Bancolombia SA, Colombia’s largest bank, may report a decline in first-quarter net income amid rising loan delinquencies, according to Banco Santander SA.
Net income in the quarter will be 434 billion pesos, down from 446 billion a year earlier, Santander analysts Boris Molina and Luis Guzman estimated in a report today. Loans 90 days or more past due may rise to 1.56 percent of the total, they wrote.
Loan-loss provisions at Medellin-based Bancolombia will climb to 320 billion Colombia pesos ($174 million) from 198 billion a year earlier, the analysts wrote.
While lending margins stayed “relatively flat” in the first quarter, they’re likely to contract this quarter as interest-rate cuts take effect, the analysts wrote. They rate the shares “underperform” with a year-end price target of 31,750 pesos.
The shares rose 0.9 percent to 30,600 pesos as of 2:42 p.m. in Bogota. They have advanced 5.5 percent this month, the best performance on the benchmark Colcap index, which is down 3.3 percent in the period.
Bancolombia said April 10 it would reduce borrowing costs on 1.6 million credit cards by 2 percentage points after Finance Minister Mauricio Cardenas called for lenders to pass on benchmark rate cuts to their customers. The effective annual rate on Bancolombia’s so-called Classic, Gold and Platinum cards fell to 28.9 percent from 30.9 percent, according to a report on its website.
Banco de la Republica has reduced its benchmark by 2 percentage points since July to 3.25 percent.