Bancassurance revenues grew 25.0% in the quarter and 23.9% in the year due to growth in premiums from distributed products. In an annual basis, it is worth mentioning the higher originations in consumer loans that had a significant contribution on distributed insurance policies.
Banking services grew 10.4% in the quarter and 31.3% in the year, showing a positive performance from a growing demand for transactional products and the use of digital channels. On payments revenues, it must be noted the greater collection of invoices from individual clients, and a higher volume of incoming remittances.
2.3.Other Operating Income
Total other operating income was COP 537 billion in 4Q22, increasing 45.7% compared to 3Q22 and decreasing 10.1% compared to 4Q21. The quarterly increase is mainly explained by the positive balance from net foreign exchange operations associated to hedging on investments.
Income from operating leases was COP 388 billion in 4Q22, an increase of 9.1% compared to 3Q22 and 40.1% compared to 4Q21. Such growth is based on a higher volume on customer financial lease agreements and customer rental contracts in the renting business. Profits from sale of assets was COP 68 billion, decreasing 37.6% compared to 4Q21 due to a lower number of operations.
2.4.Asset Quality, Provision Charges and Balance Sheet Strength
The principal balance for past due loans (those that are overdue for more than 30 days) totaled COP 8,490 billion at the end of 4Q22, and represents 3.2% of total gross loans, decreasing when compared to 3Q22, when past due loans represented 3.6% of total gross loans. During the quarter, charge-offs totaled COP 1.836 billion.
The coverage, measured by the ratio of allowances for loans losses (principal) to PDLs (overdue 30 days), was 168.7% at the end of 4Q22, decreasing compared to 154.3% at the end of 3Q22. The deterioration of the loan portfolio (new past due loans including charge-offs) during 4Q22 was COP 1.249 billion.
Provision charges (net of recoveries) totaled COP 1.742 billion in 4Q22, growing 48.8% with respect to 3Q22. This increase in the quarter is caused, firstly, by consumer given the deterioration and significant growth during the year, and, secondly, by macroeconomic variables incorporating the forecast update with less favorable prospects for 2023 throughout the different countries in which Bancolombia operates. Additionally, in previous quarters there were provision releases regarding the portfolio with financial reliefs that are no longer available for this quarter.
Provisions as a percentage of the average gross loans was 2.6% annualized for 4Q22 and 1.6% for the last 12 months. Bancolombia maintains a strong balance sheet supported by an adequate level of loan loss reserves. Allowances (for the principal) for loan losses totaled COP 14.325 billion, or 5.5% of total loans at the end of 4Q22, decreasing when compared to 3Q22.
The following tables present key metrics related to asset quality:
| | | | | | | |
ASSET QUALITY | | As of | |
(COP millions) | | 4Q21 | | 3Q22 | | 4Q22 | |
Total 30‑day past due loans | | 8,674,971 | | 9,077,412 | | 8,489,903 | |
Allowance for loan losses (1) | | 14,425,719 | | 14,003,344 | | 14,325,181 | |
Past due loans to total loans | | 4.05 | % | 3.60 | % | 3.24 | % |
Allowances to past due loans | | 166.29 | % | 154.27 | % | 168.73 | % |
Allowance for loan losses as a percentage of total loans | | 6.73 | % | 5.55 | % | 5.47 | % |
| (1) | Allowances are reserves for the principal of loans. |