Banking

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.