BanColombia Q3 2026 Earnings Call Transcript

BanColombia (NYSE:CIB) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

BanColombia reported strong financial results with net income reaching 2 trillion pesos for the third quarter and a year-to-date increase of 10.5%.

The company announced the separation of Nequi, a leading neobank, as an independent entity to accelerate its growth in Central America.

BanColombia’s loan growth guidance for 2026 has been revised upwards to 8-9% and is projected at 9-10% for 2027, with commercial loans being the primary driver.

Nequi’s user base and deposit growth have been significant, with over 29 million users and plans to expand services to increase average deposit balances.

Cost of risk is anticipated to rise due to loan growth and effects of El Niño and recent earthquake, while NIM is projected to be stable between 7.5% to 7.7%.

BanColombia maintains a strong focus on capital efficiency, operational discipline, and strategic growth in Colombia and Central America.

The company’s long-term ROE target is 20%, supported by strategic initiatives and macroeconomic conditions.

Management remains optimistic about the group’s ability to navigate fiscal adjustments and inflationary pressures in Colombia and other markets.

Full Transcript

Carrie (Operator)

Good morning, ladies and gentlemen, and welcome to the BanColombia third quarter 2026 earnings conference call. My name is Carrie, and I will be your operator for today’s call. At this time all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. During the question-and-answer session, if you have a question, please press star then one on your touchtone phone. Please note that this conference is being recorded.

Please note that this conference call will include forward-looking statements, including statements related to our future performance, capital position, credit-related expenses and credit losses. All forward-looking statements, whether made in this conference call, in future filings, in press releases or verbally, address matters that involve risks and uncertainty. Consequently, there are factors that could cause actual results to differ materially from those indicated in such statements, including changes in general economic and business conditions, changes in currency exchange rates and interest rates, introductions of competing products by other companies, lack of acceptance of new products or services by our targeted clients, changes in business strategy and various other factors that we describe in our reports filed with the SEC.

With us today is Mr. Juan Carlos Mora, Chief Executive Officer, Mr. Mauricio Botero Wolf, Chief Strategy and Financial Officer, and Ms. Laura Clavijo, Chief Economist. I will now turn the call over to Mr. Juan Carlos Mora, Chief Executive Officer. Mr. Juan Carlos, you may begin.

Juan Carlos Mora (Chief Executive Officer)

Good morning and thank you for joining BanColombia’s third quarter conference call. Please turn to Slide 2. In the third quarter, Colombia faced a difficult political, social and economic environment. A tense government transition was followed by a major earthquake in the Southwest. This increased fiscal concern and raised questions about how quickly and on what scale reconstruction can restore infrastructure, economic activity and community well-being.

Overall, we now expect the economy to have grown 2.1% in the third quarter, below earlier forecasts. Laura Clavijo will elaborate on this shortly. Even so, we delivered strong results. Credit origination rebounded sharply, led by commercial loans, as confidence grew in the rule of law and security and as expectations rose for a credible path to fiscal adjustment. Net income reached 2 trillion pesos in the quarter; year to date it is up 10.5%, more than offsetting Banistmo’s contribution last year. NIM in the quarter at 7.4%. Investment income stabilized; time deposits resumed growth and lower spreads.

Commercial loans led the expansion of the loan book. Cost of risk rose 1.8% on higher consumer provisions. This was as expected and within our guided range. Strict expense discipline also underpinned solid operating performance. As a result, ROE for the core stood at 21.7%. On September 1st, we reached another corporate milestone: the separation of Nequi from BanColombia. Nequi is Colombia’s leading neobank with a growing presence in Central America. It is now an independent commercial financing company wholly owned by BanColombia. This spin-off is designed to accelerate its development as a leading regional neobank. In July we also completed an intragroup additional Tier 1 capital instrument transaction to further optimize BanColombia’s capital structure.

I will now turn the call over to our Chief Economist, Laura Clavijo, for an overview of the macroeconomic landscape. Laura.

Laura Clavijo (Chief Economist)

Thank you, Juan Carlos. If you could please proceed to Slide 4. Turning to Colombia, the economy enters 2027 with a mixed but gradually improving outlook. Our central view is that the year will be characterized by two competing forces: an improving investment cycle and post-earthquake reconstruction on the one hand, and the necessary adjustment in fiscal and monetary conditions on the other. We expect GDP growth to moderate from 2.6% in 2026 to 2.4% in 2027.

Household consumption should remain an important source of growth but lose momentum as high interest rates, persistent inflation and softer labor market conditions constrain disposable income. At the same time, fiscal consolidation will reduce the contribution from government spending. Encouragingly, the composition of growth should become more investment oriented. Fixed investment is projected to rise above 17% of GDP, supported by construction, mining and energy projects, as well as reconstruction following the August earthquake.

Inflation remains one of the key challenges. Following a projected 6.7% year-end reading in 2026, headline inflation could peak at 7.3% during the first half of 2027, largely reflecting the impact of El Niño on food and regulated prices together with indexation and the minimum wage adjustment. We expect these supply-side pressures to fade during the second half, bringing inflation down to 5.5% by December—nevertheless still well above the central bank’s target range.

This inflation backdrop will keep monetary conditions tight. We suspect the policy rate could rise further to 12.5% and remain at this level well into 2027, with the central bank waiting for clear evidence of disinflation before restarting the easing cycle. We therefore anticipate only modest cuts in the fourth quarter. While fiscal risks and elevated global rates further constrain the scope for monetary easing, the fiscal position remains the main macroeconomic vulnerability.

An ambitious economic rescue bill worth 2.4% of GDP, containing a significant budget cut and additional taxes, is being discussed in Congress before year-end. These signals of fiscal responsibility must be weighed against significant expenditure rigidity and historically high financing requirements. Our baseline scenario speaks of a central government deficit of 7.9% of GDP in 2027 compared with 7.2% in 2026, and assumes a fiscal adjustment of at least 1.5% of GDP to maintain investor confidence and set the path towards fiscal sustainability.

Finally, external accounts remain manageable, although the current account deficit is expected to widen from 2.5% of GDP in 2026 to 3.2% in 2027. Importantly, remittances of around 3.4% of GDP should remain an important buffer, keeping the external deficit below its historical average of approximately 4%. Overall, 2027 should be viewed less as a year of acceleration and more as a year of transition. Growth remains resilient and its composition improves, but Colombia will need to navigate sticky inflation, restrictive financial conditions and, above all, a demanding fiscal adjustment before a more balanced and sustainable expansion can take hold.

If you could please proceed to Slide 5. Turning to Central America, the outlook for El Salvador and Guatemala remains constructive, although inflationary pressures warrant attention. In El Salvador, growth accelerated to 5.1% year over year in the second quarter of 2026, increasingly supported by investment and double-digit construction growth, while resilient consumption, tourism revenues and renewed progress under the IMF program provide additional buffers despite slower remittances and higher import costs.

In Guatemala, growth remained robust at 4.3% and supported by domestic demand, remittances, manufacturing and exports. However, inflation has risen to 4.7%, while the medium-term outlook increasingly hinges on translating fiscal expansion and the strengthened public-private partnership framework into infrastructure investment alongside institutional improvements that could support the country’s path toward investment grade. Now please let me turn the presentation to Mauricio, who will present Nequi as an independent entity, followed by BanColombia’s quarterly performance.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Mauricio. Please turn to slide 26. Turning now to our guidance for 2026, we are revising our loan growth outlook upward from a range of 7 to 8% to a range of 8 to 9%. This reflects stronger demand for commercial loans in Colombia. All other guidance items remain unchanged. For 2027, we project slightly higher loan growth of 9 to 10%, again led by commercial loans in Colombia, provided the fiscal deficit narrows in an orderly and gradual way.

We also expect NIM of 7.5 to 7.7% and a cost of risk of 1.9% to 2.1%, reflecting stronger origination and interest rates that are likely to remain high. Finally, we expect an efficiency ratio of 46% to 47%. We remain committed to cost discipline while continuing to invest in our business transformation. Please turn to slide 27. To conclude, if macroeconomic conditions improve and investment confidence rebounds strongly, as we anticipate, BanColombia is uniquely well placed to seize the growth opportunities ahead, and even in a more adverse scenario, our proven NIM management, sound credit underwriting, cost discipline and efficient capital allocation allow us to deliver sustainable ROE throughout the economic cycle. With this, we conclude our prepared remarks. We will now be pleased to take your questions.

Carrie (Operator)

Thank you. We will now begin the question and answer session. If you have a question, please press Star then one on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you’re using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press Star then one on your touch tone phone. And our first question will come from Ernesto Gabalondo with Bank of America.

Ernesto Gabalondo (Analyst at Bank of America)

Thank you. Hi, good morning, Juan Carlos, Mauricio and Catalina, and thanks for the opportunity to ask questions. My first question will be on your earnings growth expectation for next year. So you have mentioned ROE could be maintained between 21 to 22% next year. But just wondering how should we expect in terms of earnings growth? And for my second question is on Nequi. If I am not mistaken, Nequi represents around 2% of BanColombia’s consolidated net income.

So how do you see Nequi’s contribution to BanColombia earnings in the future? And wondering if you have any plans to IPO this business in the future or if we should just consider it as another subsidiary within BanColombia. Thank you.

Juan Carlos Mora (Chief Executive Officer)

Thank you. Ernesto, let me take your question regarding Nequi and I’m going to ask Mauricio to take your question about earnings. As you mentioned, Nequi today represents around 2% of BanColombia net income. It’s still small. Nequi will grow in the future and we are very optimistic. But the size of BanColombia is going to continue to be very important in BanColombia. So Nequi will gain some importance in the future, probably in 2030 will be something around 8 to 10% if the growth is strong, particularly on loans and depending on the credit cycle.

But Nequi is an alternative and it’s a diversification of BanColombia. But BanColombia will continue to be the most important entity for BanColombia. But Nequi will add diversification, as I mentioned, and alternatives to have presence in the Colombian market, and also it’s going to be an avenue of growth in other markets, particularly in Central America. Regarding your question of IPO, now Nequi is a separate entity, fully owned by BanColombia. That gives us the opportunity to assess different strategic alternatives. We are not thinking about an IPO in the short term, but with this corporate structure we have open alternatives, as I mentioned, to develop Nequi and to find the best way to give Nequi those avenues of growth. So we will continue developing the business in Colombia and in the other markets that we are, and then in parallel we will be assessing any additional strategic alternatives.

But that is not going to happen in the short term, Ernesto. Now regarding earnings, Mauricio.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi, Ernesto. When we think about the end of this year, net income should be around 8.5 trillion Colombian pesos, and that should be in the upper part of our ROE guidance. And when we think about 2027, the growth should be between 8 and 10% of that net income. So if you think about either 9.2, 9.3 trillion Colombian pesos, that should give you the 21.5, 22% ROE guidance that we’re thinking for next year.

Ernesto Gabalondo (Analyst at Bank of America)

Super helpful. Thank you very much, Juan Carlos and Mauricio.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Ernesto.

Carrie (Operator)

And our next question will come from Tito Labarda with Goldman Sachs.

Tito Labarda (Analyst at Goldman Sachs)

Hi, good morning, Juan Carlos, Mauricio and everyone. Thank you for the call, taking my question. Two questions also, I guess first on the loan growth, as you mentioned, commercial lending seems to be accelerating, I guess on the back of the elections. Just to think about the sustainability of the loan growth, particularly given, as you mentioned, you need the fiscal adjustment to happen. I think, Juan Carlos, you mentioned as long as that kind of happens gradually.

So how do you think about that fiscal adjustment? How do you think, what are the upside downside risks to loan growth depending on how that evolves? Also, I guess on the consumer lending, which has lagged a little bit, do you think that can accelerate? Is that maybe more second half of 27 as there’s more visibility on the fiscal adjustments? So just to think about the sustainability of the loan growth given some of the macro risks that are still there for Colombia.

And then second question, just on the sustainability of the ROE more longer term. I know you gave the guidance of 21 to 22 for 2027, but you still have a high rate environment as eventually rates come down, which could put some pressure on your NIM. How should we think about what the sustainable ROE should be longer term? Thank you.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Tito. Loan growth and what we are seeing is that the demand for commercial loans is strong. This third quarter showed that the demand was there, and there are companies thinking about new projects projecting 2027 with more economic activity. So there is demand. And we are seeing that also in the fourth quarter. So even though the rates are high, what companies are thinking is that there is an opportunity, particularly in Colombia. Also, they are seeing some opportunities in Venezuela.

So they are preparing for that and they are investing and expecting also that the rates will go down by the end of next year. In terms of consumer lending, I am a little less optimistic. I think there is going to be demand, but there is not going to be strong growth in consumer loans. In the past, consumer loans were growing very, very aggressively or very strong, and I think the growth is going to moderate in the future due to the level of the rates and also the fiscal situation.

And opening the conversation to what we think is going to be the fiscal situation, I’m going to ask Laura to give you some comments about how we see the development of the fiscal situation of Colombia.

Laura Clavijo (Chief Economist)

Thank you, Juan Carlos. Yeah, indeed, the fiscal sustainability and adjustment is the talk of the town, whether it should be accompanied by the IMF, apparently a disbursement of around 15,000 million dollars as well as the fiscal adjustment. The fiscal adjustment as presented in the whole economic rescue bill is worth 2.4% of GDP. It’s an ambitious number. But our kind of base case scenario, more leaned, biased towards fiscal adjustment by budget expenditure cuts, should give us a base scenario of around 30 billion COP reduction, which would be an adjustment of around 1.4% of GDP.

We believe that this base case scenario accompanied by multilateral support, even though it’s not sufficient to really bring down the levels of debt moving forward and they will have to move with some fiscal adjustment later on, it should be sufficient to maintain investor confidence and reduce expenditure in line with a 7.9% GDP fiscal deficit for 2027. So these are big numbers in terms of the fiscal adjustment, but I would comment that there seems to be a consistent message in terms of the importance and the necessity to do this important budget cut really soon.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi, Tito. And regarding your question about the ROE in the long term, as you know, we have this tailwind that is going to help us in 2027. So that’s why we believe the 21 to 22% ROE is feasible. But going forward, when interest rates start coming down and we reach more stable inflation and interest rate levels along with GDP growth, ROE should be around 20%. Everything that we’re doing in terms of operations, in terms of capital structure, is targeting the long-term ROE of 20%.

Tito Labarda (Analyst at Goldman Sachs)

Okay, very clear. Thanks Juan Carlos and everyone, thank you.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Tito.

Carrie (Operator)

We’ll go next to Yuri Fernandez with JP Morgan.

Yuri Fernandez (Analyst at JP Morgan)

Hey guys, good morning. Hi, Juan Carlos, Mauricio, Catalina, everyone. Congrats on loan growth revenues. I have a question regarding your guidance for 2027 on cost of risk and risk-adjusted margins. Right. You are calling for NIMs to expand a little bit, but cost of risk increase is higher than NIM increase. Right. And when I go to the macroeconomic assumptions, most of them are okay, like inflation coming down, rates coming down. So I’d like to understand why the guidance is implying risk-adjusted NIMs coming down, if that’s really the rationale.

Maybe you’re being a little bit more conservative on asset quality, maybe. This was an era with very few corporate cases. So just trying to understand why the guidance is implying a cost of risk increase and thus a risk-adjusted NIM decrease. Thank you.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi, Yuri. Yes, we are expecting NIM to increase 10 bps approximately, and that’s basically because of the effect of interest rates and sensitivity with NIMs. Just to give you an idea, when we started 2026, interest rates from the central bank were at a lower level. So what we have seen throughout the year is an increase in interest rates, which helps us in the average. But the average of the year will be lower this year to that one of 2027 because we’re going to start 2027 at a higher rate, and we expect that rate to be stable until the fourth quarter of the year.

So that explains the expected increase in net interest margin. Now, in terms of cost of risk, the explanation there is we are expecting growth. We are hoping to take advantage of the demand for lending that we’re seeing in the commercial segment, in the corporate segment, and that’s a segment with lower margins that not only has lower yields, but also pushes us in terms of funding to get funding from institutional investors. So that’s positive growth, but puts some pressure in margins. But the growth itself demands provision.

So most of the increase in cost of risk that we’re expecting for 2027 comes from growth both in commercial loans and in consumer loans, in which we tend to go to some risk brackets in which we’re not participating. Also, we have to take into account that we have this earthquake just recently, and we have to wait and see the effects of that in the coming couple of years.

Juan Carlos Mora (Chief Executive Officer)

And, Yuri, let me add that at the beginning of next year, we also will have the effects of El Niño. We foresee that it’s going to be strong and is going to affect particularly some sectors, agriculture mainly, but also in Colombia the effect of El Niño could have some collateral effects on energy supply. So because of that, we are conservative on the cost of risk for 2027, Yuri.

Julie

Super clear. So El Niño, a little bit of the growth. I think that explained a lot on the earthquake, like behind the cost of risk. And if I may, just a quick one on Nequi, you’re calling for some deposit acceleration. I think the guidance for Nequi is deposits growing between 23 and 25 year over year. So accelerating a little bit the growth of deposits, but the number of users, they are slightly less, right? You’re growing your users, calling for 5%.

You are very penetrated. You already have a lot of clients. So basically what this implies is average balance of deposits growing, right, on a year over year. Like less users, more deposits, more balance. What is the strategy here for you to grow the average deposit of the Nequi users? Thank you.

Juan Carlos Mora (Chief Executive Officer)

Julie. Nequi is going to reach 30 million clients soon. Of those, around 24 million are active. They use Nequi on a regular basis. If we take into account that there are 44.0 million adults in Colombia, that’s a high percentage of the population are Nequi users. So we are not going to continue the pace of growth because we are reaching a level in which there is not much room to grow. But we will continue to add products and services to the platform, to Nequi, that will.

What we are seeing is that Nequi will become the main source of financial services for many people and that will increase the average of deposits that they maintain in Nequi. So Nequi will continue adding services, investment also and other types of loans. And that will create that virtuous circle of being Nequi more the, as I mentioned, the main source of financial services and principal relationship is going to be there on Nequi.

Julie

Thank you. Thank you very much, Juan Carlos and Mauricio.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Juli.

Carrie (Operator)

We’ll hear next from Carlos Gomez with HSBC.

Carlos Gomez (Analyst at HSBC)

Thank you for taking my questions and congratulations on the results. First, on your long-term guidance, the ROE of 20% which you are working. Can you tell us, and that’s a very reasonable goal, right, can you tell us what inflation rate and what tax rate you assume when you’re working on your long term planning for that type of return? And second, geographically, do you think the bank needs any changes in the long run either adding, or I think Dominican Republic or Venezuela, or reducing geographies?

Juan Carlos Mora (Chief Executive Officer)

Thank you. Carlos, let me take your second question first and then I want to ask Mauricio to answer your first one. Our focus right now is our current markets, Colombia, we have BanColombia and Nequi. And as I mentioned in the answer to Julie, we will continue developing Nequi and Nequi will become an alternative for many people to be its principal financial relationship. And Guatemala and El Salvador are our focus. Not just with Nequi, that as you know, we are developing Nequi in those markets, but also the banks that we have there, Banco Agrícola and BAM, particularly in Guatemala.

We are optimistic that we can improve our presence in the market and we can take advantage of an economy that is stable, that offers opportunities. Other than that, we continue looking for how the region is developing. You mentioned Venezuela. Venezuela is a very, very important market. If they evolve positively, and we think they will, the question is when and when is the right time to be. Now the position that we have now is that we are accompanying our customers that are exploring possibilities in Venezuela and that will evolve and we will continue being very, waiting for the right signals in that market.

But at this moment we think the right thing is wait and see how the situation in Venezuela evolves. Other markets we continue exploring and having information of different markets, but that’s not going to be our focus in the short term. As I mentioned, we will continue in the markets that we are and we are not planning to leave any of the markets we are. We will continue developing those markets. We see that there are good opportunities and we have all the tools and the elements to take advantage of those opportunities in those markets.

Carlos, let me pass your first question to Mauricio.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi, Carlos. When we think about long-term guidance and the way we build the structure of services, we’re thinking loan growth could be or should be above nominal GDP. That’s working with NIMs between 6.5 and 6.7 or 8, approximately. That should be achievable with an inflation rate of 4%. You know, the long-term target for the central bank is 3%, but we believe that’s going to take a while to be achievable. So 4% in inflation. Tax rate you should work with 30%, 29 to 30%.

But we will have to wait and see what the fiscal reform ends up having. And to wrap up, cost of risk long term should be around 2%. And that will depend, of course, on the mix of the loan portfolio.

Carlos Gomez (Analyst at HSBC)

Thank you. That’s very detailed. And 29, 30%, that is the effective tax rate for the group or BanColombia.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

For the group.

Carlos Gomez (Analyst at HSBC)

For the group. And I missed loan growth. The line didn’t go through. Can you repeat

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

The lending growth? You mean

Carlos Gomez (Analyst at HSBC)

loan growth?

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Yeah. Loan growth should be above nominal GDP. One or two points above nominal GDP.

Carlos Gomez (Analyst at HSBC)

Thank you so much.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Thank you, Carlos.

Carrie (Operator)

Our next question comes from Daniel Vaz with Safra.

Daniel Vaz (Analyst at Safra)

Hi, Juan Carlos, Mauricio, Catalina, congrats on the results. I want to ask a question on fees. You don’t give guidance for this line, so it’s good to get a sense on the trends. So your net fees are running at about, I think it’s 1.4 trillion pesos per quarter. And at the margin you’re growing, I think 15% year over year, right. So if you look to 2027 and this breakdown, the 15%, I think you’re growing mid single digits on the gross fees and fee expenses, they’re coming down.

So what do you see as sustainable growth for maybe 2027, 2028, since you’re getting good traction on the commercial business? And maybe a second question related to fee income ratio. So you reached 21% this quarter. You get again good traction in commercial business and Nequi and you get some efficiency gains to capture going forward. So what’s the level of fee income ratio that makes sense for us to model for your long term? Thank you.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi, Daniel. In terms of fee guidance, what we have seen in 2026 is a very positive result on fee expenses. We have been able to contain the fee expense growth and that way we have reached the 15% net fee growth. Now for 2027 that is probably not going to be sustainable. So we’re going to see revenue on fees growing more in line with expenses. Both of them should be growing between 10 to 12%. That way the guidance for net fees for next year should be around 12%.

But we will keep on investing on how to transfer the operational processes that demand the fee expenses in order to defend and sustain the margin for fees. Now regarding your second question. The fee income ratio for us is not a goal itself. It’s more a result because it depends a lot on the margins that depend a lot on the interest rates from the central bank. So in a more, like, longer-term picture in which margins come down, fee income ratio should reach figures closer to 25%. But somewhere between 20 and 25% is reasonable to project and it will all depend on margins as I explained before.

Daniel Vaz (Analyst at Safra)

That’s super clear. Thank you for the answer.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Thank you, Daniel.

Carrie (Operator)

Moving on to Andreas Soto with Santander Mexico.

Andreas Soto (Analyst at Santander Mexico)

Hello everybody, thank you for the presentation. I have a couple of questions. The first one on your double leverage ratio. You have mentioned the 98% level this third quarter. What is your expectation by year end and what is your assumption both for the 2027 guidance and for your medium-term guidance in this metric?

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Hi Andres. Yes, our double leverage ratio is around 98%. As you know, after the divestment of it decreased significantly. We do not believe that’s going to be above 105, 110 tops. That’s basically because of the way we plan to manage leverage. We have a lot of room for leverage. As we have mentioned before, the 120% is the ratio that the risk rating agencies expected us to have. But thinking about between 100 and 105 for double leverage in 2027 should work.

Andreas Soto (Analyst at Santander Mexico)

Thank you, Mauricio. How do you guys think about the combination of cash dividends and buyback?

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

So we think about it in a very different way. Both of them are very important tools to manage the leverage structure and the value creation for shareholders. But the buyback program is executed only on market conditions. So it’s a tool, we have it. We look at the market every day. But we are not going to execute unless we believe it’s an attractive price to not only execute but also to signal the market. Whereas ordinary dividend is more a result of the leverage structure we have, leaving the operational banks having the solvency ratios that they need to absorb growth and the excess capital flowing into the holding.

That way being able to distribute between 50 and 60% of our net income. So if you think about ordinary dividends going forward, it should be with a growth of inflation plus 2 or 3 points, growing in real terms. Now extraordinary dividends are only coming with extraordinary milestones as it was the creation of CVS and the divestment of Banistmo.

Andreas Soto (Analyst at Santander Mexico)

That’s very clear. Thank you, Mauricio. And I have a different question and this is regarding your loan growth expectations for 2027. You mentioned this is going to be driven by commercial lending. When you see the competitive environment, how do you see the risk-adjusted returns that this new commercial loan production is going to produce versus the one that you currently have in your book?

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Andres? The competitive environment is tough. There is a lot of competition, but we are very well positioned, not only in terms of capital, that we have plenty to absorb big tickets and be able to work with our corporate clients, but also with funding. As you know, we have a competitive advantage in funding and we are activating that to be able to work with those customers. But also, and most important of all, is our customer-centric strategy in which we are not focused on competing on pricing.

We’re competing more in value proposition. We’re competing more in terms of being the principal relationship of our customers in order to be able to serve them with not only lending needs, but everything related to structuring, advisory and all their financial needs.

Andreas Soto (Analyst at Santander Mexico)

Anderson. Thank you, Mauricio and congratulations to all on the results.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Thank you, Andres.

Carrie (Operator)

Moving on to Santiago Villanueva with Davivienda Corredores.

Santiago Villanueva (Analyst at Davivienda Corredores)

Hi, good morning and thank you for taking my questions. I just have two. The first one is what opportunities do you see for the group in terms of Ruje, the new program through which the government aims to incentivize the private investment. And my second question is that I would like to better understand the differences between the year-to-date net income for Nequi as reported during the call and the year-to-date net income through August as reported to the Superintendencia Financiera, while a loss of 21 billion is reported to the Superintendencia Financiera.

The figure mentioned during the call shows a profit of 111 billion. So how should I read those differences? Thank you.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Santiago. Regarding the incentives that the government is proposing on its fiscal project that they presented to the Congress, I think it’s a good opportunity for Colombia and for investors. I think one of the main challenges that Colombia has today is the lower rate of investment to GDP. Colombia used to have levels around 24%, now it’s 16%. So the proposed measures I think are going to incentivize. Incentivize the investment and the idea, the goal is that that investment return to levels of more than 24% of GDP.

As I mentioned, for us, we will need to wait and see what is the final result and what ends being the decision of Congress regarding those incentives for investment. We think there is going to be an opportunity, but we will, as I mentioned, wait and see.

Laura Clavijo (Chief Economist)

I would just add that our growth forecast, up 2.4% for 2027, does in fact include the positive signals in terms of investment that are already in place and that would be furthermore boosted by programs such as Ruhe. We estimate investment to grow 3.5% in 2026 and 4.7% in 2027. And as Juan Carlos was mentioning, that will gradually bring investment as a percentage of GDP, at least for next year, around 17–18%. Still a long way to go from our golden years in investment, but definitely signals in the right direction.

Mauricio Botero Wolf (Chief Strategy and Financial Officer)

Now, in terms of your question about NICI. So NICI is very particular, and we need to understand the difference between the formal accounting figures and the managerial accounting figures. It was born on September 1st, so in the third quarter it only has a P&L of one month of operation, but it has the balance sheet that was built throughout the history. So the way we presented NICI is assuming it existed from January 1st of 2026. And that way, managerial net income should be between 160 or 180 billion Colombian pesos.

For next year, that should grow and be above 250 billion pesos. But it’s important to expect that 2027 figures should converge, so the managerial accounting and the formal accounting are going to look much more similar as we build the history of NICI going forward.

Santiago Villanueva (Analyst at Davivienda Corredores)

Okay, thank you and congratulations for the quarter.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Santiago.

Carrie (Operator)

We’ll hear next from Alonso Aramburu with BTIG.

Alonso Aramburu (Analyst at BTIG)

Yes, hi, good morning and thank you for the call. There’s been discussions about the potential increase in the interest rate cap, the tasa de usura. I’m just wondering, if this materializes and let’s assume the tasa de usura increases by 4 or 5 percentage points, what kind of impact would that have on your NIM in 2027? Thank you.

Juan Carlos Mora (Chief Executive Officer)

Thank you, Alonso. There have been a lot of discussions, as you mentioned, regarding the cap rate in Colombia. And our view is that in Colombia there is not just one cap rate. Actually there are six, for different types of loans. The most common is the consumer loans cap that applies for credit cards and consumer loans. But there are other cap rates for different types of loans. As a matter of fact, in Nikki, around 60% of our loans have a cap rate that is different than the consumer cap rate.

So there are opportunities today. Our view is that there will be some conversations on how that rate is calculated, but we see it as difficult to have the discussion in Congress and remove completely the cap rate. So that will give additional room for conversations about how that cap rate is calculated. And to your question, for us that’s an opportunity. What happened with the cap rate, at the level that it is today in Colombia—at least the consumer cap rate, which is around 28.4%—is that it generates exclusion of people that, due to their level of risk, that cap rate doesn’t allow formal financial institutions to lend to them. If that ceiling increases, it will probably include more people that, as a matter of fact, are already customers of either BanColombia or Nikki.

So that will allow us to lend them money that today is difficult due to the level of risk and the cap rate. So what we see is we can keep operating in the way we’re operating today with the current cap rates, but if the calculation of the cap rate changes and allows more room, that will also be a big opportunity for us, Alonso.

Alonso Aramburu (Analyst at BTIG)

Okay, but on a net basis, I would assume your margins should be able to increase marginally, in addition to potentially faster loan growth,

Juan Carlos Mora (Chief Executive Officer)

right? Yeah, you are correct.

Alonso Aramburu (Analyst at BTIG)

Okay, thank you.

Carrie (Operator)

Thank you, Alonso. This now concludes our question and answer session. I would like to turn the floor back over to our CEO, Juan Carlos, for closing comments.

Juan Carlos Mora (Chief Executive Officer)

Thank you, everybody, for participating in this third-quarter conference call results. We are positive about how the group of civics results are developing. The third quarter showed that we are in the trend of having the results that we were expecting. And what we have seen so far for the fourth quarter is positive. So we think that we will end 2026 in line with what we are expecting. 2027 will have some challenges, but I think we are well prepared to face those challenges and take advantage of the opportunities that we will have next year.

With this, we conclude this conference call, and we hope you participate in the fourth-quarter conference call results. Thank you very much. Have a good day.

Carrie (Operator)

Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines and have a wonderful day.

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