A rise in provisions and lower results from its revenue sources drove Bancolombia SA's first-quarter 2018 profit down 14.29% year over year.
The bank reported net income of about 521.76 billion Colombian pesos, or 542.47 pesos per share for the quarter that ended on March 31, down from 608.75 billion pesos, or 632.91 pesos per share, in the year-ago period.
Net interest income totaled 2.513 trillion pesos for the first quarter, declining 4.15% from a year earlier due to the adoption of IFRS 9 and currency fluctuations of the peso against the U.S. dollar in the past year. The company's net interest margin from continuing operations was 5.80%, down from 6.31% a year ago.
Bancolombia collected 679.92 billion pesos in net fees and income from services for the first quarter, up 8.81% from 624.84 billion pesos a year ago. Other operating income, however, dropped 9.89% to 318.46 billion pesos.
Net provisions also rose 12.98% from the prior-year period to reach 875.02 billion pesos in the first quarter. The lender said the provisions helped it maintain a strong coverage ratio amid a challenging environment, adding that new past-due loans totaled 1.49 billion pesos.
Meanwhile, Bancolombia's total operating expenses reached 1.829 trillion pesos in the first quarter, falling 1.61% from 1.859 trillion pesos a year earlier. The bank attributed this decrease to several strategic actions, including the reduction of its branch network and automation.
The lender's total credit portfolio expanded 4.14% in the 12 months through March to reach 158.645 trillion pesos. Allowances for loan losses increased 28.26% year over year to 8.991 trillion pesos. The ratio of the bank's 30-day nonperforming loans to total loans was 5.06%, compared to 4.49% in the linked quarter and 4.10% a year earlier.
The bank's return on average total assets from continuing operations was down to 1.04% from 1.25% a year earlier. Return on average shareholders' equity also slid to 9.21% from 11.44%.
As of May 14, US$1 was equivalent to 2,836.90 Colombian pesos.