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Banco Davivienda's Q1 profit sinks 23.2%

Banco Davivienda SA reported a 23.2% drop in first-quarter profit as the Colombian lender booked higher loan loss provisions and operating expenses.

The company recorded consolidated net income of 326 billion Colombian pesos for the three months to March 31, down from the 424 billion pesos earned in the year-ago quarter, the lender said in a May 30 earnings release.

Gross financial margin income for the period ticked 1.6% higher year over year to 1.353 trillion pesos, as an 11.7% rise in financial income offset a 28.8% rise in financial expenses.

Davivienda's provisions, however, grew 9.2% year over year to 486 billion pesos from 445 billion pesos, which the company attributed to the "lower dynamics of the Colombian economy." The bank's overall 90-day portfolio quality indicator rose to 2.38% from 1.93% in the linked quarter and 1.91% a year earlier.

Operating expenses, meanwhile, rose 9.1% to 740 billion pesos year over year.

Davivienda's loan portfolio closed at 71.550 trillion pesos as of first-quarter end, up 11.4% from 64.238 trillion pesos a year earlier. Mortgages and consumer loans grew 13.6% and 16.8%, respectively.

Return on average assets was 1.8% in the first quarter, compared to 1.6% a year ago, while return on average equity improved to 17.0% from 15.4%.

As of May. 30, US$1 was equivalent to 2,923.78 Colombian pesos.