Banco Davivienda SA's consolidated net income in the fourth quarter of 2017 dropped 32.7% to 360 billion Colombian pesos from 535 billion pesos a year ago, as net provision expenses saw a nearly three-fold increase.
Operating income went up 29.8% to 325 billion pesos from 251 billion pesos, mainly due to the reclassification of income from the sale of Colombian research firm CIFIN S.A. in 2016.
Income due to investments and interbank funds totaled 168.9 billion pesos, up 12.9% from the previous quarter, mainly attributable to an increase in debt instruments.
Operating expenses, meanwhile, rose to 870 billion pesos in the quarter from 863 billion pesos in the year-ago period.
Financial expenses slid 11.3% to reach 919 billion pesos in the fourth quarter, from 1.036 trillion pesos a year earlier, due to a series of cuts in Colombia's monetary policy rate during the year, which also led to lower costs of savings accounts and lower financial costs.
Net provision expenses in the quarter climbed 176.6% to 512 billion pesos from 185 billion pesos in the year-ago period. "This effect is explained by the lower dynamics of the Colombian economy, the deterioration of individual customers in the commercial portfolio and the impact of regulatory changes in provisions for restructured clients," the bank noted.
The Colombian lender's loan portfolio closed at 78.2 trillion pesos in the quarter, 7.3% higher compared to the final quarter of 2016, as the mortgage and consumer portfolios posted increases. Nonperforming loans stood at 2.76% of total loans in the period, compared to 1.99% in the same period in 2016.
Return on average assets was 1.3% in the quarter, compared to 1.9% a year ago, while return on average equity declined year over year to 12.4% from 18.6%.
For full year 2017, Davivienda posted net income of 1.283 trillion pesos, down 25.6% from 1.725 trillion pesos earned in the previous year.
As of March 12, US$1 was equivalent to 2,851.10 Colombian pesos.
