Good morning. Welcome to Banco de Bogotá 2024's first quarter consolidated results conference call. My name is Karen, and I'll be your operator for today's conference call. At this time, all participants are in a listen-only mode. Afterwards, 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 available on slide number 2. When applicable in this webcast, we refer to trillions as millions of millions and to billions as thousands of millions. 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, everyone, and welcome to Banco de Bogotá's first quarter 2024 earnings call. As we announced in the previous call, we have been reviewing the bank's strategy for some months now. This review includes innovations and renewed efforts on different fronts that will complement our current strategy. Today, I want to share with you some of the key points. Our strategy consists of four pillars, namely growth, profitability, sustainability, and funding optimization. First, we want to leverage the bank's strength in wholesale banking. Specifically, for our large and medium-sized corporate clients, we are focusing on complementing our traditional strength in credit with an enhanced value proposition on intermediation in payments, in particular, leveraging treasury, transaction banking, cash management, and supply chain finance solutions. We expect to become the primary bank for these clients and thereby increase our share in corporate deposits.
For the public sector, we will be focused on clients at the national, state, and local level. We want to increase our participation in this segment, which has been an extremely important source of relatively inexpensive and stable deposits. The competitive strategy is based on a service model with highly specialized relationship managers. We will also offer tailor-made solutions, transactional, operational, and technological, which are very valuable for these clients and also create exit barriers. In addition to that, the bank has a widespread channel network for payments, including around 430 branches and over 22,000 banking correspondents, which are crucial for intermediation in payments for these clients. A special effort will be made in different regions of the country beyond the largest urban centers, which are usually underserved and offer great business opportunities.
Regarding SMEs, we are working to simplify our offering by developing customized solutions packages that focus on digitization and self-service capabilities. We will also develop an app that supports the client's journey from onboarding to retention. In addition, we are working on building more cost-efficient service models that will complement the relationship managers, such as virtual managers and different digital channels. We are also starting to deploy new risk models for this segment, especially for low-end SMEs. With regards to retail banking, we want to pay special attention to affluent clients. Here, the value proposition is based on a relationship manager model and the offering of an integrated portfolio of banking and investment products, including onshore and offshore solutions. We are reviewing the thresholds and characteristics of each sub-segment, increasing the size of our premium base.
We will seek to increase the number of affluent clients, as well as strengthen the relationship with existing ones through the improvement in products, processes, and relationship models. We intend to evaluate the attention channels, in particular, rethinking the specialized premium offices we currently have. The bank is also working on deepening the integration with its asset management and offshore subsidiaries. For the rest of our retail banking clients, we will be working on reducing the cost to serve, focusing on migrating these clients to low-cost service models, such as digital channels like the app. In general, we want to leverage our future growth with a balanced portfolio, including an adequate mix of consumer products such as credit cards, personal loans, payroll lending, automotive lending, and mortgages.
These and many other concepts have been mapped into specific goals that we are already beginning to implement and will continue to do so in the short to medium term. Now, on slide 4, let me summarize the bank's consolidated first quarter results. Profitability was higher than the previous quarter, with an attributable net income of COP 206.8 billion, which resulted in annualized profitability ratios of 5.3% for return on average equity and 0.6% for return on average assets. Quarterly net interest margin increased 18 basis points to 4.5% due to both lower cost of funds and higher investment yields. Fee income ratio decreased by 2.1 percentage points in the quarter to 25.5%, as expected after the usual seasonality in the last quarter of the year.
Efficiency, measured as cost to income, improved to 49.2% this quarter. Cost to assets ratio also decreased to 2.7% for the same period. Consolidated gross loans amounted to COP 101.3 trillion, with the Colombian portfolio increasing 11.1% year-on-year and representing 85% of the total gross loan portfolio. Deposits totaled COP 95.3 trillion this quarter, a 4.7% quarterly increase. When excluding FX movements, deposits show a 4.5% quarterly growth. The ratio of deposits to net loans was 1x on target. Deposits increased their share of funding, reaching 79.6% as total funding increased 2.6% this quarter, mainly due to the growth in time deposits.
Loan quality deteriorated slightly this quarter, as 90-day PDLs increased by 14 basis points to 4.3%. Net cost of risk increased this quarter by 28 basis points to 2.9%, as commercial and mortgage loans deteriorated by 49 and 45 basis points respectively, while consumer loans improved by 34 basis points. 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 5, where we present highlights regarding our digital strategy. The execution of the strategic exercise we recently completed relies importantly on digital tools and channels, where the bank has demonstrated significant strengths and progress. Here are some examples. In Q1 2024, we continued expanding the digital portfolio, improving the value offer in the corporate segment, one of our strategic focal points. Regarding customer products, we implemented new developments that enhanced user experience and strengthened already available products. During the quarter, we continued growing our digital offering for corporate segment. Currently, our corporate digital products had a 79% increase in disbursements versus the fourth quarter of 2023.
This performance was possible due to our sales force adoption, with eight out of 10 sales representatives using digital tools for disbursements, improving the overall experience and lowering operational expenses. We would like to highlight the following results for corporate business. First, in digital business loans, we reached 2,530 disbursements for a total amount of COP 284 billion, which represents a quarterly growth of 76% and 48% yearly. Through innovation, the bank accelerated the digital experience for the SME segments, one of our focuses in the new strategy. During the first quarter, we achieved the first case of embedded finance with the payroll accounts API, which integrates directly with the company's platforms. Through this initiative, companies can open payroll accounts through the company's ERP experience without the need of the bank's engine.
We currently have 50 accounts opened through their ERP systems in the country. In line with the strategy, we are close to launch several APIs to strengthen our portfolio of cash management and transactional banking for companies. This portfolio includes APIs for payouts, including taxes and factoring. For the retail segment, I want to highlight the following results and improvements during the quarter. First, as part of our strategy, we will pay special attention to affluent clients. We continue to strengthen our digital investment products. For example, digital time deposits reached more than 17,000 digital time deposits and achieved a total balance of COP 749 billion. In Q1 2024, we improved our digital reinvestment experience, where we optimized the experience to increase the renewal and reinvestment rate.
Second, our digital savings account reported 152,000 new accounts for a COP 74 billion growth in balance. In this quarter, we'd like to highlight Mi Trabajo savings account, which is the payroll account product without a payroll admin, where 5,500 accounts were opened, representing a growth of 2 times compared to Q4 2023. Third, in Q1 2024, we placed more than 36,000 credit cards, reaching COP 137 billion in balance. The recently introduced credit card called On, tailored for tech-savvy users, which offers 5% cashback reward on purchases made at gaming and technology stores. In the pilot phase, 204 cards were placed, contributing to the balance of COP 1.1 billion.
With the development of this product, we seek to expand our product offering while being aligned with market needs and reaching the right customer profiles through our channels. Fourth, we sold over 37,000 digital insurance products, where 78% were positioned through an effective cross-selling experience. We also kept improving the digital experience for insurance acquisition and increased our portfolio with accident and health insurance. Moreover, 20% of the bank's total insurance fees are generated from digital products. Our new strategy seeks to deepen relationships with existing clients and enhance product placement. Insurance products clearly optimize the cross-selling experience. Another focal point is to continue strengthening our digital channels.
In Q1 2024, we had over 2.5 million active customers on our digital channels, with an adoption of 60%, having conducted over 21 million monetary transactions, including PSE digital safe payments, for a 16% growth year-over-year. Instant payments by using only the customer's cell phone number through Transfiya or Aval payments recorded 6.3 million transactions in Q1, showing an annual growth of 10%. Furthermore, advancements in QR-based transactions, although in early stages, achieved 40,000 immediate transactions, representing a 5-time increase compared to Q4 2023. We implemented a panic button feature across our digital channels, empowering users to swiftly block their banking products in case of theft or loss of their mobile phone, protecting users from potential frauds. Also, we enriched the digital help center with comprehensive support information for all products.
Additionally, we introduced an innovative feature to our mobile banking platform, enabling users to access and use virtual credit card data seamlessly. Furthermore, we improved the digital channel experience in our banking correspondents and ATMs by increasing card-not-present withdrawal limits. Finally, Fintech Americas recognized Banco de Bogotá in the category for innovation in channels, acknowledging our efforts in evolving banking services with our recurring payment system that allows payments through PSE and Avance. Now, moving on to slide 6, we present highlights regarding our sustainability strategy. For the fourth consecutive year, Banco de Bogotá is in the top 4% of the S&P Sustainability Yearbook, surpassing 96% of more than 500 banks evaluated globally. This milestone was further enhanced by the issuance of our sustainable subordinated bond in international markets, raising $230 million, and marking our inaugural impact report in this area.
Our commitment to sustainable finance is clearly reflected in our extensive portfolio of sustainable loans, which now totals COP 13 trillion. As of March 2024, green loans reached COP 3.5 trillion, representing a robust growth of 34% since December 2023. Over the past four years, this segment of the lending portfolio has expanded by 10.8 times. Additionally, social loans, totaling COP 10.7 trillion, are primarily targeted at SMEs and social housing initiatives, with COP 258 billion allocated specifically to small and medium-sized enterprises, 37% of which operate in vulnerable communities. Our social housing efforts have been equally significant, with COP 3.2 trillion directed towards these projects, of which 34% have benefited women.
An initiative that stands out this quarter is our involvement in the financing of four photovoltaic solar parks, an investment of COP 519 billion that generates approximately 1,345 gigawatts per hour of energy annually, and prevents the emission of over 200,000 tons of carbon dioxide equivalent each year. The sustainable subordinated bond has made a significant influence, not only in terms of environmental benefits, but also in social impact. During the quarter, we dispersed 58 green loans focused on climate change, adaptation, and mitigation across sectors such as energy, agriculture, aquaculture, and fishing. Our social loans are equally impactful, with 12,920 credits dispersed, promoting prosperity and gender equality.
Furthermore, over 10,000 credits were granted, 83% of which went to women-owned micro, small, and medium-sized enterprises, with 53% serving clients below the poverty line. In addition, more than 2,000 credits were allocated to social housing, with 55% benefiting women and 94% aiding households below the poverty line. Moving on to slide 7, let me summarize the local macroeconomic overview. The Colombian economy registered a favorable start during the first quarter of 2024, thanks to the higher level of public spending, the calendar effect due to the leap year, the notable increase in agricultural production, and finally, the greater demand and provision of public services, especially electricity, thanks to the high temperatures caused by El Niño phenomenon. On the contrary, the more traditional sectors of the economy, such as manufacturing and commerce, continue their weak trend.
For 2024, our economic research team predicts that the more working days, lower interest rates on Banco de la República, gains in workers' purchasing power, thanks to the decrease in inflation, and high levels of public spending, would lead to the Colombian economy to go from an economic growth of just 0.6% in 2023, to one closer to 1% in 2024. The modest recovery will be a consequence of the low levels of confidence of both households and companies. Local sociopolitical uncertainty amid the discussion of social reforms in Congress, security progress, and the recent outward revision in the central bank's interest rate prospects, both globally and locally. At the same time, investment remains weak as uncertainty weighs in, and slower growth and lower capacity utilization discourage new projects.
Meanwhile, consumer inflation continue its downward trend, and in April, completed 13 consecutive months of moderation. With this, the metric went from a maximum of 13.3% in March 2023, to 7.2% on April 2024, explained by the relevant slowdown in food and goods inflation. In that same period, inflation in these items went from 21.8% and 15.1% to 3% and 2.4%, respectively. Greater agricultural supplies and lower exchange rates reduced the price of inputs and imported goods, largely explaining the effects in inflation and on these segments. In contrast, the services and regulated components have presented inflationary persistence. In services, indexation to past inflation has impacted rentals, while prices of other services were influenced by the 12% increase in the minimum wage.
In the case of regulated components, El Niño phenomenon put upward pressure on energy rates, while gasoline experienced its final price increases. Thus, on April, services and regulated inflation were 8% and 14.6%, respectively. For the rest of 2024, our economic research team anticipates continuing moderation in inflation, but at a slower speed, ending the year at 5.6%. Several factors support this outlook. First, the possible increase in the price of diesel and the risk of high oil prices in international markets. Second, the greater sensitivity to the upside of the exchange rate. And third, the recovery of the internal demand in the second semester.
The economic slowdown and the almost 600 basis point drop in inflation allow Banco de la República to accelerate the pace of interest rate cuts from 25 basis points in December and January to 50 basis points in March and April, taking it to 11.35%. Our economic research team highlights that the Board of Banco de la República maintains a cautious approach to rate cuts, especially due to the short-term risks that have resurfaced from inflation and the challenging fiscal outlook, which would lead to reductions of equal magnitude in the coming months. An acceleration in the pace of interest rate cuts could occur in the second half of the year if inflation risks remain contained and shows greater signs of deceleration. Depending on the above, we expect the interest rate to the end of the year between 8.75% and 9.25%.
Turning to the exchange rate, in the first quarter of 2024, the currency traded in a low volatility range, with an average slightly above COP 3,900 pesos. During April, volatility increased, and the exchange rate averaged close to COP 3,850 pesos, in both cases below the year-end level of COP 3,822 pesos. The appreciation of the peso is based mainly on a favorable global environment amid the expectation of lower interest rates in the United States and a contained perception of country risk. Going forward, the adjustment in the Federal Reserve rate outlook will keep on benefiting the local currency.
On the local front, the discussions of the reforms in Congress, the deterioration of public finances, and the stabilization of the external imbalance at higher than 2023, could lead to a change in the trend of the exchange rate. Our economic research team forecasts an exchange rate of 3,950 pesos per dollar at the end of this year. Regarding the external imbalance, so far this year, a slight deterioration has been observed compared to the end of 2023, explained by a better performance of imports when compared to exports. In particular, imports moderated their annual contraction rate, and even in the case of consumer goods, resumed a path of annual expansion, thanks to a slight rebound in household demand for durable goods. For its part, the fall in oil exports, despite higher prices, limited the results of Colombian sales abroad.
The above, in the midst of trade slowdown in the inflow of remittances, would lead to a current account imbalance to go from 2.7% of GDP in 2023 to 2.9% in 2024, similar to a historical average between 2001 and 2019.... Regarding public finances, the path of fiscal adjustment that started in 2021 was paused in 2024, as the government revised upwards its 2024 fiscal deficit goal from 4.2% to 5.3% of GDP. Likewise, weak tax collection, the accounting of income with low probability of occurrence, and execution problems have left the government with little margin of error to abide by the fiscal rule.
This is a relevant risk for the current year, because the solution through spending cuts will be postponed until the end of the year. Now, I will hand over the presentation to Javier Dorich Doig, Head of Investor Relations and Corporate Development, who will provide details on our financial results for the quarter.
Thank you, Germán, and good morning, everyone. Starting on slide eight, we present our balance sheet evolution during Q1, 2024. Consolidated assets total COP 139 trillion at the end of Q1, 2024, presenting annual and quarterly growth of 5.1% and 1% when excluding FX fluctuations. The net loan portfolio continues to be the main asset, representing 68.8%. This investment portfolio follows with 12.2%, while other assets and equity investments portfolio represent 11.1% and 7.9% respectively. The gross loan portfolio closed at COP 101.3 trillion in Q1, 2024, increasing 2.4% in the quarter and 4.4% yearly.
Excluding FX, loans grew 9.5% year-on-year and 2.3% this quarter, with the Colombian peso portfolio increasing 3.1% in the quarter and representing 85% of the consolidated portfolio. Regarding loan mix, the commercial portfolio represents 64.6% of consolidated loans, while consumer and mortgage segments represent 22.8% and 12.3% respectively. The commercial portfolio increased its share in the loan mix this quarter, as this segment's relatively better quality has made it more attractive. Commercial loans amounted to COP 65.4 trillion, increasing 3% in the quarter and 9.2% annually when excluding FX. General purpose loans increased the most in absolute terms during the quarter, both in Colombia and in Panama. Consumer loans increased 0.2% quarterly without effects, reaching COP 23.1 trillion.
The consumer portfolio size remains stable as credit policy has become tighter. Mortgages increased 2.7% this quarter to COP 12.5 trillion, or 2.6% when excluding effects. In Colombia, this segment increased 3.8%, as government subsidies have positively impacted its performance in the past quarters. In Panama, mortgages decreased by 0.8% in dollar terms. Finally, micro credits increased to COP 283 billion, a growth of 2.7% in the quarter, remaining a small component of the total loan portfolio. We expect loan growth to be between 7% and 8% for 2024. Moving on to slide 9, we present our liability structure. Total funding reached COP 119.7 trillion, increasing 1.5% year-on-year and 2.6% this quarter.
Excluding the peso devaluation effect, funding increased 5.9% yearly and 2.5% quarterly. Deposits remain the main source of funding, representing 79.6%, followed by banks and others with 9.1%, long-term bonds with 7.4%, and interbank borrowings with 3.9%. Deposits totaled COP 95.3 trillion, increasing 4.7% in the quarter and 6.4% annually. Isolating the FX effect, growth was 12.8% in the year and 4.5% in the quarter, respectively. In terms of deposit mix, time deposits remain the largest source, increasing their participation to 51.8%. Savings accounts increased their share to 33.5%, while checking accounts represent 14.5% of total deposits.
On the bottom right, we show the evolution of the liquidity coverage ratio, or IRL in Spanish, which closed the quarter at 155%, while the net stable funding ratio, or CFN in Spanish, was 108%, close to the previous quarter's ratio. Deposits to net loans were 1x on target. Let's continue with slide 10, where we present our equity and capital and equity levels. Total equity was COP 15.5 trillion in Q1 2024, decreasing 1.8% quarterly and increasing 0.7% annually, explained mainly by dividends. Tangible common equity remained at COP 13.9 trillion during the quarter. The tangible common equity ratio decreased from 10.5% to 10.1%. Likewise, leverage, measured as equity over assets, decreased from 11.5% to 11.1% this quarter....
Common Equity Tier 1 capital decreased this quarter by COP 337 billion, or 2.5%, due to the effect of dividend payments, as well as slightly higher intangible assets of COP 47 billion. Total risk-weighted assets increased by COP 1.97 trillion, or 1.9% in the quarter. Therefore, both Common Equity Tier 1 and Tier 1 ratios stand at 12.4% this quarter, a reduction of 55 basis points versus the fourth quarter of 2023. Tier 2 capital decreased by 16.7% quarterly, or COP 429 billion, mainly explained by the decrease in weighting of the 2026 subordinated bonds, as they lose 10 percentage points of their weight for Tier 2 calculations every year since the issuance. The Tier 2 ratio decreased by 44 basis points from 2.4%-2%.
Consequently, total capital adequacy was 14.4%, 99 basis points lower than in Q4 2023. Tier One ratio and total solvency ratios are 3.9 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 11. Net interest income for Q1 2024 was COP 1.3 trillion, showing a quarterly increase of 6.2%, explained by lower cost of funds. Lending yield decreased from 13.8% to 13.4% in the quarter and increased by 87 basis points annually. Mortgage and microcredit yields grew by 20 and 89 basis points this quarter, while commercial and consumer yields decreased by 47 and 33 basis points, respectively.
Investment yields were 37 basis points higher this quarter, mainly due to the rollover of investments at higher yields. The cost of funds decreased by 42 basis points this quarter. All deposit types decreased their cost of funds, especially savings accounts, with a 95 basis points reduction. Consequently, loan NIM increased to 5.4%, as the cost of funds decreased more than loan yields. Investment NIM remained negative this quarter, though higher. Investment yield was 7.6%, and cost of funds was 8.7%, rendering a -0.4% investment NIM, increasing 84 basis points quarterly. Finally, total NIM was 4.5%, experiencing an 18 basis points quarterly growth. We expect NIM to increase slightly this year as Banco de la República continues its downward rate cycle, which is expected to last well into 2025.
We expect to take advantage of becoming slightly liability sensitive, and our NIM is expected to increase as macroeconomic policy rates decrease. We expect NIM for 2024 around 4.6%. Moving on to slide 12, we present loan quality ratios. Starting with delinquency ratios, thirty-day PDLs increased from 5.7% to 6.2% this quarter. The Colombian portfolio presented a 41 basis points increase this quarter, while Panama's thirty-day PDLs increased 157 basis points to 5%. On the bottom left, we show that thirty-day PDLs deteriorated in the consumer segment by 98 basis points this quarter to 8.2%. Likewise, commercial and mortgage loans deteriorated by 52 and 23 basis points, respectively, to 5.4% and 6.6%, respectively.
Most of the deterioration in commercial loans is explained by Panama's 315 basis points increase in the quarter, as the Colombian portfolio deteriorated only by 17 basis points. As for the 90-day PDL ratio, it reached 4.3%, an annual and quarterly increase of 57 and 14 basis points, showing less deterioration than that of 30-day PDLs. The increase came from the Colombian portfolio, with a 17 basis points increment to a ratio of 4.6%. Panama's 90-day PDL ratio was 2.3%, the lowest level since Q3 2022. Breaking down 90-day PDLs, the consumer segment deteriorated 26 basis points this quarter, mainly in personal loans, vehicle loans, and financial leases. Commercial 90-day PDLs increased 12 basis points this quarter and 39 basis points yearly, where all products except financial leases and working capital loans saw some deterioration.
Mortgages remained stable in 3.7%, improving by only 4 basis points. We still have a positive outlook for 2024, where lower inflation and central bank rate cuts are expected to improve portfolio quality. On slide 13, we present the total gross loan mix by stages. On the top, one can observe that stage one loans, which in Q1 2024 represented 87.5% of the portfolio, have maintained a similar level throughout previous quarters. Stage one loans decreased in the loan mix by 35 basis points this quarter, migrating by 30 basis points to stage two loans high, and by only 6 basis points to stage three.
The stage three loans, which imply high grade risk, have maintained a level between 7.7% and 7.2% in the last two years, and are 7.3% in this quarter, 14 basis points lower than a year ago. In the bottom graph, we present coverage by stage. For stages two, three, and for the entire portfolio, coverage increased. Coverage only decreased by 7 basis points for stage one loans, which are in need of the least coverage. These coverages show stability and evidence similar figures than in the past quarters. On slide 14, we present coverage ratios. On the top left, the coverage ratio for 30-day PDLs decreased to 0.93 times this quarter. The Colombian 30-day PDL coverage ratio was 1.01 times, and the Panamanian figure was 0.31 times, both with a slight reduction.
Panama's lower coverage is explained by its increase in 30-day PDLs, especially in the commercial portfolio. On the top right, we observe consolidated coverage for 90-day PDLs, diminishing 1 percentage point to 1.34 times. For Colombia, this ratio decreased to 1.39 times, while in Panama, this ratio increased to 0.67 times. The relative stability in 90-day coverage is explained by a lower deterioration in 90-day PDLs than in 30-day PDLs. Allowances over gross loans increased 12 basis points this quarter to a level of 5.8%, increasing in all segments. On slide 15, we present our net cost of risk and charge-off ratios. Net cost of risk was higher than expected, as loan deterioration was impacted by higher than anticipated PDLs. The first quarter's annualized net cost of risk was 2.9%, 28 basis points higher than the previous quarter.
Colombia's figure deteriorated 34 basis points to 3.2%, and Panama's figure improved 18 basis points to 0.7%. Commercial net cost of risk increased 49 basis points this quarter to 0.6%. Most of the deterioration has been in financial leases and overdrafts. Consumer cost of risk decreased 34 basis points to 10%. Personal loans, credit cards, and financial leases improved their cost of risk, while payroll loans and overdrafts saw deterioration. Mortgage cost of risk increased by 45 basis points this quarter to 1%, given a 74 basis point deterioration in the Colombian portfolio. Finally, micro credits remained stable at 11.9% during this quarter. For 2024, we expect net cost of risk to be around 2.3%, as this quarter's figure was higher than anticipated.
For the consolidated portfolio, the ratio of charge-offs over ninety-day PDLs stands at 59%. In Colombia, it is 61%, having decreased by 10 percentage points quarterly, and in Panama it is 31%, decreasing by 7 percentage points this quarter. Charge-offs over average loans decreased 31 basis points quarterly to 2.5%. The Colombian and Panamanian figure decreased 34 and 22 basis points, respectively. On slide 16, we present fee income structure and details on other income. Gross fee income in Q1 2024 decreased by 3.2% in quarterly terms to COP 488 billion. Banking services and credit and debit card fees amount to 82% of total gross fees, while 10.7% is explained by fiduciary activities from the Fiduciaria Bogotá .
Card fees and banking services fees decreased quarterly by 4.6% and 5%, respectively, reflecting the effect of year-end seasonality. Fee income ratio was 25.5% for the quarter, increasing 1.1 percentage points yearly and decreasing 2.1 percentage points quarterly. Other operating income stood at COP 213 billion this quarter, coming from: first, equity method and dividend income, which came in at COP 169 billion, a 12.7 quarter-on-quarter increase, and a 46.8% year-on-year decrease. This quarter's figure is mostly explained by Corficolombiana's and Porvenir positive results of 77 billion and 60 billion pesos, respectively. Second, income from net investment activities was COP 39.4 billion, a 13% quarterly decrease.
Third, the derivatives and FX position had a net expense of COP 117 billion, decreasing 4.5% in the quarter. Finally, COP 121 billion from other income, a slightly below average figure.... Fee income ratio should be in the 26% area in 2024. Slide 17 presents efficiency ratios measured by cost to income and cost to assets. Total income for the quarter was COP 1.9 trillion, 4.4% higher than in Q4 2023. Operating expenses reached COP 923 billion this quarter, increasing 1.5% year-on-year, and showing a notable decrease of 8.4% quarter-on-quarter. Consequently, cost to income decreased to 49.2% for the quarter, 6.9 percentage points below Q4 2023's figure.
Total average assets increased by COP 197 billion, or 0.1% this quarter. Therefore, cost to assets ratio decreased by 25 basis points this quarter to a level of 2.7%. We expect cost to income ratio to be around 49% for the entire 2024. Finally, on slide 18, we present our profitability ratios. This quarter saw an increase in NIM, offset by an increase in cost of risk, having both figures revert to the levels observed in Q3 2023. Also, the slight decrease in fees was more than compensated by the gains in efficiency. There were improvements in the effective tax rate this quarter, as last quarter's tax rate was abnormally high, given a one-off tax. Analyzed profitability metrics were 0.6% for ROAA and 5.3% for ROAE in Q1 2024.
These ratios result from a combination of factors that we have mentioned along the call, and we will work towards improvement as surrounding circumstances also improve. 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 around 4.6%. Net cost of risk is expected to be around 2.3%. Fee income ratio should come in around 26%. Cost to income ratio around 49%, and return on average equity should be around 7%. Now we are open to your questions.
We will now begin our Q&A session. We can take your written questions through our Q&A chat box, as well as your live questions, or you can ask the questions yourself if you're using a phone line. Please note the following instructions: For our Q&A chat box, please type your questions down and we'll proceed to read them. After answering the questions received at our Q&A chat box, we will proceed with the live questions. If you wish to ask your questions live, please click the Request button and we'll open your microphone and call your name accordingly to give you the floor. If you're using a phone line, please press the Star button and 5 to access the Q&A feature. If you're using a speakerphone, you may need to pick up your handset first before pressing the numbers.
Once again, for our Q&A chat box, please type your questions down in the Q&A chat box, and we'll proceed to read them. If you wish to ask your questions live, please click the Request button. We'll open your microphone and call your name accordingly to give you the floor. If you're using a phone line, 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 first before pressing the numbers. Right now, we're standing by for questions. Our first question comes from Mr. Jaskaran Singh from Goldman Sachs. He's got a couple of questions. Question number one: Could you please provide a breakup of consumer lending? How much are payroll loans, credit cards, unsecured personal loans, auto loans, et cetera?
Question number 2: What is the average LTV for mortgage portfolio, and compared to peers, is the end segment more Low IG or High IG ? Thank you.
Hi, Jaskaran, and thank you for your question. So, in terms of our consumer portfolio, we have a very balanced portfolio, because around 35% of our consumer portfolio is payroll loans and another 10% is auto loans. We have another 25% in personal loans and other 20% in credit cards. So, this is a very balanced portfolio, which has been a strength in the recent credit deterioration cycle, and explains the difference between us versus our peers in terms of cost of risk and PDLs. So in terms of the second part of your question, the loan-to-value at origination is 60% on average, but for the stock, that number should be lower than 40%-50%, sorry.
And finally, in terms of segment, around 50% of our mortgage loan, loan portfolio is concentrated in high-income individuals, and the other half in the low-income group, or which in Colombia is called the VIS portfolio. Thank you.
Thank you very much. Our second question comes from Mr. Juan Carlos Guisao Jaramillo. His question is: What is the bank's NIM or NIM expected for 2024? Thank you.
...Thank you, Juan Carlos. So, as I just mentioned, our guidance for NIM in 2024 is 4.6%. Remember that in the first quarter, the figure was 4.5%, so we feel comfortable that NIM will improve in the next quarters as the central bank decreases rates and the cost of funds decrease faster than the loan yield. Thank you.
Thanks a lot. Our third question comes from Mr. Julián Ausique from Davivienda Corredores. His question is: I'd like to know your perception about the quality metrics on the commercial segment. Do you have any worries about any specific segment?
Thank you for your question, Julián. Basically, in the case of the commercial loans, in general terms, we feel comfortable. Maybe there's been a certain deterioration in the very small segments of that category. In general, I would say that the big portion of commercial lending is based on big corporate lend customers as well as medium-size. So in general terms, in that segment, we have no concern whatsoever. We believe that not only the ratios are behaving properly, but also within each sector, different customers have, you know, good results in general terms.
In connection with the small, you know, subcategory of that, of that, commercial lending, there are certain deterioration, but, I have to indicate that that, that segment—sub-segment, is only about 2.5% of the total, you know, loan, portfolio of, of the bank.
Thanks a lot. Our fourth question comes from Mr. Julián Ausique as well, from Davivienda Corredores. Do you have any strategy to motivate the share price or the liquidity? Thank you.
I would say that the strategy is basically first what César at the very beginning of the presentation indicated. There is a change of strategy, which is basically building on what we have, but also reviewing some of the different, you know, parameters of the different contributors to bottom line for the organization. So in that regard, there's been certain progress that we see in market share, that we see in the NIM, that we see in the better, you know, efficiency.
So that's basically the beginning of a new effort to continue strengthening these attributes of the balance sheet, which at a certain point it should, you know, have impact in the share price and in the behavior of that share. So that's basically the strategy that I could, you know, share with you in connection with your question.
Thank you very much. Our fifth question comes from Mr. Julián Ausique from Davivienda Corredores. Do you have any targets in terms of market share? We've seen an increase on that, and your expectation of loan growth is higher than your peers.
Hi, Julián, and thank you for your question. We may not have a precise target, but we're looking all the time what's happening in the market. What has been happening is that we do have gained market share this year. For example, if you look at the local book, you can see that we've gained around 20 basis points in the first quarter. And if you look figures up to the middle of May, that number gets even to 30 basis points. So yes, of course, we want to grow, and we want to be relevant. Of course, we are very cautious in doing so.
But the thing is, if you talk about our peers and in market share, you have to talk about the peers, maybe they are doing more charge-offs and being even more cautious than us. But you know, in the last two or three years, we have lost some market share, so we think we're getting that back. Thank you.
Thank you very much. Mr. Sebastián Gallego from Ashmore has got a series of questions. Question number one: Can you please provide specific targets under your new strategy, particularly in quantitative terms? Question number two: What could be different compared to peers in terms of the new strategy? Question number three: What is the medium-term effective tax rate for the bank? Question number four: Can you please elaborate on the deterioration of PDL in Panama, and what is the outlook ahead? Question number five: What is the outlook for asset quality in Colombia, considering negative surprise in the first quarter of 2024? Where are we in this cycle? Thank you very much.
Thank you, Sebastián, for your questions. I'm gonna take a couple of them. Regarding strategy, we have mapped more than 50 initiatives. Currently, we are working on detailing them with specific activities, metrics, CapEx involved, if applicable, KPIs, phases, business cases, and so on and so forth.... Even though several initiatives have already began, we expect to start a comprehensive implementation in July, and we believe that most of the whole plan should be completed in 18 months, approximately. We wanted to communicate to the investor community the launching of our new strategy, as well as, as some of its main aspects. Nonetheless, we feel at this point that we don't necessarily want to discuss it in more detail.
In the future, when we have more material advancements in different fronts, we will be more than happy to convey them accordingly, including, sorry, specific and quantitative targets. Javier, could you address the other question, please?
Yes, of course, César. So for example, in terms of the effective tax rate for the bank in the medium and long term, as you know, right now, the statutory tax in Colombia is 40%, and in Panama, it's around 25%. In Colombia, that 40 has a surcharge of 5 points, that we don't know what's gonna happen with that in the future, but hopefully that will decrease. So what we can say is that the compound effective tax rate for us, excluding equity method, of course, should be between 30 and 30% in the foreseeable future.
Continuing with the other question about the deterioration of PDLs in Panama and what we're looking ahead, yes, it did have a deterioration from 3.5% to 5%, mainly in the commercial portfolio and mainly in construction and real estate projects. Some of them are already paying their obligations right now, so that figure should improve in the second quarter. The other thing that make us be very confident is that most of these loans have collaterals that may exceed the amount of the loan, so we don't really need to do many provisions in the future. So we think that that situation is under control.
And finally, you are asking about the asset, the outlook for asset quality in Colombia, considering negative surprises in the first quarter, and where are we in the cycle? So, first, I already mentioned what happened in Panama, but in Colombia, we did see a slight deterioration in the commercial and the mortgage books. But keep in mind that those books were behaving very well in 2023, so any slight surprise might be on the upside in terms of cost of risk and PDLs. As Germán mentioned, our commercial portfolio is in very good shape right now, mainly because our composition in terms of companies, mostly large companies.
In the mortgage portfolio, of course, it did experience the same as some of our consumer portfolio in terms of high interest rates last year. But we also feel very confident there because, as I mentioned, loan-to-value is close or below 50%, so we think our clients will resume paying in the very short term. There are also some other considerations, for example, Holy Week this year, which was in March, and the end of the month was a Sunday. So that may explain also an increase in PDLs, which did not have a correlation with the consumer cost of risk, because, in fact, consumer cost of risk decreased 30 basis points this quarter.
Finally, I'm sorry getting that long, but in terms of the consumer book, as you know, we are being more strict in terms of disbursement and originations, especially in personal loans and credit cards. That already has paid off in personal loans. New vintages are performing very well, and PDLs for those new vintages are at levels that we saw two years ago. Unfortunately, that hasn't happened yet with credit cards, so we're making additional adjustments. We hope to see better results starting on the second quarter and onwards. Thank you, Sebastián.
Thanks a lot. Our next question comes from Mr. Nikolay Dimitrov from MSIM. His question is: Did Banco de Bogotá engage in purchases of consumer loans from Banco Popular and Banco AV Villas in 2023, or do you plan on engaging in such transactions in 2024? Can you provide more information on the economics of these transactions? Thank you.
Yes, of course. As we disclosed in our financial statements, we did some purchases last year from Banco Popular. I don't have any recall of any Villas purchase, but we did buy loans, payroll loans and commercial loans from Banco Popular. For us, it was an opportunity we evaluated and especially the pricing, that it was profitable for us. And it was, as I mentioned, an opportunity for us to grow in terms of market share. So that, that's - that was the main reason for us in terms of why we did it. We don't know if more of that will come in the future. We will see.
Thank you very much. Our next question comes from Mr. Sebastián Gallego from Ashmore. Could you please provide any comments regarding potential M&A? Is this part of the new strategy?
Thank you, Sebastián, for your question. In spite of the fact that we have an important share in the local market, especially if you take into account the numbers of the whole conglomerate, what I can say is that we are always open to analyze opportunities for inorganic growth that may arise, and the same applies to international M&A opportunities.
Thank you very much. Our next question comes from Mr. Camilo Arenas, from Credicorp. Is there any update regarding the local bonds issuance expected for last April?
Thank you for the question, Camilo. At that time, we decided to put it off, basically because of the market conditions, you know, came to certain stress. And on the other hand, for in the case of the bank, there's no really need to have that issuance in the meantime, maybe it will be postponed until the second semester, until the situation kind of normalizes. And we believe that the price and the spread are going to be more normal compared to our expectations.
Thank you very much. We're switching over now to our phone line. Our first question from the phone line comes from Mr. Nicolas Riva from Bank of America. Mr. Nicolas, the floor is yours.
... Questions. The first one on your Tier 2 capital, if you can confirm that the decline that we see in the quarter of $110 million, if it's entirely due to the phase out from capital treatment of the 2026 Tier 2 bonds. And if that's the case, then the question is, given that the 2026 bonds are losing capital treatment, if you could consider doing a tender offer on the 2026s and issuing a new Tier 2 that counts 100% for Tier 2 capital treatment. And then my second question on MultiBank. So you already gave the guidance for the bank on a consolidated basis for this year for ROE and other metrics.
My question is, if you can share some guidance specifically for MultiBank in Panama. Last year, they reported only $9 million in net profits, given higher funding costs. If you can share any guidance for net profits or ROE for MultiBank this year? Thanks.
Hi, Nicolas. So I'm going to address the, the first part of the question, and the answer is yes. Mostly all the impact in the Tier 2 bucket was because of the loss of capital treatment for the 26s. As you know, we have an outstanding of $1.1 billion. Last year, it was counting for us at 40%, and right now it's at 30%, so that 10 points means 110, roughly COP 400 billion of less Tier 2 capital.
In terms of what we will do with that, so we're not in a rush, because as you can see, right now, our CET1 is 12.4, our Tier 2 is 12.2, so our total solvency is 14.4%, and that is way up above the regulatory minimums. So we are fortunately in a comfortable position, so we can wait. Of course, between this and next year, we may be looking into the market favorable market conditions in order to do some things, because, of course, we don't want to wait until 2026 for a maturity of $1.1 billion. But we haven't figured out exactly what we're going to do just yet.
And Javier, on that point, if I can follow up. So, my understanding is your minimum total capital requirement is 11.5% as a systemic bank in Colombia, fully loaded for Basel III. Your Tier 1 is at 12.4%. All the Tier 2 you have is losing capital treatment, so that 12.4%, assuming at some point that converges to be both Tier 1 and other capital, would that be... That 90 basis points buffer, is that enough of a capital buffer for you, or what's really your target for total capital, or Tier 1?
No, as you see, we don't give a specific guidance about solvency. We have a track record of always being above those regulatory minimums. But you know, until 2019, there was a, the minimum was 9%. Right now the minimum is 11.5%, that maybe our risk appetite changes a little bit because we don't feel it would be very efficient to have a very large buffer against that minimum. That is all I can say right now, but of course, we always want to have a prudent distance against those minimums.
Okay, thanks, Javier. Then on the guidance, if there is any of ROE or net profit for MultiBank this year?
Yes, of course. So, as you mentioned, last year was a tough year for MultiBank, slightly below $10 million in profits. This year, we think we may increase that figure maybe 30%-40%, but we are aware that that may be not enough. MultiBank is a liability-sensitive bank, so we need the Federal Reserve to start cutting rates, and as you know, that may not happen at least until September or the end of this year. So, while that happens, MultiBank's NIMs is gonna be pressured. We don't have any concern in terms of profits. They are making reasonable profits every month.
But as I mentioned, the ROE for MultiBank this year may be also, as last year, slightly below 5%.
Okay, thanks very much, Javier.
Thank you very much. It seems like we have no further questions at this time. We'll proceed now with the final remarks from Mr. César Prado. Mr. Prado, please, the floor is yours.
Thank you, Karen. As previously mentioned, this quarter reflects improvement in NIM, offset by an increasing cost of risk. Overall, this quarter's increase in profitability is consistent with our view of a slow recovery of profitability throughout the year. Thank you for attending today's meeting, and I hope you will join us for our next conference call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.