Bancolumbia SA (CIB) has taken precautionary measures to protect its balance sheet against loan losses by boosting its reserve ratios.

Company Description

Bancolumbia SA offers a range of banking products and services to a range of different sized businesses and individual customers in Columbia and Internationally. The company was founded in 1945 and has a market cap of $30 billion.

Latin American countries continue to benefit from the regions strong presence in commodities and a growing middle class with more spending power. That dynamic helped fuel Bancolumbia’s better than expected second-quarter results, reported on Aug 3.

Second-Quarter Results

Earnings came in strong at 64 cents, 4 cents ahead of the Zacks Consensus Estimate. The bank further insolated itself from loan losses by building its reserves to 5.2% of total loans outstanding while the number of past due loans dropped from 4% to 3.9%.

The company noted that its solid results were driven by an increase in corporate lending, up 17% from last year, and deposits, which were up 24% from last year.

Estimates Climb

Estimates have risen since word of the strong quarter hit the Street, with the current year adding 58 cents and climbing to $2.84 per share. The next-year estimate is pegged at $3.21, a 13% growth projection.


In spite of the big run up in shares over the last few months, this stock still has value, trading at 13X projected current-year earnings, a discount to the overall market.

The Chart

Shares of CIB are up big over the last 6 months after bottoming out just above $18 in early March. Since then, this stock has hit a new 52-week high just above $38. Take a look at the nice move below.

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