Industry Report. February 9th, Colombia, Equities Colombian Banks Lot of headwinds for ; a neutral stance on the industry

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1 February 9th, 2015 Colombia, Equities Colombian Banks Lot of headwinds for ; a neutral stance on the industry The strong drop in oil prices, its spillover effects on the entire economy through fiscal accounts and investments, and the negative effects on EPS from the recently signed tax bill affected our mid-term outlook for the banking industry. As a consequence we are reviewing our long-held overweight on the sector (which paid off in 2014), taking a more neutral stance. We still like the long-run fundamentals of the industry, supported by a low penetration of financial services, a high potential GDP growth for global standards, and demographics; nonetheless, in the mid term the expected moderation of the economy in will affect loan growth, asset quality, and indirectly, NIM, as the likelihood of policy rate cuts by the Central Bank has increased notoriously under this new environment. Industry Report Industry: Banks 2015E T.P. and ratings in this research piece Ticker Rating Updated Previous pfbcolo cb Hold COP 31,000 COP 33,200 cib us Hold USD 55.0 USD 65.0 gruposur cb Buy COP 42,000 COP 46,400 pfgrupsu cb Buy COP 42,000 COP 46,400 pfaval cb Hold COP 1,400 COP 1,530 aval us Hold USD 12.4 pfdavvnd cb Hold COP 31,400 COP 35,300 bogota cb Uperf. COP 66,100 COP 71,000 We are not as positive as we used to be on Colombian banks. Besides the already discussed macro headwinds, Colombian banks are not trading at attractive multiples, following the healthy performance last year. In fact, we are expecting multiple contraction in most names. We are downgrading PfDavivienda to Hold (factoring in a capital increase in 2016); we are maintaining our Hold rating in both PfBancolombia and PfAval, and an Underperform in Bogotá. Within the Hold ratings PfAval could be more defensive, while PfDavivienda still looks discounted but timing is not good to increase exposure. In our Colombian financials coverage we are only favoring Grupo Sura. A stiff discount compared to NAV and the regional diversification of this HoldCo may prove supportive. As a result, we are upgrading our rating on Grupo Sura to Buy. Colombian Financials Summary Rating 2015E T.P. P / B P / E Dvd Yield (COP) 2015E 2016E 2015E 2016E 2015E Bancolombia HOLD 31, % Grupo Aval HOLD 1, % Davivienda HOLD 31, % Bogota UPERF. 66, % Grupo Sura BUY 42, % CREDICORP CAPITAL EQUITY RESEARCH Juan Dominguez +(571) Ext 1026 jcdominguez@credicorpcapital.com César Cuervo, CFA +(571) Ext 1012 ccuervo@credicorpcapital.com This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A. Sociedad Comisionista de Bolsa and/or Credicorp Capital Perú S.A.A. and/or its subsidiaries (hereinafter jointly referred to as Credicorp Capital ), therefore, no part of this the material or its content, nor any copy of it, may be altered in any way, transmitted, copied or distributed to any third party without prior and express written consent of Credicorp Capital. In making this report, Credicorp Capital has relied on public information. Credicorp Capital has not verified the truthfulness, completeness or accuracy of the information accessed, nor has audited the information in any way. Accordingly, this report does not constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the information contained herein or any other written or oral information furnished to any person and/or their advisors.

2 Last Px / B 2015E Relative Valuation and Price Performance Credicorp Capital Coverage Universe Price Market Cap CC CC P/E PEG P/B Dvd Yield ROAE (local) (USD mn) Rating T.P. 2014E 2015E 2016E Ratio 2014E 2015E 2015E 2014E 2015E 2016E Banco de Chile ,856 BUY % 24.5% 20.8% 21.6% BCI 28,612 4,961 REST. REST. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Corpbanca ,022 BUY % 13.5% 12.8% 12.7% Santander ,586 BUY % 22.5% 18.3% 18.6% Chile Median 7, % 22.5% 18.3% 18.6% Bancolombia 28,000 11,090 HOLD 31, % 12.9% 13.4% 12.8% Dav iv ienda 27,000 5,036 HOLD 31, % 15.1% 15.7% 14.0% Grupo Av al 1,260 11,976 HOLD 1, % 13.1% 14.6% 14.0% Bogota 64,000 8,903 UPERF 66, % 13.3% 14.2% 13.9% Colombian Median 9, % 13.2% 14.4% 13.9% Non-banks Corficolombiana 37,900 3,352 HOLD 44, % 10.7% 10.6% 10.7% Grupo Sura 35,600 8,601 BUY 42, % 3.7% 3.5% 3.7% EVA vs P/BV in Latam y = x R² = Compartamos Bancolombia* Grupo Aval* Banco de Bogotá* Inbursa Banorte Davivienda* Corpbanca* Galicia Banregio Santander Santander México Chile* Bradesco Itaú BCI Banco Macro Credicorp Banco de Chile* Crédito Real IFS 1.0 Santander Brasil 0.5 Banco do Brasil Banrisul % -5% 0% 5% 10% 15% 20% [ ROAE - Ke ] 2016E Source: Bloomberg, Company reports, Credicorp Capital; * Credicorp Capital earnings models; As of February 6 th,

3 Relative Valuation and Price Performance Forward P/BV L5Y Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Bancolombia Davivienda Bogota Grupo Aval L12M performance in USD Forward P/E L5Y Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Bancolombia Davivienda Bogota Grupo Aval L3M performance Crédito Real 41.8% Santander -6.4% Credicorp 20.1% Credicorp -6.7% Bradesco 16.8% Santander Mexico -6.9% Bladex 16.8% Banco de Chile -7.6% Compartamos 10.0% Bradesco -8.1% Davivienda 8.4% Itau -8.7% Corpbanca 8.4% Corpbanca -8.9% Santander Mexico 7.0% Crédito Real -9.4% Bancolombia 5.8% Santander Brasil -12.9% Itau 3.9% Bladex -13.0% Santander Brasil 1.9% Compartamos -13.1% Santander -0.8% Banorte -14.0% Banco de Chile -3.4% Banco de Bogota -16.7% Grupo Aval -7.6% Bancolombia -17.0% BTG Pactual -8.1% BCI -17.2% Banco do Brasil -13.2% BTG Pactual -17.4% Banorte -15.2% Banco do Brasil -20.2% BCI -16.1% Grupo Aval -21.2% Banco de Bogota -17.6% Davivienda -25.3% Sources: Bloomberg, Company reports, Credicorp Capital 3

4 Valuation Scenarios and Assumptions Undoubtedly, the Colombian economy will be negatively affected by the current very low oil prices. The banking industry, considering its cyclical nature, will likely be affected from a more moderate economic activity in the next couple of years, with a possible deceleration in loan growth and perhaps, some deterioration in asset quality. Moreover, we included a couple of items in our forecasts: i) Tax bill: The tax bill signed in Dec-14 pressures ROAE to the downside mostly as a consequence of the surcharge on CREE (income tax for practical purposes). This will result on a high statutory income tax of 43% in 2018, coming from 34% in We also include the equity tax payments, assuming that banks will pass it through reserves (shareholders equity) as allowed by Article 10 of the tax bill (some banks are still defining the way they will treat equity tax). As a result of this accounting treatment, ROAE will have some upside pressure, while Tier 1 ratios could contract a bit (a few basis points for each bank). Recall that, according to the tax bill, the equity tax for companies will be eliminated starting ii) IFRS: There is a lot of uncertainty on the final outcome of the implementation of IFRS in various topics including treatment of leases, SPVs for securitizations, treatment of provisions at a consolidated level, among others. The simplest identified effect of IFRS is the disallowance of goodwill amortization, as goodwill is considered an intangible asset with indefinite useful life. Factoring in the elimination of goodwill amortization improves the cost-to-income ratios of the banks, but also restricts a faster improvement on capital adequacy ratios. Finally, goodwill amortization is assumed to continue for fiscal purposes (i.e. it lowers the effective tax rate). The macro scenarios we have designed for our valuation exercises are explained below. Base Scenario: The expected GDP growth for 2015 and 2016 was revised to 3.7% and 3.0% respectively, in line with recent research pieces of our macro team (refer to Colombia: Growth to continue outperforming the region in However, risks remain on the downside, particularly for 2016 released on January 16 th, 2015). As a consequence of this moderation of the economic pace, we are expecting that the Central Bank will start cutting its policy rate towards 2015 year-end, possibly reaching a low of 3.5% during 2016 depending on the actual performance of the economy, but is expected to increase afterwards reaching a long-term neutral rate of 4.5%. The effects on asset quality are somehow more difficult to estimate, specially when the current environment in Colombia is compared to the trend of Chile and Peru (the end of the commodity boom has not translated into a material deterioration on employment, nor significant increases of NPL ratio). We are expecting some deterioration on asset quality, but far from the evolution observed in 2009 following the global financial crisis. After 2016, as the economy once again approaches its potential growth, asset quality should improve. In our base scenario we are expecting a 4.5% real potential GDP growth, and a 6% nominal dividend perpetuity growth. 4

5 Pessimistic scenario: In our pessimistic scenario we expect a similar trend to that observed in following the global financial crisis. Thus, forecasted GDP growth in 2015 and 2016 is set at 3.5% and 1.5% respectively. This assumption implies a higher expected deterioration in asset quality compared to our base scenario. The Central Bank cuts its policy rate to a low of 3% in As the economy approaches potential GDP growth (we are assuming convergence in 2017), the policy rate should increase reaching a nominal neutral rate of 4.5% (i.e. we are not assuming changes in the real neutral rate nor in long term inflation). Under our pessimistic scenario, real potential GDP growth is assumed at 4.0%, and nominal dividend perpetuity growth at 5%. Optimistic scenario: In our optimistic scenario we do not expect a material spillover effect from the oil market to fiscal accounts and other macro figures. Thus, forecasted GDP growth in 2015E and 2016E is set at 3.8% and 4.0% respectively. This assumption implies a lower expected deterioration on asset quality compared to our base scenario. The Central Bank cuts its policy rate to a low of 4% in 2016; as the economy approaches potential GDP growth (we are assuming convergence in 2017), the policy rate should increase reaching a nominal neutral rate of 4.5% (i.e. we are not assuming changes in the real neutral rate nor in long term inflation). Under our optimistic scenario, real potential GDP growth is assumed at 4.7%, and nominal dividend perpetuity growth at 6.5%. Worth noting, this is the scenario that is currently being assumed by management teams of local banks. Valuation Scenarios - Macro Colombia Long-term Base GDP growth 4.3% 4.7% 3.7% 3.0% 4.5% Policy rate 3.25% 4.50% 4.00% 3.50% 4.50% Total loan growth 13.6% 13.0% 11.7% 9.7% 10.0% Pessimistic GDP growth 4.3% 4.7% 3.5% 1.5% 4.0% Policy rate 3.25% 4.50% 4.00% 3.00% 4.50% Total loan growth 13.6% 13.0% 11.0% 6.3% 9.2% Optimistic GDP growth 4.3% 4.7% 3.8% 4.0% 4.7% Policy rate 3.25% 4.50% 4.00% 4.00% 4.50% Total loan growth 13.6% 13.0% 11.7% 11.9% 10.3% Sources: DANE, BanRep, SFC, Credicorp Capital 5

6 USD mn February 9th, 2015 Colombia, Equities Bancolombia Still struggling with profitability despite good results in efficiency; reiterating Hold Following the adjustments in the macro outlook, we revised our 2015E T.P. for PfBancolombia from COP 33,200 to COP 31,000/share (-6.6%), maintaining our HOLD rating in the shares. Even though we are positive on management efforts to improve the cost of funding and the cost-to-income ratios, we expect profitability to remain relatively low in an environment of slower loan growth, lower policy rates and likely deterioration in asset quality. Multiples are not particularly attractive either, which supports our neutral stance. The bank has improved cost-to-income and cost of funding ratios. The efficiency efforts are having good results, and excluding goodwill amortizations, we are expecting the cost-toincome ratio to reach ~51% in the long run mostly on operating leverage. The strategy on cost of funding should defend NIM ahead of expected cuts in policy rate towards year end. We forecast ROAE to touch its lowest point in 2016E. We expect ROAE to reach 12.8% in 2016, just slightly above the cost of equity estimated for Bancolombia. This means that we are expecting that the bank will not create material value in 2016 as a result of higher provision expenses and taxes, and lower NIM. However, profitability should improve starting 2017, reaching 15.5%-16.0% in the long-term. This long-term ROAE was cut slightly compared to our previous 16.0%. Forward looking multiples are not particularly attractive. PfBancolombia is trading at 11.7x 2015E P/E, above PfDavivienda, but below PfAval. According to our analysis, EVAadjusted P/B looks fair, and our total return forecasts a 10% P/E contraction during the year. This means that most of the total return is explained by the high expected EPS growth, which is partly explained by a low base in 2014 following the losses reported on accounting adjustments in 3Q14. Risks. Downside risks include lower-than-expected deliveries in efficiency and challenges from the integration of Banistmo, which is demanding opex in order to improve quality of service and to successfully migrate IT systems to Colombia. Macro risk (impacting loan growth and asset quality) is material in the current environment. Company Update Rating: Hold Industry: Banks Stock Data Ticker Price Chart (COP) and Volume (USD mn) Source: Bloomberg, Credicorp Capital pfbcolo cb / cib us Price (COP) 28,000 LTM Range (COP) 22,720-31,000 Target 31,000 (loc) / 55.0 (ADR) Total Return 14% Market Cap (USD mn) 11,309 Shares Outstanding 962 Free Float 69% ADTV (USD mn) (loc) (ADR) 80 0 Feb-14 Jun-14 Oct-14 Feb-15 PfBancolombia COLCAP CREDICORP CAPITAL EQUITY RESEARCH Juan Dominguez +(571) Ext 1026 jcdominguez@credicorpcapital.com César Cuervo, CFA +(571) Ext 1012 ccuervo@credicorpcapital.com 6

7 Bancolombia - Company Summary Sector: Banks Rating: HOLD Target Price: COP 31,000 (loc) / 55.0 (ADR) Stock Data Ticker pbcolo cb / cib us Company Description Grupo Bancolombia is the second largest financial conglomerate in Colombia, offering a wide range of financial products and services to its individual and corporate client base. In Colombia, the Group has a 25% market share in loans. The Bank also has presence in Panama through Banistmo (14% market share), in El Salvador through Banagrícola (28% market share) and in Guatemala through a non-controlling stake in Agromercantil (11% market share). Price (COP) 28,000 Positives Concerns LTM Range 22,720-31,000 - Leading position in both Colombia and - Below peers profitability. Market Cap (USD mn) 11,309 Central America. - Weakest efficiency in our banking space Shares Outstanding (mn) Top of mind brand. despite the possibility of economies of scale. Free Float 69% - Healthy expected trend on asset quality. ADTV (USD mn) 11.0 (loc) (ADR) Loans by segment (as of Sep-14) Mortgages 12% Financial leases 11% Valuation Summary E 2015E 2016E P/E P/BV ROAE 16.5% 12.6% 12.9% 13.4% 12.8% ROAA 1.9% 1.3% 1.4% 1.5% 1.4% EPS growth -5.4% -11.0% 9.1% 23.1% 2.0% Div. Yield 2.4% 3.2% 2.8% 3.0% 3.4% Consumer 18% Income Statement COP bn E 2015E 2016E Net interest income 4,767 5,009 6,016 7,048 7,583 Ownership Structure (as of Sep-14) Net fee income 1,807 1,916 2,240 2,555 2,806 Other international inv estors 15% Other local inv estors 14% Local pension funds 21% Commercial 59% Grupo Sura 27% ADR Program 20% Grupo Argos 3% Operating income 7,407 7,765 9,322 10,761 11,653 Provision expenses -1,111-1,231-1,426-1,832-2,086 Operating expenses -4,162-4,639-5,218-5,668-6,202 Net income 1,702 1,515 1,867 2,298 2,344 EPS (COP / share) 1,998 1,779 1,941 2,389 2,437 Balance Sheet COP bn E 2015E 2016E Cash & interbank loans 8,169 15,409 13,348 14,719 16,181 Investments 12,554 13,806 16,234 17,953 19,645 Gross loans 69,989 89, , , ,487 Management Total assets 97, , , , ,575 Deposits 64,159 86,557 94, , ,518 Chairman BoD: David E. Bojanini Financial obligations 17,899 26,572 27,554 30,384 33,401 CEO: Carlos Raúl Yepes Total liabilities 86, , , , ,076 CFO: José Humberto Acosta Minority Interest IR Manager: Alejandro Mejía Shareholders Equity 11,607 12,493 16,442 17,752 19,000 Total Liabilities + Equity 97, , , , ,575 Tier 1 ratio 10.4% 5.8% 8.1% 8.0% 8.0% Sources: Company Reports, Bloomberg and Credicorp Capital; E Credicorp Capital Estimates 7

8 Investment Thesis We remain neutral in Bancolombia after lowering our 2015E T.P. from COP 33,200 to COP 31,000 (-6.6%). This neutral stance is supported by our expectation of a stable but low ROAE in due to higher cost of credit risk from the moderation of the economy, sluggish loan growth compared to recent history, and the negative effects of the signed tax bill. Loan growth not particularly attractive for the next two years, with increasing but manageable risk. After factoring in the economic moderation in , we expect loan growth in Bancolombia to moderate to 10.2% y/y both on lower demand (especially from corporates) and supply (especially to consumer lending) of credit. Moreover, we expect the NPL ratio to reach 2.1% towards 2H16 and the cost of credit to surge to a peak of 1.76% during 2016, compared to 1.5% 2014E. We highlight that this increase will affect EPS but is manageable and lies far from the figures observed in following the global financial crisis (cost of credit reached 2.7% on average in that period). Also, note that different from the high loan growth period, Bancolombia has decreased its growth in Colombia, and the expected acceleration in credit for 4Q14 is explained mostly by the strong depreciation of the COP. In this topic, we expect a neutral effect from the COP depreciation on asset quality as i) the likely deterioration on importers should be offset by better conditions on exporters, especially in manufacturing industry and agri-business; ii) Bancolombia (and its peers) offers USD-denominated loans to companies with naturally-hedged operations; if this is not the case, it offers hedging instruments along with the credit facility. Good cost of funding strategy in 2014 placed the foundation for a supported NIM in Bancolombia focused efforts on improving its already attractive cost of funding (which is one of its main strengths compared to peers) in 2014, using the high liquidity after the capital increase of 1Q14. This strategy, which aims towards defending NIM, could prove satisfactory now that we are expecting policy rate cuts towards year end, which will impact margins in We expect NIM to lower from 5.8% in 2015 to 5.7% in , improving to 5.9% in the long term, upon convergence of the business cycle to potential GDP growth. Diversification into Panama (Banistmo) could be positive starting We are optimistic about the delivery of Banistmo during 2015, as a significant portion of the one-time costs related to the acquisition were recognized last year. Furthermore, the bank has managed to migrate most of Banistmo s IT systems from HSBC in Mexico to the data center in Medellin, one of the most complex topics of the integration. Therefore, we believe that ROAE in Panama could start improving in 2015, from current 11% levels to 13%-14% in the long-run, in line with management s guidance. 8

9 Efficiency to keep improving in the next years, favored by IFRS. Efficiency has been one of the main weaknesses of Bancolombia, but indicators have improved materially in recent quarters mostly due to operating leverage. We expect this trend to continue, also favored by IFRS. We have already excluded goodwill amortizations from the cost-to-income ratios, but efficiency indicators could improve further as a consequence of changes in the recognition of operating leases (which could potentially lower depreciation expenses). We expect the cost-to-income ratio to reach around 51% in the long-term, improving from a forecast of 56% in 2014 and 53% in New tax bill and provision expenses, the main adjustments to our EPS forecasts; ROAE does not look appealing for the next two years. According to our estimates, the cost of credit of Bancolombia should increase in as a consequence of the expected trend in the NPL ratio. As a consequence, the provision expenses to operating revenue ratio will reach a peak of 17.9% in 2016, normalizing starting 2017 reaching 14%-15% in the long run. Also, the new tax bill will reflect in an increase of the effective tax rate of Bancolombia from 28% in 2014 to 34%-35% in the long term. These two effects, jointly with the forecasted pressures on NIM, could reflect on the ROAE reaching its lowest point during 2016 at 12.8%. We do expect improvements in profitability in the long-run, reaching a sustainable long-term figure of 15.5%-16.0%, but in the mid term, ROAE does not look appealing. Shares will gain importance due to the new COLCAP index methodology, but are not trading at appealing risk-reward; we keep on HOLD. The inclusion of ADRs (level II and level III) as free-float for COLCAP calculation purposes translated into an increase of PfBancolombia s weight in the index to the maximum allowed (20%). Therefore, Bancolombia will consolidate as the most important share in the Colombian equity market. Nonetheless, valuation multiples are not attractive to take advantage of this importance gain in the market, and actually, we are expecting P/E multiple to contract 10%. Thus, most of the upside will come from a 23% EPS growth in 2015, but an important portion of this growth is explained by a lower base in 2014, following losses on accounting adjustments in 3Q14 (worth COP 89 bn, pre-tax). PfBancolombia is trading at 11.7x 2015E P/E, below PfAval but above PfDavivienda. Moreover, trading at 11.5x 2016E P/E, it displays higher multiples than the Chilean banking industry. Finally, shares look fair on an EVA-adjusted P/B approach. Risks to our thesis. Downside risks include lower-than-expected deliveries in efficiency and challenges from the integration of Banistmo, which is demanding opex in order to improve quality of service and to successfully migrate IT systems to Colombia. Macro-related risks, such as a worse-than-expected deterioration of asset quality could impact financial statements. Finally, the final outcome of the adoption of IFRS is still uncertain. 9

10 Model Update 2014E 2015E 2016E COP bn Update Prior Diff Update Prior Diff Update Prior Diff Income statement Net interest income 6,016 6, % 7,048 7, % 7,583 8, % Net fee income 2,240 2, % 2,555 2, % 2,806 2, % Other operating income 1,066 1, % 1,159 1, % 1,264 1, % Operating income 9,322 9, % 10,761 10, % 11,653 12, % Prov ision ex penses -1,426-1, % -1,832-1, % -2,086-1, % Operating ex penses -5,218-5, % -5,668-5, % -6,202-6, % Net operating income 2,678 2, % 3,261 3, % 3,365 3, % Net income 1,869 1, % 2,298 2, % 2,344 2, % EPS (CLP) 1,941 2, % 2,389 2, % 2,437 2, % Balance Sheet Gross loans 102,433 98, % 113, , % 124, , % Annual growth 14.5% 10.7% 384 bp 10.4% 12.9% -254 bp 10.1% 12.7% -261 bp Total assets 144, , % 159, , % 174, , % Total deposits 94,471 94, % 104, , % 114, , % Financial obligations 27,554 23, % 30,384 26, % 33,401 30, % Liabilities 127, , % 141, , % 155, , % Minority interest % % % Equity 16,442 16, % 17,752 17, % 19,000 19, % Ratios NIM 5.5% 5.7% -18 bp 5.8% 6.0% -21 bp 5.7% 6.0% -34 bp Fee ratio 24.0% 23.6% 43 bp 23.7% 22.7% 104 bp 24.1% 21.8% 228 bp Cost to income ratio 56.0% 56.7% -72 bp 52.7% 54.3% -163 bp 53.2% 54.1% -88 bp NPL ratio 1.9% 1.9% 1 bp 2.0% 1.9% 11 bp 2.1% 1.9% 20 bp Risk ratio 4.6% 4.5% 9 bp 4.7% 4.5% 18 bp 4.8% 4.5% 33 bp Cost of credit risk 1.5% 1.4% 9 bp 1.7% 1.5% 20 bp 1.8% 1.5% 26 bp NPL cov erage 240% 243% -304 bp 234% 243% -944 bp 230% 243% bp Deposit to loans 97% 99% -234 bp 97% 99% -234 bp 97% 99% -234 bp Tier 1 ratio 8.1% 8.5% -40 bp 8.0% 8.5% -52 bp 8.0% 8.6% -56 bp BIS ratio 13.3% 12.8% 53 bp 12.8% 12.8% -3 bp 12.9% 12.9% -4 bp Effectiv e tax rate 28.2% 27.7% 47 bp 29.8% 29.4% 38 bp 30.6% 29.4% 123 bp ROAE 12.9% 13.7% -80 bp 13.4% 13.8% -36 bp 12.8% 14.1% -135 bp ROAA 1.4% 1.5% -15 bp 1.5% 1.6% -9 bp 1.4% 1.6% -20 bp Source: Company reports, Credicorp Capital Previous update of our valuation model on Bancolombia was released on October 25th,

11 Valuation What has changed in our model? As a result of our updated macro outlook, we made several adjustments to our valuation model. The most important impacts are: i) lower loan growth; ii) decrease in NIM for ; iii) deterioration of NPL ratio and increase in cost of credit risk towards 2016; iv) higher effective tax rate. As a result of these adjustments, our expected EPS for 2016 is 11% lower than in our previous model, and 2016E ROAE went down from 14.1% in our previous model to 12.8%. The long-term, sustainable ROAE was slightly lowered from 16% to 15.5%-16.0%. Our 2015E T.P. is based on a 10-year DDM valuation using a Ke of 12.4% in COP terms and an exit P/BV of 1.5x. Our T.P. at COP 31,000 implies 13.0x 2015E P/E, 12.7x 2016E P/E, and 1.7x 2015E P/B. Shares are trading at 11.7x 2015E P/E and 11.5x 2016E P/E. 2015E total return of 11% is in line with the COLCAP index, and is explained by a 23% increase in EPS during 2015, an 10% multiple contraction, and a 3% dividend yield. We maintain our HOLD rating considering also that the largest shareholder of Bancolombia, Grupo Sura, which is the second most relevant share in the Colombian market, looks more attractive at current levels. 2015E T.P. Derivation Assumptions PFBCOLO CB Target Price PFCOLO CB Risk-free rate 2.5% 2015E target price 31,000 Beta 1.0 Target 2015E P/B 1.7 Equity risk premium 6.0% Target 2016E P/E 12.7 Country risk spread 1.8% Discount vs fundamental value 0% Ke (USD) 11.2% Forward looking multiples Ke (COP) 12.4% 2015E P/B 1.5 Long-term ROAE 16% 2015E P/E 11.7 Long-term growth rate 6% 2016E P/B E fundamental value 31, E P/E 11.5 Source: Company reports, Credicorp Capital 11

12 E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E Shares do not offer value in our pessimistic scenario. Under our pessimistic scenario, profitability decreases to around 12% levels in 2016, and reaches a long-term, sustainable ROAE in the range of 15.0%-15.5%. Further, EPS decreases 3% y/y in The value of the shares is estimated at COP 28,300 in our pessimistic scenario, which implies 12.1x 2015E P/E, 12.4x 2016E P/E, and 1.5x 2015E P/BV. In this scenario, shares do not offer upside. ROAE trends under the different scenarios 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 16.0% 15.8% 15.4% T.P. and upside under the different scenarios Base Optimistic Pessimistic 34,000 32,000 30,000 28,000 Optimistic COP 32, % Base COP 31, % Pessimistic COP 28, % 26,000 24,000 22,000 20,000 Dec-12 Dec-13 Dec-14 Dec-15 Source: Company reports, Bloomberg, Credicorp Capital 12

13 Financial Statements Income Statement COP mn E 2015E 2016E Interest income 7,661,883 8,130,684 9,218,610 10,830,897 11,288,537 Interest ex penses -2,894,860-3,122,126-3,202,243-3,783,302-3,705,163 Net interest income 4,767,023 5,008,558 6,016,367 7,047,596 7,583,374 Net fee income 1,807,040 1,916,356 2,239,969 2,554,675 2,805,959 Other operating income 833, ,125 1,065,880 1,158,541 1,263,920 Total operating revenue 7,407,160 7,765,039 9,322,217 10,760,811 11,653,253 Prov ision ex penses -1,110,873-1,230,600-1,425,762-1,832,200-2,086,487 Operating ex penes -4,162,382-4,639,280-5,218,144-5,667,532-6,201,651 Operating income 2,133,905 1,895,159 2,678,311 3,261,079 3,365,116 Operating margin 28.8% 24.4% 28.7% 30.3% 28.9% Non operating result 40,938 54,427-75,937 37,663 40,786 Earnings before tax es 2,174,843 1,949,586 2,602,374 3,298,741 3,405,902 Tax es -467, , , ,209-1,043,172 Minority interest -5,723-17,364-2,494-18,532-18,902 Net income 1,702,046 1,515,127 1,866,776 2,298,000 2,343,828 Net margin 23.0% 19.5% 20.0% 21.4% 20.1% EPS (COP / share) 1,998 1,779 1,941 2,389 2,437 Balance Sheet COP mn E 2015E 2016E Cash and interbank loans 8,169,097 15,408,646 13,348,036 14,718,969 16,180,501 Inv estments 12,554,311 13,805,790 16,234,141 17,953,441 19,645,011 Gross loans 69,988,679 89,459, ,432, ,069, ,486,588 (-) Allow ances -3,249,639-4,065,530-4,697,291-5,295,881-6,011,851 Net loans 66,739,040 85,394,012 97,735, ,773, ,474,737 Fix ed assets 3,618,444 5,214,423 5,822,667 6,316,722 6,834,154 Other assets 6,835,488 10,993,370 11,707,615 12,546,165 13,440,133 Total Assets 97,916, ,816, ,847, ,308, ,574,536 Deposits 64,158,720 86,556,579 94,470, ,173, ,517,530 Bonds 12,059,219 12,328,275 13,264,683 14,627,054 16,079,460 Financial debt 5,840,098 14,243,405 14,289,287 15,756,892 17,321,486 Other liabilities 4,169,994 4,749,688 5,904,422 6,510,846 7,157,346 Total Liabilities 86,228, ,877, ,929, ,068, ,075,822 Shareholders Equity 11,606,955 12,492,846 16,441,871 17,752,474 18,999,577 Minority Interest 81, , , , ,138 Total Equity and Liabilities 97,916, ,816, ,847, ,308, ,574,536 Sources: Company Reports and Credicorp Capital; E Credicorp Capital Estimates 13

14 Ratios E 2015E 2016E Profitability NIM (inc. interbank loans) 6.4% 5.5% 5.5% 5.8% 5.7% Prov ision ex penses / Av rg loans -1.7% -1.5% -1.5% -1.7% -1.8% Fee ratio 24.4% 24.7% 24.0% 23.7% 24.1% Opex / Rev enue -56.2% -59.7% -56.0% -52.7% -53.2% Opex / Av rg assets -4.5% -4.1% -3.8% -3.7% -3.7% ROAE 16.5% 12.6% 12.9% 13.4% 12.8% ROAA 1.9% 1.3% 1.4% 1.5% 1.4% Asset quality NPL ratio 1.8% 1.8% 1.9% 2.0% 2.1% NPL cov erage 265% 249% 240% 234% 230% Capital adequacy Equity / Assets 11.9% 9.5% 11.4% 11.1% 10.9% Tier 1 ratio 10.4% 5.8% 8.1% 8.0% 8.0% ROAE Decomposition E 2015E 2016E (1) Net income to shareholders / Net income 99.7% 98.9% 99.9% 99.2% 99.2% (2) Tax burden = (1 - (3)) 78.5% 78.6% 71.8% 70.2% 69.4% (3) Effectiv e tax rate -21.5% -21.4% -28.2% -29.8% -30.6% (4) Pretax earning / Operating income 101.9% 102.9% 97.2% 101.2% 101.2% (5) Operating margin (1 - (6) - (7)) 28.8% 24.4% 28.7% 30.3% 28.9% (6) Efficiency -56.2% -59.7% -56.0% -52.7% -53.2% (7) Prov isiones ex penses / Rev enue -15.0% -15.8% -15.3% -17.0% -17.9% (8) Net profit margin = (1) x (2) x (4) x (5) 23.0% 19.5% 20.0% 21.4% 20.1% (9) Net interest income / Av rg assets (10) x (11) 5.2% 4.4% 4.4% 4.6% 4.5% (10) NIM 6.4% 5.5% 5.5% 5.8% 5.7% (11) Av rg interest assets / Av rg assets 81.2% 79.5% 79.0% 80.1% 80.3% (12) Fees / Av rg assets 2.0% 1.7% 1.6% 1.7% 1.7% (13) Other operating rev enue / Av rg assets 0.9% 0.7% 0.8% 0.8% 0.8% (14) Asset turnover = (9) + (12) + (13) 8.1% 6.8% 6.8% 7.1% 7.0% ROAA = (8) x (14) (excluding minority interes 1.9% 1.3% 1.4% 1.5% 1.4% Leverage = Avrg assets / Avrg equity 8.9x 9.5x 9.5x 8.9x 9.1x ROAE = ROAA x Leverage 16.5% 12.6% 12.9% 13.4% 12.8% Multiples E 2015E 2016E Price (COP / share) 29,820 23,440 28,000 28,000 28,000 Shares outstanding (mn) P / E 14.9x 13.2x 14.4x 11.7x 11.5x P / BV 2.2x 1.6x 1.6x 1.5x 1.4x EPS grow th -5.4% -11.0% 9.1% 23.1% 2.0% Div. Yield 2.4% 3.2% 2.8% 3.0% 3.4% Sources: Company Reports and Credicorp Capital; E Credicorp Capital Estimates 14

15 USD mn February 9th, 2015 Colombia, Equities Grupo Sura How expensive is it really? Actually it could be trading attractively! Upgrading to Buy Following steep declines of the shares in recent weeks, we are upgrading Grupo Sura to BUY after adjusting our 2015E T.P. to COP 42,000/share from COP 46,400/share (-9.5%). There are concerns about the high P/E ratio of Grupo Sura (trading at a 2015E P/E of 25.0x). However, this multiple is explained by the high share of earnings derived from dividend yields (exposures to Bancolombia, Nutresa and Grupo Argos). Decomposing the P/E ratio actually indicates that the current implied multiples are attractive. Additionally, i) the share is trading at a hefty discount against its NAV according to history; ii) some lines of business should have lower betas than pure banking players. Grupo Sura is not as expensive as it appears at first glance. The problem with the P/E is that 41% of 2015E profits come from dividend yield from Bancolombia (which has an inverse dividend yield of 33.1x) and Nutresa-Grupo Argos (with a combined inverse dividend yield of 65.6x). Thus, 77% of the P/E is explained by dividend yields at current prices. More importantly, the market is currently setting a 10x 2015E P/E on the consolidated business lines (SUAM and Suramericana), which supports our view that Grupo Sura is not expensive at current levels and that, on the contrary it looks attractive. Discount against NAV and lower exposure to the Colombian business cycle compared to other financial shares are the other main points in our investment thesis for Grupo Sura. In this point, Grupo Sura has a diversified operation across business lines and geography. This should shield the company ahead of a moderation in growth in the Colombian economy. The negative point in our thesis is equity tax. Equity tax will be specially high for SUAM as the company is based in Colombia, and equity investments domiciled outside Colombia are not deductible for equity tax purposes. However, this mid term pressure do not change the positive long term fundamental view on the shares on healthy demographics. Risks. Downside risks include above-expected surges in Latam unemployment rates, regulatory changes (fees, capital requirements for insurance companies, etc.) and competition. Further M&A activity is possible given the strong cash flows of GrupoSura. The effects of the adoption of IFRS are uncertain. Company Update Rating: Buy Industry: Holdings Stock Data Ticker Price Chart (COP) and Volume (USD mn) Source: Bloomberg, Credicorp Capital gruposur cb Price (COP) 35,600 LTM Range (COP) 29,800-44,300 Target 42,000 Total Return 19% Market Cap (USD mn) 8,601 Shares Outstanding 575 Free Float 51% ADTV (USD mn) Feb-14 Jun-14 Oct-14 Feb-15 GrupoSura COLCAP CREDICORP CAPITAL EQUITY RESEARCH Juan Dominguez +(571) Ext 1026 jcdominguez@credicorpcapital.com César Cuervo, CFA +(571) Ext 1012 ccuervo@credicorpcapital.com 15

16 Grupo Sura - Company Summary Sector: Holdings Rating: BUY Target Price: COP 42,000 Stock Data Ticker gruposur cb Company Description Grupo Sura is a financial holding which controls local and regional leading companies in banking (largest shareholder of Bancolombia), asset management (Sura Asset Management) and insurance (Suramericana). Additionally, it holds non-strategic stakes in food processing (Nutresa) and infrastructure (Grupo Argos). Grupo Sura, Grupo Argos and Grupo Nutresa display a crossholding ownership as a results of measures taken decades ago to prevent hostile take-overs. Price (COP) 35,600 Positives Concerns LTM Range 29,800-44,300 - Leading position in the regional financial - High competition in some insurance lines (i.e. Market Cap (USD mn) 8,601 industry. vehicle insurance) and in some countries Shares Outstanding (mn) Attractive strategy towards high-worth (pension funds in Mexico) could pressure fees. Free Float 51% individuals, and relatively lower exposure to - Regulatory risks. ADTV (USD mn) 5.5 the Colombian business cycle. - Complexity of the ownership structure. Investment portfolio Grupo Suramericana Non-strategic investments Strategic Investments Grupo Nutresa Food-processing 35.1% 10.3% Bancolombia # 2 banking group in Colombia 44.1% of common shares Grupo Argos Infraestructure 35.5% of common shares 31.4% SUAM # 1 pension manager in Latam 67.1% Suramericana # 1 insurance company in Colombia 81.1% Ownership Retail 6% Foreign funds 14% Institutional inv estors 11% Pension funds 27% Grupo Argos 32% Grupo Nutresa 10% Income statement and dividends receives (cash flows) COP mn E 2015E 2016E Div idend income 265, , , , ,268 Equity method income 323, , , , ,386 Operating income 668, , ,616 1,002,432 1,131,630 Operating ex penses -122,962-45,986-51,286-55,310-59,734 EBIT 545, , , ,122 1,071,896 Net income 546, , , , ,452 EPS (COP) 949 1,359 1,370 1,425 1,622 ROAE 2.8% 3.8% 3.7% 3.5% 3.7% ROAA 2.5% 3.7% 3.6% 3.4% 3.5% Dividends received Management Bancolombia 160, , , , ,830 CEO: David Bojanini SUAM 118, , , ,578 CFO: Ignacio Calle Suramericana 42,793 81,018 69,254 85,390 86,577 IR Manager: Luis Eduardo Martínez Nutresa 52,924 62,555 68,617 72,254 75,866 Grupo Argos 36,709 51,974 57,286 61,755 66,572 Sources: Company Reports, Bloomberg and Credicorp Capital; E Credicorp Capital Estimates Dividends paid -248, , , , ,453 16

17 Investment Thesis We are upgrading Grupo Sura from HOLD to BUY, following an adjustment of our 2015E T.P. from COP 46,400/share to COP 42,000/share (-9.5%), which reflects higher expected regional unemployment rates, the forecasted slowdown of the Colombian economy, and effects from the new tax bill. Our upgrade is based on i) a P/E ratio that does not look expensive in our view; ii) hefty discount of the shares compared to its NAV; iii) a lower beta compared to other Colombian financial names. Understanding Grupo Sura s 2015E P/E. One of the commonly heard arguments supporting staying away from Grupo Sura is its high P/E ratio both in relative and absolute terms. The problem with the P/E is that 42% of 2015E profits come from dividend yield from Bancolombia (which has an inverse dividend yield of 33.1x) and Nutresa-Grupo Argos (with a combined inverse dividend yield of 65.6x). Thus, 77% of the P/E is explained by dividend yields at current prices. More importantly, the market is currently setting a 10x 2015E P/E on the consolidated lines of business (SUAM and Suramericana, net of the HoldCo s opex), which supports our view that Grupo Sura is not expensive at current levels and that, on the contrary it looks attractive. In other words, adjusting for dividends received, the P/E multiple that the market is setting for Grupo Sura looks discounted. The results of our P/E analysis are consistent with the recent hefty discount of Grupo Sura compared to its NAV. Shares are currently trading at an 17% discount compared to its NAV, which compares to a L5Y average of 5%. This means that Grupo Sura has declined more than the combination of Bancolombia, Nutresa and Grupo Argos, and thus, that either Grupo Sura shares should adjust on the upside, or the NAV should adjust to the downside. In both cases, this should reflect in outperformance for Grupo Sura, considering the high weight of these four shares (Grupo Sura, Bancolombia, Nutresa, and Grupo Argos) in the COLCAP index (broadly 50% of the index). Grupo Sura s 2015E P/E Decomposition P/E % in EPS % in P/E Consolidated businesses (SUAM - Suramericana) and HoldCo opex 10.1x 58.4% 23.6% Bancolombia: Inverse dividend yield (dividend 2.9% ) 33.1x 25.3% 33.5% Nutresa - Grupo Argos: Inverse dividend yield (dividend 1.6% ) 65.6x 16.3% 42.9% Grupo Sura's P/E 25.0x Source: Company reports, Bloomberg, Credicorp Capital 17

18 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Fundamentally, Grupo Sura should have a lower exposure to the Colombian business cycle than the other financial names. Three reasons support this view: i) although some insurance lines are cyclical in terms of premiums, the loss reserve should be independent of the business cycle; ii) both LH lines and SUAM are more exposed to unemployment than GDP growth, and as the O&G sector employs below 1% of the Colombian labor force, we are not expecting significant increases in unemployment rates; and iii) SUAM has a diversified business across countries, and thus, the exposure of Grupo Sura to Colombia should be lower than that of pure banking players. Strategy and long-term fundamentals remain attractive. Both SUAM and Suramericana focus on high-worth clients, aiming to attract them with a better-quality service allowing a relatively higher price. This type of clients is less exposed to the business cycle than the mass segment. Moreover, a young population (around 37% below 20 years old in the countries where SUAM has presence), and low penetration of the financial services industry in Colombia imply long-term growth opportunities for Grupo Sura. The negative point in our thesis is equity tax. Equity tax will be specially high for SUAM as the company is based in Colombia, and has a considerable equity supporting the operations in the region; recall that equity investments domiciled outside Colombia are not deductible for equity tax purposes. However, according to Article 10 of the tax reform (Law 1739 of 2014), companies could charge the equity tax in equity lines, without expensing it through income statement (contrarian to IFRS). This mid term pressure do not change the positive long term fundamental view on the shares on healthy demographics. Risks. Downside risks include above-expected surges in Latam unemployment rates, regulatory changes (fees, capital requirements for insurance companies, etc.) and competition. Further M&A activity is possible given the strong cash flows of GrupoSura. The effects of the adoption of IFRS are uncertain, but we expect improvements on P/E ratios due to a more appropriate consolidation method. Discount against NAV 15% 10% 5% 0% -5% -10% -15% -20% -25% Grupo Sura vs NAV Discount/Premium (%) Average Source: Company reports, Bloomberg, Credicorp Capital 18

19 Bancolombia SUAM Suramericana Grupo Argos Nutresa Other Net debt NPV of opex 15YE T.P. Valuation What has changed in our model? We incorporated the adjustments in Bancolombia s valuation model. Also, we factored in higher unemployment rates in the region and depreciation of Latam currencies for SUAM, and GDP growth in Suramericana. Multiples on both SUAM and Suramericana were adjusted for the expected effects of the tax bill. We forecast SUAM s ROAE to be stable at 8% levels in coming years (around 12% adjusting for amortization of intangibles). Our 2015E T.P. is based on a SOTP approach. Bancolombia was included at our 2015E T.P.; Suramericana was estimated with a SOTP of the P&C, L&H, workers compensation and health services subsidiaries, using 2015E EVA-adjusted P/B and forward P/E ratios. SUAM was valued through an EVA-adjusted P/B assuming a ROAE of 8% (12% adjusting for amortization of intangibles). Cross-holdings (Grupo Argos and Nutresa) are assumed to be cash to avoid circular references overstating value, and thus are included at market prices (average last three months to avoid volatility). The end result is a 2015E T.P. at COP 42,000/share. This is equivalent to a 19% expected total return for 2015, well above the expectation for the index. Most of the expected return (13% of the 19%) is explained by multiple expansion, as our target 2015E P/E at 29.5x is assuming that the market will rerate the consolidated business implied P/E from 10.1x to 14.9x. T.P. Derivation (COP/share) 7, ,710 1,850 42,000 8,350 6,420 10,200 13,680 Source: Company reports, Credicorp Capital 19

20 USD mn February 9th, 2015 Colombia, Equities Grupo Aval Multiples are not low enough to be constructive despite profitability; Hold We remain neutral in Grupo Aval, after adjusting our 2015E T.P. from COP 1,530/share to COP 1,400/share (-8.5%), following the incorporation of our new macro forecast for Despite some mid-term headwinds ROAE will reach its lowest point at 14.0% in 2016 in our base scenario- we believe that Aval will eventually return to the highest profitability among Colombian peers, reaching 18% in the long run. In spite of the strong fundamentals of the group, which are included in our valuation analysis through higher target multiples, we believe that shares are not discounted enough to consider a positive rating. The conservative risk management of Grupo Aval and its diversification into Central America may prove positive. Although the moderation of the economic growth in Colombia will pressure asset quality and the cost of credit, the traditionally conservative risk management of Grupo Aval may prove supportive. Furthermore, we believe that Grupo Aval made the best acquisition in Central America (from the incursion of Colombian banks in the region), which could be a buffer in this less appealing business cycle in Colombia. ROAE will touch its lowest point in 2016, but Grupo Aval should outperform peers in Colombia in the long run. Two large capital increases in the last two years, pressures on NIM, cost of credit, and effective taxes will likely impact profitability in the mid term, and the ROAE should reach a low of 14.0% in However, increasing scale, attractive funding, and a strategy heavily tilted towards profitability and efficiency should drive ROAE to 18% levels in the long-run, meaning that Grupo Aval will once again outperform peers in Colombia. Despite the sound fundamentals, forward multiples are not particularly attractive. Grupo Aval trades at the highest forward P/E ratios in our coverage, and looks fair in EVA-adjusted terms. The forward P/E is in line with the 5-year average. Thus, the shares are not trading at attractive multiples to take a constructive view, even with a fundamental-driven premium. Risks. Anything preventing Grupo Aval from returning to its leading position as the most profitable banking conglomerate in Colombia is a risk. Recent focus on retail could impact asset quality. An eventual conglomerates law could imply headwinds. Company Update Rating: Hold Industry: Banks Stock Data Ticker Price Chart (COP) and Volume (USD mn) Source: Bloomberg, Credicorp Capital pfaval cb / aval us Price (COP) 1,260 LTM Range (COP) 1,155-1,455 Target 1,400 (loc) / 12.4 (ADR) Total Return 15% Market Cap (USD mn) 11,789 Shares Outstanding 22,281 Free Float 21% ADTV (USD mn) Feb-14 Jun-14 Oct-14 Feb-15 PfAval COLCAP CREDICORP CAPITAL EQUITY RESEARCH Juan Dominguez +(571) Ext 1026 jcdominguez@credicorpcapital.com César Cuervo, CFA +(571) Ext 1012 ccuervo@credicorpcapital.com 20

21 Grupo Aval - Company Summary Sector: Banks Rating: HOLD Target Price: COP 1,400 (loc) / USD 12.4 (ADR) Stock Data Ticker pfaval cb Company Description Grupo Aval is the leading financial conglomerate in Colombia through its 4 banks (Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AVVillas), developing a multi-brand strategy. It is also leader in the pension fund management and merchant bank businesses through AFP Porvenir and Corficolombiana respectively. Through BAC Credomatic, it is the leader in the Central American banking industry. Price (COP) 1,260 Positives Concerns LTM Range 1,155-1,455 - Leading position in both Colombia and - The benefits of a multi-brand strategy are not Market Cap (USD mn) 11,789 Central America. easily observable as synergies (headcount/cost Shares Outstanding (mn) 22,281 - Strong management, with focus on of funding) could be captured through mergers. Free Float 21% profitability, efficiency and robust credit risk - Recent capital increases impacting profitability ADTV (USD mn) 4.2 management. in the mid-term. Loans by segment (as of Sep-14) Mortgages 7% Financial leases 7% Valuation Summary E 2015E 2016E P/E P/BV ROAE 17.7% 15.4% 13.1% 14.6% 14.0% ROAA 2.0% 1.9% 1.6% 1.8% 1.7% EPS growth 6.9% 3.0% -3.5% 22.7% 0.8% Div. Yield 3.5% 4.0% 4.2% 4.2% 4.8% Consumer 29% Income Statement COP bn E 2015E 2016E Net interest income 6,310 6,981 7,635 9,093 9,771 Ownership Structure Net fee income 2,383 2,815 3,155 3,421 3,709 Free-float 20% Commercial 57% Luis Carlos Sarmiento Angulo (directly and indirectly ) 80% Operating income 9,566 11,113 11,838 13,727 14,841 Provision expenses ,294-1,491-1,609-1,886 Operating expenses -5,289-6,028-6,452-6,982-7,619 Net income 1,526 1,601 1,742 2,236 2,254 EPS (COP / share) Balance Sheet COP bn E 2015E 2016E Cash & interbank loans 13,399 16,097 18,489 20,354 22,412 Investments 23,296 27,299 33,475 37,178 40,995 Gross loans 80,029 96, , , ,524 Management Total assets 127, , , , ,882 Deposits 81, , , , ,316 Chairman BoD: Luis Carlos Sarmiento Angulo Financial obligations 25,306 28,257 32,155 35,398 38,977 CEO: Luis Carlos Sarmiento Gutiérrez Total liabilities 113, , , , ,104 CFO: Diego Solano Minority Interest 5,408 6,472 6,896 7,569 8,257 IR Manager: Tatiana Uribe Shareholders Equity 9,083 11,728 14,887 15,768 16,521 Total Liabilities + Equity 127, , , , ,882 Tangible ratio 9.3% 8.9% 9.7% 9.6% 9.4% Sources: Company Reports, Bloomberg and Credicorp Capital; E Credicorp Capital Estimates 21