Bancolombia S.A. (ADR) (NYSE:CIB)

NetscribeBanking (92.58) Submitted: 3/26/2007 5:21:25 AM : Start Price: $23.94 CIB Score: +154.41

Bancolombia S.A. (BSA) is Colombia’s largest commercial bank. It carries out Retail, Small, Medium-Sized Enterprises Banking; Corporate Banking; and Mortgage & Building Banking operations. BSA.'s customers have access to a network of branches and automated teller machines in Colombia with around 680 branch offices operating in 146 cities.
As on January 2007, BSA’s market share was 17.8% of total deposits, 19.9% of total net loans, 18.5% of total savings accounts, 20.9% of total checking accounts and 13.2% of total time deposits. In mid May it will purchase El Salvador's largest financial conglomerate Banagricola, with the aim of increasing its market share and operating efficiency. It will finance this purchase by issuing a US$ 300mn subordinated bond and US$ 300mn in preferred shares.
Colombia's merger & acquisition activity is at an all-time high, both from foreign investors seeking investment options in Colombia as well as local businessmen searching for opportunities abroad. Thus its investment banking arm is expected to lead 25 to 30 transactions with 80% growth in commission revenues. In order to reap benefits out of upswing in infrastructure sector, investment banking arm of bank has recently created a specialized unit for infrastructure sector.
In fourth quarter 2006, company recorded strong net margin of 7.29% and capital adequacy ratio is at comfortable position. Non performing assets further reduced to 1.36%. Its debt-equity ratio is reduced to 0.36:1. With strong financial position and growth opportunities this stock is expected to perform well.