level, I would go back to the double leverage ratio in which we are accounting for 95% for the quarter, very low.

because of the effects that i just mentioned of vanismo and the dividends no perfect very good thank you yeah our next question is from yuri fernandez with jp morgan

Thank you. Hi, Juan Carlos, Mauricio. I would like to ask about the increase on the new NPL formation, the 30 days PDL. I think that is beneath polluting the historical figures, maybe as an explanation, but we noted a small increase. Cost of risk was also a little bit higher. So just checking if you're seeing anything happen on asset quality, if asset quality is something that concerns you. Given all inflation and rates we are seeing in Columbus. So basically asking the new PDL formation this quarter and a view on asset quality. And then a second one regarding deposits. I was checking the seasonality here on first quarter versus fourth quarter. And the 3% quarter over quarter we had not adjusted by FX looks a little bit better. than historical. So just checking what is this. This is a flight to quality. It's necky. So just trying to understand on your liability franchise, I think was a good number. So just trying to understand what is driving more deposits here for the bank. Thank you.

Hi, Yuri. Regarding your first question, the first quarter, we need to divide the numbers in different aspects to understand the behavior. First, you are right, there is some contamination of the panismo numbers. Just to remind you that the cost of releasing panismo was low, so when we take out the numbers of panismo, the effect is that for the remaining of the companies on aggregate, go up. So there is an effect of retiring banismo from the numbers. In terms of behavior, what we are seeing is not a deterioration. The results of the first quarter are in line with our expectations. And just to remind you that we also included in the provisions some macro adjustments for the year. We did that in the last quarter of last year, and also we had some additional charges during the quarter that are in some form extraordinary. So as a conclusion, the behavior, it's in line with our expectations. We are cautious and we are accounting for some additional reserves that we started last quarter, last year, but we are not expecting a big additional deterioration. But good to notice that we, our guidance of the cost of risk was between 1.6 and 1.8. We expect 2026 to be, by the end of 2026, the cost of risk to be on the upper part of the range, meaning they will be closer to 1.8. And let me pass your second question to Mauricio.

Juri, in fact, the results of the deposits are very, very positive. Net of ethics we have a deposit growth of 14% over the year, 19%, only 19% for savings accounts. So basically, that's the result of a strategy based on transactionality, on the ecosystem, on investment, on our digital ecosystem. businesses in order to complement the value proposition. So we haven't gotten into a price strategy in terms of deposits in order to be able to maintain, retain, or attract deposits. Other than that, we have kept on investing on the value proposition. So what you're seeing there is basically the result of having more transactions, more customers using more our physical and digital channels. And at the end of the day, all those transactional deposits are giving us a very stable and low cost of funding.

Super clear. So message number one, you're a little bit cautious, but not seeing anything major. Guiding for the high end of the guidance for the year, 1.8, not the 1.6. So an improvement from the 1.9, but likely on the high end of the guidance. And just to follow up on deposits, Maurício, is this shift on savings, does it change the sensitivity to rates at some degree? Is the liability... somehow important for your sensitivity to higher rates in Colombia?

Not really, Yuri. If you look at the cost of deposits, it only increased six basis points. We have to recognize the rate scenario more in the time deposit product, both the physical time deposit and the online time deposit. But in savings accounts, we keep on having almost half of our deposits on savings accounts. They amounted to 47% out of all the deposit base. And the cost of those savings accounts is only 2.3%, with an overall cost of deposits of 397. So we have been able to reprice our asset side without having to pay extra cost or significant extra cost for our deposits. That way being able to expand our margin.

Super clear. Thank you very much Mauricio and Juan Carlos. Thank you, Yuri. Our next question is from Lindsay Shima with Goldman Sachs.

Hi, good morning, and thank you for taking my question. Just one question from me on loan growth. It seems like commercial loan growth is still really healthy. Just wondering how much of that was corporates kind of pulling forward loans in order to kind of circumvent the expected increase in rates? And then just how do you expect loan growth by segment to trend going forward? Thank you.

Hi, Lindsay.

Yes, in fact, I would say that some of that commercial loan growth was explained because of what you said. We saw some projects that needed to have the financial closing and because of the rate scenario, needed that closing to happen in the first quarter. But I would say those were just a few projects. So I would say that the growth is sustainable. The growth we're having in commercial loans, as it is explained not only by corporate clients, but also by SMEs. So I wouldn't say that it's just because of the financial closings that I mentioned at the beginning. Now, to have the breakdown of the loan growth expectation, it's 8.3% in commercial loans. In consumer loans, it's 6.2%. and in mortgage loans is 9.7%. Out of those three products, I would say consumer loans are the ones in which we are seeing a more stable dynamic as we restricted some of the origination strategies due to the increase in the salary with the effect on inflation and interest rates. So in consumer loans, we're being more cautious.

Very clear. Thank you. Thank you, Lindsey. Thank you. Our next question is from Carlos Gomez with HSBC.

Hello, and thank you for taking my question. Two brief ones. One is regarding your neighbors, actually. So has the relationship with Venezuela or the relationship with Ecuador have any impact on you? And do you expect that in the future, you know, that could be something that can benefit or worsen your business? And the second one is the BREVI, the system introduced by the Central Bank for Payments. Has that had any financial impact so far? You may have discussed that before. Thank you.

Thank you, Carlos. Regarding your first question, let me separate both countries. With Venezuela, we are seeing that there are companies in Colombia looking for opportunities in Venezuela. Still, they are cautious and exploring. There are some companies that are returning to that market and exporting products. from Colombia, and even you start seeing some companies starting to consider starting again operations in Venezuela. So, as a summary, there is an opportunity, still the companies are cautious, and we are working with them to accompany them on that strategy, but still we need to wait a little bit to consolidate that trend. But definitely we think in the midterm it's going to be positive for Colombia. The relationship between the two countries is very strong in terms of the economies they complement. So for Colombia and from Colombian companies, it will be a good opportunity. Regarding Ecuador, what is happening is not good. The tariffs imposed are restricting the commerce between the two countries. Basically, that commerce that was important for Colombia and for Ecuador, now it's practically going to zero. What we expect is that this is more for political reasons than economic reasons. So when the politics advance, that will clear and we will return to a normal economic relationships. But it depends on the politics. So what is happening with Ecuador is not positive. It's concentrating in some sectors, particularly some companies, some consumer sector companies in the past exported to Venezuela, but it's very focalized. It's not something that is having a huge, a big impact on the Colombian economy, and we expect to be something that will return to the normal cost in the coming future. And regarding Breve, Breve is going very well. I mean, the number of transactions, how the adoption is increasing, the number of transactions is very positive, and we are a key actor on the Breve ecosystem, so what we see is the adoption being very positive, and us being a key actor on that system. And as a matter of fact, regarding to a question that was asked before, our savings deposits are growing close to 16%. So that shows that we have transactional accounts that people are using and are using also with the Brevis system. It is positive. Overall, and as we are participating in that system on a positive way, Carlos.

Thank you. And do you have an estimate about your market share in breve transactions?

We have a market share of the keys enrolled in the system between NECI and Bancolombia. We have 50% of the keys of the system.

5-0. 5-0.

5-0.

Yeah, we have passed. Which is, you know, you have 30% for, you know, 25-30% for the other products, so this is quite impressive. Excellent. Thank you so much.

Thank you, Carlos. Our next question is from Santiago Villanueva with David Dieda. Thank you.

Good morning and congratulations on the quarter. Thank you for taking my question. I just have two questions. My first question is, considering the impairment of an ISMO that didn't represent a cash outflow and that no extraordinary dividend has been declared for this year, you are going to allocate capital on the buyback program and additional capital to NECI, WOMPI, and WINIA, but I would like to know if you can provide more information on how you plan to use the proceeds from Banismo transaction, taking into account the amount of the transaction. And my second question is, could you please give us more information about the strategies you are implementing at Ban to improve its profitability?

Thank you.

Thank you, Santiago. Let me take your second question, and I pass you first to Mauricio. As we have said in the past, we see BAM as a big opportunity for us, and we reaffirm that BAM is a key part of CBE's strategy, and we see a big opportunity in Guatemala. The economy is stable. We see companies with very good dynamics. So what we have done is we took some measures regarding expenses in BAM. Also, we are implementing our digital ecosystem in Guatemala. So we will continue to develop that strategy. The first quarter results were very good. For the rest of the year, we probably will have results that are not in the same number that we saw in the first quarter. The ROE for the whole year for BAM will be around a little bit above cost of capital, meaning 13% area. To summarize, we took some measures on expenses, also on the strategy with our digital ecosystem. Also, we are taking advantage of the serious ecosystem and the advantage that we have in the cost of funds to land in Guatemala. And we see a healthy economic activity in the country. So the combination of those factors explain how we improved the results of BAM in Guatemala, Santiago.

Santiago, as you know, with the new corporate structure, capital optimization and value creation is one of our main goals. Let me tell you different strategies in which we are deploying some of the capital that we are generating and also getting from the sale of Banismo. For this year, we have approved a 1.35 trillion Colombian pesos buyback program. We're also going to invest half a trillion Colombian pesos in NECI. And we're also going to issue from Banco Colombia an 81 of 1 trillion pesos that is going to be subscribed by Grupo CIVEST. And we're also going to invest in two different subordinated debt instruments, from Bancolombia Panama into BAM and Banco Agricola amounting to almost 1 trillion Colombian pesos. If you add all those, we are deploying capital of 1 billion U.S. dollars in this year without taking into account the possibility of having an extraordinary dividend because of the sale of Banismo. which of course is a possibility, as we have mentioned previously, and we will consider it once the sale is executed.

Thank you. Thank you. Thank you, Santiago.

Thank you. There are no further questions at this time. I would like to hand the floor back over to management for any closing comments.

Thank you, everybody, for participating in this conference call. We are really happy with the first quarter results. We see a very positive dynamic with some extraordinary items that we introduce in our results. But we see the year on a positive way. So with this, we expect... you to participate in our second quarter results. Thank you very much and have a good day.

This concludes today's conference. Thank you again for your participation. You may disconnect your lines at this time.