Good morning. Welcome to Banco de Bogotá's first quarter 2025 consolidated results conference call. My name is Diana, and I will 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 the disclaimer available on slide number two. 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 the speaker today. Mr. Prado, the floor is yours.
Good morning and welcome to Banco de Bogotá's first quarter 2025 conference call. In the first quarter of 2025, macroeconomic conditions have improved. GDP grew 2.7% in Q1 2025. While there was a setback in April, inflation and interest rates continued their downward trends. President Trump's tariff announcements, a new Minister of Finance in Colombia, and a complex local fiscal environment created uncertainty and volatility, which impacted markets in the first quarter. The S&P 500 index decreased more than 5% in the first quarter, and U.S. 10-year treasury bonds swung more than 60 basis points during that period. The Colombian peso's exchange rate and yields on bonds also experienced large fluctuations. Fortunately, the situation is stabilizing, and prices and volatility reflect a steadier environment, both in fixed income and equity markets locally and abroad, and a lower and less volatile exchange rate.
In this context, we expect to see a 2.7% GDP growth this year, inflation close to 5%, and a monetary policy rate of 8.5%. The banking system continues to face similar challenges as last year. Total bank loans amounted to COP 682 trillion in February, which represents a yearly growth of 3.9% in nominal terms and a contraction of 1.3% in real terms. While the outlook is improving, low economic growth combined with high central bank rates have slowed down loan growth in the system. Furthermore, usury rates have affected the ability of banks to be able to lend to certain sectors, particularly consumer loans. Indeed, consumer loans decreased 2.6% year on year in nominal terms as of February and contracted 7.4% in real terms. Mortgages remain the fastest-growing segment, especially social housing, which increased by 22.4% in nominal terms.
Within this context, Banco de Bogotá has managed to increase its market share. As of February, the bank gained 8 basis points of loan market share, with 12.8% of market share of bank loans in Colombia. In the first two months of this year, the bank gained 5 basis points in commercial loans, 10 basis points in consumer loans, and 14 basis points in mortgages. We believe we can achieve a 10% market share in the mortgage segment in the second quarter. This might consolidate our position in retail loans, where we also reached the same 10% share in consumer loans last year. Our commercial portfolio has been growing slowly, with 2.5% year-on-year nominal growth. Nonetheless, we remain confident that this segment will pick up in the second part of the year. Our top priority is sustainable and profitable growth.
Therefore, we are employing a critical set of criteria to decide whether or not to pursue certain transactions, especially in the corporate segment. For both the commercial and consumer segments, the quality of the loan portfolios continues a positive trend. Our consumer segment, which was most affected by this great cycle, continues to yield positive results. Improvements in 30-day and 90-day PDLs were of 36 and 19 basis points, respectively, this quarter. The total gross loans PDLs also improved by 48 and 54 basis points on 30 and 90-day PDLs. In this respect, our low-risk appetite seems to be paying off. Our digital leadership continues. We introduced Tag Aval to allow customers to conduct immediate transfers to other banks outside of Grupo Aval. We are currently part of a pilot program with other financial institutions in preparation for Bre-B, Banco de la República's program for real-time transactions across all banks.
Here is a summary of the bank's first Q1 2025 results. Net income attributable to shareholders was COP 267.1 billion, 13.4% less than in the previous quarter, resulting in a return on assets of 0.7% and a return on equity of 6.4%. The quarter's NIM was 4.2%, having increased by 15 basis points due to increases in investment NIM. Fee income ratio was 24%, 1.4 percentage points lower than in the first quarter of 2024, but in line with 2025's guidance. Efficiency measured as customer income was 50.1%, 1 percentage point higher than in the first quarter of 2024, and 12.6 percentage points lower than the previous quarter due to cyclical trends in expenses. Customer assets remained stable at 2.7%. Consolidated gross loans reached COP 106.4 trillion, decreasing by 0.9% this quarter.
The Colombian portfolio decreased 0.4%, while the Panamanian portfolio decreased by 3.4% in peso terms and increased by 1.6% in dollar terms. Deposits reached COP 104.8 trillion, a 0.5% increase during this quarter. Excluding the 4.9% peso revaluation during the quarter, deposits increased by 2.1%. The ratio of deposits to net loans was 1.03x . Deposits continued increasing their share of funding, reaching 81.2% of total funding, as time deposits and checking accounts increased by 3.9% and 3.4%, respectively. Loan quality improved as 30-day PDLs decreased by 48 basis points to 5.4%, while 90-day PDLs decreased by 54 basis points to 3.9%. Net cost of risk increased by 49 basis points this quarter to 2.2%. We consider this increase to be temporary, and we will reach figures closer to 2% or below in the near future. Now, I will turn the presentation over to Sergio Sandoval, Banco de Bogotá CFO.
Thank you, César, and good morning. Let's move on to slide four. This quarter, we have focused on improving our real-time payment systems and the launch of our new digital functions. This has generated a 25% increase in digital transactions compared to the previous quarter, reaching over 366 million transactions. Our key developments in our digital channels were over 19.3 million real-time transactions, driven by our zero-fee interbank transfers. Notably, the implementation of the static QR code in mobile banking eases payments and drove a 27% increase in these transactions since its launch. We launched a pilot program for real-time transfers with financial institutions outside of Grupo Aval, powered by our Tag Aval solution. More than 126,000 transactions were completed, making a key improvement in the implementation of digital, real-time, and costless payments between different banks in the financial system.
We implemented in our digital channels the option to modify credit card purchases installments, a feature used by more than 5,000 users who adjusted the terms of over 11,000 transactions. This enhancement supports customer retention, increases payment conversion, and promotes recurring product usage. We enabled credit card payments through PSE within our online banking channel, allowing customers to settle obligations from accounts at other financial institutions. Since its rollout in March and during the initial stage, over 4,000 transactions were processed, totaling COP 3.9 billion. Through the integration of PSE, we enabled the option to pay local taxes using credit cards directly from the District Treasury Department's website. This improvement expanded payment options, allowing users to meet their tax obligations in a more flexible and accessible way. As a result, more than 1,700 transactions were approved, totaling COP 2.3 billion.
We have expanded access to mobile banking for SMEs, completing their integration into our high-quality digital channels to manage finance securely and effectively. This solution enables thousands of entrepreneurs to optimize their daily operation. During the quarter, close to 1,200 new clients joined the platform, performing 6,000 monetary transactions totaling COP 21.4 billion. On the corporate digital product front, we strengthen our technological solutions, increasing adoption among our clients. Within our key achievements, we highlight our digital signature and promissory note management solution enabled 3,200 disbursements, reflecting a 70% increase in the number of transactions and a 75% increase in disbursed amount compared to the previous quarter. Within this total, the severance line played a prominent role mid-quarter, significantly boosting loan origination. We enabled the option to add legal co-signers to the digital signature process, improving access to corporate credit.
An assisted document upload feature was implemented to support clients experiencing difficulties uploading information. Advisors can intervene to prevent process abandonment, resulting in effective disbursements. Our ABI-based factoring connection solution enabled disbursements, representing a 102% increase compared to the previous quarter. This strengthened digital access to liquidity and improved corporate cash flow. We consolidated our digital transformation, reaching the placement of 374,000 products, a 16% increase compared to the previous quarter, with outstanding balances of COP 7.7 trillion. As a result of these improvements and their business impact, we highlight the following achievements. We scaled the savings account reactivation flow through a 100% digital process, eliminating the need for in-person assistance and reducing reactivation time to just minutes. During the quarter, 10,000 accounts were reactivated.
We developed a new digital experience for voluntary insurance through tablets at branch offices, allowing clients to personalize and combine coverages according to their specific needs. As a result, we have sold 12,000 insurance policies across finance, life, and health products. We launched a pilot for 100% digital disbursements of general-purpose refinancing loans and credit card placement through a multi-product flow. This initiative accelerates access to credit, shortens approval times, and simplifies the customer experience. We consolidated the launch of Cuenta Fácil, a savings account designed for users who value simplicity, mobility, and digital control of their finances. Without the need for payroll deposits, users can pay, transfer, and manage their obligations entirely online. During the quarter, we opened 4,800 accounts.
We marked a milestone in our digital transformation with the first integration of the savings account API into a microcredit fintech, where we began capturing value by enabling the first account openings. Our housing API solution generated approvals resulting from direct integration with the bank's housing partners' marketplaces. On slide five, we show you the quarter's highlights regarding sustainability efforts. Banco de Bogotá is steadily progressing in the implementation of its sustainability strategy, positioning itself as a key stakeholder in the transition toward a low-carbon economy and the promotion of greater social inclusion. At the end of the quarter, the green portfolio totaled COP 5.3 trillion, with an increase of 13%. 10% of the bank's corporate portfolio is green, mainly in renewable energy, transportation, and sustainable construction, the main financing targets with a positive environmental impact. In the social portfolio, we also reached COP 5.3 trillion.
38% of the loan portfolio is for SMEs that are owned or led by women. 14% of the SME portfolio was placed in towns below the poverty line, and 54% of the low-income housing portfolio corresponds to loans granted to women. The bank achieved Zero Waste Certification, an initiative aimed at addressing the environmental challenges posed by the increasing volume of waste by promoting circular economy principles and industrial ecology practices. ICONTEC and Basura Cero Colombia developed the Zero Waste Systems Certification to implement strategies for the reduction, reuse, and recovery of waste and strengthen business management. Banco de Bogotá began the Zero Waste Certification process in 2024 and, in March 2025, received certification in the Gold category for the headquarters building.
Outstanding issues included the publication of the second annual report on the use of funds and environmental impact derived from the issuance of the Sustainable Subordinated Bond on March 24th, 2023, which is available on our website for consultation, and the launch of Ecotech, a program to strengthen startups through mentoring, coaching, advice, and training for 22 ventures with innovative and sustainable technological solutions. Finally, in March, we celebrated Global Money Week together with Banca de las Oportunidades, where we managed to reach 4,000 people. Also, in these three months, the mobile classroom has visited 17 towns in six regions and has provided financial education courses to more than 6,200 users, most of them minors and young adults. Moving on to slide six, let me summarize the local macroeconomic context.
The improving trend the Colombian economy recorded in 2024 extended into early 2025, with a growth of 2.7% for the first quarter. The economy would have experienced its highest annual expansion since mid-2022. Similar to the beginning of 2024, public spending and household consumption were the main drivers. According to the Autonomous Committee for the Fiscal Rule, in the first quarter, public spending grew 21% annually, supporting the recovery phase. In fact, the best-performing sector was public administration. On the other hand, the second most dynamic sector was trade, transportation, accommodation, and food services, explained by higher private consumption of both goods and services. Without a doubt, the strength of the labor market, which at the end of the quarter recorded the lowest unemployment rate since May 2016 at 9.1%, has been one of the major drivers of Colombians' increased purchasing power.
Furthermore, annual growth of 24% in remittances in Colombian peso during the first quarter also contributed to this. In this context, sectors such as manufacturing, finance, and professional services also enjoyed an increase in their activity. Meanwhile, investment continued its modest recovery, supported by an increase in imports of capital goods for industry and agriculture, as well as the execution of infrastructure projects in the country's main cities. Thus, amid favorable domestic demand, but recognizing latent risks at the international level, growth of around 2.7% is expected for 2025, still below the country's potential. Let's move to slide seven, where we continue addressing the local macroeconomic context. For its part, the disinflationary process paused in the first quarter, dropping from an inflation rate of 5.2% at the end of 2024 to 5.1% in March.
The high indexation and the impact of the minimum wage on services, the increase in gas prices, which pressured regulated services, a slow but progressive transmission of the devaluation to the prices of goods, and a modest increase in food prices explain the above. Inflation is expected to be around 5% by the end of 2025, once again outside the target range established by the central bank. Amid the described economic outlook, and accompanied by a deterioration of Colombia's country risk due to a complex fiscal situation, the central bank paused its easing cycle, leaving the interest rate at 9.5% unchanged from the end of 2024. New members appointed to the central bank's board in February, with a heterodox view of the economy, have added uncertainty to the decisions.
In April, an ample consensus expected 1/3 stability decision, but the board unanimously opted to reduce the interest rate to 9.25%. Data dependence makes it difficult to forecast the interest rate. Despite this, it is expected to continue declining to around 8.5% at the end of the year, limited in part by the fiscal situation. Regarding the exchange rate, in line with global developments and prior to the burst of uncertainty, the Colombian peso strengthened against the U.S. dollar in the first quarter. Compared to the end of 2024, while the dollar lost 4% against G7 currencies to March, the devaluation against the Colombian peso was 5%, as the exchange rate fell from COP 4,409 to COP 4,192 per dollar. However, the Colombian peso's performance was mixed.
S&P's ratification of the country's BB+ rating with a negative outlook and the upward adjustment of rate expectations by the central bank supported the currency, with the exchange rate hitting a low of COP 4,060 in mid-February. However, the deterioration in the fiscal outlook following the publication of the government's financial plan questioned the compliance with the fiscal rule in 2024 and put upward pressure on the currency. By year-end, the exchange rate is expected to average COP 4,300 against the dollar, amid high global volatility, a challenging fiscal balance, and a widening of Colombia's external deficit. Indeed, we expect the current account deficit to fall from -1.8% of GDP in 2024 to -2.6% in 2025, due to a stronger recovery in imports than exports, both in goods and services, where the terms of trade would be affected by lower commodity prices.
Finally, the fiscal situation in 2025 is similar to that of 2024. In the first quarter, spending far exceeded revenue, resulting in record fiscal deficits and low cash flow levels. Unfortunately, the strategy for increased tax collection is not entirely clear, and the option of cutting spending has been postponed to a point where, if it takes place, it could be insufficient. Now, I will pass on the presentation to Javier Dorich, Head of Investor Relations and Corporate Development, who will provide details on our financial results for the quarter.
Thank you, Sergio, and good morning, everyone. Starting on slide eight, we present the highlights of the bank's balance sheet in the first quarter of 2025. Total assets reached COP 149.6 trillion, representing a decrease of 0.8% against the previous quarter, mainly explained by decreases in other assets, cash, and net loan positions.
The asset breakdown remains stable, comprised by 67.9% in net loans, 13.4% in fixed income investments, and 7.8% in equity investments. On the bottom left, we can observe the gross loan portfolio, which decreased by 0.9% against the previous quarter and increased by 5% against Q1 2024. Excluding FX movements, gross loans had a yearly increase of 2.9% and a quarterly increase of 0.3%. The mortgage segment increased during the quarter by 2.6% or COP 380 billion, mainly driven by the social housing credit demand. Meanwhile, commercial loans decreased by COP 1.3 trillion in the quarter, a 1.9% reduction, driven by a mix of lower demand for commercial loans, tighter credit policies on SMEs, and a highly competitive environment that limited the capture of some large corporate tickets.
Consumer loans decreased by 0.3% this quarter, or COP 80 billion, as lower-than-expected usury rates have hindered the bank's ability to reach various segments of the consumer base. Nevertheless, the bank gained 10 basis points of market share in the consumer segment in the first two months of 2025. Excluding the effect of the 4.9% peso revaluation, the consumer segment recorded a growth of 0.5% during the quarter, with the loan portfolio in Colombia increasing by 0.4%. We expect loan growth to be between 8%-9% for 2025. Moving on to slide nine, we present the bank's funding. The bank's total funding reached COP 129.1 trillion this quarter, having decreased by COP 980 billion this quarter, or 0.8%. Interbank loans decreased by COP 634 billion this quarter, or 16.5%. Bonds decreased by COP 475 billion, or 4.5%, partly due to the 4.9% peso appreciation.
Banks and others decreased by COP 413 billion, or 3.6% in the quarter. Deposits, which make up 81.2% of funding, increased by 0.5%, or COP 542 billion, during the quarter. Savings accounts decreased by COP 2.1 trillion, or 5.9%, being offset by time deposits, which increased the same COP 2.1 trillion, or 3.9% this quarter. Checking accounts increased by COP 508 billion, or 3.4%. Total deposits grew 7% year- over- year and 2.1% during the quarter, excluding the effects of the exchange rate. This is due to a 6.2% increase in time deposits and a 5.7% increase in checking accounts, excluding FX movements. As previously stated, deposits to net loans reached 1.03x , close to our one-time target. On the right side, we present the liquidity coverage ratio and the net stable funding ratio figures.
In the quarter, the 30-day liquidity coverage ratio was 129.8%, and NSFR was 107.5%, closing within our acceptable risk appetite range. Let's continue with slide 10, where we present equity and capital adequacy levels. Total equity decreased by 2.2%, or COP 372 billion this quarter, ending at COP 16.5 trillion, mainly due to the declared dividends in the shareholders' assembly on March. These are COP 146 per share per month for the remainder of the year and up to March of next year, implying a 55% dividend payout ratio. On the top right, we can observe leverage ratios. Equity over assets decreased slightly, from 11.2% in Q4 2024 to 11% by the end of the first quarter of 2025. Intangible assets remained stable, decreasing by only 0.1 percentage points during the quarter. Likewise, the tangible capital ratio decreased from 10.2% to 10%.
Both ratios decreased slightly as equity decreased comparatively more than assets. On the bottom, we present the bank's consolidated capital adequacy. CET1 capital decreased by COP 379 billion in the quarter, or 2.6%, mainly due to cash dividends authorized by the March 2025 general shareholders' meeting for COP 622 billion. Tier 2 capital decreased by COP 595 billion, or 24.2%, due to 2026 subordinated bonds decreasing their weight for capital adequacy from 30% to 20% in the quarter, and the peso revaluation of 4.9% in that period. The bank's total risk-weighted assets decreased by COP 989 billion, or 0.9%, to COP 107.9 trillion. Therefore, CET1 and Tier 1 ratios decreased by 23 basis points in the quarter and stood at 13%, 4.5 percentage points above regulatory minimums, including buffers. The Tier 2 ratio was 1.7%, decreasing 53 basis points in the quarter.
Finally, total capital adequacy was 14.7%, 76 basis points lower than in the previous quarter, and 3.2 percentage points above the regulatory minimum, including buffers. Now, let's move to our P&L performance ratios, starting with the net interest margin on slide 11. We have adjusted our calculation on investment yield, investment NIM, and total NIM to more accurately reflect the bank's current situation. An adjustment was made to better align investment assets and liabilities in foreign currency. These adjustments seek to better portray investment yields, excluding FX fluctuations that should be in the FX and derivatives line of the P&L. The impact on total NIM for 2024 would be 16 basis points less than our previous calculations. On the left side, we can observe loan yields, which decreased by 46 basis points this quarter to a figure of 11.2%.
Even though the central bank rates were unchanged during the first quarter of 2025, spreads decreased in commercial loans and lower usury rates affected consumer loans. The loan yields, which decreased the most were in consumer loans, where a decrease of 79 basis points was due to usury rates and lower credit card placement. Commercial yields decreased by 42 basis points this quarter, while mortgages decreased their yields by only 11 basis points. Investment yields increased this quarter by 87 basis points to 7.6%. This improvement was mainly driven by the seasonal increase in the yield of inflation-linked bonds, which tend to benefit from higher inflation during the first quarter. Additionally, there was a slight increase in the average rate of the investment portfolio. It is also important to highlight that the portfolio is largely composed of fixed-rate instruments, while funding relies more on variable-rate sources, which have been declining.
This dynamic supports a higher investment yield. The cost of funds decreased by 39 basis points in the quarter to 6.8%. We highlight credits from banks and others decreasing by 95 basis points, time deposits cost decreasing by 59 basis points, and savings accounts cost decreasing by 47 basis points. On the right, loan NIM remained stable at 4.8%, with interest income from the loan portfolio totaling COP 3 trillion for the quarter, reflecting a slight decrease of 3.2%, where the decreases in loan yields were offset by a reduction in the cost of funds. Investment NIM increased by 1.3 percentage points to a level of 1.3%, driven by higher investment yields, the seasonal UVR effect, and the continued decrease in funding costs.
As loan NIM remained stable and investment NIM increased by 1.3 percentage points, total NIM was 15 basis points higher than in the previous quarter, at a level of 4.2%. We have adjusted our NIM expectations slightly downwards, placing it around 4.3% for 2025, due to the upward adjustment in the expectation of the central bank interest rate, inflation, and the effects of the usury rate. Moving on to slide 12, we present loan quality ratios by country. The consolidated 30-day PDL ratio in the quarter was 5.4%, representing an improvement of 48 basis points in the quarter and 82 basis points year on year. This indicator improved this quarter both in Colombia and Panama by 52 and 32 basis points to levels of 5.6% and 4.5%, respectively.
Accordingly, 90-day PDLs ended the quarter at 3.9%, a reduction of 54 basis points in the quarter and 46 basis points in the year. The Colombian results placed this figure at levels of 4%, improving by 54 basis points during the quarter. In Panama, the 90-day PDL ratio was 3%, showing an equal improvement of 54 basis points during the quarter. On slide 13, we present the loan portfolio quality by segments, as well as PDL formation and coverage. On the right side, we show the breakdown of the loan portfolio quality by segment. During Q1 2025, we observed a reduction in 30 and 90-day PDLs within the commercial segment. 30-day PDLs reached a 4.7% level, representing a 70 basis points decrease during the quarter. This improvement is mainly attributed to a 70 basis point reduction in Colombia's portfolio, bringing the indicator to 4.6%.
Similarly, in Panama, there was a decrease of 65 basis points, positioning the ratio at 5.5%. The 90-day PDL ratio followed a similar trend, closing the quarter at 4.1%, reflecting a reduction of 75 basis points in the quarter and 39 basis points year on year. In Colombia, this ratio settled at 4.1%, with a quarterly improvement of 71 basis points, while in Panama, it reached 4%, a reduction of 98 basis points. Moving on to the consumer segment, the 30-day PDLs stood at 6.5%, reflecting a reduction of 36 basis points during the quarter. In this segment, Colombia reported a decrease of 46 basis points, bringing the indicator to 7.4%, mainly driven by improvements in credit cards and payroll loans. In Panama, the ratio stood at 2.2%, having improved by 8 basis points.
Consumer 90-day PDLs show an improvement of 19 basis points during the quarter and 91 basis points year on year, positioning the ratio at 3.2%. In Colombia, the indicator stood at 3.7%, representing a decrease of 24 basis points, with the same factors mentioned earlier contributing to the improvement. In Panama, consumer 90-day PDLs remained stable. The mortgage portfolio registered a level of 6.7% for 30-day PDLs, representing an increase of 21 basis points compared to the previous quarter. In Colombia, the indicator stood at 7.2%, reflecting an increase of 15 basis points versus the previous quarter and a decrease of 32 basis points year on year. In Panama, the indicator increased by 26 basis points, reaching a level of 4.9%. As for the 90-day mortgage PDLs, it decreased by 12 basis points during the quarter, closing at 3.9%.
In the case of Colombia, this indicator improved 18 basis points during the quarter, ending at 4.1%. On the lower left, we can observe PDL formation. We highlight the quarter's lower PDL formation than average 2024 figures in both 30 and 90-day PDLs. We can also observe coverage ratios for 30 and 90-day PDLs. The allowances over 30-day PDLs slightly increased to 0.88x , and for 90-day PDLs, it increased to 1.23x . Allowances over gross loans decreased to 4.7%. On slide 14, we present gross loans by stages and segments, as well as their coverage ratios. On the top right, we can observe that stage one loans increased their share of the total portfolio, now representing 88.6%, while stage three loans reduced their share, accounting for 6.4% of the loan portfolio this quarter.
Portfolio quality improved across all segments when measured by the percentage of loans classified as stage one. Similarly, a reduction in stage three loans was observed across all segments. On the bottom left, we observe the coverage by stage. For stage one, there was a slight increase of 6 basis points, reaching 1.1% during the quarter. Stage two loan coverage decreased by 120 basis points to 16%, and stage three coverage declined by 252 basis points, closing at 46%. On slide 15, we present the net cost of risk and charge of ratios. Net cost of risk for the quarter was 2.2%, a 49 basis point increase from Q4 2024's 1.7% figure. In Colombia, cost of risk was 2.5% this quarter, having increased by 64 basis points during the quarter, while in Panama, cost of risk was 0.9%, having decreased by 22 basis points.
For commercial loans, cost of risk was 0.9%, increasing by 63 basis points during the quarter, having increased by 66 basis points in Colombia and by 39 basis points in Panama. The increase in cost of risk was mainly in general purpose loans and commercial credit cards, where increases were of 90 and 74 basis points, respectively. The increase in commercial cost of risk was driven by a few previously restructured clients, which again went into delinquency or deteriorated in rating. The cost of risk for mortgages was also 0.9%, increasing by 52 basis points during the quarter. The cost of risk for mortgages increased by 103 basis points in Colombia and decreased by 113 basis points in Panama. The higher cost of risk in Colombia was due to some clients losing government subsidies for social housing and some restructured loans defaulting again.
Finally, consumer cost of risk remained fairly stable, increasing by only 3 basis points during the quarter. The consolidated figure for the quarter was 6.7%, a relatively low figure compared to previous years. In Colombia, consumer cost of risk increased during the quarter by 22 basis points, while in Panama, it decreased by 84 basis points. During the quarter, cost of risk decreased by 222 basis points in credit cards and by 52 basis points in payroll loans, and was offset by increases of 148 basis points in personal loans and 23 basis points in vehicle loans. The increase in personal loans was mainly due to fraud, where we are implementing stronger security and prevention measures. In all segments, a large component of the increase in net cost of risk came from our forecast on macroeconomic variables. IFRS rules dictate forward-looking expected losses.
We moved our expectation for year-end inflation from 4% to close to 5%, and central bank rates to decrease at a lower pace as well. These changes in expectations affected allowances, loan loss provisioning, and cost of risk. In another note, some products, mainly credit cards and personal loans, improved last year more than previously expected, and revisions to increase our risk appetite in these products are being made within the limits that usury rates allow. We maintain our net cost of risk guidance at 2% for 2025. On slide 16, we present fee income structure and details on other income. Gross fee income decreased by 1.3% in the first quarter of 2025 to COP 497 billion. Banking services explain 43.8% of gross fees, while credit cards and debit cards represent another 38%.
Other fees from Fidub ogotá and Almaviva explain a further 17.6% of fees from fiduciary activity and storage. The fee income ratio was 24% for the quarter, having decreased by 5.2 percentage points and having similar levels to those of Q1 2024. Total income was higher due to the adjustments from the reinstatement of fixed income investments in foreign currency that constitute hedging for liabilities denominated in U.S. dollars. Other operating income stood at COP 277 billion this quarter, coming from first equity method and dividend income of COP 158 billion, an increase of 133% against the previous quarter. Both Corficolombiana and Porvenir's results drove improvements. Second, income from net investment activities was COP 45 billion, almost tripling the previous quarter's figure. Third, the derivatives and FX net expense was COP 31 billion.
This figure includes income and expenses from the reinstatement of fixed income investments in foreign currency that constitute hedging for liabilities denominated in U.S. dollar. Finally, other income came in at COP 106 billion, a 12.2% quarterly decrease, as these figures tend to be driven by real estate appreciation. We expect the fee income ratio in the 25% area for 2025. On slide 17, we present efficiency ratios measured by cost to income and cost to assets. Total operating expenses for the first quarter of 2025 amounted to COP 1.02 trillion, a figure 4.5% lower than that of the previous quarter and 10.1% higher than in the first quarter of 2024. Given the 5.1% annual inflation in March of this year, this figure results in a real annual growth of 4.7% in operating expense against the first quarter of 2024. The 9.1% annual peso devaluation impacted on dollar-denominated expenses.
Finally, the 9.5% minimum wage increase impacts not only some personal expenses, but also several other expenses that are tied to minimum wage increases. The largest year-on-year increases came from general administrative expenses, having increased by COP 40 billion, a 7.9% increase. We also highlight increases of COP 19 billion in personal expenses, or 6%. Depreciation and amortization amounted to COP 81 billion, having increased by 14.3%. Total income for the quarter amounted to COP 2.03 trillion, a 7.9% year-on-year increase and a 19.7% quarter-on-quarter increase. Therefore, cost to income came in at 50.1%. Average assets came in at COP 150.2 trillion, having a yearly increase of 8.6% and a quarterly increase of 0.9%. Therefore, cost to assets came in at 2.7%, close to the level of Q1 2024. We expect cost to income ratio to be around 50% and cost to assets around 2.6% for 2025.
On slide 18, we show the company's overall profitability. This quarter presented an increase in net cost of risk. This variable was partially countered by the aforementioned increase in equity method income. Therefore, net income attributable to shareholders came in at COP 267 billion. These figures resulted in a return on assets of 0.7% and a return on equity of 6.4% for the quarter. These results are higher than a year ago, but represent a setback against the second half of 2024's figures. We would like to highlight that the setback in net cost of risk is expected to be temporary. Cost of risk was higher in a large extent because of changes to macroeconomic expectations in inflation and central bank rates. As these variables slowly decrease, we may regain lost ground in cost of risk.
We remain committed to decreasing cost of risk, increasing NIM, and achieving a two-digit return on equity in the short term. Finally, on slide 19, I'd like to summarize the general guidance for 2025, reflecting both this quarter's results and our expectation for the rest of the year. Loan growth is expected to be between 8% and 9%. Net interest margin is expected around 4.3%. Net cost of risk is expected to be close to 2%. Fee income ratio should come in around 25%. Cost to income ratio and cost to assets ratio should be around 50% and 2.6%, respectively. Finally, return on average equity should be between 8% and 8.5%. We are open to your questions.
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 question and we'll proceed to read it. After answering the questions received in the Q&A chat box, we will proceed 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. 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 first before pressing the numbers. Once again, for the Q&A chat box, please type your question in the Q&A chat box and we'll proceed to read it. 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, 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 first before pressing the numbers. Okay, we received a question from Daniel Mora and on stage, and he's talking through the live webcast. Daniel, you may go ahead. Please ask your question. Daniel, you can open your mic and you can ask your question. Can you speak again so we can hear you?
Hi, good morning. Can you hear me?
Yes, we can hear you.
Perfect. Thank you so much for the presentation. I have just one question. With the new base case scenario for the central bank rate, when do you expect to see normal figures of NIM? And I would like to know what will be that NIM.
In addition to this, what will be the main changes for the loan mix in 2025 and 2026? Where do you expect to gain market share? Thank you so much.
Okay, thank you, Daniel, for your question. First, in terms of NIM, this year we hope to have a 4.3% NIM. Of course, we have longer-term exercises and forecasts, but we do not have an official NIM target for 2026 and onwards. We can say that it should be at least 4.5%. We should think not only in terms of NIM, but also in terms of risk-adjusted NIM. As long as we get that figure in terms of NIM and also a cost of risk below 2%, we think we should get to an ROE of higher than 10%.
In terms of the breakdown of loan growth, what I can say is that, for example, in terms of geographies, we expect to see 2%-3% loan growth in Panama and 9%-10% growth in Colombia. In terms of products, we expect to see growth of 6%-7% in commercial loans and between 10%-11% in retail loans, with a higher increase in the mortgage portfolio than in the consumer portfolio. Finally, our goal this year is to gain between 40 and 50 basis points in loans market share. This has an assumption of 6% growth for the banking system as a whole, as it is happening right now, and between 9% and 10% in our case.
The product that we should see a higher increase in market share should be the mortgage portfolio that, as César mentioned, we hope to get at least a 10% market share as soon as this quarter. Thank you, Daniel.
We have a question from Sebastian Gallego from Ashmore Group in the live webcast. Mr. Gallego, please open your microphone. You can also type your question in the Q&A chat box so we can hear it and we can read it out loud. The question is, can you please discuss long-term ROAE and where do you see cost of capital from the bank?
Yes, Sebastian, of course. Thank you for your question.
We can say that both figures should be in the long term between 13% and 14%. In terms of the cost of capital, we build that with a CAPM. We use the treasury rates and the beta and the equity risk premium. We get, for a bank like Banco de Bogotá, a figure between 13% and 14%. That should be the target for us. We hope to get there in a period no longer than 12-24 months. We are working really hard to get there as soon as possible. Thank you, Sebastian.
It seems we have no further questions at this time, and we will proceed now with the final remarks from Mr. César Prado. Mr. Prado, please go ahead.
Thank you, Diana. This quarter represented a temporary setback in overall profitability.
Nevertheless, we are confident to improve upon cost of risk and further increase NIM. The net cost of risk should go back to a positive trend as lower PDLs and better macroeconomic conditions suggest. Furthermore, we are taking positive actions to recover NIM on both the asset and liability sides where a higher loan NIM and less volatile bond markets should turn us back into the positive trend started in 2024. Thank you for attending today's meeting, and I hope you will join us for the next conference call.