Banco Davivienda (PFDAVVNDA) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 results aligned with guidance, supported by lower funding and provision costs, ongoing cost control, and digitalization and sustainable finance strategies, positioning for long-term value creation.

• Gross loans reached COP 140.8T, up 0.8% quarter-over-quarter and year-over-year, with commercial and mortgage segments driving growth while consumer loans declined.

• Net profit for 3Q24 was COP 109B consolidated and COP 175B individually, reflecting improved financial expenses and non-recurring income from Central America operations transfer.

• Digital transformation advanced, with DaviPlata users at 18.3M and 71.8% of monetary transactions via digital channels.

• Macroeconomic environment in Colombia showed cautious optimism with GDP growth revised upward and inflation declining.

Financial highlights

• Consolidated gross loans reached COP 140.8T, up 0.8% quarter-over-quarter, mainly from commercial and mortgage portfolios.

• Quarterly profit reached COP 109B, with ROAE at 2.81%, a significant improvement from the previous quarter.

• CET1 ratio closed at 10.37%, above regulatory minimums; total capital adequacy at 14.74%.

• NIM was 5.64% for 3Q24, up 9 bps quarter-over-quarter; cost of risk decreased to 3% for the quarter.

• Operating expenses growth slowed, reflecting efficiency strategy amid high inflation.

Outlook and guidance

• Gross loan growth for 2024 expected at 5%-7%; consumer portfolio revised to -8% to -6%, commercial to 11%-13%, mortgages to 8%-10%.

• NIM expected to close 2024 between 5.7%-6%; cost of risk at 3.5%-3.8%; PDL guidance at 4%-4.5%.

• ROAE forecasted at 0%-2% for year-end; CET1 to close between 10.3%-10.8%.

• Mid to high single-digit ROAE expected for 2025, with normalization to 10%-15% by 2026.

• Non-financial income and operating expenses projected to grow 8–10% and 3–6% year-over-year, respectively.