Grupo Cibest (NYSE:CIB) executives highlighted the accounting impact of an agreement to sell Banistmo, progress from the group’s new holding-company structure, and updated expectations for Colombia’s macro environment during the company’s fourth-quarter 2025 earnings call.
Macro backdrop: resilient 2025, tougher setup for 2026
Chief Executive Officer Juan Carlos Mora said Colombia posted steady economic growth in 2025 despite fiscal challenges and volatile markets tied to trade, tariffs, and geopolitical issues. However, he warned that rising public debt and uncertainty around minimum wage changes, potential new taxes, and possible mandatory investments for financial institutions have worsened the outlook for 2026, contributing to inflationary pressures, higher interest rates, and expectations for weaker performance.
Inflation ended 2025 at 5.1%, missing the central bank’s 3% target for a fifth consecutive year, according to Clavijo. She said inflation expectations rose late in the year and increased further after the announcement of a 23.7% minimum wage increase for 2026. In January, Banco de la República raised its policy rate by 100 basis points, and Clavijo said her updated view calls for year-end inflation of 6.4% and at least 200 basis points of additional policy-rate increases, which could weigh on growth.
Clavijo added that Central America posted “moderate but solid” performance, citing World Bank estimates of approximately 3.8% GDP growth in Guatemala and 4.1% in Panama in 2025, while El Salvador grew around 2.8%.
Banistmo sale: impairment and reclassifications drove reported results
Chief Strategy and Financial Officer Mauricio Botero Wolff said the agreement to sell 100% of Banistmo to Inversiones Cuscatlán Centroamérica S.A. is an all-cash transaction valued at $1.4 billion, which he said implies 17.1x earnings and 1.2x book value. The deal triggered a one-time, non-cash goodwill impairment charge of COP 3.4 trillion and required Banistmo to be treated as “assets held for sale,” leading to balance sheet reclassifications and the deduction of Banistmo’s contribution from the profit-and-loss statement, with impacts reflected in discontinued operations.
Botero emphasized that the accounting impact did not affect capital ratios or dividend flows to and from the group.
For 2025, the group reported net income of COP 3.8 trillion and return on equity (ROE) of 9.1%, reflecting the impairment. Excluding the one-off accounting effect, management said net income would have been COP 7.3 trillion and ROE 17.2%, which Mora said exceeded guidance and was driven by strong operations, resilient margins, and improved asset quality.
Balance sheet trends: loans, deposits, and funding mix
Botero said the loan portfolio declined 8.3% year over year due mainly to the accounting effects; absent those impacts, management said loan growth would have been 2.1%. He added that a 15% appreciation of the Colombian peso reduced the value of foreign-currency portfolios when translated into pesos, and that excluding both the accounting and FX effects, the loan book would have grown 7.2%.
By segment, mortgages led growth, while consumer lending regained momentum after two years of contraction due to renewed risk appetite and Nequi’s expansion in low-value loans. Commercial lending grew more moderately, with a slight pickup in the second half of the year in Colombia despite political uncertainty.
By geography, management said Bancolombia and El Salvador led loan growth, and that Banco Agrícola delivered the strongest expansion, with commercial lending accelerating sharply—particularly in construction—supported by renewed demand for housing projects. Meanwhile, BAM in Guatemala and Banistmo in Panama applied tighter credit standards, resulting in more restrained lending dynamics.
Deposits contracted 5.2% year over year, Botero said, but would have expanded 4.5% absent accounting impacts and 10.2% if FX effects are also excluded. He highlighted savings account growth of 16.1% net of accounting and FX effects.
Management also pointed to a funding mix shift toward sight deposits, aided in part by Banistmo’s reclassification and strong savings growth across Colombia, El Salvador, and Guatemala. Savings represented 47% of total deposits at year-end, up from 40% a year earlier, and Botero said the overall cost of liabilities fell to 3.8%, down 114 basis points year over year.
Profitability drivers: NIM, fees, expenses, and digital businesses
Net interest income decreased 5.3% on a reported basis, but grew 1% excluding accounting impacts, supported by a larger contraction in interest expense than interest income, which Botero said was aided by hedging strategies that allowed faster repricing of funding as rates came down. Excluding accounting impacts, net interest margin (NIM) declined to 6.5% from 6.8% due to lower prevailing rates, while Banco Agrícola posted consistent NIM expansion due to growth in high-yielding loans and low-cost deposits.
Net fee income increased 4.3% year over year, or 10.4% excluding accounting impacts, driven by higher transactional activity in cards and a new Bancassurance alliance in Colombia, along with strength in brokerage, payments and collections, and trust services. Fee income represented 18.4% of total net operating income in 2025.
Operating expenses rose 1.6% year over year, or 8.3% excluding accounting impacts, with higher licensing and technology costs tied to transformation efforts and higher taxes following the incorporation of Grupo Cibest. Personal expenses increased 2.3% year over year, or 10% excluding accounting impacts, due to wage adjustments and higher bonus provisions. The cost-to-income ratio was 49.8%, in line with updated guidance.
Management also highlighted progress in digital businesses. Mora said both Nequi and Wompi reached breakeven in the fourth quarter, and Botero said Wompi reached breakeven in 2025 as revenue growth outpaced operating expenses. He added that Wenia continued to advance with growth in onboarded clients, assets under custody, and transactions.
For Nequi, management reported:
- Loan portfolio up 174% to COP 1.6 trillion, with 700,000 clients holding active loans.
- Average loan ticket of COP 2.3 million and average term of 32 months.
- 90-day past due loans at 3.5% and cost of risk at 13.1% for 2025.
- Deposits up 58% to COP 7 trillion in Q4 2025.
- 27.4 million users with an activity ratio close to 80%, and monetized users up 43% to 16.5 million.
- Fee income up 53% year over year to COP 175 billion in Q4 2025.
Mora also said the group is in the process of separating Nequi and expects the process to conclude in the third quarter of the year, or by the fourth quarter at the latest, at which point Nequi would be presented as a separate entity within Grupo Cibest.
Capital allocation, dividends, buybacks, and 2026 guidance
Mora said the new holding structure improved capital allocation, enabling higher dividends, buybacks, and more flexibility, referencing Banistmo’s divestment as an example. The company proposed a dividend of COP 4.3 trillion, equal to COP 4,512 per share, to be paid in four installments starting April 1. Management said annual dividend growth was 14.6% despite the one-off effects from the Banistmo divestment.
On the share buyback program, Mora said that as of Dec. 31, about 32% of the total authorized amount had been executed, representing about 8.6 million shares, or nearly 1% of total shares outstanding. Of the repurchased shares, 53% were preferred, 40% were ADRs, and 7% were common shares. Mora said the program remains active and aligned with market conditions and liquidity by share class. In the Q&A, Botero said the company plans to present a three-year buyback program, executing based on market conditions.
Botero reported Bancolombia standalone CET1 of 12.2% and total solvency of 14.4%, with Banco Agrícola and BAM above 13.5%. He also cited low double leverage of 101% at Grupo Cibest and said discussions with rating agencies imply a 120% limit. In response to an analyst question, Botero said the group plans to invest around COP 600 billion in Nequi and COP 50 billion each in Wenia and Wompi. He also said the group plans to issue at least COP 2 trillion of AT1 instruments from Bancolombia to the holding and around $250 million from Central American operations to the holding.
For 2026, management updated guidance to reflect the macro shift toward higher inflation and interest rates, Banistmo deconsolidation, and tax uncertainty. Mora said the group expects loan growth of 7% to 8%, NIM of 6.8% to 7%, cost of risk of 1.6% to 1.8%, operational efficiency around 49%, and ROE of 18% to 18.5%.
Tax policy uncertainty was a recurring theme in the Q&A. Mora said it is difficult to forecast taxes, citing a decree tied to additional income tax for financial institutions that was suspended by the Constitutional Court pending a final decision, and separate, informal indications of a potential equity tax that had not yet been formalized. Botero said the guidance includes extra tax provisions based on information available at the time, while a new equity-related decree had not been incorporated. He added it was “very unlikely that both decrees are accepted.”
On asset quality, Mora said cost of risk will need close management in 2026 due to macro challenges, but he said the guidance range incorporates those risks. Botero added the company has already tightened certain consumer origination risk brackets and said the group built additional provisions at the end of 2025 considering the minimum wage increase.
In closing remarks, Mora described 2025 as a “pivotal year,” citing corporate transformation, the share repurchase program, and the Banistmo divestment agreement as key milestones. He said the high-rate environment could support marginal improvement that may help offset weaker loan demand and emerging credit risks, and expressed confidence the electoral process will proceed smoothly.
About Grupo Cibest (NYSE:CIB)
Bancolombia SA (NYSE: CIB) is a leading financial institution in Colombia, offering a comprehensive suite of banking and financial services. As one of the largest universal banks in the country, the company provides retail and commercial banking, corporate and investment banking, treasury services, and wealth management solutions. Through its extensive branch network and digital platforms, Bancolombia serves individual clients, small and medium enterprises, and large corporations, focusing on convenience, innovation and customer experience.
In addition to traditional banking, Bancolombia’s product portfolio includes insurance, pension fund management, leasing, factoring, brokerage and asset management.
