Banco de Comercio Exterior de Colombia S.A. (BANCOLDEX)
Table 1 Banco de Comercio Exterior de Colombia S.A./Financial Statistics (cont.)
Pretax income % change Net income % change
BANCOLDEX operates on a for-profit basis. Its mandate is to provide financing for exports of Colombian goods and services, as well as to provide both working-capital and fixed-capital financing to local firms. It also promotes modernization of Colombian firms, with a special focus on SMEs. Given the high concentration of business activity in a few locations in Colombia, the promotion of regional development has recently become a growing part of its mandate.
BANCOLDEX works primarily as a "second-floor" bank, lending to other banks, nonbank finance companies, financial cooperatives, and non-government organizations (NGOs) that lend to the borrower. Only about 10% of its portfolio is lent directly to the borrower; the rest passes through another institution for on-lending to the final borrower. The on-lending banks are first in line to absorb any losses on the ultimate loan. BANCOLDEX can take over the intermediate bank's rights as creditor, if needed, for collection or for enforcing its security.
The bank has increasingly focused on providing services to the poorer segments of the nation's society by expanding its network of intermediary lenders, its products, and its regional presence. It has opened new business information centers in several locations to promote the growth of SMEs. It has also expanded its support for microcredit lending, mainly through NGOs, and has begun providing insurance to such borrowers. The focus on lending for microcredit has led the bank to screen NGOs for eligibility and to work to strengthen the organizations too weak to qualify for credit.
In November 2002, the Colombian government decided to terminate IFI's operations, transferring a large share of IFI's assets and liabilities to BANCOLDEX. At the same time, BANCOLDEX's mission was expanded to help finance the country's industrial sector, especially SMEs and microcredits. As part of this strategy, the bank added staff to oversee small-business lending. Although BANCOLDEX assumed many of IFI's assets and liabilities in 2003, it did not assume any of IFI's other obligations, such as pensions, labor, and taxes.
BANCOLDEX's significance as a policy tool of the government is also reflected in the fact that its public-policy activities have, at times, been outside its mission and occasionally, to its own detriment (such as the assumption of a large part of IFI's assets and liabilities in 2003). In addition to taking over the troubled IFI, BANCOLDEX transferred 23% of its capital to the also-troubled state-owned bank Caja Agraria in 1992 through an equity-for-debt swap designed to capitalize the bank; and this transaction reduced BANCOLDEX's high equity base. These swap bonds were subsequently repaid in 1999.
Despite the difficulties seen in 1999 and 2000 and the assignment of the IFI assets and liabilities to the bank, BANCOLDEX continues to be among Colombia's strongest banks in terms of asset quality, capitalization, and profitability. As a second-floor bank, its credit exposure consists primarily of loans to Colombia's highest-quality commercial and investment banks. BANCOLDEX's past-due loans remain well below the average for the nation's overall financial system, and its profitability and capitalization ratios remain robust. BANCOLDEX's return on average assets (ROAA) remained positive throughout the 1999-2000 banking crisis and the post-crisis recovery period. The bank's adjusted total equity-to-assets ratio, after falling significantly in 2003 as a result of the IFI
Standard & Poor’s | RatingsDirect on the Global Credit Portal | January 26, 2010
771152 | 300210593