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Banco de Bogotá Q4'17 profit tumbles on higher provision expenses

Banco de Bogotá SA's profit for the fourth quarter of 2017 fell 25.2% from a year earlier as the bank's provision expenses shot 41.3% higher.

The lender booked quarterly net income attributable to owners of the parent of about 409.7 billion Colombian pesos, down from 547.7 billion pesos in the fourth quarter of 2016.

The company's net interest income improved 6.0% from a year ago to about 1.712 trillion pesos. Its net interest margin came in at 6.0%, compared to 5.9% in the linked quarter and 6.1% a year earlier.

Net fees and other services income, meanwhile, jumped 9.8% year over year to 1.042 trillion pesos.

However, those gains were offset by significantly higher provisions for impairment loss and financial assets, which soared to 614.8 billion pesos from 435.0 billion pesos in the year-ago period. Banco de Bogotá said impairment losses from Electricaribe and Concesionaria Ruta del Sol had a strong impact on its quarterly results.

Provisions for Electricaribe, a power company that was liquidated in 2017, and for Concesionaria Ruta del Sol, an infrastructure project, each amounted to 20 basis points of the bank's cost of risk, net of recoveries of charge-offs.

Banco de Bogotá's consolidated gross loan portfolio expanded 5.6% annually to reach 102.404 trillion pesos at the end of 2017. Its 90-day nonperforming loan ratio was 2.4%, unchanged from the linked quarter but higher than 1.7% a year earlier.

The lender's return on average assets fell to 1.3% from 1.7% a year ago, while its return on average equity declined to 9.6% from 13.6%.

The fourth-quarter results brought the bank's full-year 2017 attributable profit to about 1.908 trillion pesos, down from 4.246 trillion pesos in 2016.

As of March 19, US$1 was equivalent to 2,857.10 Colombian pesos.