Search

 

Cablegate: Colombian Banking Sector Profits Up Sharply in 2007

VZCZCXYZ0009
RR RUEHWEB

DE RUEHBO #0583 0442230
ZNR UUUUU ZZH
R 132230Z FEB 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 1399
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHBR/AMEMBASSY BRASILIA 8046
RUEHCV/AMEMBASSY CARACAS 9956
RUEHLP/AMEMBASSY LA PAZ FEB LIMA 5908
RUEHZP/AMEMBASSY PANAMA 1237
RUEHQT/AMEMBASSY QUITO 6556

UNCLAS BOGOTA 000583

SIPDIS

SIPDIS

WHA/EPSC FOR PMAIER; EEB/IFD/OMA FOR ASIROTIC; TREASURY FOR
MEWENS

E.O. 12958: N/A
TAGS: EFIN ECON CO
SUBJECT: COLOMBIAN BANKING SECTOR PROFITS UP SHARPLY IN 2007

REF: 07 BOGOTA 8255

1. (SBU) SUMMARY: Amid strong economic growth and growing
consumer credit demand, Colombian banks booked a USD 2.1
billion profit in 2007, up 13 percent over 2006. The solid
performance ran across the financial sector including
insurance and pension segments. In particular, local and
international banks reported strong profits in commercial
lending. The outlook for 2008 remains positive, but profits
may slow as uncertainty over the impact of a recession in the
United States and an up-tick in overdue loans in Colombia
reduces lending. END SUMMARY.

2. (U) Most local financial institutions in Colombia had a
record year in 2007. Together, revenues on banking,
insurance, brokerage and pension services reached USD 5.2
billion. Commercial banks, in particular, experienced strong
profit growth as they shifted an increasing part of their
capital from portfolio investment in government securities to
consumer lending. Colombia's largest bank, Bancolombia,
recorded a 38 percent increase in profits to USD 400 million,
while the second largest local bank, Banco de Bogota, posted
a 39 percent increase in profits to USD 260 million.

3. (SBU) Local units of international banks also registered
strong gains with U.S.-based Citibank recording a 51 percent
increase in profits to USD 58 million and Spanish-owned BBVA
netting USD 160 million in profits, up 30 percent from 2007.
The President of Citibank Colombia recently told the
Ambassador that the company's Colombian operations were among
the most profitable in all of Latin America. BBVA, which has
a 12 percent stake in the Colombian banking market, has moved
steadily to expand its operations in Colombia. The bank has
doubled its investment since 2006, including acquiring the
defunct Colombian mortgage bank Granahorrar. BBVA plans to
invest a further USD 140 million in Colombia in 2008 through
the opening of 18 new branches.

4. (SBU) Overall, the President of Colombia's banking
association (Asobancaria) told us the sector's 2007
performance results from the fundamental development of the
Colombian economy as the growing middle class's demand for
banking services continues to rise. She pointed to
Colombia's progress in reducing unemployment in 2007 as
another example of the maturation of the economy.

5. (SBU) Nevertheless, local financial analysts have
expressed concern that the ratio of overdue loans to total
lending increased in 2007, thereby increasing the sector's
risk exposure. Likewise, while the GOC estimates the
Colombian economy will grow approximately five percent in
2008, some local analysts now fear a recession in the U.S.
could trim as much as one percent off of Colombian growth
estimates and, in turn, lead to a tightening of the
profitable consumer credit market.
Brownfield

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC