BANCOLOMBIA S.A. Reports Consolidated Net Income of COP 386 Billion for the Second Quarter of 2011, Which Represents an Increase of 32% Compared to the Same Quarter Last Year

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Today, BANCOLOMBIA S.A. (NYSE: CIB; BVC: BCOLOMBIA, PFBCOLOM)("Bancolombia" or "the Bank") announced its earnings results for the second quarter of 2011.

For the quarter ended June 30, 2011 ("2Q11"), Bancolombia reported consolidated net income of COP 386 billion, or COP 489 per share - USD 1.01 per ADR, which represents an increase of 10% as compared to the results for the quarter ended March 31, 2011 ("1Q11") and an increase of 32% as compared to the results for the quarter ended on June 30, 2010 ("2Q10"). The cumulative net income for the first six months of 2011 was COP 736 billion, which is 16% higher with respect to the same period of the previous year.

Bancolombia ended 2Q11 with COP 75,157 billion in assets, 6% higher than those at the end of 1Q11 and 20% greater than at the end 2Q10. At the same time, liabilities totaled COP 67,149 billion and increased 6% as compared to the figure presented in 1Q11 and 21% as compared to 2Q10 (1).

Net loans grew 5.1% during the quarter and 22.4% compared to 2Q10. This growth confirms the trend of sustained credit demand that started in the second half of 2010.

Net interest income increased 10% during the quarter and 17.2% compared to 2Q10. These increases are the result of loan growth coupled with a funding strategy that allowed the Bank to maintain a low cost of deposits during the quarter as a measure to defend the net interest margin, which ended the period at 6.2%

Loan portfolio quality continues showing a good trend. Loan deterioration during 2Q11 was COP 62 billion, 56% lower than in 1Q11, and past due loans as a percentage of total loans were 2.6%. Net provision charges totaled COP104 billion for the quarter, while annualized credit cost for the first semester of 2011 was 0.7%.

The balance sheet remains strong. Loan loss reserves represented 4.8% of total loans and 187% of past due loans at the end of 2Q11. The capital adequacy ratio ended the quarter at 13.7% (Tier 1 of 9.9%).

Profitability. ROE for 2Q11 was 19.6%, and annualized ROE for the first six months of the year was 18.5%, which represents an increase from the 18% reported for 2010.

Bancolombia.