Bancolombia S A : Results Presentation 2Q23

Earnings Results 2Q23

2Q23 Overview

Financial Highlights

Credit Risk

Macroeconomic

Trends

• Loan book down -2.4% QoQ and up 7.4% YoY
• Deposits down -3.0% QoQ and up 9.5% YoY
• NIM 6.7%
• Net income COP 1.5 trillion and ROE 15.7%
• Basel III CET1 Capital Ratio of 10.5% and Total Capital Ratio of 12.5%
• Net provision charges amounted to COP 2.1 trillion up 1.8% QoQ equivalent to a CoR of 3.1%
• Coverage ratio of 207%
• Allowances represent 6.2% of total loans
• Our updated economic forecasts for Colombia reflect a better outlook for 2023 (1.2%), but a gradual slowdown for 2024.
• Receding inflation, declining economic activity and labor market stability should give way to possible interest rate cuts before year-end.

Colombia's Economic Outlook

Economic indicators for Colombia

Macroeconomic Indicators	2019	2020	2021	2022	2023p	2024p
Real GDP growth (% change, end of year)	3.2%	-7.3%	11.0%	7.3%	1.2%	0.9%
Unemployment (% change, end of year)	11.5%	19.1%	15.2%	11.4%	11.5%	12.4%
Consumer prices (% change, end of year)	3.8%	1.6%	5.6%	13.1%	9.0%	5.3%
Central Bank reference rate (%, end of year)	4.3%	1.8%	3.0%	12.0%	12.5%	8.5%
Current account balance (% GDP)	-4.6%	-3.4%	-5.6%	-6.2%	-3.6%	-3.3%
Fiscal balance (% GDP)	-2.5%	-7.8%	-7.0%	-5.3%	-4.4%	-4.8%
Exchange rate (USDCOP, year average)	$ 3,281	$ 3,693	$ 3,744	$ 4,256	$ 4,473	$ 4,335
Depreciation (% change, year average)	11.0%	12.6%	1.4%	13.7%	5.1%	-3.1%

Source: Grupo Bancolombia, DANE, Banco de la República, Ministerio de Hacienda.

Economic Growth

• The Colombian economy expanded at a 3% annual rate in 1Q23, denoting resilient growth. Nevertheless, a slowdown is expected for the second half of 2023.
• In fact, weakening economic activity is already evident in leading sectors (retail, construction, mining, and manufacturing).
• Our updated economic forecasts for Colombia reflect a better outlook for 2023 (1.2%), but a gradual slowdown for 2024.

Inflation and Interest Rates

• Inflation peaked at 13.3% during March and has	•
consistently decreased to 12.1% in July, responding to
decreasing monetary stimulus and declining food
prices.
• However, inflation may be challenged by potential	•
pressures, due to sticky prices of regulated goods and

climate impact (El Niño). Only in early 2026 should inflation return to the Central Bank's target.

• The Central Bank´s reference rate has stabilized at its 20-year high of 13.25%. Declining economic activity and receding inflation may motivate interest rate cuts before year end.

Public Finances

The fiscal deficit reached its worst level in 2020 but has managed to steer its course in recent years, driven by high oil prices and increasing tax revenues.

The fiscal outlook has improved, considering the government's announcements in the MTFF (Medium-Term Fiscal Framework), but there are questionable assumptions regarding additional sources of income (litigation and tax collection efficiency), amidst increasing social spending goals.

Our Purpose and Value Driving Pillars

Our Purpose: "We promote sustainable development to achieve EVERYONE´S WELL-BEING"

Pillar 1	Pillar 2	Pillar 3	Pillar 4
Integrated & Client-centric	Interoperable multichannel	Corporate structure,	Culture, efficiency and
solutions approach	platform and digital evolution	governance model, financial	productivity
		management, risk and capital

control

Integrated and client-centric solutions approach

Ecosystems

Financial-Non	Services			(CaaS)
		(BaaP)	•	KYC
		•	PEP - ALM
	Capabilities		• Cash in - out
Digital		•	Costumer linking
Compras	•	Authentication
		Inmobiliario
		Movilidad
Financial Services	Negocios		(BaaS)
	Wallet	Consumption as a Service
			BNPL	Housing as a Service
		Propietary Channels		Third Party Channels

Value Proposition

• Agro-Industry

• Financial Inclusion

• Sustainable Mobility • Gender Equality

•	SMEs	• Decarbonization-
•	Financial Education	Climate Change

Analytics-based Models

• Pre- approved loans
• Collections
• Rating models