MEDELLIN, Colombia, Aug. 4 /PRNewswire-FirstCall/ --  Today, BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM) ("Bancolombia" or "the Bank") announced its earnings results for the second quarter of 2010.

• Net loans grew 4.92% compared to 1Q10. There was still a reduction of 2% in net loans with respect to 2Q09; however, the positive trend in credit demand that began to show at the end of 1Q10 became stronger during 2Q10.
• Net Interest Margin recovered in 2Q10 due to the better performance of investment securities and an effective funding strategy. Net interest margin increased 37 basis points ("bp") during the quarter and ended 2Q10 at 6.45%. This increase is explained by the better performance of investment securities and a funding strategy that decreased the cost of funds from 2.73% in 1Q10 to 2.56% in 2Q10.
• Net income from fees and other services continued to increase consistently during the quarter and totaled COP 396 billion, 5.7% higher than in 1Q10 and 4% higher than in 2Q09. This positive performance is explained by greater income from the Bank's investment banking and asset management businesses, and by solid levels of credit and debit card fees.
• There was less deterioration of the loan portfolio in 2Q10 vs. 1Q10.  The deterioration of the loan portfolio in 2Q10 totaled COP 35 billion, a figure 88% lower than that for 1Q10 and 85% lower than that 2Q09. Loan charge-offs were COP 225 billion, 64% higher than those reported in 1Q10 and 32% lower than those reported in 2Q09. Net provision charges were COP 187 billion in 2Q10.
• The balance sheet remains strong due in part to the solid level of loan loss reserves, which represented 5.6% of total loans and 154% of past due loans at the end of 2Q10. The capital adequacy ratio increased during the past 12 months and ended at 13.37% (Tier 1 of 10.7%), a figure that is considerably higher than the 12.9% (Tier 1 de 10%) reported at the end of 2Q09.
• Solid liquidity position. The ratio of net loans to deposits (including borrowings from domestic development banks) was 95% at the end of 2Q10, and net investment securities totaled COP 9,009 billion, 4.7% higher as compared to 1Q10 and 19.3% as compared to 2Q09.

For the quarter ended June 30, 2010 ("2Q10"), Bancolombia reported consolidated net income of COP 291 billion, or COP 370 per share - USD 0.77 per ADR, which represents an increase of 15% as compared to the results for the quarter ended June 30, 2009 ("2Q09") and a decrease of 15% as compared to the results for the quarter ended March 31, 2010 ("1Q10"). Bancolombia's annualized return on equity ("ROE") was 16.7% for 2Q10, and 18.03% for the first semester of 2010.

Bancolombia ended 2Q10 with COP 62,489 billion in assets, 3% higher than at the end of 1Q10 and 1% lower than at the end 2Q09. At the same time, liabilities totaled COP 55,387 billion and decreased 3% as compared to the figure reported in 2Q09(1).

(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 June 30, 2010. The statements of income for the quarter ended March 31, 2010 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  July 1, 2010:  COP 1,913.15 =USD 1

Average Representative Market Rate for 2Q10: COP1,947.57=USD 1

SOURCE Bancolombia S.A.