Feb 22, 2019
Operator
[Call Starts Abruptly] …statements including changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products and services by our targeted clients, changes in business strategy and various others factors, that we describe in our files with SEC. With us today, Mr.
Juan Carlos Mora, Chief Executive Officer; Mr. Jaime Velásquez, Chief Strategy and Finance Officer; Mr.
José Humberto Acosta, Chief Financial Officer; Mr. Rodrigo Prieto, Chief Risks Officer; Mr.
Jorge Humberto Hernandez, Chief Accounting Officer; Mr. Alejandro Mejia, Investor Relations Manager; and Mr.
Juan Pablo Espinosa, Chief Economist. I will now turn the call over Mr.
Juan Carlos Mora, Chief Executive Officer of Bancolombia. Mr.
Juan Carlos, you may begin.
Juan Carlos Mora Uribe
Good morning, everybody, and welcome to the conference call for Bancolombia's fourth quarter results. I would like to start this call presenting the net income for 2018.
During the year, we posted a COP 2.6 trillion net profit, a 1.7% increase versus the result of 2017. We consider this a very positive result, given the challenging economic environment in Colombia.
During the fourth quarter, we generated COP 1 trillion in net income, a result that we consider very positive since we could maintain the NIM, keep expenses under control, and most importantly, to reach a turning point in the credit cycle. I would like to elaborate about the performance of the bank.
In the last month of the year, we saw a change in the trends of some metrics of the business. We experienced a faster growth of the loan portfolio, which suggest that in 2019, the trend will continue and will reach high-single-digits.
This evolution is particular to Colombia, where we see an improving demand from corporates. Another element that I want to highlight is the change in the credit cycle and the reduction in provision charges.
The quarterly new past due loans formation was close to 0 and shows clear signals of a better situation among customers and better origination over the last 6 months. For 2019, we believe that the trend will continue and the stock of past due loans will decline.
Regarding provisions, we saw the peak in the third quarter 2018. And the trend suggests that the cost of credit for 2019 will be around 2%.
Higher provisions during the quarter and the year lead to an increase in coverage. It went from 164% in 2017 to 180% in 2018.
Also, we continue our cost control program. And as a result, the expenses grew only 3.6%.
We aim to continue improving the efficiency levels and the cost to income ratio will go down to around 48% in 2019 as the top-line will grow faster. Finally, I would like to highlight also some relevant achievements during 2018: a 10% growth in our base of personal customers and SME, which represent 1 million new clients; 25% growth in the number of transactions performed by the Bank in Colombia; the fastest growth occurred in Internet and mobile channels.
We reached 9.5 million debit cards in Colombia, a 11% growth. [These cards] [ph] performed 43% of the debit card purchases in the country and have become the first line of fee revenue.
The consolidation of these trends observed in the fourth quarter 2018 such as credit growth, quality improvement and efficiency gains, led us to believe that Bancolombia will have positive numbers in 2019. That will lead to a double-digit growth in net income.
Having said this, I want to ask José Humberto Acosta to elaborate on the main topics that are driving our business. José?
José Humberto Acosta Martin
Thank you, Juan Carlos. For all of you following the presentation, let me remind you that at the end, you will find additional information that complements the bank's numbers and that might be useful.
I want to start this presentation making a reference to the very good performance of the core business during the last quarter, in particular two factors explains this. One is the net interest income after provisional charges, which increases 70%, due to a positive change in the performance of the loan portfolio.
The other factor is a 10% growth on net fees due to our greater number of transactions. 3 one-offs net income quarter of the quarter.
First, we conducted the annual appraisal of the investment that we do not consolidate. One of them [is SURA] [ph], which presented a significant increase of value of our COP 174 billion, due to the recovery of impairments done in 2017.
Second, the agreement to sell SURA AM, a stake of SURA AM announced in December generate a pre-tax profit of COP 63 billion, or a net profit of around $15 million. The third one is the recovery of income taxes from previous periods, which was a result of clarification about certain Bancolombia tax provisions.
The impact for the deal was COP 149 billion and for the quarter was COP 98 billion. Now I want to elaborate about the results of the bank.
On Slide number 3, regarding loan growth, the portfolio started to show signals of recovery as our commercial loans grew at a faster pace that in our previous quarters in the Colombia operation. [Business for our America] [ph] operations grew at around 2% when expressed in dollars.
As a result, the annual growth reached 8%, the fastest pace was observed in Colombia with 7% growth and [it's about] [ph] with 6%. Two factors impacted the loan portfolio growth in the fourth quarter.
First, the seasonal effect during the last months of the year that present a more dynamic economic environment. As a result, corporate credit demand, which had been slow until December picked up and the portfolio expanded.
In the consumer front, we maintained the pace of expansion of the portfolio, which reached 18.5% of the loan book in line with our strategy to change the mix and improve margins. Second, the 9% depreciation of the pesos versus the dollar contributing also to the past year growth of the portfolio when expressed in pesos.
After considering these signals of recovery, we are estimating our loan growth at around 7% in 2019, with Colombia growing at around 9%. On Slide 4, we see the evolution of margins.
Core margins remain stable during the quarter. Nevertheless, we had a positive impact in the NII of around COP 120 billion, due to the reduction of the stock of loans classified in Stage 3.
This contributed to a 20 basis points pick up the lending NIM. This fact has the opposite effect in provision charges, which are $120 billion higher in the quarter and as a result it's neutral to the bottom line of the bank.
Isolated the impact, two factors explain the stability in NIM despite interest rates cuts in the first half of the last year. One, is the change on mix over the last year, with consumer loan contributing to a higher asset deal.
As you can see, consumer loans represent, again 18% of the portfolio today versus 16% two years ago. And the second factor is a reduction in funding cost through repo deposit and a reduction of cost of time deposit.
We don't forecast a big variations in margins during that year and we are expecting a NIM at around 5.8% for 2019. The funding strategy for some geographies will be to replace long term debt with clients deposits and promote checking and savings accounts.
In Slide 5, we present the provisional charges. The three large corporate cases, the red bar in the chart represented COP 130 billion in charges during the quarter or 30 basis points of the reported cost of risk.
As of December, they presented the following status. Electricaribe, we went from 84% coverage in September to 91% in December.
Ruta del Sol, we came from 26% in September to 34% in December. And in Consorcio Express a massive transportation company in Bogota, we came from 54% coverage in September to 57% in December.
The blue bar as we just mentioned also includes a COP 120 billion in charge associated with a reduction of the stock of clients classified in Stage 3, which increases the net interest income on provisions. Additionally, as we do in every fourth quarter, we updated the parameters and historical data to run the provisioning models.
These adjustments costs a one-off charge of $140 billion, which are not directed to any specific case. So taking out of these components, the normalized provision costs were COP 600 billion, which indicated a clear improvement in the credit conditions of our portfolio.
The next Slide number 6 shows the quality of the loan portfolio during the quarter. Past due loans ratio declined for both commercial and consumer loans for 30 and 90 days.
The 90 days past due loan ratio went down to 3.08%, which shows an improvement of the loan portfolio across all segments, particularly in Colombia. Regarding the other countries, we do not see a major impact in the trends.
Similarly, coverage is increasing for 30 and days. The most important metric regarding the credit cycle is the amount of new past due loans generated during the quarter.
The COP 4 billion indicated a strong recovery in the overall credit conditions of the portfolios, especially in the corporate and SME segments. We expect to maintain the recovery path in 2019 and we forecast the cost of credit to be at around 2%.
These metric includes an additional charges that we might require to increase the coverage of some corporate cases mentioned before. Slide number 7, shows the evolution of expenses and efficiencies.
The key point in 2018 was the annual growth in expenses of 3.6%. This is the result of our cost control initiative and the process optimization.
We forecast to maintain this path in 2019 and as a result cost to income will be at around 48%. As we can see in Slide number 8, the bank continues its strategy to increase popularity and migrate to low cost channels.
The distributions of products and transaction cost are two of the largest cost of Bancolombia; therefore, it is key to increase the operational leverage. The total number of transaction increased by 12% in 2018.
Nevertheless, when we analyze each channel, we see these structural trends, a fast growth in banking agents and mobile and the reduction in physical branches. This is the shift that we are looking for.
The outcome of our strategy is the reduction of the average cost per transaction and the capacity to grow faster than the market. The next Slide number 9 shows the outcome of our business strategy in the consumer and SME segments during 2018.
We grew 10% of our base of personal clients, which equates to more than 1 million new clients. Several products also grew in line with our commercial strategy.
Credit and debit cards in particular are growing at high single digit and the market share of billing and purchases in Colombia hit the record high - 25% in credit cards and 43% in debit cards. Finally, we wish to highlight our strategy to grow the consumer loan portfolio, which contributed to the loan portfolio mix that we want to have.
Our expectations are based on the fact that the trends defining the future of the banking operations are positive. Growth would remain in line with our forecast for all geographies reaching 7% for the year.
Regarding margins, we will continue optimizing the funding structure of the promoting retail loans in the portfolio mix in order to maintain earnings at a level of 5.8%. This should maintain a positive trend given the growing number of transactions in Colombia and the launching of new projects in the other geographies.
We forecast 10% fee growth. In 2019, we see a normalization of the cycle.
The stock of past due loans is not growing as we forecast a cost of risk of 2%, which includes provision charges for a large corporate plans. Similarly, we do not forecast large PDLs one-offs.
And as a result, the 90-day past due loan ratio should be at around 2.7% at the end of the year. We will keep our cost control initiatives in order to have a normal growth of OpEx at around 3.5% and reach a cost to income at a level of 48% at the end of this year.
With this combination we forecast a return-on-equity of 12.5%. After elaborating on these key topics, we want to open the line for questions.
Thank you.
Operator
Thank you. We will now begin the question-and-answer session.
[Operator Instructions] And we have a question from Jason Mollin from Scotiabank. Please go ahead.
Jason Mollin
So my - thank you for the opportunity to ask a question. Talking about this 12.5% ROE, let's call it guidance, soft guidance for 2019, how should we think about that versus - I'm imagining that's a recurring run rate, because we're not going to have special case provisions or you're - you didn't mention any kind of one-off issues in that number.
Where would you say the ROE was in 2018 kind of normalizing in a comparable basis? And an important part, I guess, of that 12.5% ROE would be what is your outlook for taxes, given the recent increase in the corporate tax rate for financial - for banks in Colombia?
Thank you very much.
José Humberto Acosta Martin
Okay, thank you, Jason. Regarding taxes, we are not seeing an incremental in tax - statutory tax for 2019, will be 37%.
And the last tax reform implies and the tax will be this year 37%, next year 35%, the 2021 34% and 2022 30%. Based on that consideration of the statutory tax, we are contemplated to get a level of return on equity of around 15% in 2020, assuming the normalization of cost of risk will be on the area of 1.8%.
So, again, this year we are expecting 2%, but next year cost of risk that that will be the [shift] [ph] transition, the return on equity will be at a level of 15%.
Operator
Our next question is from [Juliana Mia from Navidia Coragores] [ph]. Please go ahead.
Unidentified Analyst
Good morning. Thank you for the presentation.
I have a question regarding the SURA AM transactions. As the transaction is on and you received the resources, what are you planning to do with this capital?
José Humberto Acosta Martin
Okay. Yes.
We announced the sale of our stake in SURA AM in December.
Juan Carlos Mora Uribe
Sura Asset Management.
José Humberto Acosta Martin
Or Sura Asset Management, we announced the stake of 3.5% that we were shareholders. And that represents for us a net income for approximately COP 45 billion, which is not material in terms of the results of the Bank.
Operator
Our next question is from Yuri Fernandes from J.P. Morgan.
Please go ahead.
Yuri Fernandes
Thank you, gentlemen, for the opportunity of making questions. I had a question on your cost of risk, the 2% number.
I understood that this includes one-off provisions, let's say the corporate cases. But does this number include reversals of those provisions.
And how do you plan to treat the payment of Ruta del Sol that's received in January? Should that be like a reversal of provisions?
Should we book that as NII, just like you - and also if you can give some color, if you expect to receive the missing 50% of that loan, just provide some color on that exposure. Thank you.
José Humberto Acosta Martin
Thank you, Yuri. Just putting on nominal terms, our expectation of provisions in 2019 will be COP 3.5 trillion in provisions, that is contemplating increased provision in certain cases like for example in massive transportation system we will get a level at around 75% the year and was 55% coverage.
So we are contemplating that, and in this including the 2% cost of risk. Also remember that in the case of Electricaribe, at the end of this year our level of provision was 93%.
So also we have contemplated just a marginal increase in provisioning. So, again, assuming that we have to increase provisions in those clients, that's our expectation, the COP 3.5 trillion at the end of the year.
Juan Carlos Mora Uribe
And, Yuri, let me elaborate a little bit on your question. We are expecting the cost of credit of around 2% as you mentioned.
And that's taking into consideration the additional provision in that we need to do on those corporate customers. We don't include the reversal of any of those provisions.
It's not included there. And related to your question about reversal, those, we are within this particular case we received a payment as you mentioned, it's already included on the outstanding debt.
And we are in conversations and there are some - also some legal procedures around this case that we think will lead to additional payments in the future. Meanwhile, we have a coverage of 34% in that case.
And we think that it's enough due to the situation of this particular client at this point.
Yuri Fernandes
Okay. Thank you, gentlemen.
Operator
Our next question is from [Thiago Bensville from Itau] [ph]. Please go ahead.
Unidentified Analyst
Hi, everyone. Thank you for taking my question.
I would like to ask about loan growth. You mentioned during the call that you expect high-single-digit growth for 2019.
But can you give us a sense of the growth you are expecting for each of your segments? Thank you.
José Humberto Acosta Martin
Okay, Thiago, thank you. Yes, we are expecting on the upper side of the loan growth, the consumer loans that would be on the area of 11% to 12%.
In the middle of range will be the mortgage business, especially in Colombia the loan growth will be at around 10%. And on the lower part will be commercial, which includes corporations and SMEs and the loan growth will be 8% to 9%.
We have to highlight that these trend would be particularly different in commercial loans, because the commercial loan grew last year was weak - was below 6%. So that's the key driver of loan growth this year, the commercial loans.
Unidentified Analyst
Very clear, thank you.
Operator
Our next question is Sebastián Gallego from CrediCorp Capital. Please go ahead.
Sebastian Gallego Betancur
Hi, good morning. Thanks for the presentation.
I have two questions, the first one you didn't say much during the quarter about Panama. Can you elaborate on the results of Panama and what you're expecting going forward.
And the second question is related to capital and particularly to Basel III. Can you provide any more color on any progress regarding Basel III and what you expect going forward on timings regarding Basel III.
Thank you.
José Humberto Acosta Martin
Thank you, Sebastian. Yes, regarding Banistmo operation, to put some context remember the GDP growth for the country has been dropping and the number at the end was on the low 3% of GDP and that impact our business in that operation.
The loan growth was close to zero and we are expecting for this year to gain some traction and to begin to grow in between 5% to 6%. What happened with Banistmo, they have been doing a big effort in efficiency and they are right now at the area of 52% efficiency level.
So we expect that Banistmo in 2019 will help and provide to the banking on consolidated basis with loan growth, with lower level of expenses and in fee income growth as well, because we have replicated the same products in Panama. That's the situation with Banistmo.
Juan Carlos Mora Uribe
Sebastian, let me summarize what Jose Humberto said. We are happy with the trend.
We have some challenges coming from the macro of the country, which is not bad at all, but it's slowing down a little bit. Efficiency of the bank is around - I think Banistmo is around 50%, which is very good for us.
The ROE is in the low double digit. Still we have way to go, but we are happy with the trend again.
We have challenges related to loan growth in 2019 and also fee growth, but we are happy with the trend in Panama.
José Humberto Acosta Martin
Regarding your second question Sebastian on Basel III, we made calculations assuming that change of risk equated and just to give you a precise number of our density because of the change of risk weighted asset will come from 76% to 65%. So if you do the math that implies that beginning next year under Basel III probably over Q1 will increase in between 100 and 150 basis points.
Sebastian Gallego Betancur
Very clear, thank you so much.
José Humberto Acosta Martin
You are welcome Sebastian.
Operator
Our next question is from Ernesto Gabilondo from Bank of America Merrill Lynch. Please go ahead.
Ernesto Gabilondo
Thank you. Hi, good morning everyone and thanks for the opportunity.
Sorry I entered late to the call so can you provide again your guidance for the year. And then two questions, the first one is in terms of expenses.
How much room do you see to maintain low single digit growth in this line? Can you provide more details on your digital channel strategy to maintain those levels?
And then the final question is a follow up in terms of Basel III. So what will be the timeline for this and if you are expecting lower risk weighted assets while implementing Basel III.
Thank you.
José Humberto Acosta Martin
Okay, Ernesto, four questions. The first answer is Basel III.
That would be implemented in January the 1st and that would be implemented during full year is increasing the buffers, but fully implemented the Tier 1 in January the 1st and the implementation, the result will be a higher level of Q1 because of the change of the risk weighted. Regarding your second question or your first question to guidance - again, loan growth at around 7%, NIM that would be around the area of 5.8%.
Fee income growth that would be around a level of 10%. Cost of risk which is as relevant for your models could be at around 2%.
The level of past-due for 90-days that would be at a level of 2.7%. Regarding your second question, expenses, I will say that this is one of our flagship.
The way we are controlling the expenses and we expect to be on the area of inflation. And this year again 2019, we are expecting 3.5% and this is supported basically because of the cost control initiatives.
Regarding your question the digital channel. In digital channel, we are doing a very interesting things.
There are many clients that are using digital channels. In Colombia, for example, out of the 10 million clients that we have, out of 4 million is using digital channels.
There the internet is more than 70% of the transactions on a daily basis. So we are moving the clients to use those channels.
And also this is interesting because the things that we are doing in Colombia, we are replicating in our other geographies. So you will expect the same trend in our operations in Banistmo, in Guatemala and in El Salvador.
Ernesto Gabilondo
Thank you very much Jose Humberto. And are you providing guidance in terms of net income growth?
José Humberto Acosta Martin
Yes, the guidance is double digit income growth and more specific guidance will be the return on equity could be at around 12.5% at the end of this year.
Ernesto Gabilondo
Perfect. Thank you very much.
Operator
We have a question from [Marc Lin from Lazard] [ph]. Please go ahead.
Unidentified Analyst
Thanks to you for the opportunity. You shared with us new customers you've acquired in the past.
Could you just provide some granularity on how these customers were acquired and also maybe share with us, what you expect the rate of customer acquisition going forward?
José Humberto Acosta Martin
Thank you, Marc for your question. Yes, we are very happy with the result and the acquisition of new customers.
As we mentioned, we're a new 1 million net new customers, around 800,000 were persons, individuals and around 200,000 SMEs. The strategy is - basically we are adding new functionalities on our relation with the customers.
Digital is a key part of this strategy and many of the customers can enroll and acquire product now with Bancolombia through the digital channels so that has been key. And also our digital strategy related mobile banking, we have two platforms that are growing really at a very good pace in the case of our [Rollermanu] [ph], we have now 1.3 million customers to just remind you that platform, it's just mobile platform and it's targeting low income individuals to do basic banking.
But for us it's the door to enter to the financial world. We also have another digital platform, we call it Nequi.
It's targeting young adult that's starting doing their business and their transactions and that also has been very successful. Today, you have close to 900,000 customers on that platform.
And also on the traditional banking, we are also offering additional features and the other key element on acquiring customers, it is analytics. We are doing or performing an analysis that allow us to target new customers in a very precise way.
Unidentified Analyst
Thank you very much. Thanks.
José Humberto Acosta Martin
You're welcome, Marc.
Operator
We have a question from Natalia Corfield from J.P. Morgan.
Please go ahead.
Natalia Corfield
Thank you for the question. I have two questions.
The first one is related to the coverage levels that you just mentioned about company Ruta del Sol and Electricaribe, in mass transportation. I would like to know if this is related to a Colombian GAAP or is this IFRS.
And also connected to this, it would be good to refresh, if your capitalization, the number of 13.47%, is this taking in to account IFRS or is it based on Colombian GAAP. Those are my two questions.
Juan Carlos Mora Uribe
Thank you, Natalia. All the numbers that you have seen are under full IFRS so it is contemplated all the regulations.
Natalia Corfield
Of 57% for the - for instance the mass transportation companies this is based on IFRS, not Colombian GAAP.
José Humberto Acosta Martin
Exactly, it's IFRS, which is tougher in terms of provisioning level. And the capital level that you are seeing is also under IFRS, contemplated all the risk weighted assets as well.
Natalia Corfield
All right, okay. Thank you.
José Humberto Acosta Martin
My pleasure.
Operator
Our next question is from Andrés Soto from Santander. Please go ahead.
Andrés Soto
Hi, thank you for the opportunity. My question is regarding net interest margin.
If I understood correctly, you guys are expecting stable NIM for 2019. I would like to understand what is the assumption that you are making there in terms of Central Bank rate?
I mean, in general terms, in terms of the rate of your loans? And how this plays out in a context of some credit growth acceleration that probably is going to put some pressures on the funding side?
Thank you.
José Humberto Acosta Martin
Thank you, Andrés. We are going to transfer to Juan Pablo to answer the view of the interest rates in Colombia.
Juan Pablo Espinosa
Yeah, so basically in terms of monetary close you are expecting for this year a very mild upward move in the reference rate of around 50 basis points and those movements will be more probably be happening in the second half of the year. The reason for that is that the economy is recovering that it is still below - growing below potential.
And secondly, there are some price pressures on the economy. But they are very controlled.
So we expect that inflation will be around the target range of the Central Bank. So that led us to think that the Central Bank will be moving towards a more neutral stance on monetary policy which is consistent with what I just mentioned of 50 basis points increase in the second half of the year.
José Humberto Acosta Martin
Thank you, Juan Pablo. How we are going to maintain the NIM?
Let's divide it in two different scenarios. In the Colombian scenario, as Juan mentioned, we are expecting a hike of 50 in the second half of the year.
Meanwhile, we are replacing some of the most expensive - the higher level of interest rate on time deposits and bonds. We are replacing part of the bonds that we're finalizing this year.
So that will help us to sustain the cost of funding at a level that we have projected. In the U.S.
dollar world, it is the opposite. You see that the interest rates came up, so we were - we had the opportunity to expand the NIM, especially in El Salvador and we are seeing something of that in Guatemala.
So if you combine both effects of a U.S. dollar and local currency, we were able to sustain that NIM, again, replacing part of the funds that came from bonds, going to the cheaper way to funding, checking accounts and savings accounts.
Operator
Our next question is from Carlos Rodríguez from Ultraserfinco. Please go ahead.
Carlos Enrique Rodríguez
Good morning, gentlemen. And thank you for the conference call.
Just a follow-up on Panama, I mean, I just want to know your expectations for the country and if you are worried at some point, because we have seen deceleration in some sectors. And if you are worried of the provision occurring of the operation in that country?
Thank you.
José Humberto Acosta Martin
As Juan mentioned in the previous question, we are seeing very positive trends in the Banistmo operation. We are implementing products.
We are implementing new ways to do business there. So we are seeing for the next coming years a loan growth positive.
And on the funding side, we have a strong customer base as well. So we don't foresee any specific concern, obviously, it all depends on the performance of the country, of the GDP.
But again, we are forecasting a much better performance the next two, three years. Today, as Juan mentioned, the return on equity of the operation is - it's double-digit on the lowest and we are expecting to reach a level of 13% in the next two, three years of return on equity.
Carlos Enrique Rodríguez
Okay. Thank you.
And my second question is regarding the cost of funding. What's been under the - is the bottom that we can see in the midterm, as you previously said that you are replacing the bonds and the deposit with the checking and saving accounts.
And internally you have 3.1%, do you have any number, guidance that you could share with us?
José Humberto Acosta Martin
Yes, if your question is the average cost of funding that will be almost at the same level with ups and downs. And the down is we're replacing the bonds we have, since we are moving forward to checking accounts.
So the net balance is we will maintain the same cost of funding that we are having to take. And you can see that on the final pages of the presentation.
And the funding cost closed in the year is 3.1%. We are expecting to be on the area of 3% to 3.2% at the end of 2019.
Carlos Enrique Rodríguez
Great. Thank you very much.
Operator
Our next question is from Carlos Gómez from HSBC. Please go ahead.
Mr. Gómez, you may initiate with your question.
Carlos Gómez López
Yes, sorry, I was on mute. And thank you for taking the question.
You mentioned that you may get an additional 100 basis points in Tier 1 capital after the implementation of Basel III. We wonder how this will lead - how you see capital going forward.
If you start to generate more, will you increase the dividend payout or would you contemplate acquisitions, and if so where? Thank you.
José Humberto Acosta Martin
Yes, the level that we are reaching next year as you mentioned increasing 100 basis points. In our forecast, we believe that this is enough capital for the next coming years.
We have not contemplated any particular change in our dividend policy, because again, you have to consider also loan growth in the next coming years and implementation also we take 4 years in terms of the buffers. So we have to have also a buffer for the buffers for the next coming 4 years.
Carlos Gómez López
Okay. So you are ruling out any acquisition for time being?
José Humberto Acosta Martin
Sorry.
Carlos Gómez López
You are ruling out, you're not contemplating acquisitions for the time being?
José Humberto Acosta Martin
I'm sorry, Carlos. In previous conference call, we have been sending a clear message, that right now, our focus is to improve international operations, because you know that there is a - down the road an improvement in NIMs, in return on equity.
And in Colombia, we have to optimize the momentum of the economy and to take advantage, gaining some competition. So we have not contemplated any particular acquisition.
Carlos Gómez López
That makes sense. Thank you very much.
Operator
Our last question is from Jason Mollin from Scotiabank. Please go ahead.
Jason Mollin
My question has been answered. Thank you very much.
Operator
We have no further questions at this time. Thank you, ladies and gentlemen.
I will now turn back the presentation to Mr. Mora, Chief Executive Officer of Bancolombia, for final remarks.
Juan Carlos Mora Uribe
Thank you. I just want to summarize.
We have very good results in 2018 on a tough environment. And we are positive about 2019.
We think that the trends lead us to believe that 2018 [ph] is going to be a year in which we consolidate the strategies that we have been implementing in the last 2 years. The pace that we have seen in the past and during this year confirms that view.
So we expect that this year, as I said, is going to be very positive. Thank you again for your interest in this conference call.
And we expect to see you on the next conference call for the first quarter 2018 [ph]. Thank you very much.
Have a good day.
Operator
This concludes today's conference. Thank you for participating.
You may now disconnect.