The Changing Business Environment for Deposit Insurance in Colombia. DICJ-IADI International Conference February 16 th, 2017

Transcription

1 cv cv The Changing Business Environment for Deposit Insurance in Colombia February 16 th, 2017

2 AGENDA I. Colombia The macroeconomic environment II. Evolution of the Colombian banking system III. How Fogafín reacted to the current environment

3 Colombia, as well as other countries in the Latin America, evidences a economic slowdown given the weakness of its exports and the fluctuation of commodities.

4 Gross Domestic Product (YoY %) Source: Bloomberg.

5 Commodities Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 CRB Index Brent (USD) Source: Bloomberg.

6 Currency Exchange 3,700 3,200 2,700 COP 3,002 2,200 1,700 COP 1,767 1,200 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 USD/COP Source: Bloomberg.

7 Inflation 9% 8% 7% 6% 5.96% 5% 4% 3% 2% 1.94% 1% 0% Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Inflation YoY % Source: Bloomberg.

8 Central Bank Interest Rates 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 3.0% 7.5% Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Interest Rate Source: Bloomberg.

9 AGENDA I. Colombia The macroeconomic environment II. Evolution of the Colombian banking system III. How Fogafín reacted to the current environment

10 The Colombian financial system at a glance Colombia has a large and diversified financial system compared with peer countries, with significant cross-border institutions and large mixed function conglomerates. The four largest banking groups are considered systemic, and account for over 70 percent of banking assets. Of these four groups, the top three are domestic and privately owned (D-SIFIs). These banks are also regionally systemic financial institutions in Central America G-SIFIs have a small presence in Colombia These large groups are part of mixed-function conglomerates, with significant financial interests besides banking.

11 Number of financial institutions 54 Number of Institutions Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 Source: Financial Supervisor CO

12 Assets 55% Annual Growth of Assets 45% 35% 25% 15% 5% -5% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Assets (5.8%)** Loans (8.1%) Investments (-2.4%) Nov-16 Source: Financial Supervisor CO

13 Loans 70% Annual Growth Loans 70% Annual Growth Non-Performing Loans 55% 50% 40% 30% 25% 10% 10% -10% -5% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 Comercial Loans (5.2%) Consumer Loans (13%) Mortgage Loans (13.6%) Microcredit Loans (6.1%) May-16 Nov-16-30% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 NPLs Commercial (16.2%) NPLs Consumer (26.6%) NPLs Microcredit (18.4%) Mortgages (25.9%) May-16 Nov-16 Source: Financial Supervisor CO

14 Liabilities 25% Annual Growth of Liabilities 90% Annual Liabilities 280% 20% 70% 50% 210% 140% 15% 70% 10% 30% 0% 5% 6.04% 10% -70% -10% -140% 0% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 Local Liabilities (-1.4%)** Total Deposits (8.3%) May-16 Nov-16 Bonds (11.9%) Supranational Liabilities (-8.4%) (Right axis) Source: Financial Supervisor CO

15 RoE & RoA Return on Assets RETRURN ON ASSETS Return on Equity RETURN ON EQUITY 2.9% 22% 2.7% 20% 2.5% 2.3% 2.1% 1.9% 2.1% 18% 16% 14% 14.9% 1.7% 12% 1.5% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 10% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 Source: Financial Supervisor CO

16 Solvency 17.0% Solvency 16.5% 16.0% 15.9% 15.5% 15.0% 14.5% 14.0% Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Source: Financial Supervisor CO

17 DI Fund $ $ $3.44 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Reserve (USD bn) Source: Fogafín

18 AGENDA I. Colombia The macroeconomic environment II. Evolution of the Colombian banking system III. How Fogafín reacted to the current environment

19 Our new corporate plan Key elements: Our mandate goes beyond deposit insurance. We think we have the power to consolidate our institution as the resolution agency. Both, KA and CP are key inputs to improve our current practices and procedures. We need to adapt our organizational structure to the new environment. Our vision: being recognized by the Colombian people as a financial authority able to manage the DIS and solve troubled financial institutions, minimizing the use of public funds and in coordination with the FSN.

20 Strategic objectives Fund Resolution Mechanisms Deposit Insurance SFC Fogafín Recoveries Crisis

21 Strategic objectives (cont.) Mission Resolution Mechanisms Liability Deposit Insurance System Solve any type of financial institution, reducing the use of public funds and the loss exposure of our fund. Build a DIS in line with best international practices allowing us to reimburse depositors within 7 business days after the liquidation order. Mission Recoveries Prepare our institution to act faster in order to recover assets from the application of the resolution mechanisms and reduce possible losses to creditors of financial institutions. Asset DI-Resolution Fund Achieve a target fund level enough to solve a crisis similar to the worst scenario faced in Colombia, without requesting public funds.

22 Organizational structure Board of Directors Internal Audit Resolution Mechanisms Managing Director Asset Management Corporate Affairs Operations Resolution and Liquidations Treasury Legal Administrative issues Content Development Deposit Insurance System Middle-Office Strategic Planning Operative Risks and Processes Institution Analysis and Simulations Assets from Liquidation Processes Communications and Institutional Relations Accounting Human Talent Back-Office IT

23 Thank you! Tokyo, Japan