Good morning. Welcome to Banco de Bogotá's conference call for the second quarter of twenty twenty-four's consolidated results. My name is Karen, and I will be your operator for today's conference call. At this time, all participants are in a listen-only mode. Afterward, management will be available for a question and answer session. Please note that this conference is being recorded. We also advise you to read our disclaimer, which is available on slide number two. When applicable in this webcast, we refer to trillions as millions of millions and billions as thousands of billions. Thank you for your attention. Mr. César Prado, CEO of Banco de Bogotá, will be the host and speaker today. Mr. Prado, the floor is yours.
Thank you, Karen. Good morning, and welcome to Banco de Bogotá's second quarter 2024 conference call. This quarter, as the banking system as a whole, we faced similar challenges compared to those of the first quarter of the year. Both inflation and monetary policy rates decreased in the first semester, yet at a slower pace than previously anticipated, and the relatively high interest rates still affected household credit delinquency. Consequently, we have experienced a slower-than-expected recovery in loan quality ratios. It is worth noting that July's inflation was a positive surprise at 6.9%, and GDP growth is recovering slightly faster than previously expected. Indeed, most analysts are now foreseeing an economic growth between 1.5% and 1.8% for the full year.
The bank has been growing in this challenging environment, and between December and June, gained 42 basis points on loan market share. Also, the consumer loan portfolio is showing positive figures, both in PDLs and cost of risk. We are seeing the awaited effects of our tighter consumer loan policies, and new vintages are showing a much better performance. These policies, combined with improving macroeconomic variables, could be a turning point for the bank's loan quality and profitability. Although this transaction did not impact this quarter's results, I want to share that on July twenty-fifth, we issued senior sustainable bonds in the local market for COP 500 billion. This is our first issuance in the local market in more than three years.
The bonds were issued in two tranches: one for COP 282 billion, with a maturity of two and a half years and a yield of 10.45%, and the other for COP 218 billion with a maturity of four years and a yield of 10.38%. Investor appetite was strong, with a bid cover ratio of 2.9 times. Regarding our strategy, which is based on four pillars, namely growth, profitability, sustainability, and funding optimization, we have formally started implementation in July and expect to share advancements in next quarter's call. However, as a preview, we can mention that for the corporate segment specifically, we have reorganized the sales force by different industries. We expect our relationship managers to be industry experts that deliver tailored solutions and know each sector in depth.
Regarding corporate governance, Gerardo Hernández , our Legal Vice President, was appointed as CEO of Banco AV Villas. As a result, Juan Camilo Maldonado has been appointed as Acting Legal Vice President. He was previously the Legal Director for Retail Banking and Corporate Services. Now, moving on to this quarter's results, the bank's profitability deteriorated slightly. However, Banco de Bogotá is still one of the most profitable banks in the country, continuously gaining market share and maintaining sound portfolio quality. We remain positive in our outlook, especially regarding net interest income and cost of risk in the next few quarters, enabling the bank to reach profitability metrics which are more aligned to our aspirations and our cost of capital. Here is a summary of the bank's second quarter results.
Net income attributable to shareholders was COP 197.4 billion, 4.5% lower than the previous quarter, resulting in a return on equity of 5%, 27 basis points lower than the previous quarter. Return on assets was 0.6%. This quarter's net interest margin remained at 4.5%, having lower loan yields and cost of funds, while investment yields increased. Fee income ratio was 27.6%, 2.1 percentage points higher than in the first quarter. Efficiency, measured as cost to income, increased to 53.5%. While the cost to assets ratio decreased to 2.6%. Consolidated gross loans reached COP 104 trillion. The Colombian portfolio increased 9.3% year on year, and 2% in the quarter.
The Panamanian portfolio increased 6.3% in the quarter, but decreased by 1.5% in dollar terms. Deposits total COP 100.6 trillion, a 5.5% quarterly increase. Excluding the 8% peso depreciation in the quarter, deposits increased by 3%. The ratio of deposits to net loans was 1.02 times, slightly above the 1-time target. Deposits continued increasing their share of funding, reaching 80.2% of total funding, as savings accounts and time deposits increased by 9.4% and 3.9%, respectively. Loan quality deteriorated slightly this quarter, as 30-day PDLs increased by 7 basis points to 6.3%, while 90-day PDLs increased by 27 basis points to 4.6%. Net cost of risk decreased this quarter by 82 basis points to 2.1%.
In Colombia, cost of risk decreased by ninety-six basis points to 2.3%, while in Panama, cost of risk decreased five basis points to 0.5%. Now, I will turn the presentation over to Germán Salazar, Banco de Bogotá's Executive Vice President.
Thank you, César, and good morning, all. Let's move on to slide four. Our digital strategy is focused on enhancing our digital channels. We have reached 2.5 million customers, who performed over 30.4 million monetary transactions in the second quarter, an increase of 2 million transactions or 7% compared to the previous quarter. Average transactions per customer increased from 3.7 to 4 in just one quarter. Our main objective is to provide the best possible customer experience and increase the adoption of immediate payment solutions. Throughout the quarter, digital transactions were driven by innovative solutions by Transfiya, QR codes, and PSE, enabling our clients to complete instant and secure online operations. I will mention a few highlights.
Banco de Bogotá leads the industry by offering free bank-to-bank transactions with over 7.4 million in Q2 2024, representing a 20% growth compared to the previous quarter. This growth is due to the improvements in the overall user experience, reflecting efficient adoption by our customers. We are growing considerably in our QR payment strategy. Now, our customers can make payments to accounts in any other bank from our mobile banking by scanning the merchant's QR code. This allows us to offer various payment solutions from our digital accounts and achieving 95,945 payments, 2.4 times more than in Q1 2024. We have enhanced the e-commerce payment experience by simplifying and speeding up PSE payments.
We are pioneers in an innovative solution that allows merchants to register for recurring payments, enabling users to validate payments in a single step with an SMS code. The PSE Avanza initiative has reached over 800,000 transactions this quarter, growing 30% compared to Q1 2024, and representing 11% of total PSE transactions. Since its launch, over 3,000 merchants have registered. We expect greater adoption of new agile and secure payment methods through an improved payment experience via PSE. For the corporate segment, our digital channels are focused on enhancements to enable greater adoption based on business needs. We have launched a mobile app for ICBS portal customers, reducing the average client activation time from 18 to four days, which includes a virtual token.
This app allows clients to place inquiries, authorize transfers, and make payments directly from their mobile devices, reducing friction and increasing efficiency across our channels. Regarding digital products, we have improved digital disbursements and automated the process of collateralizing securities. This digitalization has reduced manual requests from 700 to just 3 per month, significantly speeding up the disbursement process for our corporate clients. As a result, in digital promissory notes, we achieved 2,260 disbursements for a total of COP 311 billion, reflecting a 56 increase growth compared to Q1 2024. On slide 5, we show you the quarter's highlights regarding sustainability efforts. In June, the bank's green loans reached COP 4.3 trillion, 62% higher than in December 2023.
Likewise, we had COP 10.9 trillion in social loans to MSMEs and social housing, COP 267 billion for micro-enterprises, of which 37% are in towns under the poverty line, and we had COP 3.3 trillion in social housing loans, of which 54% were loans to women. In alliance with Azimut. Through an innovative investment model, we invested COP 150 billion pesos in projects that foster energy efficiency and solar energy, which will reduce around 380 metric tons of CO2 emissions per year. In June, we launched our first report on responsible banking principles, where we reaffirm our commitment to sustainability and demonstrate that our focus reaps real benefits to our stakeholders and the environment.
We established objectives for the second semester under the Net Zero Banking Alliance, advancing towards the decarbonization of our loan book and supported the global transition towards a net zero economy. We participated in BID Invest Sustainability Week in Brazil, where we shared the bank's effort to protect the Amazon rainforest, as well as innovative practices in sustainability. This quarter, the bank was also granted the Flor Ángela Gómez Award for Sustainable Finance from Asobancaria, due to the results and impact of last year's sustainable subordinated bond. We were also recognized by Saving the Amazon in the Compromise with Sustainable Objective category for generating positive impacts on social and environmental fronts. Finally, in Camacol's Green Conference, we were recognized in the climate financing category due to our efforts to foster sustainable construction. Moving on to slide six, let me summarize the local macroeconomic overview.
Economic activity has turned out better than expected in the first half of 2024, with an annual growth of 1.5%, compared with projections between 1.5% and 1.8% for the year. This improvement has been influenced, first, by the recovery of the global economy, which has been reflected in a better performance of foreign trade. Second, in the local context, better dynamics in sectors such as public administration, agriculture, digital and utilities, especially electricity, have also explained the positive surprise in economic performance. In contrast, more traditional sectors of the economy, such as construction, commerce, and manufacturing, maintained contraction rates at the beginning of the year. These results show relatively high dispersion in sectoral performance. Growth in 2024 is likely to exceed the 0.6% of 2023. However, it will remain below that of the long term.
A low recovery in investment, affected by low levels of confidence for both business and households, coupled with still high interest rates, has had a negative impact on the present, but has also reduced the outlook for future growth. The twelve-month aggregate investment rate as of March 2024 approached its lowest level since the beginning of the series in 2005 of 17% of GDP, which will have a negative impact on economic growth in the coming years. Thus, potential growth is now estimated to be between 2.5% and 3%, lower than the pre-pandemic estimate of between 3% and 3.5%. Nevertheless, some of the modest signs for the consumer side suggest that the worst is behind us.
The national unemployment rate shows an annual increase of just 0.2 percentage points in the first half of 2024 at 11.1%, benefiting from higher public and service hiring, and partially offset by job losses in sectors that were traditionally the engine of the labor market: agriculture, construction, commerce, and manufacturing. In addition, the expected lower interest rates, the higher purchasing power as wages increase more than inflation, while the Colombian peso has devalued annually, and a reduction in the financial burden would allow for a change in the consumption cycle. This has been evident in the positive readings of imports of consumer goods in the first half of the year. In July, inflation was slightly below consensus at 6.9%, resuming its downward trend after pausing just above 7% during the second quarter.
Although the disinflationary path continue, the inflationary trend of services, especially rents, the expected depreciation of the Colombian peso, and the increase in diesel prices, will only allow inflation to reach the target range established by the central bank between 2% and 4% by mid-2025. In this regard, inflation risks are centered on the indexation of services and the dependence on the minimum wage, which could increase significantly again in 2025. Additionally, on an exchange rate with the potential to lose against the dollar, climatic shocks that could affect food and energy prices and fuel prices subject to the global context are other latent risks. The situation has displayed Banco de la República's caution in its process of interest rate cuts, where in July, it completed four sessions with 50 basis points rate adjustments.
However, given the improvements in inflation and the convergence of expectation to the market, the pace of rate cuts is likely to accelerate to 75 basis points soon. Furthermore, the forecast of lower rates at a global level reinforces the above. In terms of external accounts, the country has seen a significant adjustment with a reduction in the current account deficit to levels below 3% of GDP. This can be explained by a combination of lower demand for goods produced abroad, especially inputs and capital goods, while the country has seen a greater inflow of dollars from remittances and tourism. In net terms, this situation has resulted in a lower need for dollars, which has provided some support to the exchange rate....
Other factors that play into the currency behavior are potential interest rate cuts by the Federal Reserve, the United States elections, the fiscal situation, and local uncertainty. If rate cuts are delayed, the Republican Party wins the presidency, the Colombian fiscal situation deteriorates further, and local political noise returns, the Colombian peso would tend to devalue. For the time being, the aforementioned forces have found a fragile balance that favors a flat exchange rate with an upwards bias in the midst of recession fears in the United States. On the fiscal front, even though the government has straightened out its accounts with a significant spending cut, risks are still present, and compliance with the fiscal rule is at stake, as indicated by the autonomous committee of the fiscal rule.
For the remainder of the year, it is necessary for tax collection to meet the established targets, and for the government to restrain its spending to ease concerns about sustainability of public finances. In any case, rating agencies are alert to any new developments, while the markets are still estimating a lower level for sovereign's rating. Fiscal risks will linger in twenty twenty-five due to the potential budget financing issues, with the need for the approval in Congress of a financing law and an earlier end to the transition period for the fiscal rule. Now, I will pass on the presentation to Javier Dorig, Head of Investor Relations and Corporate Development, who will provide details on our financial results for the quarter.
Thank you, German, and good morning, everyone. Starting on slide 7, we present the highlights of our balance sheet in the second quarter of 2024. Total consolidated assets reached COP 145.4 trillion pesos at the end of the second quarter. This represents a 6.8% annual growth and a 4.6% quarterly increase. Net loans represented 67.6% of total assets, followed by the fixed income portfolio with 12.1%, while the equity investment portfolio and other assets represent 7.7% and 12.6% respectively. The gross loan portfolio reached COP 104 trillion pesos, being geographically split, 84% in Colombia and 16% in Panama.
In Panama, the loan portfolio decreased 5.5% year on year, and 1.5% in the quarter in dollar terms. In Colombia, in line with our strategy of gaining market share, loans grew 9.3% annually and 2% quarterly. On a consolidated basis, when excluding FX fluctuations, growth was 6.6% year on year and 0.8% in the quarter. Commercial loans represent 64.4% of total gross loans, while consumer and mortgage segments represent 22.7% and 12.6% respectively. In relative terms, the mortgage segment increased its share of total loans, gaining 29 basis points this quarter. Commercial loans amounted to COP 67 trillion pesos, having grown by COP 1.6 trillion pesos in the second quarter, or 2.4%.
In line with the bank's current strategy, we expect further gains in this segment's market share. Commercial loans increased by 2.2% in Colombia and decreased by 3.9% in Panama in dollar terms. The largest growth in the quarter was in general purpose loans. Consumer loans reached COP 23.6 trillion, increasing 5.5% in the year and 2.1% in the quarter. Growth in Colombia was 0.4% against Q1 2024, while in Panama, in dollar terms, was 3.5%. Most of the growth in this segment was due to the 8% quarterly peso depreciation. Given tighter credit policies, consumer loans have experienced a slowdown in growth. Mortgages increased the most in relative terms by 13.7% yearly and 5.1% quarterly.
Excluding FX, growth was 13.9% and 3% respectively. In Colombia, this segment grew by 4.1% this quarter, and in Panama, it decreased by 0.1% in dollar terms. Finally, micro credits remain a small component of our total gross loans. This grew by 3.8% this quarter, or COP 10.7 billion. In relative terms, this segment kept the same size of 0.3% of total gross loans. We expect loan growth to be between 7% and 8% for 2024. Moving on to slide eight, we present our financial liabilities. Total funding reached COP 125.5 trillion, which represents an 8% annual increase and a 4.8% growth this quarter. Excluding FX, these growths are 8.1% and 3.1% respectively.
Deposits have traditionally been the bank's main source of funding and remain so at 80.2%, having gained 54 basis points in terms of funding mix this quarter. Loans from banks and interbank loans represented 12.3% of the funding mix, while bonds represented 7.6%. These figures do not include the latest bond issuance in the local market, which, as César mentioned, took place on July twenty-fifth, for COP 500 billion in senior sustainable bonds. Deposits totaled COP 100.6 trillion, having increased by 11.3% year on year, and 5.5% quarter on quarter. Excluding FX, growth was 11.6% for the year, and 3% for the quarter.
Deposits increased by 5.4% in Colombia in Q2 2024, while they decreased by 1.9% in dollar terms in Panama. The peso's 8% depreciation partially explains deposit growth in Colombia, as it positively affected figures from the agencies in Miami and New York. Regarding deposit mix, time deposits remain the main type, with a 51% share of deposits. Nevertheless, this ratio decreased this quarter, given a lower rate differential between time deposits and other accounts. We expect the relative attractiveness of time deposits continue decreasing against savings and checking accounts. Savings accounts increased by 9.4% this quarter. Excluding FX, they increased by 8.8%. Current accounts represent 14.1% of deposits, growing 2.8% this quarter, and decreasing 0.5% when excluding FX.
On the bottom right, we show the evolution of the liquidity coverage ratio, or IRL in Spanish, which closed the quarter at 124%, while the Net Stable Funding Ratio, or CFEN in Spanish, was 109%, close to the previous quarter's ratio. Deposits to net loans were at 1.02 times, close to the target of 1 time. Let's continue with slide 9, where we present our equity and capital adequacy levels. Total equity closed at COP 16 trillion pesos in the second quarter, having increased 2.3% annually, and 3.1% in the quarter. Profits and higher other comprehensive income explain most of this increase. Tangible common equity increased to COP 14.3 trillion pesos during the quarter.
Tangible common equity ratio decreased from 10.1% to 10%, as intangibles increased by COP 56 billion, or 3.6% quarterly. Likewise, leverage, measured as equity over assets, decreased from 11.1% to 11%. Common equity Tier 1 capital increased by COP 281 billion in the quarter, or 2.1%, as higher accumulated income and less negative OCI of COP 197 billion and COP 129 billion, respectively, were countered by COP 45 billion in higher intangibles and COP 11 billion of higher book goodwill, both of which subtract common equity Tier 1 capital. Tier 2 capital increased by COP 171 billion, or 8%, given that the Tier 2 bonds are U.S. dollar-denominated, and this currency appreciated against the peso by the same magnitude in the quarter.
Total risk-weighted assets increased by COP 2.7 trillion, or 2.5%, mainly due to credit risk-weighted assets of COP 3.8 trillion and offset by market risk-weighted assets, which decreased by 16.8%, or COP 1.3 trillion. Thusly, CET1 and Tier I ratios decreased four basis points to 12.3%. Total capital adequacy increased by six basis points, remaining at 14.4%, as the Tier Two ratio increased by eleven basis points. Tier I ratio and total capital adequacy ratios are 3.8 and 2.9 percentage points above regulatory minimums, including buffers. Now, let's move to our PNL performance ratios, starting with net interest margin on slide 10.
Net interest income for Q2 2024 was COP 1.3 trillion, having increased by 4% in the quarter, mainly due to lower interest expenses. Lending yield decreased this quarter, as Banco de la República's rate cuts have an effect on variable loans, which represent 60.4% of total loans. The central bank's rate decreased by 200 basis points from their highest point of 13.25% to 11.25%. Therefore, loan yields decreased by 72 basis points, ending at 12.7%. Also, since usury rates have contracted substantially, a portion of consumer loans yield has been impacted. Investment yield was 179 basis point higher this quarter, standing at 9.4%. Cost of funds decreased by 48 basis points in the quarter. This effect was twofold.
First, savings accounts gained relative participation within the funding mix of 119 basis points, while time deposits lost relative participation of 36 basis points in the mix of total funding. Second, almost all funding types decreased their cost of funds. Time deposits decreased by 77 basis points, current accounts by 87 basis points, while savings accounts remained relatively stable. Lending NIM was 5% for the quarter, a 38 basis point decrease, due to the already mentioned effects of, on loan yield and cost of funds. Conversely, investment NIM increased by 213 basis points in the quarter, from higher investment income and lower cost of funds. Investment NIM was 1.7% this quarter. Finally, total NIM was 4.5%, remaining at the same level as in the past quarter and in 2023.
Total NIM has not increased, partially because usury rates' lower levels have impacted loan yields more than expected. Additionally, there is a lag effect between central bank decisions and their impact on loan yields, as well as cost of funds. We expect a stable NIM this year, as Banco de la República continues its downward rate cycle. We remain hopeful that the usury rate will behave more in line with market rates going forward. Furthermore, Fed rate cuts in the second semester could improve our NIM in Multibank. We expect NIM for 2024 between 4.5% and 4.6%. Moving on to slide 11, we present loan quality ratios. Starting with 30-day PDLs, this increased from 6.2% to 6.3% this quarter. The Panamanian portfolio presented a three basis points decrease, while the Colombian portfolio increased by eleven basis points.
For 90-day PDLs, the Colombian figure remained relatively stable, having increased by 16 basis points, from 4.6% to 4.8%. The Panamanian figure increased by 103 basis points, ending at three point four percent, mainly due to an increase in commercial 90-day PDLs in Panama, which were observed last quarter as 30-day PDLs. We would like to emphasize that the Panamanian commercial cost of risk increased much less, as most of these 90-day PDL increases were in loans already highly provisioned or with ample collaterals. On slide 12, we present 30- and 90-day PDLs by segment, as well as information on 30-day and 90-day PDL formation and charge-offs. First, on the lower left, we present new PDL formation. New PDL formation seems to have peaked in Q1 2024 for 30-day PDLs, and in this quarter for 90-day PDLs.
Much of this quarter's increase in formation of new 90-day PDLs is a reflection of an increase in 30-day PDLs last quarter in Panama. On the right, we show the behavior of 30- and 90-day PDL by segments. Commercial PDLs deteriorated slightly this quarter. The 30-day figure increased by 16 basis points to 5.6%, while the 90-day figure increased by 36 basis points to 4.9%. Commercial 90-day PDLs in the Colombian portfolio deteriorated by 15 basis points, while the Panamanian commercial loans experienced a 1.9 percentage points deterioration. Fortunately, most of these loans have solid collaterals, and as you will observe further on the Panamanian commercial cost of risk, presenting a slight deterioration. The consumer portfolio is already showing improvement regarding delinquency.
Thirty-day PDLs decreased by 38 basis points, having improved both in Panama and Colombia, where a 125 basis point decrease in credit card delinquency is noteworthy. Regarding ninety-day PDLs, they decreased by 2 basis points, remaining at 4.1%. In ninety-day PDLs, a 35 basis point improvement in personal loans reflects tighter credit policies. Mortgages deteriorated by 37 basis points in thirty-day PDLs, and by 31 basis points in ninety-day PDLs. Most of the deterioration came from the Colombian portfolio, where mortgages deteriorated by 51 and 38 basis points in thirty- and ninety-day PDLs, respectively. The Colombian mortgage portfolio has suffered deterioration due to increases in the cost of living for households, but low loan-to-value ratios imply a controlled expected loss in this portfolio.
On slide thirteen, we show the credit quality of vintages three months after origination for personal loans and credit cards in Colombia, which largely explain loan deterioration and increasing cost of risk, which started two years ago. Regarding personal loans, you can see that the vintage of February 2023 had 8% thirty-day PDLs in May 2023, or three months later. This ratio has declined significantly, as the vintage of April 2024 only had 2.8% as thirty-day past due loans in July 2024, an even lower point than in early 2022. Credit cards showed progress as well, even though deceptive practices, particularly in Q1 2024, had an impact on their delinquency.
There has been positive evolution as the December 2023 vintage had a 13.6% thirty-day PDL ratio, while the April 2024 vintage had a 4% thirty-day PDL ratio in July, with a lower figure than in the beginning of 2022. On slide 14, we present gross loans by stages and segments, as well as coverage ratios by stages. Starting with total gross loans, there is a stable percentage of Stage One loans. There was a slight migration from Stage Two into Stage Three loans, with Stage Two loans decreasing from 5.2% to 5%, while Stage Three loans increased from 7.3% to 7.5%.
Commercial loans experienced a similar behavior, where Stage One loans decreased their share by 0.1 percentage points, while Stage Two loans decreased from 3% to 2.8%, and Stage Three loans increased from 9.2% to 9.6%. Consumer loans showed improvement, having Stage One loans increased from 85.5% to 86.1%. The Stage Three loans remained stable, and it was Stage Two loans that decreased from 10.4% to 9.8%. In mortgages, Stage One loans decreased by 112 basis points, having increased by 99 basis points in Stage Two loans, and by 13 basis points in Stage Three loans. On slide 15, we present coverage ratios by PDLs and gross loans. On the top left, the coverage ratio for 30-day PDLs decreased to 0.90 times this quarter.
The Colombian thirty-day PDL coverage was 0.97 times, and the Panamanian figure was 0.33 times, both at similar levels than the previous quarter. On the top right, consolidated coverage for ninety-day PDLs decreased to 1.23 times. For Colombia, this ratio decreased to 1.32 times, and in Panama, to 0.48 times. This ratio reduction is explained by higher ninety-day PDLs in commercial and mortgage segments, which tend to have higher collaterals, and therefore, a lesser need for provisioning. Allowances over gross loans decreased by 12 basis points this quarter to a level of 5.7%, a similar level as to that of 2023's end of year. On slide 16, we present our net cost of risk and charge-off ratios. On the top left, cost of risk improved by 82 basis points this quarter to 2.1%.
Improvement came from the Colombian portfolio, which experienced an 86 basis point reduction in the quarter to 2.3%. In Panama, cost of risk improved by 5 basis points to 0.5%. On the top right, you can observe the consolidated cost of risk by segments. First, the commercial cost of risk was 0% this quarter, due to the reversal of long lost provisions, due to a significant improvement in the repayment capacity of a big corporate client. For the second consecutive quarter, the consumer portfolio's cost of risk decreased. This quarter's result decreased by 161 basis points to 8.4%, having improved in both Panama and Colombia, showing improvement of 444 basis points in credit cards, and by 135 basis points in personal loans.
We have been enforcing tighter credit policies in the consumer portfolio for some quarters now, so it's positive to observe these results. Cost of risk for mortgages improved by 10 basis points this quarter to a level of 0.9%. This figure has not matched PDL increases, as the bank's mortgages have high levels of collaterals. 85% of collaterals have a loan-to-value under 70% at origination. For 2024, we expect net cost of risk to be around 2.4%, as this quarter's figure was higher than anticipated when excluding one-off items. The ratio of charge-offs over 90-day PDLs stands at 57% this quarter. In Colombia, it is 61%, remaining fairly stable, and in Panama, it is 11%. Relatively low figures partially explain the decrease in 90-day PDL coverage in Panama.
Charge-off over average loans remains stable, increasing by only three basis points this quarter and remaining at 2.5%. On slide 17, we present fee income structure and details on other income. Gross fee income increased by 0.5% in the second quarter of 2024 to COP 490.5 billion. Banking services explain 43.2% of gross fees, while credit and debit cards represent another 40.1%. Other fees, like fees from Fidubogotá and Almaviva, explain further 16% of fees from fiduciary activity and storage. Fee income ratio was 27.6% for the quarter, having increased 2.1 percentage points, and having similar levels to those of Q4 2023. The increase is due to higher fees by 0.5% this quarter, and lower total income by 7.1%.
Other operating income stood at COP 50.4 billion this quarter, coming from: First, equity method and dividend income came in at COP 52.8 billion, a 69% quarter-on-quarter decrease or 39% year-on-year decrease. Second, income from net investment activities was COP 23.5 billion, a 40% quarterly decrease. Third, the derivatives and FX position had a net expense of COP 137.2 billion, increasing by 17% in the quarter. Finally, COP 111.3 billion from other income presented a decrease of 8%. We expect fee income ratio in the 26% area for 2024. On slide 18, we present efficiency ratios measured by cost to income and cost to assets.
Total income was COP 1.8 trillion, 6.4% lower than in the previous quarter, and 2.6% lower than in Q2 2023, mainly due to lower equity method income. Operating expenses were COP 941 billion for the second quarter of 2024, increasing 2.9% year-on-year and 1.9% quarter-on-quarter. Employee benefits and other operational expenses increased the most in the quarter. Consequently, cost to income increased quarterly to 53.5%, 4.3 percentage points above last quarter, or 2.9 percentage points above a year ago. These ratios increase is mostly explained by total income, 6.4% quarterly decrease. Total average assets increased by COP 4 trillion, or 2.9% this quarter.
Thus, cost to assets ratio decreased by three basis points in the quarter to a level of 2.6%. We expect cost to income ratio to be around 50% for the entire 2024. Finally, on slide 19, we show the company's overall profitability. This quarter's NIM remained stable at 4.5%. Even though the cost of risk decreased substantially to 2.1%, this effect was offset by a decrease in equity method income and dividends. Analyzed profitability metrics were 0.6% for ROAA and 5% for ROAE in Q2 2024. These results should slowly improve in the next couple of quarters, as we should see improvements in net interest income, a slow but a steady improvement in the quality of loan portfolios, and a recovery in equity method income.
Before moving on to the Q&A session, I'd like to summarize our general guidance for 2024. Loan growth is expected to be between 7% and 8%. Net interest margin is expected between 4.5% and 4.6%. Net cost of risk is expected to be around 2.4%. Fee income ratio should come in around 26%. Cost to income ratio should be around 50%, and return on average equity should be between 6% and 7%. And now we're open to your questions.
Thank you very much. We will now begin the Q&A session. We can take your written questions through the Q&A chat box, live questions, or through the phone line. Please note the following instructions: For the Q&A chat box, please type your questions and we'll proceed to read them. After answering the questions received through the chat box, we will proceed with the live questions. If you wish to ask your question live, please place your request, and we'll open your mic and call your name accordingly. If you are connected by phone, please press the star button and the number five to access the Q&A feature. If you're using a speakerphone, you may need to pick up your handset before pressing the numbers. Once again, for our Q&A chat box, please type your questions in the Q&A chat box, and we'll proceed to read them.
If you wish to ask your question live, please place your question, and we'll open your mic and call your name accordingly. If you are connected by phone, please press the star button and number five to access the Q&A feature. If you are using a speakerphone, you may need to pick up your handset before pressing the numbers. We're standing by for questions at this moment. The first question coming through our chat box comes from Mr. Julián Ausique from Davivienda Corredores. It says: Hi, thank you for having my question. I would like to have more color on the net foreign exchange losses, COP 137.2 billion. Why was it so much? Thank you.
Hi, Julian, this is Javier. So regarding your first question, please bear in mind that our FX position is mostly balanced, so the COP 137 billion pesos you're referring are not precisely a foreign exchange loss, but rather the net cost of derivatives assigned to liabilities in dollars that do not have a hedge in the asset side. We consider that that this net cost will decrease in 2025 as interest rate in pesos fall, will fall faster than rates in dollars. Thank you.
Thank you very much. Our second question comes from Mr. Julián Ausique from Davivienda Corredores: Do you already have expectations on twenty twenty-five results? Thank you.
Hi again, Julian, and thank you for that second question. We don't have guidance for 2025 yet, since we're just beginning our budgeting process. What we could say right now is that we aim to keep improving in terms of NIM, cost of risk, and overall profitability, and we will disclose those figures in the next call.
... Thanks a lot. A third question from Mr. Julián Ausique from Davivienda Corredores is: Can you please repeat your expectations for ROE for twenty twenty-four? Thank you.
Of course, Julian. Our guidance for ROAE for 2024 is a range between 6% and 7%.
Thank you very much. We're now standing by for questions, and we'll proceed to read the instructions. If you are, if you have any questions, you can ask your questions through our Q&A chat box. To do so, please type your question and we'll proceed to read your questions. After answering the questions received through the chat box, we'll go with live questions. If you wish to ask your questions live, please place your request, and we'll open your mic and call your name accordingly, and if you're connected by phone, please press the star button and number five to access the Q&A feature. If you're using a speakerphone, you may need to pick up your handset before pressing the numbers. Right now, we're standing by for questions. There seems to be no further questions at this time. With that, we'll proceed now with the final remarks from Mr.
César Prado. Mr. Prado, the floor is yours.
Thank you, Karen. As has already been stated, this quarter saw a slight decline in profitability. We remain confident that further improvements will come in the following quarters. Thank you for attending today's meeting, and I hope you will join us for our next conference call.
Thank you very much. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.