Banking
From The Report: Colombia 2016
View in Online Reader

Despite the current economic deceleration, Colombia’s banking sector remains strong, with bank profitability, capital adequacy and return on equity (ROE) indicators holding up well during 2015. Loan portfolio growth reached 15.5% that year, according to Colombia’s central bank, while non-performing loans rose to 3.08% at the end of August 2015. Meanwhile, the capital adequacy ratio fell to 15.2% in the same period, comfortably above the minimum legal requirement of 9%, and ROE rose to 15.4%, up from 12.3% at the start of the year. If the expected macroeconomic recovery takes place during the following years, total loan portfolio is expected to continue growing at double-digit rates in nominal terms, although in 2016 the growth rate will be in single digits in real terms, and marginally lower than in 2015. Longer term, lending to corporate, trade financing, higher-end consumer loans and the emerging mortgage loan sector hold out the promise of sustainable expansion.  

This chapter includes an interview with Luis Carlos Sarmiento Gutiérrez, CEO, Grupo Aval. 

Articles from this Chapter

Overview

Counting on it: As the sector matures it evolves and expands
OBG
plus

Colombia’s banking system is strong and has been enjoying double-digit percentage growth in its loan portfolio. Despite a relative slowdown in economic growth, bank profitability has held up well, as has capital adequacy and return on equity (ROE). Industry Structure Data published by the regulatory agency, the Colombian Finance Superintendence (Superintendencia Financiera de Colombia, SFC), shows that in September 2015 there were 25 commercial banks in operation with gross assets of COP343trn…

Interview

Tax reforms: OBG talks to Luis Carlos Sarmiento Gutiérrez, CEO, Grupo Aval
OBG
plus

Interview:Luis Carlos Sarmiento Gutiérrez How will the new tax reform and the financial transactions tax affect the banking sector? LUIS CARLOS SARMIENTO GUTIÉRREZ:The tax reform, passed in December 2014, encompassed a tax on financial transactions, an equity tax and an increase in income tax. The first two were just extensions of existing taxes that were supposed to cease starting in 2015. The third – the income tax – is new and will impact profitability. The tax payable on…

Analysis

A future generation: New road projects attract attention from investors
OBG
plus

Colombia has launched what is known as the fourth generation (4G) road concession programme, which is a major public-private investment initiative. Work on designing the programme first began in 2011. The first 4G concessions were awarded four years later in 2015, with the first construction work commencing in November 2015. According to Luis Fernando Andrade, president of the National Infrastructure Agency (Agencia Nacional de Infraestructura, ANI), the programme is designed to resolve Colombia’s…