Edgar Filing: BANCOLOMBIA SA

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2011.

Comission File Number 001-32535

Bancolombia S.A.

(Translation of registrant’s name into English)

Cra. 48 # 26-85

Medellín, Colombia

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(2):___

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .

3Q11

BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) REPORTS CONSOLIDATED NET INCOME OF COP 424 BILLION FOR THE THIRD QUARTER OF 2011 (COP 539 PER SHARE - USD 1.12 PER ADR), WHICH REPRESENTS AN INCREASE OF 13% COMPARED TO THE SAME QUARTER LAST YEAR.

Net loans grew 8% during the quarter and 27.6% compared to 3Q10. This growth is in line with the current environment of solid credit demand in Colombia.

Net interest income increased 2% during the quarter and 15.4% compared to 3Q10. These increases are the result of loan growth coupled with a funding strategy that allowed the Bank to maintain a moderate cost of deposits during the quarter as a measure to defend the net interest margin, which ended the period at 6%

Loan portfolio quality continues showing a good trend. Loan deterioration during 3Q11 was COP 184 billion, and past due loans as a percentage of total loans were 2.5%. Net provision charges for past due loans and foreclosed assets totaled COP 87 billion for the quarter, and represented 0.7% of gross loans.

The balance sheet remains strong. Loan loss reserves represented 4.6% of total loans and 184% of past due loans at the end of 3Q11. The capital adequacy ratio ended the quarter at 13% (Tier 1 of 9.3%).

Profitability. ROE for 3Q11 was 20.6%, and annualized ROE for the first 9 months of the year was 19.2%, which represents an increase from the 18.9% reported for the same period in 2010.

November 3, 2011. Medellín, Colombia – Today, BANCOLOMBIA S.A. (“Bancolombia” or “the Bank”) announced its earnings results for the third quarter of 2011.

For the quarter ended September 30, 2011 (“3Q11”), Bancolombia reported consolidated net income of COP 424 billion, or COP 539 per share – USD 1.12 per ADR, which represents an increase of 10% as compared to the results for the quarter ended June 30, 2011 (“2Q11”) and of 13% as compared to the results for the quarter ended on September 30, 2010 (“3Q10”). Cumulative net income for the first nine months of 2011 was COP 1,160 billion, 15% higher than that for the same period of the previous year.

Bancolombia ended 3Q11 with COP 80,622 billion in assets, 7% higher than those at the end of 2Q11 and 25% greater than at the end 3Q10. At the same time, liabilities totaled COP 72,156 billion and increased 7% as compared to the figure presented in 2Q11 and 26% as compared to 3Q101.

1 This report corresponds to the consolidated financial statements of BANCOLOMBIA S.A. (“BANCOLOMBIA”) and its affiliates of which it owns, directly or indirectly more than 50% of the voting capital stock. These financial statements have been prepared in accordance with generally accepted accounting principles in Colombia and the regulations of Superintendencia Financiera de Colombia, collectively COL GAAP. BANCOLOMBIA maintains accounting records in Colombian pesos, referred to herein as “Ps.” or “COP”. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. There have been no changes to the Bank's principal accounting policies in the quarter ended September 30, 2011. The statements of income for the quarter ended September 30, 2011 are not necessarily indicative of the results for any other future interim period. For more information, please refer to the Bank's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties; consequently, there are or will be factors, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptances of new products or services by our targeted customers, changes in business strategy and various others factors, that could cause actual results to differ materially from those indicated in such statements. We do not intend, and do not assume any obligation, to update these forward-looking statements. Certain monetary amounts, percentages and other figures included in this report have been subject to rounding adjustments. Any reference to BANCOLOMBIA means the Bank together with its affiliates, unless otherwise specified.

Representative Market Rate October 1, 2011 $1929.01=US$ 1 Average Representative Market Rate for 3Q11: $1794.52 = US$ 1

3Q11

BANCOLOMBIA: Summary of consolidated financial quarterly results2

CONSOLIDATED BALANCE SHEET
AND INCOME STATEMENT	Quarter									Growth
(COP millions)	3Q 10			2Q 11			3Q 11			3Q 11/2Q 11			3Q 11/3Q 10
ASSETS
Loans and financial leases, net		42,891,624			50,709,728			54,745,266			7.96	%		27.64	%
Investment securities, net		9,152,209			10,231,243			11,012,486			7.64	%		20.33	%
Other assets		12,625,936			14,215,941			14,864,457			4.56	%		17.73	%
Total assets		64,669,769			75,156,912			80,622,209			7.27	%		24.67	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits		42,288,485			46,237,745			48,472,078			4.83	%		14.62	%
Non-interest bearing		5,873,306			6,972,139			7,290,767			4.57	%		24.13	%
Interest bearing		36,415,179			39,265,606			41,181,311			4.88	%		13.09	%
Other liabilities		14,832,175			20,911,566			23,684,139			13.26	%		59.68	%
Total liabilities		57,120,660			67,149,311			72,156,217			7.46	%		26.32	%
Shareholders' equity		7,549,109			8,007,601			8,465,992			5.72	%		12.15	%
Total liabilities and shareholders' equity		64,669,769			75,156,912			80,622,209			7.27	%		24.67	%

Interest income		1,258,938			1,448,120			1,548,720			6.95	%		23.02	%
Interest expense		387,124			464,471			542,969			16.90	%		40.26	%
Net interest income		871,814			983,649			1,005,751			2.25	%		15.36	%
Net provisions		(137,778	)		(103,940	)		(86,665	)		-16.62	%		-37.10	%
Fees and income from service, net		390,858			407,298			409,191			0.46	%		4.69	%
Other operating income		110,514			121,321			116,892			-3.65	%		5.77	%
Total operating expense		(755,374	)		(888,740	)		(919,426	)		3.45	%		21.72	%
Goodwill amortization		(12,823	)		(11,747	)		(11,709	)		-0.32	%		-8.69	%
Non-operating income, net		32,586			9,394			(3,266	)		-134.77	%		-110.02	%
Income tax expense		(124,664	)		(131,708	)		(86,326	)		-34.46	%		-30.75	%
Net income		375,133			385,527			424,442			10.09	%		13.14	%

PRINCIPAL RATIOS	Quarter									As of
	3Q 10			2Q 11			3Q 11			Sep-10			Sep-11
PROFITABILITY
Net interest margin (1)		6.28	%		6.16	%		5.98	%		6.23	%		6.01	%
Return on average total assets (2)		2.36	%		2.11	%		2.20	%		2.15	%		2.11	%
Return on average shareholders´ equity (3)		20.56	%		19.64	%		20.58	%		18.87	%		19.20	%
EFFICIENCY
Operating expenses to net operating income		55.94	%		59.55	%		60.79	%		55.91	%		60.61	%
Operating expenses to average total assets		4.83	%		4.94	%		4.83	%		4.86	%		4.89	%
CAPITAL ADEQUACY
Shareholders' equity to total assets		11.67	%		10.65	%		10.50	%		11.67	%		10.50	%
Technical capital to risk weighted assets		15.17	%		13.69	%		12.97	%		15.17	%		12.97	%
KEY FINANCIAL HIGHLIGHTS
Net income per ADS (USD)		1.06			1.10			1.12
Net income per share $COP		476.16			489.35			538.75
P/BV ADS (4)		3.08			2.91			2.50
P/BV Local (5) (6)		3.07			2.86			2.63
P/E (7)		15.46			14.94			12.90
ADR price (8)		65.63			66.73			55.70
Common share price (8)		29,380			29,060			28,300
Shares outstanding (9)		787,827,003			787,827,003			787,827,003
USD exchange rate (quarter end)		1,801.01			1,772.32			1,929.01

(1) Defined as net interest income divided by monthly average interest-earning assets. (2) Net income divided by monthly average assets. (3) Net income divided by monthly average shareholders' equity. (4) Defined as ADS price divided by ADS book value. (5) Defined as share price divided by share book value. (6) Share prices on the Colombian Stock Exchange; (7) Defined as market capitalization divided by annualized quarter results. (8) Prices at the end of the respective quarter. (9) Common and preferred.

3Q11

1.	BALANCE SHEET

1.1.

Assets

As of September 30, 2011, Bancolombia’s assets totaled COP 80,622 billion, which represents an increase of 7% compared to 2Q11 and of 25% compared to 3Q10.

Prepaid expenses and deferred charges increased 179% in 3Q11 versus 3Q10. This increase is explained by the recording of deferred expenses for COP 469 billion in 1Q11, related to the wealth tax that Bancolombia and its subsidiaries will pay from 2011 to 2014. The value recorded in this line will be amortized during the next four years and will be shown mainly as a reduction in the reappraisal and others account, although a portion will be reflected on the administrative expenses and others account. As of September 2011, the prepaid expenses and deferred charges account had COP 347 billion related to this wealth tax.

The property, plant and equipment account increased 10% during 3Q11 and 49% with respect to 3Q10. These variations are mainly explained by the increase in the import of equipment for leasing operations, and also by investments and capitalized expenses related to technology.

1.2.	Loan Portfolio

The following table shows the composition of Bancololombia’s investments and loans by type and currency:

(COP Million)	Amounts in COP									Amounts in USD converted to COP									Amounts in USD (thousands)									Total
(1 USD = 1.929.01 COP)				3Q11/2Q11			3Q11/3Q10						3Q11/2Q11			3Q11/3Q10						3Q11/2Q11			3Q11/3Q10						3Q11/2Q11			3Q11/3Q10
Net investment securities		8,406,744			13.99	%		19.94	%		2,605,742			-8.76	%		21.58	%		1,350,818			-16.17	%		13.51	%		11,012,486			7.64	%		20.33	%
Gross Loans		41,917,761			5.82	%		20.02	%		15,481,228			13.54	%		48.25	%		8,025,478			4.31	%		38.41	%		57,398,989			7.79	%		26.52	%
Commercial loans		23,820,337			4.79	%		13.26	%		11,924,029			14.27	%		62.85	%		6,181,424			4.99	%		52.05	%		35,744,366			7.77	%		26.07	%
Consumer loans		8,026,323			6.85	%		40.10	%		2,016,367			9.33	%		8.39	%		1,045,286			0.45	%		1.20	%		10,042,690			7.34	%		32.33	%
Small business loans		272,022			4.88	%		12.78	%		41,517			439.04	%		323.21	%		21,522			395.26	%		295.12	%		313,539			17.40	%		24.91	%
Mortgage loans		3,730,567			9.91	%		28.75	%		811,576			8.31	%		4.76	%		420,722			-0.49	%		-2.19	%		4,542,143			9.62	%		23.69	%
Finance lease		6,068,512			6.17	%		20.74	%		687,739			14.72	%		44.49	%		356,524			5.40	%		34.90	%		6,756,251			6.98	%		22.80	%
Allowance for loan losses		(2,280,912	)		4.38	%		7.05	%		(372,811	)		5.33	%		7.99	%		(193,265	)		-3.22	%		0.83	%		(2,653,723	)		4.51	%		7.18	%
Net total loans and fin. leases		39,636,849			5.90	%		20.87	%		15,108,417			13.75	%		49.62	%		7,832,213			4.51	%		39.70	%		54,745,266			7.96	%		27.64	%
Operating leases, net		1,093,327			6.72	%		20.23	%		100,592			6.03	%		63.65	%		52,147			-2.58	%		52.79	%		1,193,919			6.66	%		22.98	%

The most relevant aspects regarding the evolution of the loan portfolio during 3Q11 were:

· The dynamic growth of consumer loans in Colombia during 3Q11 and compared to 3Q10. Conversely, consumer loans in USD, which correspond to the operation in El Salvador, remained stable during 3Q11 and increased 1.2% during the past 12 months.

3Q11

· Demand for loans denominated in USD by Colombian companies. The increase in international trade flows played an important role in the growth of loans denominated in USD as companies demanded credit to finance their exporting activities and the working capital needs associated with them. The Colombian government, in an effort to control external debt in dollars that could result in further appreciation of the COP, imposed a withholding tax on the interest paid by Colombian companies on loans granted to them by banks domiciled outside Colombia. This tax motivated companies with loans in USD granted by foreign banks to start taking loans in USD with domestic banks, which was one of the reasons for the growth in Bancolombia’s USD denominated loan book.

· Net loans in USD correspond to loans originated in Colombia (USD 3,244 million, 41%), El Salvador (USD 2,359 million, 30%) and other countries (USD 2,229 million, 29%).

· The COP depreciated 9% against the USD during 3Q11. This affected the conversion to COP of loans denominated in USD, and explains approximately 2% of the increase in the balance sheet figures expressed in COP during 3Q11.

· Mortgage loans denominated in COP also showed a positive performance. The increased dynamism of mortgage lending in Colombia is explained by optimism regarding the economy, lower long-term interest rates, as well as by the Colombian government’s interest rate subsidy programs, which have produced higher credit demand in this segment. On the other hand, the outstanding mortgage balances denominated in USD from our operation in El Salvador remained stable in 3Q11 and decreased slightly in the past 12 months.

· Financial leases, 90% of which are denominated in COP, increased 7% during the quarter and 23% as compared to 3Q10. Operating leases, net of depreciation, increased 7% during the quarter and 23% during the year.

When analyzing the performance of the loan portfolio according to the categories established by Bancolombia to manage its commercial strategy, it becomes clear that corporate loans were key drivers of the growth of the total loan portfolio during the quarter as they increased 8% with respect to 2Q11. This increase is explained by higher demand for working capital and financing by corporations. On the other hand, retail and SME loans increased 7% in the same period due to higher demand for working capital and financing by SMEs, personal loans and car loans..

Reserves for loan losses increased 5% during 3Q11 and totaled COP 2,654 billion, or 4.6% of total loans at the end of the quarter. For further explanation regarding coverage of the loan portfolio and credit quality trends, please see Section 2.4. “Asset Quality, Provision Charges and Balance Sheet Strength” of this report.

3Q11

The following table summarizes Bancolombia’s total loan portfolio:

LOAN PORTFOLIO	As of									Growth						% of Total			% of
(COP million)	Sep-10			Jun-11			Sep-11			3Q11/2Q11			3Q11/3Q10			loans			Category
CORPORATE
Working capital loans		20,331,403			22,973,517			24,316,016			5.84	%		19.60	%		42.36	%		84.23	%
Funded by domestic development banks		324,811			256,657			269,850			5.14	%		-16.92	%		0.47	%		0.93	%
Trade Financing		2,110,665			3,382,659			4,138,336			22.34	%		96.07	%		7.21	%		14.33	%
Overdrafts		90,155			93,779			100,583			7.26	%		11.57	%		0.18	%		0.35	%
Credit Cards		42,618			42,084			44,398			5.50	%		4.18	%		0.08	%		0.15	%
TOTAL CORPORATE		22,899,652			26,748,696			28,869,183			7.93	%		26.07	%		50.30	%		100.00	%
RETAIL AND SMEs
Working capital loans		4,360,456			5,471,297			5,930,290			8.39	%		36.00	%		10.33	%		34.42	%
Personal loans		4,229,536			5,024,114			5,369,049			6.87	%		26.94	%		9.35	%		31.16	%
Loans funded by domestic development banks		727,207			626,738			667,109			6.44	%		-8.26	%		1.16	%		3.87	%
Credit Cards		2,456,024			2,962,531			3,158,648			6.62	%		28.61	%		5.50	%		18.33	%
Overdrafts		238,226			256,508			253,217			-1.28	%		6.29	%		0.44	%		1.47	%
Automobile loans		1,238,911			1,653,102			1,788,166			8.17	%		44.33	%		3.12	%		10.38	%
Trade Financing		43,295			46,981			64,796			37.92	%		49.66	%		0.11	%		0.38	%
TOTAL RETAIL AND SMEs		13,293,655			16,041,271			17,231,275			7.42	%		29.62	%		30.02	%		100.00	%
MORTGAGE		3,672,243			4,143,652			4,542,280			9.62	%		23.69	%		7.91	%		100.00	%
FINANCIAL LEASES		5,502,055			6,315,210			6,756,251			6.98	%		22.80	%		11.77	%		100.00	%
Total loans and financial leases		45,367,605			53,248,829			57,398,989			7.79	%		26.52	%		100.00	%		100.00	%
Allowance for loan losses		(2,475,981	)		(2,539,101	)		(2,653,723	)		4.51	%		7.18	%
Total loans and financial leases, net		42,891,624			50,709,728			54,745,266			7.96	%		27.64	%

1.3.	Investment Portfolio

As of September 30, 2011, Bancolombia’s net investment portfolio totaled COP 11,012 billion, increasing 8% compared to 2Q11 and 20% compared to 3Q10. The investment portfolio is mainly composed of debt investment securities, which represented 92% of Bancolombia’s total investments and 13% of assets at the end of 3Q11. Investments denominated in USD totaled USD 1,351 million and represented 24% of the investment portfolio. Additionally, the Bank has COP 1,962 billion in mortgage backed securities, which represent 18% of the investment portfolio. The duration of the debt securities portfolio was 19.7 months with a yield to maturity of 4.79% at the end of 3Q11.

1.4.

Goodwill

As of 3Q11, Bancolombia’s goodwill totaled COP 719 billion and increased 7% compared to the amount reported in 2Q11. This variation is explained by the depreciation of the Colombian peso in the quarter and the amortization of goodwill reported during the past year (under COL GAAP, goodwill is amortized within a period of 20 years). As of September 30, 2011, Bancolombia’s goodwill included USD 348 million related mostly to the acquisition of Banagrícola in 2007 and COP 4 billion related to the acquisition of a participation of Renting Bancolombia by Leasing Bancolombia.

1.5.

Funding

As of September 30, 2011, Bancolombia’s liabilities totaled COP 72,156 billion and increased 7% compared to 2Q11 and 26% compared to 3Q10. The ratio of net loans to deposits (including borrowings from domestic development banks) was 106% at the end of 3Q11, increasing compared to the figures reported in 2Q11 (104%) and 3Q10 (96%). The growth of the loan portfolio and Bancolombia’s ability to obtain funds through long-term bond issuances resulted in the higher ratio of net loans to deposits for the quarter.

Deposits totaled COP 48,472 billion (or 67% of liabilities) at the end of 3Q11 and increased 5% during the quarter and 15% over the last 12 months. CDs represented 40% of deposits in 3Q10, and 37% of deposits in 3Q11. This decrease is in line with the funding strategy executed by the Bank during the past year, which has consisted of taking advantage of the greater liquidity and low interest rates through increasing savings and checking accounts. As a result of this recomposition of the funding mix, demand deposits went from representing 60% of the Bank’s total deposits in 3Q10, to representing 63% as of the end of 3Q11.

3Q11

DEPOSIT MIX	3Q10					2Q11					3Q11
COP Million			%					%					%
Checking accounts		8,159,806		19.30	%		9,242,949		19.99	%		9,819,942		20.26	%
Saving accounts		16,821,175		39.78	%		19,484,245		42.14	%		20,290,667		41.86	%
Time deposits		16,880,463		39.92	%		17,012,101		36.79	%		17,787,650		36.70	%
Other		427,041		1.01	%		498,450		1.08	%		573,819		1.18	%
Total deposits		42,288,485					46,237,745					48,472,078

At the end of 3Q11, Bancolombia had outstanding bonds for USD 2,540 million in international markets and COP 4,766 billion in local markets. The maturities of these bonds range from 2 to 10 years.

1.6.	Shareholders’ Equity and Regulatory Capital

Shareholders’ equity at the end of 3Q11 was COP 8,466 billion, increasing 12% or COP 917 billion with respect to the COP 7,549 billion reported at the end of 3Q10.

Bancolombia’s capital adequacy ratio was 12.97%, 72 basis points below the 13.69% for 2Q11 and 220 bps below the 15.17% for 3Q10. The decrease in the capital adequacy ratio is explained by the dynamic growth of the Bank’s loan portfolio and assets.

Bancolombia’s capital adequacy ratio was 397 basis points above the minimum level required by Colombia’s regulator, while the basic capital ratio (tier 1) was 9.31% and the tangible capital ratio, which is equal to shareholders’ equity minus goodwill and intangible assets divided by tangible assets, was 8.83% at the end of 3Q11.

TECHNICAL CAPITAL RISK WEIGHTED ASSETS
Consolidated (COP millions)	3Q 10			%			2Q 11			%			3Q 11			%
Basic capital (Tier I)		6,117,948			10.60	%		6,717,062			9.95	%		6,817,714			9.31	%
Additional capital (Tier II)		2,637,611			4.57	%		2,526,745			3.74	%		2,684,736			3.67	%
Technical capital (1)		8,755,559						9,243,807						9,502,451
Risk weighted assets included market risk		57,727,371						67,511,195						73,237,366
CAPITAL ADEQUACY (2)		15.17	%					13.69	%					12.97	%

(1) Technical capital is the sum of basic and additional capital.

(2) Capital adequacy is technical capital divided by risk weighted assets.

3Q11

2.	INCOME STATEMENT

Net income totaled COP 424 billion in 3Q11, or COP 539 per share – USD 1.12 per ADR, which represents an increase of 10% compared to 2Q11 and of 13% compared to 3Q10. Bancolombia’s ROE was 20.6% for 3Q11, higher than the annualized ROE of 19.6% for 2Q11 and the same as that reported in 3Q10.

2.1.	Net Interest Income

Net interest income totaled COP 1,006 billion in 3Q11, 2% higher than that reported in 2Q11, and 15% higher than the figure for 3Q10. Interest income increased 7% during the quarter, and interest expense increased 17%. The increase of interest paid on liabilities was lead by the interest on bonds outstanding, which increased 28% in 3Q11 due to growth in the amount of bonds outstanding resulting from the issuance that took place in June 2011, and the payment of coupons in dollars at a higher exchange rate.

During 3Q11, income generated by the investment portfolio totaled COP 181 billion, a figure 6% lower than the COP 192 billion for 2Q11 and 18% higher than the COP 153 billion for 3Q10.

Net Interest Margin

Annualized net interest margin ended 3Q11 at 6.0%. Annualized net interest margin for investments was 4.3%, while the annualized net interest margin for loans, financial leases and overnight funds was 6.3%.

Annualized Interest
Margin	1Q10			2Q10			3Q10			4Q10			1Q11			2Q11			3Q11
Loans´Interest margin		7.1	%		7.1	%		6.7	%		6.6	%		6.4	%		6.3	%		6.3	%
Debt investments´margin		1.4	%		3.1	%		3.6	%		2.3	%		3.0	%		5.1	%		4.3	%
Net interest margin		6.2	%		6.4	%		6.2	%		6.0	%		5.9	%		6.2	%		6.0	%

The funding cost increased during 3Q11 as deposits began to reflect the increase in interest rates by the Colombian Central Bank. The annualized weighted average cost of deposits reached 2.7% in 3Q11, higher than the 2.5% for 2Q11 and the 2.3% for 3Q10.

Deposits' weighted
average cost	3Q10			2Q11			3Q11
Checking accounts		0.42	%		0.37	%		0.44	%
Time deposits		4.01	%		3.94	%		4.18	%
Saving accounts		1.70	%		2.26	%		2.63	%
Total deposits		2.32	%		2.46	%		2.73	%

2.2.	Fees and Income from Services

During 3Q11, net fees and income from services totaled COP 409 billion, stable compared to those reported in 2Q11 and 5% higher than those reported in 3Q10. In particular, fees from credit and debit cards increased 1% with respect to 2Q11, and 5% with respect to 3Q10, and fees from banking services increased 2% respect to 2Q11 and 34% with respect to 3Q10. Fees form pension fund management were not recorded in 3Q11 because of the sale process of the pension fund manager AFP Crecer in El Salvador.

3Q11

The following table summarizes Bancolombia’s participation in the credit card business in Colombia:

ACCUMULATED CREDIT CARD BILLING					%
(COP millions)	Sep-10		Sep-11		Growth			Market Share
Bancolombia VISA		1,382,599		1,637,652		18.45	%		7.93	%
Bancolombia Mastercard		1,684,311		1,958,465		16.28	%		9.49	%
Bancolombia American Express		1,732,061		2,140,391		23.57	%		10.37	%
Total Bancolombia		4,798,972		5,736,508		19.54	%		27.79	%
Colombian Credit Card Market		17,548,325		20,638,874		17.61	%
Source: Credibanco y Redeban multicolor

CREDIT CARD MARKET SHARE					%
(Outstanding credit cards)	Sep-10		Sep-11		Growth			Market Share
Bancolombia VISA		322,907		366,823		13.60	%		5.93	%
Bancolombia Mastercard		348,392		384,465		10.35	%		6.21	%
Bancolombia American Express		415,208		544,087		31.04	%		8.79	%
Total Bancolombia		1,086,507		1,295,375		19.22	%		20.94	%
Colombian Credit Card Market		5,385,165		6,187,457		14.90	%
Source: Credibanco y Redeban multicolor

2.3.	Other Operating Income

Total other operating income was COP 117 billion in 3Q11, 4% lower than in 2Q11, and 6% higher than in 3Q10. Income from foreign exchange gains and derivatives denominated in foreign currencies increased 87% due to the appreciation of the COP against the USD.

Notably, revenues aggregated in the communication, postage, rent and others totaled COP 56 billion in 3Q11, 7% higher as compared to 2Q11 and 28% higher as compared to 3Q10. This line includes commercial discounts and operating leases payments, which have grown as the value of assets rented under operating leasing contract has increased. Finally, income from subsidiaries from the real sector increased 10% during the quarter and 22% over the past year.

During 3Q11, a loss was recorded for the sale of equity investments that Bancolombia had received as collateral for a loan that defaulted. These equity investments increased the recovery of foreclosed assets and the net effect for Bancolombia was net gain for COP 3 billion.

2.4.	Asset Quality, Provision Charges and Balance Sheet Strength

The deterioration of the loan portfolio (new past due loans before charge-offs) was COP 184 billion in 3Q11. The new vintages of loans have a low deterioration and contribute to the improvement of the loan portfolio quality.

Past due loans (those overdue more than 30 days) totaled COP 1,439 billion at the end of 3Q11, which represents 2.5% of total gross loans. The PDL ratio decreased from 2.6% in 2Q11 and 3.4% at the end of 3Q10. Loan charge-offs totaled COP 104 billion in 3Q11.

Provision charges (net of recoveries), totaled COP 87 billion in 3Q11. It is remarkable that while gross loan provisions decreased 8% in the last 12 months, recovery of charged-off loans increased 14%.

Bancolombia maintains a strong balance sheet in terms of loan loss reserves. Allowances for loan losses totaled COP 2,654 billion, or 4.6% of total loans at the end of 3Q11, decreasing with respect to the 4.8% presented at the end of 2Q11 and the 5.5% at the end of 3Q10. Additionally, coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 184% at the end of 3Q11. Likewise, coverage measured by the ratio of allowances for loans losses to loans classified as C, D and E, was 118% at the end of the second quarter of 3Q11.

3Q11

The following tables present key metrics for asset quality:

ASSET QUALITY	As of									Growth
( COP millions)	Sep-10			Jun-11			Sep-11			3Q11/2Q11			3Q11/3Q10
Total performing past due loans (1)		545,724			512,210			518,331			1.20	%		-5.02	%
Total non-performing past due loans		974,779			847,988			921,055			8.62	%		-5.51	%
Total past due loans		1,520,503			1,360,198			1,439,386			5.82	%		-5.33	%
Allowance for loans interest losses		2,475,981			2,539,101			2,653,723			4.51	%		7.18	%
Past due loans to total loans		3.35	%		2.55	%		2.51	%
Non-performing loans as a percentage of total loans		2.15	%		1.59	%		1.60	%
“C”, “D” and “E” loans as a percentage of total loans		4.62	%		4.12	%		3.92	%
Allowances to past due loans (2)		162.84	%		186.67	%		184.36	%
Allowance for loan losses as a percentage of “C”, “D” and “E” loans (2)		118.08	%		115.67	%		117.91	%
Allowance for loan losses as a percentage of non-performing loans (2)		254.00	%		299.43	%		288.12	%
Allowance for loan losses as a percentage of total loans		5.46	%		4.77	%		4.62	%
Percentage of performing loans to total loans		97.85	%		98.41	%		98.40	%

(1) "Performing" past due loans are loans upon which Bancolombia continues to recognize income although interest in respect of such loans has not been received. Mortgage loans cease to accumulate interest on the statement of operations when they are more than 60 days past due. For all other loans and financial leasing operations of any type, interest is no longer accumulated after they are more than 30 days past due.

(2) Under Colombian Bank regulations, a loan is past due when it is at least 31 days past the actual due date.

PDL Per Category (30 days)
	% Of loan Portfolio			3Q10			2Q11			3Q11
Commercial loans		62.27	%		2.4	%		1.71	%		1.8	%
Consumer loans		17.50	%		4.3	%		3.27	%		3.5	%
Microcredit		0.55	%		8.6	%		9.16	%		9.2	%
Mortgage loans		7.91	%		8.8	%		7.16	%		6.7	%
Finance lease		11.77	%		3.2	%		2.61	%		1.9	%
PDL TOTAL		100.00	%		3.35	%		2.55	%		2.51	%

PDL Per Category (90 days)
	% Of loan Portfolio			3Q10			2Q11			3Q11
Commercial loans		62.27	%		1.7	%		1.25	%		1.3	%
Consumer loans		17.50	%		2.0	%		1.49	%		1.6	%
Microcredit		0.55	%		4.8	%		5.39	%		5.8	%
Mortgage loans		7.91	%		4.0	%		3.39	%		3.2	%
Finance lease		11.77	%		2.0	%		1.26	%		1.2	%
TOTAL LOAN PORTFOLIO		100.00	%		2.0	%		1.48	%		1.48	%

LOANS AND FINANCIAL LEASES CLASSIFICATION ( COP millions)	Sep-10					Jun-11					Sep-11
¨A¨ Normal		41,698,504		91.9	%		49,789,864		93.5	%		53,822,788		93.8	%
¨B¨ Subnormal		1,572,259		3.5	%		1,263,852		2.4	%		1,325,637		2.3	%
¨C¨ Deficient		606,209		1.3	%		772,764		1.4	%		797,671		1.4	%
¨D¨ Doubtful recovery		1,035,384		2.3	%		892,671		1.7	%		865,523		1.5	%
¨E¨ Unrecoverable		455,249		1.0	%		529,678		1.0	%		587,370		1.0	%
Total		45,367,605		100	%		53,248,829		100	%		57,398,989		100	%
Loans and financial leases classified as C, D and E as a percentage of total loans and financial leases		4.6	%				4.1	%				3.9	%

3Q11

2.5.	Operating Expenses

During 3Q11, operating expenses totaled COP 919 billion, increasing 3% compared to 2Q11 and 22% compared to 3Q10.

Personnel expenses (the sum of salaries and employee benefits, bonus plan payments and compensation) totaled COP 356 billion in 3Q11, increasing 1% as compared to 2Q11 and 13% as compared to 3Q10.

During 3Q11, administrative and other expenses totaled COP 484 billion and increased 8% as compared to 2Q11 and 32% compared to 3Q10. This variation is explained by higher expenses for rentals and leasing of technology that the Bank has incurred for several years. Rent expenses were COP 30 billion during 3Q11. At the same time, advisory fees increased during the quarter, and provisions were made for the improvement of physical facilities.

Depreciation expenses totaled COP 56 billion in 3Q11, increasing 6% as compared to 2Q11 and 13% compared to 3Q10.

At the end of 3Q11 Bancolombia had 22,821 employees and 951 branches.

3Q11

3.	BANCOLOMBIA Company Description (NYSE: CIB)

Bancolombia is a full service financial institution incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 6.9 million customers. Bancolombia delivers its products and services via its regional network comprised of Colombia’s largest non-government owned banking network, El Salvador’s leading financial conglomerate (Banagricola S.A.), off-shore banking subsidiaries in Panama, Cayman and Puerto Rico, as well as an agency in Miami. Together, Bancolombia and its subsidiaries provide stock brokerage, investment banking, leasing, factoring, consumer finance, fiduciary and trust services, asset management, pension fund administration, and insurance, among others.

Contact Information

Bancolombia’s Investor Relations

Phone (574) 4041837 / (574) 4041838

E-mail: investorrelations@bancolombia.com.co

Alejandro Mejía (IR Manager) /Catalina Botero (Analyst)

Website: http://www.grupobancolombia.com/investorrelations/

3Q11

BALANCE SHEET
(COP million)	Sep-10		Jun-11		Sep-11		Last Quarter			Annual			% of Assets			% of Liabilities
ASSETS
Cash and due from banks		4,636,088		5,068,394		5,278,593		4.15	%		13.86	%		6.55	%
Overnight funds sold		781,401		690,974		806,053		16.65	%		3.15	%		1.00	%
Total cash and equivalents		5,417,489		5,759,368		6,084,646		5.65	%		12.31	%		7.55	%
Debt securities		8,785,254		9,664,733		10,165,627		5.18	%		15.71	%		12.61	%
Trading		3,235,613		4,288,308		4,780,614		11.48	%		47.75	%		5.93	%
Available for Sale		2,315,513		1,822,591		1,756,172		-3.64	%		-24.16	%		2.18	%
Held to Maturity		3,234,128		3,553,834		3,628,841		2.11	%		12.20	%		4.50	%
Equity securities		451,628		631,411		906,053		43.50	%		100.62	%		1.12	%
Trading		207,177		282,865		296,487		4.82	%		43.11	%		0.37	%
Available for Sale		244,451		348,546		609,566		74.89	%		149.36	%		0.76	%
Market value allowance		-84,673		-64,901		-59,194		-8.79	%		-30.09	%		-0.07	%
Net investment securities		9,152,209		10,231,243		11,012,486		7.64	%		20.33	%		13.66	%
Commercial loans		28,353,190		33,166,893		35,744,366		7.77	%		26.07	%		44.34	%
Consumer loans		7,589,110		9,356,075		10,042,690		7.34	%		32.33	%		12.46	%
Microcredit		251,007		267,064		313,539		17.40	%		24.91	%		0.39	%
Mortgage loans		3,672,243		4,143,587		4,542,143		9.62	%		23.69	%		5.63	%
Finance lease		5,502,055		6,315,210		6,756,251		6.98	%		22.80	%		8.38	%
Allowance for loan losses		-2,475,981		-2,539,101		-2,653,723		4.51	%		7.18	%		-3.29	%
Net total loans and financial leases		42,891,624		50,709,728		54,745,266		7.96	%		27.64	%		67.90	%
Accrued interest receivable on loans		382,908		405,441		464,760		14.63	%		21.38	%		0.58	%
Allowance for accrued interest losses		-43,246		-40,925		-40,427		-1.22	%		-6.52	%		-0.05	%
Net total interest accrued		339,662		364,516		424,333		16.41	%		24.93	%		0.53	%
Customers' acceptances and derivatives		914,322		1,046,411		930,191		-11.11	%		1.74	%		1.15	%
Net accounts receivable		667,351		761,779		840,161		10.29	%		25.89	%		1.04	%
Net premises and equipment		1,068,890		1,444,712		1,595,994		10.47	%		49.31	%		1.98	%
Foreclosed assets, net		71,334		56,450		53,461		-5.29	%		-25.06	%		0.07	%
Prepaid expenses and deferred charges		271,879		784,297		759,692		-3.14	%		179.42	%		0.94	%
Goodwill		719,442		672,169		718,637		6.91	%		-0.11	%		0.89	%
Operating leases, net		970,838		1,119,393		1,193,919		6.66	%		22.98	%		1.48	%
Other		1,365,721		1,443,053		1,482,911		2.76	%		8.58	%		1.84	%
Reappraisal of assets		819,008		763,793		780,512		2.19	%		-4.70	%		0.97	%
Total assets		64,669,769		75,156,912		80,622,209		7.27	%		24.67	%		100.00	%
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Non-interest bearing		5,873,306		6,972,139		7,290,767		4.57	%		24.13	%		9.04	%		10.10	%
Checking accounts		5,446,265		6,473,689		6,716,948		3.76	%		23.33	%		8.33	%		9.31	%
Other		427,041		498,450		573,819		15.12	%		34.37	%		0.71	%		0.80	%
Interest bearing		36,415,179		39,265,606		41,181,311		4.88	%		13.09	%		51.08	%		57.07	%
Checking accounts		2,713,541		2,769,260		3,102,994		12.05	%		14.35	%		3.85	%		4.30	%
Time deposits		16,880,463		17,012,101		17,787,650		4.56	%		5.37	%		22.06	%		24.65	%
Savings deposits		16,821,175		19,484,245		20,290,667		4.14	%		20.63	%		25.17	%		28.12	%
Total deposits		42,288,485		46,237,745		48,472,078		4.83	%		14.62	%		60.12	%		67.18	%
Overnight funds		1,530,865		2,444,591		3,089,294		26.37	%		101.80	%		3.83	%		4.28	%
Bank acceptances outstanding		772,779		840,863		707,342		-15.88	%		-8.47	%		0.88	%		0.98	%
Interbank borrowings		938,735		2,843,177		3,465,631		21.89	%		269.18	%		4.30	%		4.80	%
Borrowings from domestic development banks		2,532,858		2,716,078		2,988,391		10.03	%		17.98	%		3.71	%		4.14	%
Accounts payable		1,661,115		1,920,536		1,740,716		-9.36	%		4.79	%		2.16	%		2.41	%
Accrued interest payable		315,505		319,721		363,090		13.56	%		15.08	%		0.45	%		0.50	%
Other liabilities		728,622		570,210		573,814		0.63	%		-21.25	%		0.71	%		0.80	%
Bonds		5,390,862		8,387,065		9,666,416		15.25	%		79.31	%		11.99	%		13.40	%
Accrued expenses		891,276		807,135		1,024,702		26.96	%		14.97	%		1.27	%		1.42	%
Minority interest in consolidated subsidiaries		69,558		62,190		64,743		4.11	%		-6.92	%		0.08	%		0.09	%
Total liabilities		57,120,660		67,149,311		72,156,217		7.46	%		26.32	%		89.50	%		100.00	%
SHAREHOLDERS' EQUITY														0.00	%
Subscribed and paid in capital		393,914		393,914		393,914		0.00	%		0.00	%		0.49	%
Retained earnings		6,008,980		6,613,749		7,117,518		7.62	%		18.45	%		8.83	%
Appropiated		5,001,613		5,878,139		5,957,466		1.35	%		19.11	%		7.39	%
Unappropiated		1,007,367		735,610		1,160,052		57.70	%		15.16	%		1.44	%
Reappraisal and others		1,103,111		989,760		952,303		-3.78	%		-13.67	%		1.18	%
Gross unrealized gain or loss on debt securities		43,104		10,178		2,257		-77.82	%		-94.76	%		0.00	%
Total shareholder's equity		7,549,109		8,007,601		8,465,992		5.72	%		12.15	%		10.50	%

3Q11

INCOME STATEMENT	As of						Growth												Growth
(COP million)	Sep-10			Sep-11			Sep-11/Sep-10			3Q10			2Q11			3Q11			3Q11/2Q11			3Q11/3Q10
Interest income and expenses
Interest on loans		2,900,639			3,320,969			14.49	%		959,837			1,100,638			1,200,725			9.09	%		25.10	%
Interest on investment securities		345,633			505,281			46.19	%		153,394			191,992			180,678			-5.89	%		17.79	%
Overnight funds		35,304			12,245			-65.32	%		6,502			4,226			3,117			-26.24	%		-52.06	%
Leasing		426,063			459,950			7.95	%		139,205			151,264			164,200			8.55	%		17.96	%
Total interest income		3,707,639			4,298,445			15.93	%		1,258,938			1,448,120			1,548,720			6.95	%		23.02	%
Interest expense		-			-						-			-			-
Checking accounts		27,529			28,678			4.17	%		9,666			9,045			10,955			21.12	%		13.34	%
Time deposits		533,826			491,184			-7.99	%		169,950			163,180			181,702			11.35	%		6.91	%
Savings deposits		236,146			331,265			40.28	%		77,051			110,477			130,515			18.14	%		69.39	%
Total interest on deposits		797,501			851,127			6.72	%		256,667			282,702			323,172			14.32	%		25.91	%
Interbank borrowings		13,614			23,940			75.85	%		4,255			8,607			8,396			-2.45	%		97.32	%
Borrowings from domestic development banks		107,442			114,220			6.31	%		32,575			36,685			44,971			22.59	%		38.05	%
Overnight funds		26,750			57,578			115.24	%		8,219			21,010			18,460			-12.14	%		124.60	%
Bonds		234,053			368,289			57.35	%		85,408			115,467			147,970			28.15	%		73.25	%
Total interest expense		1,179,360			1,415,154			19.99	%		387,124			464,471			542,969			16.90	%		40.26	%
Net interest income		2,528,279			2,883,291			14.04	%		871,814			983,649			1,005,751			2.25	%		15.36	%
Provision for loan and accrued interest losses, net		(608,874	)		(486,588	)		-20.08	%		(187,855	)		(176,744	)		(173,103	)		-2.06	%		-7.85	%
Recovery of charged-off loans		179,508			186,555			3.93	%		61,273			61,040			69,942			14.58	%		14.15	%
Provision for foreclosed assets and other assets		(55,178	)		(77,527	)		40.50	%		(15,562	)		(25,428	)		(34,451	)		35.48	%		121.38	%
Recovery of provisions for foreclosed assets and other assets		17,621			107,263			508.72	%		4,366			37,192			50,947			36.98	%		1066.90	%
Total net provisions		(466,923	)		(270,297	)		-42.11	%		(137,778	)		(103,940	)		(86,665	)		-16.62	%		-37.10	%
Net interest income after provision for loans		-			-						-			-			-
and accrued interest losses		2,061,356			2,612,994			26.76	%		734,036			879,709			919,086			4.48	%		25.21	%
Commissions from banking services and other services		222,135			280,983			26.49	%		73,116			96,285			98,224			2.01	%		34.34	%
Electronic services and ATM fees		41,020			48,578			18.43	%		13,830			17,553			17,945			2.23	%		29.75	%
Branch network services		85,963			91,479			6.42	%		29,825			30,657			31,930			4.15	%		7.06	%
Payment fees		164,231			164,737			0.31	%		56,271			55,601			55,937			0.60	%		-0.59	%
Credit card merchant fees		11,303			12,701			12.37	%		3,410			5,870			4,064			-30.77	%		19.18	%
Credit and debit card annual fees		424,639			448,098			5.52	%		143,803			149,332			150,999			1.12	%		5.00	%
Checking fees		51,803			55,839			7.79	%		17,504			18,452			19,418			5.24	%		10.93	%
Fiduciary activities		125,033			142,057			13.62	%		41,610			48,429			47,449			-2.02	%		14.03	%
Pension plan administration		66,024			-			-100.00	%		19,922			-			-			0.00	%		-100.00	%
Brokerage fees		25,043			31,839			27.14	%		9,182			9,462			11,476			21.29	%		24.98	%
Check remittance		12,919			14,195			9.88	%		3,860			4,631			5,120			10.56	%		32.64	%
International operations		42,984			51,105			18.89	%		15,890			17,939			16,437			-8.37	%		3.44	%
Fees and other service income		1,273,097			1,341,611			5.38	%		428,223			454,211			458,999			1.05	%		7.19	%
Fees and other service expenses		(112,214	)		(140,021	)		24.78	%		(37,365	)		(46,913	)		(49,808	)		6.17	%		33.30	%
Total fees and income from services, net		1,160,883			1,201,590			3.51	%		390,858			407,298			409,191			0.46	%		4.69	%
Other operating income		-			-						-			-			-
Net foreign exchange gains		21,057			50,079			137.83	%		(1,912	)		(12,200	)		41,171			437.47	%		2253.29	%
Derivatives Financial Contracts		36,311			25,024			-31.08	%		14,139			31,081			(5,943	)		-119.12	%		-142.03	%
Gains(loss) on sales of investments on equity securities		43,221			(17,883	)		-141.38	%		9,634			(848	)		(16,595	)		1856.96	%		-272.25	%
Securitization income		44,214			33,356			-24.56	%		18,698			11,790			12,715			7.85	%		-32.00	%
Dividend income		32,499			26,792			-17.56	%		4,935			15,352			3,393			-77.90	%		-31.25	%
Revenues from commercial subsidiaries		64,465			74,024			14.83	%		20,970			23,354			25,670			9.92	%		22.41	%
Insurance income		4,596			-			-100.00	%		15			-			-			0.00	%		-100.00	%
Communication, postage, rent and others		128,349			158,288			23.33	%		44,035			52,792			56,481			6.99	%		28.26	%
Total other operating income		374,712			349,680			-6.68	%		110,514			121,321			116,892			-3.65	%		5.77	%
Total income		3,596,951			4,164,264			15.77	%		1,235,408			1,408,328			1,445,169			2.62	%		16.98	%
Operating expenses		-			-						-			-			-
Salaries and employee benefits		836,195			931,727			11.42	%		282,878			312,905			313,392			0.16	%		10.79	%
Bonus plan payments		86,215			96,868			12.36	%		24,289			33,533			32,077			-4.34	%		32.06	%
Compensation		23,616			24,565			4.02	%		6,229			5,529			10,148			83.54	%		62.92	%
Administrative and other expenses		1,069,365			1,359,475			27.13	%		367,891			450,047			484,122			7.57	%		31.59	%
Deposit insurance net		62,366			66,065			5.93	%		21,221			22,342			22,733			1.75	%		7.13	%
Donation expenses		5,068			14,988			195.74	%		3,565			12,197			1,379			-88.69	%		-61.32	%
Depreciation		146,086			157,727			7.97	%		49,301			52,187			55,575			6.49	%		12.73	%
Total operating expenses		2,228,911			2,651,415			18.96	%		755,374			888,740			919,426			3.45	%		21.72	%
Net operating income		1,368,040			1,512,849			10.59	%		480,034			519,588			525,743			1.18	%		9.52	%
Goodwill amortization (1)		43,006			36,213			-15.80	%		12,823			11,747			11,709			-0.32	%		-8.69	%
Non-operating income (expense)		-			-			0.00	%		-			-			-			0.00	%		0.00	%
Other income		162,267			121,837			-24.92	%		62,788			49,082			32,937			-32.89	%		-47.54	%
Minority interest		(11,101	)		(8,219	)		-25.96	%		(6,159	)		(2,026	)		(3,083	)		52.17	%		-49.94	%
Other expense		(85,101	)		(93,039	)		9.33	%		(24,043	)		(37,662	)		(33,120	)		-12.06	%		37.75	%
Total non-operating income		66,065			20,579			-68.85	%		32,586			9,394			(3,266	)		-134.77	%		-110.02	%
Income before income taxes		1,391,099			1,497,215			7.63	%		499,797			517,235			510,768			-1.25	%		2.20	%
Income tax expense		(383,732	)		(337,163	)		-12.14	%		(124,664	)		(131,708	)		(86,326	)		-34.46	%		-30.75	%
Net income		1,007,367			1,160,052			15.16	%		375,133			385,527			424,442			10.09	%		13.14	%

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		BANCOLOMBIA S.A. (Registrant)

Date: November 3, 2011	By:	/s/ JAIME ALBERTO VELÁSQUEZ B.
		Name: Jaime Alberto Velásquez B.
		Title: Vice President of Finance