Helm Bank SA (PFBHELMB) dropped the most in six months as Colombian lenders sank amid speculation that the central bank’s decision last month to reduce borrowing costs will erode profit margins.
Helm’s preferred shares retreated 2.2 percent to 501 pesos at the close of trading in Bogota, the steepest one-day decline since Oct. 8. Grupo Aval Acciones y Valores fell 1.2 percent to 1,270 pesos, and Grupo de Inversiones Suramericana SA (GRUPOSUR), the biggest shareholder in Bancolombia SA (BCOLO), lost 0.8 percent to 38,460 pesos.
“Banco de La Republica’s decision to surprise the market and cut rates by 50 basis points is spurring speculation of lower margins for lenders,” Daniel Velandia, head of research at brokerage Correval SA, said in a phone interview today from Bogota.
Colombia’s central bank cut on March 22 its benchmark rate by half a percentage point to 3.25 percent, surprising all 32 economists surveyed by Bloomberg.
Finance minister Mauricio Cardenas said yesterday the government’s patience is “wearing thin” on Colombian loan rates and is asking banks to lower them.
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