Message from
the CEO

2023 was a challenging year both internationally and locally; the economy and the financial sector in general continued to be affected by historically high levels of inflation and interest rates, which impacted the cost of living for households and businesses, as well as their ability to meet their obligations. In Colombia, we experienced the lowest economic growth in the last decade - excluding the pandemic - joined by lower credit offering and demand, as well as high deposit and lending rates.

Our financial results reflected the challenging operating environment that has materialized since mid-2022, being impacted by higher funding costs that pressured our net interest margin and higher provisioning expenses.

Within this context, we have capitalized on several lessons to strengthen our management, by taking several measures to protect our business’ performance. For example, we have been implementing various strategies to improve our credit portfolio profile, to gradually adjust our funding composition safeguarding our margins, to strengthen other sources of income, and to improve productivity, so that we can capture greater efficiencies in our operations.

Amidst these challenges, we have maintained our capital strength, with a Total Capital Adequacy Ratio of 14.54% and a Common Equity Tier 1 Ratio of 10.25% by the end of 2023, solid and sufficient levels to continue developing our business. Additionally, we continue to support our 23.6 million customers in Colombia and Central America, with a market share of 15.17% and 8,96% , respectively, and a gross loan portfolio of COP 136 trillion.

In this way, we remain determined in our vision for the future, and we are convinced that there are multiple opportunities to seize. We remain focused on our strategy, leveraging our digital capabilities and sustainable management, to continue working towards our higher purpose.

Over more than half a century of experience, we have faced and overcome various obstacles, and each challenge has been a valuable lesson that strengthens our resilience and drives us to continue building the bank of the future.

Innovation and service are in our culture’s DNA

Our innovative DNA and the digital capabilities we have developed over the years position us to generate greater value for our stakeholders going forward. Thanks to these skills, we have managed to build one of the most comprehensive digital offerings of financial services for individuals in Colombia, and we continue to complement our offering for businesses. In Central America, we are pioneers with digital solutions that respond to the dynamics of each country.

As evidence of this, 91% of our clients are digital: around 93% in Colombia and 69% in Central America. In the past year, we have launched several products and functionalities for them, to continue guaranteeing reliable, user-friendly, and simple experiences for our clients, such as the Super App for individuals, our new App for Businesses, a new service model leveraged on Vivi (our virtual assistant based on Artificial Intelligence), interoperable QR code, among others.

Through these and other solutions, we are aiming to create and participate in ecosystems with financial and non-financial services, being an organization that goes beyond Banking, finding new ways to reach our clients and enabling our offering to be just a click away in the ecosystems where they live.

On the other hand, DaviPlata continues to demonstrate its ability to be the easy banking solution for everyone, reaching nearly 17.4 million customers in 2023, with deposits close to COP 993 billion. For 4.3 million people, DaviPlata was their only financial product, and 31 thousand customers received their first nanocredit, thanks to Daviplata.

We continue to see great monetization potential in DaviPlata's value proposition, which has proven to be a successful product to reach different segments of the population, promoting financial inclusion and the growth of businesses and small enterprises.

A key element of our value proposition is customer service, where our goal is to provide a world-class experience supported both in our branch network and in our digital capabilities, with end-to-end digital self-service tools, a memorable resolution, and the availability and resilience of our platforms. In line with this commitment, we are positioned as leaders in service in Colombia and in Central America, and we continue to work so that more customers prefer Davivienda.

In short, we will continue to leverage on our transformative capacity to lead innovation in the banking sector, offering cutting-edge experiences with exceptional service levels that will allow us to continue consolidating our position.

Our strategy is sustainable

Responsible banking is one of the most important pillars of Davivienda, and every day we work towards harmonizing economic objectives with global commitments to the environment and society.

In 2023, our sustainable loan portfolio increased by around 20% compared to 2022, reaching COP 17.1 trillion, representing a 12.6% share of the total gross loan portfolio. We are consistently advancing towards our goal of making 30% of our portfolio sustainable by 2030.

We continue to be the leading bank in mortgage financing in Colombia, with a market share of approximately 26.40% as a result of our firm commitment to contribute to the well-being and improvement of people's living conditions, bridging basic needs and multidimensional poverty gaps. Additionally, we have supported nearly 5 million people, especially women, in fulfilling their dream of owning a dignified home and building their wealth and social capital. We also worked closely with constructors to develop more environmentally sustainable certified homes.

Furthermore, we aim to reduce the gender gap in access to financial products. Currently, about 9.7 million of our customers are women, and we have financed over 52 thousand SMEs, with 12 thousand of them being led by women in Colombia and El Salvador, progressing towards our goal of increasing the women's participation in our SME portfolio.

Beyond being a banking solution, we aim to transcend towards the health and financial well-being of our customers through tailored products and services, as well as financial education content. In 2023, this content reached nearly 19 million people, including both customers and non-customers, from children to retirees.

In terms of climate, we recognize the importance of acting rapidly to address this global challenge. One of our action plans is to increase our disbursements in environmentally sustainable projects.

For example, in the agricultural sector, we work to improve access to financing for the sector companies, as well as to protect the most vulnerable population. We reach small-scale producers with financial inclusion solutions, technical assistance and climate adaptation. In this regard, we closed 2023 with a 14% market share in the agricultural sector, financing 52 thousand producers, over 30 thousand SMEs in 763 municipalities in Colombia, and providing climate change protection through parametric insurance to nearly 14 thousand low-income small-scale producers. This solution was designed in partnership with Finagro and Seguros Bolívar.

On the other hand, we acknowledge that our impacts and dependencies on climate and biodiversity are concentrated not in our operations but in the activities we finance. Therefore, we measure on an annual basis the evolution of greenhouse gas emissions from our asset portfolio, initially focusing on commercial banking and some investment vehicles.

Thus, we act to guide our corporate and business clients on their path towards an orderly, fair, and equitable energy transition, increasing our involvement in financing low-emission green businesses, funding projects that contribute to energy transition and efficiency, renewable energy generation, optimization of productive resources, cleaner production, and sustainable infrastructure.

Additionally, in order to strengthen our actions in terms of financial health, climate, and nature management, and in line with our vision of being Net-Zero by 2050, in 2023 we joined various initiatives such as UNEP FI (United Nations Environment Programme Finance Initiative) and its Principles for Responsible Banking (PRB), as well as the NZBA (Net Zero Banking Alliance), GFANZ (Glasgow Financial Alliance for Net Zero), and SBTi (Science Based Targets Initiative).

At Davivienda, we are committed to making the world our home, and we will continue working to make it more prosperous, inclusive, and green.

Let's keep building the Bank of the future.

We are confident that we are on the right path. Through our strengthened risk management and other strategic focuses, we will continue deploying robust strategies to assist our clients, protect our Bank, and improve our results with the determination and resilience that characterize us.

We have thrived for over 50 years and contributed to the growth of the countries in which we operate; this would not have been possible without the support of our shareholders and investors, without the trust of our clients and suppliers, and without the hard work of our more than 17 thousand employees in 6 countries. Their motivation and support drive us forward. We are committed to continue building the bank of the future, and we will do it hand in hand with each and every one of you. Together, we will move towards a promising future.