Bancolombia (CIB) AI Stock Analysis

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Bancolombia

(NYSE:CIB)

Rating:77Outperform

Price Target:―

Bancolombia demonstrates strong financial performance with robust revenue and profit growth, a positive technical outlook, and attractive valuation metrics. The low P/E ratio and high dividend yield are particularly appealing. Despite some challenges such as cash flow issues and sector-specific underperformance, the positive macroeconomic environment and strategic initiatives suggest a favorable outlook.

Positive Factors

Earnings Growth

El Salvador’s earnings rose 54% supported by strong year-over-year core revenue growth.

Macroeconomic Recovery

Bancolombia is well positioned to benefit from a nascent macroeconomic recovery.

Price Objective

The price objective was raised by 16% to reflect new earnings estimates and a higher sustainable return on average equity.

Negative Factors

Earnings Decline

Panama’s earnings significantly declined due to weaker core revenue generation and higher operating expenses.

Fiscal Challenges

A challenging fiscal outlook for the country, while recent polls are showing different trends compared to early this year.

Interest Rate Pressure

Bancolombia’s earnings are seen as being limited due to NIM pressure from lower rates.

Bancolombia (CIB) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.01B

Dividend Yield14.39%

Average Volume (3M)381.84K

Price to Earnings (P/E)12.7

Beta (1Y)0.48

Revenue Growth-0.15%

EPS Growth8.78%

CountryUS

Employees34,182

SectorFinancial

Sector Strength81

IndustryBanks - Regional

Share Statistics

EPS (TTM)1.70

Shares Outstanding113,030,600

10 Day Avg. Volume468,185

30 Day Avg. Volume381,839

Financial Highlights & Ratios

PEG Ratio4.60

Price to Book (P/B)1.02

Price to Sales (P/S)0.00

P/FCF Ratio-5.06

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$38.00

Price Target Upside-9.50% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering2

Bancolombia Business Overview & Revenue Model

Company DescriptionBancolombia S.A. (CIB) is a leading financial institution in Latin America, primarily operating in Colombia, Panama, El Salvador, and Guatemala. It offers a comprehensive range of banking products and services, including personal and commercial banking, investment banking, asset management, and insurance. With a focus on innovation and customer service, Bancolombia serves individuals, SMEs, and large corporations, providing solutions tailored to meet the diverse financial needs of its clients.

How the Company Makes MoneyBancolombia generates revenue through a diversified business model that includes interest income, fees, and commissions. The bank earns interest income primarily from lending activities such as personal loans, mortgages, and commercial loans. Additionally, Bancolombia benefits from fees and commissions on various services, including credit card transactions, asset management, insurance products, and financial advisory services. The bank also engages in treasury operations, trading, and investment activities to optimize its financial performance. Strategic partnerships and collaborations with fintech companies and other financial institutions further enhance its revenue streams by expanding service offerings and improving operational efficiency.

Bancolombia Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 3.76%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

Bancolombia's first quarter results showed positive financial performance with increased net income and strong ROE. The successful merger of digital platforms and recognition in ESG are notable achievements. However, challenges remain with a slight contraction in the loan portfolio and a difficult fiscal environment in Colombia, compounded by global economic uncertainties.

Q1-2025 Updates

Positive Updates

Quarterly Net Income Increase

Bancolombia reported a quarterly net income of COP 1.7 trillion, reflecting a 4.5% growth both on a quarterly and annual basis.

Strong Return on Equity

The return on equity (ROE) was 16.3% for the quarter, showcasing robust financial performance.

Positive Asset Quality Trends

Improved asset quality with lower delinquency rates and a cost of risk of 1.6% for the period.

Successful Merger of Digital Banking Platforms

Bancolombia A la Mano merged with Nequi, now serving 23.5 million users, enhancing digital service offerings.

Resilient Deposit Growth

Annual deposit growth was 13%, demonstrating Bancolombia's ability to secure funding without raising costs.

Recognition in ESG

Bancolombia was recognized as Colombia's top ESG company for the 6th consecutive year.

Negative Updates

Loan Portfolio Contraction

The loan portfolio slightly decreased on a nominal basis due to a 5% appreciation of the peso.

Challenging Fiscal Environment in Colombia

Colombia faces a challenging fiscal situation with a forecasted fiscal deficit of 5.9% of GDP, impacting local assets and fiscal sustainability.

Impact of Global Economic Uncertainty

Global trade tensions and risk aversion affected emerging markets, impacting Colombia's exchange rate and CDS spread.

Potential Pressure from IMF Credit Line Suspension

Suspension of Colombia's access to the IMF's flexible credit line adds pressure to develop a credible fiscal plan.

Company Guidance

During Bancolombia's first quarter 2025 earnings call, the company provided several key metrics and guidance for the fiscal year. The quarterly net income was reported at COP1.7 trillion, marking a 4.5% growth both quarterly and annually, with a robust net interest margin (NIM) of over 6.4% and a return on equity (ROE) of 16.3%. The loan portfolio decreased slightly during the quarter but grew 7% on an annual basis, while deposits fell by 1% quarterly but increased nearly 13% annually. The cost of risk for the period was 1.6%, supported by improved asset quality and lower delinquency rates. Bancolombia's capital position remains strong with a total solvency ratio of nearly 13% and a core equity Tier 1 ratio of 11%. The company announced the completion of legal steps for reorganizing under the new holding structure, Grupo Cibest, with expected changes in Colombian operations to appear in May's financial statements. For the fiscal year 2025, Bancolombia anticipates loan growth of approximately 5%, a NIM of around 6.2%, a cost of risk between 1.8% and 2%, an efficiency ratio of approximately 51%, and an ROE between 14.5% and 15%.

Bancolombia Financial Statement Overview

Summary

Bancolombia exhibits strong revenue and profit growth, reflecting robust performance in the banking sector. While the balance sheet shows prudent leverage management, there is a need for better equity utilization. Cash flow challenges, particularly in 2024, signal a need for enhanced cash management strategies. Overall, the company demonstrates financial stability with areas for operational improvement.

Income Statement

Positive

The income statement shows strong growth in total revenue and net income over the years, with a revenue increase from 2023 to 2024. The gross profit margin is solid at 100% due to the nature of the banking industry. The net profit margin for 2024 is approximately 28.3%, indicating high profitability. However, the EBIT margin has fluctuated, which suggests varying operational efficiencies.

Balance Sheet

Positive

The balance sheet reflects a stable equity base with a debt-to-equity ratio of about 0.44 in 2024, indicating a well-managed leverage position. The equity ratio stands at around 11.7%, showing moderate reliance on equity for asset financing. However, the return on equity of approximately 14.4% suggests room for improved equity utilization.

Cash Flow

Positive

The cash flow statement highlights negative free cash flow in 2024, which raises concerns about cash management, despite positive operating cash flow in prior years. The operating cash flow to net income ratio is negative for 2024, suggesting issues in converting profits into cash flows. Improvements in cash flow efficiency are needed for better financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
22.18T	20.88T	24.21T	17.36T	15.72T
	Gross Profit
22.18T	47.08T	19.31T	17.36T	15.72T
	EBIT
11.01T	10.27T	17.02T	5.86T	269.41B
	EBITDA
0.00	10.27T	0.00	0.00	0.00
	Net Income Common Stockholders
6.27T	6.12T	6.78T	4.09T	275.99B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.62T	11.65T	24.72T	23.15T	20.19T
	Total Assets
10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
	Total Debt
29.91T	32.09T	41.17T	31.46T	32.15T
	Net Debt
2.79T	127.11B	16.45T	8.32T	11.96T
	Total Liabilities
10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
	Stockholders Equity
43.54T	38.09T	39.09T	32.23T	26.55T
Cash Flow		Free Cash Flow
-19.94T	16.74T	3.03T	3.91T	9.70T
	Operating Cash Flow
-17.89T	19.15T	6.56T	6.10T	11.23T
	Investing Cash Flow
-559.20B	-159.69B	-4.65T	-650.49B	-7.52T
	Financing Cash Flow
9.09T	11.59T	853.44B	-6.81T	-4.92T

Bancolombia Technical Analysis

Technical Analysis Sentiment

Positive

Last Price41.99

Price Trends

50DMA

40.72

Positive

100DMA

38.54

Positive

200DMA

33.41

Positive

Market Momentum

MACD

0.66

Positive

RSI

50.89

Neutral

STOCH

50.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIB, the sentiment is Positive. The current price of 41.99 is below the 20-day moving average (MA) of 42.14, above the 50-day MA of 40.72, and above the 200-day MA of 33.41, indicating a neutral trend. The MACD of 0.66 indicates Positive momentum. The RSI at 50.89 is Neutral, neither overbought nor oversold. The STOCH value of 50.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIB.

Bancolombia Risk Analysis

Bancolombia disclosed 38 risk factors in its most recent earnings report. Bancolombia reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

The Bank is subject to a wide range of cybersecurity incidents. Q4, 2023

Bancolombia Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIB	77 Outperform	$11.01B	12.66	15.99%	14.39%	-0.15%	8.78%
BCH	77 Outperform	$15.42B	11.75	23.88%	5.16%	-16.96%	-10.73%
BMA	74 Outperform	$4.97B	1,116.79	0.11%	10.59%	-46.30%	-79.35%
BAP	74 Outperform	$17.30B	11.20	16.35%	4.98%	5.84%	12.67%
BSAC	73 Outperform	$11.71B	10.99	24.02%	3.99%	-22.63%	32.31%
GGAL	71 Outperform	$8.97B	5.96	28.17%	4.28%	-35.65%	70.23%
Sector *	64 Neutral	$12.86B	9.79	7.78%	16985.65%	12.28%	-7.82%

* Financial Sector Average

Performance Comparison

CIB

Bancolombia

41.99

13.58

47.80%

BCH

Banco De Chile

30.19

8.01

36.11%

BMA

Banco Macro SA

75.83

23.77

45.66%

BSAC

Banco Santander Chile

24.46

6.68

37.57%

BAP

Credicorp

213.40

66.48

45.25%

GGAL

Grupo Financiero Galicia SA

54.02

24.06

80.31%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.