In Colombia, the financial conglomerates are formed by other financial entities that have partnered with insurance and investment companies. The group of these entities, both national and international, manages 65.81% of the country’s private bank loans.

Over the past year, there were increases in the different types of loans. The consumer portfolio grew by more than 8.2%, housing by 7.7% and microcredit by 2.8%. However, the commercial portfolio has shown decreases due to the slowdown in the economy. In business terms, the issue of corporate bonds has increased by approximately 1.2% in comparison to 2017, which directly impacts the growth of the corporate portfolio. As for the overdue portfolio, only 4.25% is in default, which means that 95.75% of the loans are up to date. 

The growth of this sector has been mostly driven by the following factors:

  • The creation of government policies has encouraged an increase in housing purchases, which in turn stimulates growth in the application for bank loans.
  • Financing by Colombian banks to support infrastructure works, such as 4G, by up to 50%.
  • The implementation of credit card payment models for small traders and people with fewer resources, stimulating and encouraging consumption.
  • The reduction of the unemployment rate in low social strata has meant that those on salaries are willing to spend more and take out loans.
  • The creation of digital platforms designed to invest in new segments and market trends, such as FinTechs or startups, where more people are expected to have access to- and utilize financial products.

The government projects that by 2020, there will be more dynamism, more infrastructure projects, and programs that encourage loans for the sector to grow as a result of the increases and the improvement in consumer confidence.

Capital Markets

The capital market sector rebounded in 2017 in line with the economic recovery and the consolidation of efforts to deepen the market. The Colombia Stock Exchange (CSE) closed 2017 with revenues of US$ 246,645, showing an increase of 53% in comparison to 2016, mainly due to the integration between the CSE and Deceval. The merger seeks to increase efficiency and encourage further development of the local capital market.

In addition, the Colcap benchmark index closed 2017 with gains of 12.0% after a solid year-end in the energy and financial sector. In particular, the recovery in oil prices boosted the shares of Ecopetrol, the largest publicly traded company.

According to the data of CSE, local pension funds and foreign investors are driving the capital market in Colombia. On the one hand, foreign funds represented a concentration of 28% in the amount of 2017 operations, which means an increase of 5% when compared to 2016. On the other hand, national pension funds positioned itself as the largest net buyers of shares, with 2,3 trillion Colombian pesos.

The equity market faces multiple challenges: it requires more liquidity because it is currently around 4.5% of GDP, raising market capitalization, increasing the number of issuers (there are currently 69 listed companies) and increasing the participation in investments of natural persons.

On the other hand, one of the great challenges of deepening the capital market is to put it at the service of infrastructure financing. Colombia’s capital market contributed only 11% of the total financing of the I-wave of 4G infrastructure projects.


Featured Information

  • Colombia ranks 3rd in Latin American countries with the highest financial inclusion, after Brazil and Chile.
  • The country’s financial inclusion rate is 78.1%, i.e. more than 26 million Colombians have some kind of financial product.
  • Colombia ranks 2nd in countries with the largest leasing portfolio in the Andean region, according to The Alta Group consulting firm.
  • Last year, the financial system recorded 4,926 million transactions, of which 52% are purely monetary and the remaining 48% correspond to internet and mobile telephony.
  • Social stratas 4 and 5 are the largest consumers of loans in the country, according to the Credit Grant Index of Datacredito.
  • Annually, the number of companies that have some kind of financial product increases by approximately 3%.

Source: Colombia Stock Exchange (CSE), National Financial Institutions Association (ANIF), BMI Research

Experiencia
Advisory to GOLDMAN, SACHS & CO., JP MORGAN SECURITIES PLC AND BANCO BILBAO ARGENTARIA, S.A, as underwriters, in the different bond offerings of the Republic of Colombia in the US

In addition, in the international markets registered with the US Securities Exchange Commission – SEC.

Advisory to GOLDMAN, SACHS & CO., JP MORGAN SECURITIES PLC AND BANCO BILBAO ARGENTARIA, S.A, as underwriters, in the different bond offerings of the Republic of Colombia in the US

In addition, in the international markets registered with the US Securities Exchange Commission – SEC.

Advisory to BLACKROCK INC. in the structuring, incorporation and fundraising of a local debt fund to invest in infrastructure projects located in Colombia.
Advisory to BLACKROCK INC. in the structuring, incorporation and fundraising of a local debt fund to invest in infrastructure projects located in Colombia.
Advisory to BANCOLOMBIA S.A., in the issuance of US$ 750 million of subordinated bonds with a return of 4.875% Tier II due in 2027.

The purchase of (i) US$ 360,912,000 of subordinated bonds with a return of 6.125% due in 2020, and (ii) US$ 321,152,000 of subordinated bonds with a return of 6.125% due in 2022.

Advisory to BANCOLOMBIA S.A., in the issuance of US$ 750 million of subordinated bonds with a return of 4.875% Tier II due in 2027.

The purchase of (i) US$ 360,912,000 of subordinated bonds with a return of 6.125% due in 2020, and (ii) US$ 321,152,000 of subordinated bonds with a return of 6.125% due in 2022.

Provided legal assistance to ITAÚ UNIBANCO and ITAÚ BBA COLOMBIA S.A. in the structuring of a USD370,000,000 project financing to Sociedad Portuaria Puerto Bahía S.A.

The purpose was the construction, start-up, operation and maintenance of a multipurpose port located in the Bay of Cartagena, Colombia. The project sponsor is Pacific Infrastructure Ventures, Inc., a Pacific Rubiales Energy indirect subsidiary. 

Provided legal assistance to ITAÚ UNIBANCO and ITAÚ BBA COLOMBIA S.A. in the structuring of a USD370,000,000 project financing to Sociedad Portuaria Puerto Bahía S.A.

The purpose was the construction, start-up, operation and maintenance of a multipurpose port located in the Bay of Cartagena, Colombia. The project sponsor is Pacific Infrastructure Ventures, Inc., a Pacific Rubiales Energy indirect subsidiary. 

Advisory to INTER-AMERICAN DEVELOPMENT BANK (IDB) in the development of a technical analysis required to study the prefeasibility of the Pacific Alliance Infrastructure Fund ("PAIF").

In order to establish an investment fund to finance private infrastructure projects, particularly considering the context and needs of Colombia and the regional nature of the Fund.

Advisory to INTER-AMERICAN DEVELOPMENT BANK (IDB) in the development of a technical analysis required to study the prefeasibility of the Pacific Alliance Infrastructure Fund ("PAIF").

In order to establish an investment fund to finance private infrastructure projects, particularly considering the context and needs of Colombia and the regional nature of the Fund.

Advisory to BANCOLOMBIA S.A., BANCO GENERAL S.A., BANCO DE BOGOTÁ S.A., BANCO DAVIVIENDA S.A. AND BANCO BILBAO VIZCAYA ARGENTARIA COLOMBIA S.A, as creditors, in the negotiation of a credit agreement granted to Ajover and Nouvelle Colombia E.U.

The credit granted was with a tranche in USD and a tranche in pesos to refinance their existing financial obligations.

Advisory to BANCOLOMBIA S.A., BANCO GENERAL S.A., BANCO DE BOGOTÁ S.A., BANCO DAVIVIENDA S.A. AND BANCO BILBAO VIZCAYA ARGENTARIA COLOMBIA S.A, as creditors, in the negotiation of a credit agreement granted to Ajover and Nouvelle Colombia E.U.

The credit granted was with a tranche in USD and a tranche in pesos to refinance their existing financial obligations.

Advisory to EVOLVERE CAPITAL S.A.S., acting as borrower and buyer, in a credit facility for an amount of COP$ 86,500,000,000.

The credit was granted by Banco Davivienda S.A. and Banco Colpatria Multibanca Colpatria S.A. to Evolvere Capital S.A.S. for the acquisition of 28 companies.

Advisory to EVOLVERE CAPITAL S.A.S., acting as borrower and buyer, in a credit facility for an amount of COP$ 86,500,000,000.

The credit was granted by Banco Davivienda S.A. and Banco Colpatria Multibanca Colpatria S.A. to Evolvere Capital S.A.S. for the acquisition of 28 companies.

Assistance to BANCO DE BOGOTÁ S.A. in the financing to acquire 5% of the shares of Oleoducto Central de Colombia S.A. from Inversiones Sol del Sur S.A.S. The total value of the acquisition was US$ 250,000,000.
Assistance to BANCO DE BOGOTÁ S.A. in the financing to acquire 5% of the shares of Oleoducto Central de Colombia S.A. from Inversiones Sol del Sur S.A.S. The total value of the acquisition was US$ 250,000,000.