Grupo Cibest SA (CIB) 2009 Q3 法說會逐字稿

Good morning, and welcome everyone to Bancolombia's Conference Call. Today's call is being recorded.

Please note that this conference call will include forward-looking statements including statements related to our future performance, capital position, credit related expenses and credit losses. All forward-looking statements, whether made in this conference call, in future filings, in press releases or verbally address matters that involve risk and uncertainty.

Consequently, there are factors that could cause actual results to differ materially from those indicated in such statements, including changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by our targeted clients, changes in business strategy and various other factors that we describe in our reports filed with the SEC.

With us today is Mr. Jorge Londono, President and CEO of Bancolombia; Mr. Juan Carlos Mora, Chief Risk Officer; and Mr. Jaime Velasquez, Chief Financial Officer.

At this time, I would like to turn the call over to Mr. Londono.

Please go ahead, sir.

Thank you, and good morning to everybody, and our thanks for your interest in attending our Third Quarter Results Call.

First, I would like to introduce Jaime Velasquez, our Chief Financial Officer, who is going to share with you our views and our thoughts about the macroeconomic environment in the market that Bancolombia is present.

Thank you and good morning. We've seen numbers confirm what we were expecting with regard to the Colombian economy. The measures taken by the government, and the Central Bank, have been effective in preventing larger drops in economic activity within a hard, global economic environment. In the end, Colombia may prove to have weathered the recession better than any other of the Latin American countries.

During the second quarter of 2009, actual consumption by homes and investment decreased in response to the international environment. However, despite contracting at an annual rate of 0.5% during the quarter, the Colombian economy performed better than those of Brazil, Chile, Mexico and Peru.

In fact, while most countries have presented negative quarter of acquired GDP growth, most of Colombia's contractions took place by the end of last year, and nominal output numbers remain on positive ground, in both the first and second quarters of 2009 as compared to the fourth quarter of 2008.

After maintaining rates on hold for a few months, the Central Bank reduced its interbanking rate an additional 50 basis points at the end of September, leaving it at 4% and accounting for 600 basis points reduction since December 2008 as people [dropped] down anywhere in the region outside Chile.

We are confident that most of the decrease in interest rates has already taken place. And also we can rule out further cuts. We are not expecting any dramatic moves on the part of the Central Bank.

On the side of the fiscal stimulus, government demand increased 10% in the second quarter of the year, driven primarily by a significant increase in civil work as municipal and departmental entities executed multiple, planned infrastructure projects.

Regarding foreign investment, [LTI] influx continued to support long-term growth profit, totaling $5 billion as of June and decreasing only 10% as compared to last year. Also, a large portion of LTI influx corresponds to commodity related sectors such as oil and mining. There are other sectors such as infrastructure, power generation and retail that are benefiting from those influxes as well. We expect foreign investment to remain strong in the foreseeable future, as Colombia continues to offer a solid business climate, improved regulation and macroeconomic stability.

All in all, Colombia's economy faces the risk of having a recovery as gentle as the downturn. Our economic research team expects our economy to grow between 2% and 2.5% next year, as the country's export continues to be pressured by trade restrictions imposed by Venezuela and Ecuador and still challenging outlook for the United States, our biggest commercial client. Nonetheless, we maintain a constructive approach toward Colombia's future growth prospects.

Now moving to Central America, its diverse economy has been most severely affected by the global crisis, particularly through its strong connections to the United States economy. Domestic demand has been affected more than anticipated.

GDP is now expected to contract more than 2% this year. However, we are becoming more optimistic about the economic outlook for the next year. And we welcome the recent Stand-By Arrangement between the IMF and the local authorities that will safeguard fiscal and financial sustainability under the dollarization which then provides room for currency (inaudible) measures and re interest in those two companies.

Despite this challenging environment our Salvadorian subsidiary has outperformed in this period. We're sharing the same principles of cautious approach and adequate risk management we apply in our Colombian subsidiaries.

After this good review of the environment, I will turn to Mr. Londono again, who is going to go over the Bank results.

Thank you.

Thank you, Jaime.

And just to check on our results for the quarter, I would like to start by a quick summary of our main highlights during this period which you could take a look at in the slide number two of the presentation that we have in the Investor Relations website that you can refer to.

First, I would like to point out that our total revenues remain stable in a very challenging environment in which we had reduction of margins and reduction of volume of total assets. We are going to look further down, the main components that presented this figure of maintenance of our total revenues.

Second, in a more positive note, the pace of asset deterioration during the third quarter has slowed down, continuing the favorable trend that we started to see in the second quarter of this year. Consequently, our provision charges, our provision burden, was significantly lower during this quarter. We remain very much committed to maintain the strength of our balance sheet.

Accordingly, the coverage for loan losses remained in a very high level at 135% of our past-due loans in accordance with the Colombian measure of 30-days past due.

The third highlight that we would like to make is that we have a very good quarter from the point of view of net income. Net income increased 27% with respect to the second quarter. Totaling COP321 billion, which is in annualized terms, for the third quarter, a 20% return on our shareholders equity. This represents an improvement from what we had during the second quarter in which the annualized return on equity was of 16%.

In general then, with a more challenging year, net income for the nine month period ended in September totaled COP885 billion, which is a reduction of 11% compared with the results of the previous year. Nonetheless, this cumulative result equates at a 19% return on equity of the year so far.

Let's take then a more detailed look at our revenues, which are shown in slide number three. Net interest income totaled COP849 billion, which is a reduction of 8% with respect to the previous quarter, negatively impacted by lower margins and lower volumes.

In particular, margins continued to be pressured by the decreasing interest rate in the country, especially the DTF rate, which is the weighted average interest rate paid in 90 days deposit, fell additional 77 basis points during the quarter, which is, we came down to 4.8% at the end of the quarter when we had last year -- and the same quarter -- we had 9.7% DTF rate.

That rate affects about half of our total loan portfolio. As a result, net interest margin reached 6.3% in the third quarter, down from 6.7% in the second quarter of the year, and 7.7% in the previous year at the end of September.

Looking ahead, although we could have some additional margin compression, we think that we are close to seeing the bottom of this trend. We are aware that there is going to be very strong competition because of the decreasing rates and the decreasing volumes of credit. But we think also that our liability management and ample liquidity and our solid competitive funding position, will enable us to defend our margin and obtain a cheaper funding cost.

We have an illustration of that already in this quarter. Our total interest expenses fell 17%, outpacing significantly the 12% decrease in total interest income. That was one of the elements that helped us to offset the described reduction in net interest income. We expect to be able to get more of this in the coming months of this year and in the near term.

Revenues different from interest had a better quarter. On one hand, fees continued their solid performance during the year. After reaching a record of COP380 billion in the second quarter, we obtained COP369 billion in the third quarter.

On a cumulative basis, net fees and income from services totaled in the nine months of this year COP1.1 trillion, which is an increase of 70% compared with the same period of last year. Fees solid performance has been driven primarily by solid credit and debit card annual fees, which have increased 25% over the year. And also is being supported by fiduciary activities, which have increased 80% as they benefited from the increasing volume of assets under management during this year.

On the other hand, the other operating income has returned to more normal levels after we finished with the adjustment to new regulatory changes that probably you remember, we have mentioned about our derivative valuation. That adjustment was done entirely in the first half of this year. As a result, total other operating income amounted to COP100 billion compared with COP20 billion during the second quarter of the year, affected by the adjustment I already mentioned.

OpEx, now going to the slide number four where we show the expenses, OpEx totaled COP696 billion increasing 2% to the second quarter and 9% compared with the same period last year. As you know, our cost cutting efforts remain limited by the increasing charges and expenses related to the software development and IT upgrades that we continue to undertake in the process of overhauling our banking core systems and the underlying process. These ongoing efforts will continue for a couple of more years and aims at elevating our productivity and efficiency in the long run.

Personnel expenses, which are the sum of salaries and employee benefits, totaled COP227 billion (sic - see 3Q '09 Report) in the third quarter, decreasing 2% quarter-over-quarter, and only increasing 3% year-over-year. Such performance has been driven by lower bonus plans and payments related to Bancolombia's variable compensation program. The variable compensation program in Bancolombia, it is important to mention that it's very much risk sensitive. And it's in the best standard of design of the new reflections on this matter.

As a result of lower revenues and increasing expenses, our cost to income ratio presented some deterioration, reaching 53.9% from the 52.7% that we had in the previous quarter. Likewise, and also affected by the decline in the volume of assets, operating expenses for the quarter represented 4.6% of total assets. Which is a larger proportion than the 4.4% presented at the end of the previous quarter.

Let's go now to look at the asset quality and provision charges, which are illustrated in slide number five. As we mentioned in the quarter's highlights, the pace of asset deterioration has slowed for the second consecutive quarter. This is a positive development, but it has maintained the same policy for Bancolombia, of strengthening our balance sheet. And it also confirms some trends in the improvement in the quality of assets. It hasn't changed our policy of maintaining a very high coverage of our past-due loans.

Actually, if we look at what happened in the last quarter, total loan charge-offs totaled COP389 billion and COP238 billion in the two previous quarters, first and second quarter of this year; and during the third quarter it only went up to COP192 billion of total charge-offs.

Pointing in the same direction, net loan charge-offs, which totaled COP331 billion in the second quarter, decreased considerably to COP181 billion in the third quarter of this year. Consequently, provision charges were significantly lower in the third quarter. They total COP168 billion, half the provision -- quarter --- the provision charges that we had during the second quarter of this year.

Such a significant decrease is explained by lower asset deterioration and also by recoveries of the provisions related to loan prepayments. It is important to mention that we have, in Colombia, since 2007, counter-cyclical provision models that lead us to make a loan loss reserve in the disbursement of any loan. Therefore, a loan prepayment, no matter of the quality of the loan, will produce immediate recoveries of loan loss reserves.

On a relative basis, annualized provision charges for the third quarter represented only 1.5% of our average loans, a considerably lower provision burden than about 3% that we have had for the previous quarters.

On the nine months, ended on September 30, provision charges totaled COP853 billion, which is an increase of 29% compared with the same nine-month period of the previous year and represented 2.6% of the average total loans in annualized terms.

Despite a slower pace of deterioration, and largely due to a reduction in the size of our loan portfolio, the past-due loans increased slightly, from 3.9% to 4.9% during the quarter.

But the important matter is that allowances for loan losses totaled COP2.3 trillion, which is 5.5% of our total loans, increasing from 5.2% of the total loans at the end of the second quarter.

In addition, coverage for loans and actual interest losses remained close to 135%, which is well above the 120% that we had at the end of the same quarter of last year.

Demonstrating how, despite a more challenging asset quality environment in the 12 months, our balance sheet is even better protected now and is responded by increasing the reserves during the last year in anticipations and well aware of the trends seen in the non-performance.

It is important to keep in mind that under current Colombian regulations, we consider past-due loans, as we mentioned, all the loans with 30-days past due. If we make the adjustment that we presented last quarter, of making the calculation with more international terms of 90-days past due and 120-days for mortgages, we will come up to a past-due ratio of only 2.2%. And our coverage will be 255%, reinforcing our view that we have a very strong and well covered balance sheet.

Looking ahead, for the rest of the year, and into the next year, I could say that although signs of asset quality stability and our adequate coverage are likely to generate a lower provision burden, it is hard to imagine last quarter's provision charges as a run rate from here on.

All in all, although a scenario of milder deterioration is gaining traction, our basis scenario for economic activity and the previous experience in recent credit cycles lead us to conclude that the declining trend in credit costs is more likely to be gradual for the rest of the year.

In slide number six, we present the asset structure and the loan growth. As of September 30th, Bancolombia's assets totaled COP60 trillion, or close to $30 billion. That is a reduction of about 5% compared to the figures at the end of the second quarter of this year and only 4% as compared with the third quarter of 2008.

It has been a while since the last time that we conducted, in this presentation, a reduction on the loan book. And even though the surrounding circumstances are entirely different from what we had in previous reductions, we would like to take a lot of time to explain our view of this reduction.

Also it was hard to forecast the loan growth levels in this year. Last quarter's sluggish volume performance was definitely lower than what we anticipated. The fact is that we did not factor in our estimations the dynamic access of our corporate clients to the foreign and to the local bond markets, which is an effect of the liquidity that is rightly given by the economic authorities to the markets in an effort to support from the fiscal activity the recovery of the economy.

But at the end of September, domestic bond issuances have amounted to COP11 trillion, which is close to three times that we had in the last year of the same activity.

And these have concentrated particularly in the private sector, in the corporate clients that last year had almost zero, about COP500 billion of activity in the bond market, and this year, they have about COP5.5 trillion. This is more than 10 times what they had in the year 2008.

In addition to disintermediation driven by capital markets, low levels of credit demand, as part of the slower economic activities in the economies where we operate, has also pressured our volumes a little bit down. Gross loans totaled COP42 trillion at the end, decreasing about 6% during the quarter.

Given that 24% of our loans are denominated in US dollars and that the Colombian peso appreciated 10% during the quarter, it is important to make an analysis of the volume, breaking out the figures in their own currencies.

Peso-denominated loans decreased 4% during the quarter. That reduction was mainly concentrated in commercial loans. And the consumer loans decrease is lower, decreased only 3% during the quarter.

On the contrary, mortgages were dynamic. And we already perceive that the Colombian government's housing subsidy program is taking a positive effect. During the quarter, if we account for the securitized loans, mortgages have increased 4%.

On the other hand, the dollar-denominated portfolio remained stable, totaling about $5.2 billion.

Performance of the main loan categories was mixed, with a small reduction in commercial loans, and then a small growth in consumer loans, particularly in El Salvador.

Looking ahead, our expectations for a more stable global and domestic economic scenario lead us to anticipate a more benign outlook in the matter of disintermediation. So in the midterm, it is reasonable to expect loan growth rates to return to what has been typical in Colombia, 2 or to 3 times the growth GDP.

Let's take a little bit -- a little look to the funding side, in slide number seven. Deposits decreased in line with the decline of our assets, totaling COP40 trillion, the total deposits at the end of the quarter; we have still 75% of our liabilities in deposits.

In recent months, we have increased our efforts to optimize the funding mix and reduce the funding costs. And that has helped us to manage the margin compression in the economy.

As a result, time deposits decreased their relative size in the funding mix to 47% from 50% that we have at the end of the second quarter, while demand deposits increased from 49% to 52%.

Also our weighted average funding costs for deposits decreased 71 basis points during the quarter. Some additional funding cost reduction is still quite possible as we continue to reprice our liabilities, and particularly as we continue to reprice our CD rates.

Above all, we maintain a solid liquidity position. Our net loans to deposits, including borrowing from development bonds, remains at 92% at the end of the third quarter, which compares very favorable to the 99% that we have in that relation in the same quarter of last year.

Bancolombia's funding remains one of the cheapest in the countries where we operate, explained by the sizeable amount of our deposits and our funding mix.

In capital position, we have done very well. As we can see, it's next slide number eight. Actually, the capital increased to 14% during the third quarter and we end up with COP6.6 trillion. That is a reduction, obviously, of the reduction in assets, but it's also an effect of our profitability that is maintained in the institution.

Our capital adequacy ratio has increased primarily as a result of lower risk-weighted assets, but also, as I mentioned, of the increased profits in the institution.

We are adequately capitalized, as our current Tier 1 level is close to 11% and our consolidated capital ratio is 480 basis points above the minimum required in Colombia, that as you know is 9%.

So I would like to finalize by sharing with you the message that we are very pleased with the third quarter results and the overall performance of the Bank that has throughout this very challenging year.

We have achieved, so far, a 19% return on equity, which is quite good under the current circumstances. And we, above all, have a better covered balance sheet and we just saw the better capitalized structure of our institution at the end of the quarter.

Also, it is now clear that our belief in a soft landing of the Colombian economy came to be true. We will maintain a cautious approach for managing our risks and we'll continue to monitor, very closely, the macroeconomic scenario.

Our base economic growth scenario is one of a mild recovery, where we expect to still be challenged by a sluggish labor market and a foreign trade with restrictions. In other words, we are aware of the growth and margin challenges that lie ahead in the short and midterm, yet we remain confident in our ability to generate value to shareholders, while investing in our business and remaining committed to the interests of our clients.

We remain confident in our franchise earnings power and in a strong balance sheet, solid liquidity and capital position. And overall, we remain confident in our ability to compete in the markets in which we are present.

At this time, we will be quite happy to hear your questions and your comments. Thank you.

(Operator Instructions) And your first question comes from the line of Jason Mollin with Goldman Sachs.

Hello, everyone. I have two questions today.

My first question is related to the 51% decrease quarter-on-quarter in loan loss provisions. You explained, in the release and in your presentation, that this decrease was related to a slower pace of asset quality deterioration as well as the impact of the recoveries related to corporate prepayments. Can you quantify the amount related to the recoveries and those prepayments, so we can get a sense of a more normalized level of loan provisions in this current context?

And secondly, it's somewhat related, but my question is about the disintermediation of corporate lending. Corporate loans are about half of Bancolombia's loan book. What do you expect in this segment going forward? Has Bancolombia been active in arranging the capital markets funding for these clients?

And were the fees -- are you generating significant fees? And if so, what were they for the Bank in the third quarter related to this? Thank you.

Okay. Let me start with the second question, Jason, and thank you very much. Actually, what we intend to show when we analyzed what had happened with the total debt of our corporate market is that it has remained rather dynamic, if we may say so, because that indebtedness is being supported very dramatically by the capital markets, rather than the credit, banking credit.

So we believe that the increase in the assets to the capital markets has more or less already occurred. We are not going to continue in that trend of increases in the assets to the capital market, so the opportunities for the credit are going to appear, not in a dramatic way, but we are going to recover some growth also in that sector.

The fact that the programs of the government are taking effect in public works and public expenses will represent significant demands from the corporate market. And the type of credits are going to be suitable for the Bank, for the capacity that we have to serve this very big capital market. The very big loan facilities. So I would say that the trend that we have already observed in disintermediation going to slow down.

Now, on the first question, actually the total impact of recoveries was about $15 million or COP30 billion if we may say so. So that was something which was impacted more by prepayments and also some recoveries.

But as we suggested during the presentation the fact of a reduction in the credit has impacted significantly the quarter. In the successive quarters we certainly are not expecting additional reductions and therefore that impact might be not as high.

Just as a follow up to the first question on provisioning, so this 1.5% annualized provision to loan ratio that we saw in this quarter and you suggested was obviously much lower than it has been, this may be a little bit too low going forward; but would we go back to 2%, is it 1.75%? What -- how should we think about the provision needs particularly given what you suggested about how high your coverage ratio is particularity if you look at 90-days overdue?

Yes, I agree with what you say Jason, probably 1.5% is not going to be sustainable and 2%, 2.5% will be more like it; but definitely we are going to be down from the 3% that we have maintained on the average for the previous quarters.

Thank you very much.

You're welcome Jason.

Your next question comes from the line of Saul Martinez with JPMorgan.

Hi, good morning gentlemen. I want to get a better feel for how you guys are thinking about the sustainability of your current level of profitability and earnings power that you've been generating on a core basis of roughly COP300 billion per quarter. Obviously your earnings benefited from loan loss provisioning levels that, as you mentioned, are probably unsustainable.

As we head out into the coming quarters assuming that the interest rates don't trend up sooner than you think, should we be thinking that you guys can't sustain your current level of profitability and the ROEs close to 20% and earnings that are close to COP300 billion per quarter?

Thank you, Saul. What we think is that most of the reduction in interest rates has already taken place. And the profits that we have been given in Colombia, the reduction in the rate of intervention has translated basically to our assets, while not so quickly to our liabilities.

Therefore we believe that we have an ample possibility of additional reductions in the cost of our fundings. And that is going to be significant for the earning power of coming quarters.

It doesn't mean that we discount absolutely additional reductions in the rate of interest, but certainly not at the pace that we have been observing during the last year when the rate of intervention of the Central Bank has dropped by 600 basis points and the DTF is also declined by about the same figure.

So that is what will happen. Actually, we are close to see the end of this process and in the end of this process we will have some additional benefit on the reduction of our liabilities cost.

Okay. Well, I guess I'm a little confused because I think earlier you said that you may see some additional net interest margin compression in the coming quarters even though you're close to the bottom. What you seem to suggest if your funding costs decline is that you're expecting NIMs to either remain constant or expand. Should we be expecting some growth in net interest income in the coming quarters then?

I think that we are going to be able to defend the net interest income in the coming quarters and even see some good progress in it as we are able to develop a more efficient process of funding the Bank. It all depends on how the total balance moves; but we trust that we are going to be able to reduce the cost of funding in an environment in which we have some growth.

Okay. So is it fair to say that you guys then expect to be able to defend your current level of profitability in the coming quarters?

Certainly.

Okay. Great. Thank you.

You're welcome.

Your next question comes from the line of Tito Labarta with Deutsche Bank.

Hi, good morning. Just a couple questions.

First, in terms of your loan growth if I understood correctly I think you said you're expecting GDP growth of 2% to 2.5% for next year and then loan growth of 2 to 3 times GDP. So that would imply maybe single digits loan growth for next year, maybe around 7%, 8%. Is that in real terms? And is that what you would be expecting, maybe 10% loan growth next year? If you can maybe give some more guidance on that.

Secondly, if we can get some color on your business in El Salvador in terms of what kind of loan growth you saw there, what kind of ROE and net income of Banagricola. Thank you.

Okay. The relation of our loan growth is something that has to be looked at in the midterm. It's very difficult, as we have been experiencing, to predict what the loan growth is going to be for the next quarter or so. In fact, the projections of our economic department for the next year is something between 2% and 2.5 growth% for the economy.

We have been achieving in the midterm and it's like an element of projection of the Colombian economy, a relation of 2 to 3 times loan growth in current terms, rather than in real terms, for the economy. So I would say that some growth between 5% and 6% in loan growth is achievable for next year.

And if that happens to be obtained, with a more than proportionate recovery of the consumer loans that have been the ones with the largest comparable reduction during the nine months of this year, that is going to be very significant in the net income of the Bank for the coming months.

In El Salvador, as you have seen we have an economy which is -- drives lower, we are seeing a reduction of 2% for DTF; and that is going to have also some recovery for the coming year. And we are also optimistic in seeing in El Salvador something that we are expecting to have in Colombia. The relation of credit growth to El Salvador is similar to this Colombian economy.

And I must highlight the fact that we have been very successful in defending the profitability of the Bank in El Salvador. Actually, we have increased our market share in assets. But we have more than increased the market share in revenues because in El Salvador net income of Banagricola is now close to 70% of total profitability of the financial sector in that country.

So I think that we will be able to benefit of the recovery of the growth rates in El Salvador.

Thanks. Just to clarify, so the loan growth you're saying 5% to 6% to nominal growth for next year?

And then just on Banagricola, to follow up, what kind of ROE did you have for this quarter?

I wouldn't like to also quote precisely on what ROE we are projecting. We, just as we mentioned in previous quarters we are committed to obtain at least 20% return on equity, that is our target. But we have to wait and see, due to the volatility that we are seeing during the past months, how the economy performs.

But that is our commitment and we are very much in the line of maintaining that promise.

All right. Thank you very much.

(Operator Instructions) And your next question comes from the line of Jose Restrepo from Interbolsa.

Good morning, everybody, I have two questions.

The first is, do you think that the asset quality will reach its maximum and we will see further improvement in the following quarters?

And the second one, in your macro scenarios that you are forecasting in the Bank, when do you see increase in interest rates by the Central Bank?

Well the first question is -- Jose, thank you. We have maintained actually the asset quality not only in the Bank but in the economy. And if we look at what happened in this period, it is more a result of the reduction in total assets, than any other effect.

We don't see any signs of an increase in the deterioration in the coming months. We see, as we were saying, a more gradual recovery of the economy. And therefore I will say that even though we see some reduction in our total charges from provisions, we don't see a drop in the figure, a rapid drop in the figure of past-due loans. We will be more comfortable with the maintenance of that figure.

Now on the Central Bank, I will say that it will take a while for the recovery. What we have seen worldwide is that most of the authorities are pledging the maintenance of the fiscal stimulus for the economy. And certainly in Colombia that is something that looks quite reasonable to recommend, and quite reasonable to expect.

We have usually been quite comfortable with the management of the Central Bank in that matter and we just want to wait and see. What I will say is that we will bet more to the maintenance of the current interest than to the increase of it.

Thank you.

You're welcome Jose.

And we have a follow-up question from the line of Jason Mollin with Goldman Sachs.

Just a follow-up to understand a little of the composition of the earnings contribution. We have the earnings reported locally for Bancolombia, but can you help us to understand how we reconcile that with the consolidated earnings, so therefore the question was previously asked about the contribution or lack thereof from Banagricola or other subsidiaries?

Yes, Jason, certainly to look at the local operation and the consolidated figures we would rather to analyze the Bank on the consolidated figures. When we look at our local results we have to keep in mind that the coverage in Colombia of past-due loans is 164% so that is very high. A lot of margin on the coverage of our local competitors.

So we have been -- in this effort of maintaining a strong balance sheet, we have been placing, in our Colombian operation, a high burden on the results.

And also, the Colombian operation is particularly affected by the change in the price of the dollar. So I would say that the consolidated figures show more clearly the average of what is going on in the Bank.

I understand, I'm trying to look -- I'm trying to look, we can look to see what Banagricola reports locally, does that -- would that be the right number to use, what they report to the local authorities, to understand the profitability of that operation?

That is fair, the local figures --.

Would there be any distortion from those figures? I don't know if they run, if they have operations that are not consolidated in the local figures.

They have some figures which aren't out. Just to describe it to you, in El Salvador we have a pension fund and an insurance company. Both of them have been reasonably profitable during this year.

But the Bank reports its figures independently, and that is the figures that you should look to look at the profitability of our banking activity in El Salvador which has been, as I mentioned, good, we are satisfied. We have been able to preserve the profitability of that operation in a very challenging environment.

And there is some activities of the Bank which are booked in Panama and so on and so forth, but that is not representative of what you want to see, that is the profitability of the Salvadorian banking operation. That could be very clearly seen from the individual figures of Banagricola.

I only have -- for instance I have just in my model, I'm just looking here at $28 million for the first six months of the year but I don't have the numbers through September. Will those be released shortly?

We could give it to you directly, I will ask Juan Esteban to give you the detailed figures of El Salvador. We have already them available.

Okay, thank you very much.

Thank you, Jason.

And there are no more questions at this time.

Okay. Thanks again for attending this conference call. Thank you for being with us in the analysis of this term which was one of good results and in which we maintained the very strong balance sheet of the Bank without affecting the profitability of the institution. Thank you very much and good bye.

This concludes today's conference call. You may now disconnect.