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‘More human banking’ produces solid and sustainable results

Interview - August 12, 2015

Over the past six years, Bancolombia has doubled its assets, from $35 billion in 2009 to $70 billion in 2014. The bank’s president, Carlos Raúl Yepes Jiménez, attributes such remarkable results in such globally uncertain times in part to its carefully thought-out strategy and the ‘human’ approach to banking that the company champions. 


According to the IMF, Colombia was the third fastest growing Latin American economy in 2014, and according to Mr. Uribe from Banco de la República (Central Bank of Colombia) it will be the fastest growing economy this year. We are facing some difficult international circumstances, and some studies are predicting a huge drop in FDI in the country, although President Santos has stated that this is just a cloudy moment. Bloomberg named the Colombian economy as one of the 15 poorest in the world, while The Daily Telegraph has mentioned that it is one of the strongest in the region. Apparently it all depends on the eye of the beholder. How do you assess the Colombian economy for 2015, and which sectors do you think would help making it more dynamic?

Colombia’s economy is going through a rough time, just like all the rest of the economies in the world. Because of my optimistic predisposition, I tend to think that in a moment like this, the economy is in good shape if it is growing between 3% and 3.5%.

On the other hand, the IMF predicted 0.5% growth for all Latin America. Colombia is growing by 3%, six times what the IMF is expecting for the region. It is not the level we want, but there are many global factors that have an impact on this slowdown.

However, we are optimistic, and in this financial institution we are accompanying the growth. We have the ability to continue on the right track. There are many opportunities, we just have to make them come true.

Colombia is expecting to enter the OECD by 2016. Former Presidential Minister Humberto Martínez told us that “this will give us better regulation, a better institutional environment for development, and of course, keeping a sort of benchmarking compared to other countries which have already overcome their underdevelopment, from which we have a lot to learn”. What could the country learn from this organization, and what could it contribute to the rest of the member countries?

There is a lot to learn. The OECD represents a very important reference. Bancolombia is the only private institution in Colombia which is a part of the Emerging Markets Network, the EMnet.

In there we are working for our country. The goals are very tough, but I’m sure that working on them, step by step and with the help of public-private cooperation, we will achieve them.

Colombia is trying to update its structures. There is still a lot to be done at the institutional level, but the important thing is that there is political willingness to do it.

The year 2015 will be a milestone if peace is finally achieved, after more than five decades of armed conflict. You are playing an important role in this, as a member of the Advisory Commission for Peace. You have said that the people of Colombia need to reconcile with each other, leaving the past behind and building a better future, and also that nothing makes a country more economically competitive than a peaceful society. What is the role of the private sector and institutions like Bancolombia, both in the achievement of peace and in the post-conflict process?

Indeed, I think the achievement of peace will create many opportunities. Our role is not only in the economic aspect, but also as members of society.

The articulation with society and the ability to achieve different effects are very important aspects of any company.

We have the ability to exercise that leadership as a private sector institution, and that is why we are very concerned about what happens in the public sector.

The decision to be part of the Advisory Commission for Peace is a consequence of my personal convictions.

We have been a part of a very important process together with the National Business Association of Colombia (ANDI), the Colombian Reintegration Agency, the programs for the education of demobilized people, and others.

I’m convinced that achieving peace is the best that could happen to the entire Colombian society, that is why it is so important to stay together and support the government through this process.

This is a key moment for the country. We are witnessing the development of the most ambitious infrastructure undertakings in its entire history. You have mentioned that the national 4G infrastructure program will be the most important business in the history of the bank, at least regarding the volume of resources involved. How will this megaproject affect the economy?

Although we’ve had some delay in setting out the general scheme, the scope, and the structure of the whole infrastructure development, the most important part is the feeling that the country is facing an era of great opportunities, so we have to make them come true, and do it right.

This is the best opportunity for the entire population, for Bancolombia, and for the rest of the financial institutions. The volume of resources is so large in scale that there will be plenty of room for everyone.

It’s not just about loans and interest rates, we also must be able to innovate; we are being invited to 18 or 20 years of financing. We have to make sure we make the right decisions today so we do well in the future.

The government has the will, and we’re having very good relations with the National Agency for Infrastructure (ANI), the National Development Financer (FDN), and the Ministry of Finance.

Together we are succeeding in developing all the relevant aspects of the project. We are in charge of risk management, minimizing their impact and promoting the development of the country not only when it comes to roads, but also ports, airports, and energy.

We estimate that this could involve an investment of some 100 billion pesos for the next few years. Our organization will be accompanying that growth of 10% or 12%.

Infrastructure projects are usually financed by development banking or by debt issuance. In Colombia, the private banking sector is taking on this responsibility and making billions of dollars available. In order to make investment easier and more attractive, the government has changed the legal framework. What is your balance of the new Public Private Partnerships Law and the Investment Law, in order to guarantee and facilitate the financial aspects of these megaprojects?

We are definitely on the right track. We must notice that great progress has been made in the way the Public Private Partnership Law was handled.

We were a part of the negotiations and I can confirm that all players will be present in the new infrastructure projects, not only domestic but also international.

And not only banks; the volume of resources required is so large that there was the need to invite all the possible players, including the multilateral credit agencies.

A lot has been done in the legislation as well, for example, to allow the pension funds to be present in long-term financing.

Still there are risks to be reduced, like the tax issues, security, and consulting the potentially affected communities.

Minister of Transport, Natalia Abello Vives has stated that Colombia is “a country of regions” and that her wish is to make Colombia “a competitive country, a country in constant development and progress, always in touch with its different regions”. What is your opinion, as someone coming from the Antioquia region, on the impact that a highly communicated country will have on its competitiveness?

The Minister has hit the nail on the head. Even with the creation of clusters of innovation or high production volumes in the regions, as long as we are not bringing the products from one region to the other in a competitive manner, it will be impossible to achieve our goals.

For instance, a region like Antioquia, in the middle of a mountain area, was able to become an industrial city, but for that to actually make sense we need to provide the region with access to the ports both in the Pacific and the Atlantic oceans.

When it’s no longer expensive to transport a container from Cartagena to Singapore, then we will notice the significant impact of the infrastructure projects.

Your concept of “more human banking” has resonated inside and outside Colombia. In fact, a recent research by the University of Quebec has concluded that the crisis of 2008 could have been avoided if the banks had adopted the Bancolombia philosophy. What message do you think you are sending through this business philosophy?

We started developing this innovative concept five years ago. Every day we are more convinced of the importance of having “more human banking”, building long-term relationships with our own employees, our suppliers, and the authorities, founded on mutual respect and trust.

When the University of Quebec talks about “human management” they are basically talking about what we do, trying to make business more human.

Very often what we do as human beings is actually “not being human”, so I’m glad that the society is acknowledging that our organization is based on actual people in spite of being a bank, a sector with a bit of a bad reputation exactly for that very same reason.

We are a highly appreciated institution. One of the greatest signs of public recognition was that Merco Business Monitoring awarded us as “the best private company to work in”.

But the “more human banking” concept is not just about perception and qualitative issues, it actually moves into our financial results.

We have an outstanding performance in every region we are present, a performance that is solid and sustainable.

Both aspects, side by side, define us as a strong, reliable, profitable, sustainable institution that is founded on people.

When we interviewed you in 2012, you said that a company like Bancolombia “must have internationalization as a part of its strategic agenda”. Since then you have acquired Banco Agromercantil of Guatemala for $216 million and the Panama HSBC Bank for $2.1 billion. This year you will invest more than $300 million as well. What is your current strategy?

In the last six years we have doubled our assets, from $35 billion in 2009, to $70 billion in 2014. This growth is explained by the acquisition of Banco Agrícola of El Salvador and the Banistmo of Panama, and because of the inorganic growth of our portfolio, with the bonds and issuances of the last two years.

Our current strategy aims at the consolidation of this growth. We are not considering new acquisitions at the moment. We want our organization to be focused on innovation, efficiency, service, and customer relationships, with an excellent technological platform.

Those are the five aspects on which we will be focused this year. Additionally, we have permanent maintenance investments in the company, our channels, and our assets, and we have just announced the investment of $250 million in all the regions we are present.

You are also the first and only Colombian financial institution listed on the New York Stock Exchange. What was the importance of this for the company?

I was lucky enough to be the legal director of the project aimed to have the company listed on the NYSE. This project demanded a lot of work and dedication from us, we were two years preparing ourselves to reach the NYSE. At that time we made an equity issuance of $72 million.

Twenty years later, we issued new shares and got $1,300 million between 9 and 11am. That was the milestone that showed us the way, increased our reporting, communication, and information standards, and gave us the possibility of being in touch with the international investment community.

There are currently around 16 New York analysts following the company. Our shareholders are just regular people; there is no big entity in control here, not one major shareholder.

There are actually near 75,000 shareholders, from employees of a random company in Colombia to retirees from the United States.

This means we have achieved our goal of creating trust in people, we have consolidated a good reputation. It’s 20 years of continuing success, and we’re also celebrating our 140th anniversary since Bancolombia was founded. These are both very significant anniversaries for our company.

Reinaldo Rueda said during his presentation that he means to leave a mark, and let the supporters enjoy the titles achieved. Juan Carlos de la Cuesta once said that “the first thing we want is the joy of our supporters, we will establish a strategic plan to achieve this”. How does Bancolombia look after its clients and anticipate their needs?

A soccer field and a company have a lot in common; actually I think they are almost identical. In both contexts you have to use your most accomplished players, each one with its own vision of the field.

A soccer match is about joy and sadness, love and heartbreak, victories and defeats. The same applies to the business world.

We take good care of everything we do, we plan and prepare each and every step we take, the same way a soccer team plans the strategy for a match.

We want our employees to be happy about their work with us, and communicate that happiness to our customers. We take care of our customers in many different ways, we are sensitive to their needs, we really walk in their shoes.

Our strategy has four main pillars: people committed towards a ‘more human banking’, the value of trust, innovation in achieving an enjoyable customer experience, and sustainable growth.

These are the fundamentals of our entire strategy and relationship with our customers, employees, investors, and the general public.

If, at the end of the day, both our collaborators and clients are satisfied, then the investors will be satisfied the most because they will find a sustainable and long-lasting organization, with a clear strategy in promoting its values.

As you know, we will be publishing through The Worldfolio at the G20 and the B20 Summits. One of the topics of these meetings will be the global expansion of SMEs, the largest employment generator, and the promotion of the entrepreneurial spirit as a means for economic growth. What are the challenges and opportunities of Colombia in these areas?

Here in Colombia there is still a lot to do, and everything is welcomed. Bancolombia has always stood out as the bank for SMEs. Actually, 42% of the country’s SMEs are connected to us.

We do this in both ways, from inside the country to the outside and back, either through the Pacific Alliance or the FTAs.

Bancolombia has always specialized in foreign trade. 90% of the international leasing transactions are carried out through our bank. The SME segment has always been extremely important, we have always appreciated it.

Pablo Picasso used to say that the quality of an artist depended on the amount of past he carries with him. Without question, Medellin is a city with a lot of past behind it. Which experiences have made Medellin one of the most dynamic and entrepreneurial cities in Colombia?

Medellin has a great past and a great future. We have several problems, but this is a society that has been able to join forces from the different sectors, public, private, academic, and governmental.

I feel a lot of satisfaction when big things are planned in this city, and we can see for ourselves that there is a common agenda between politicians, entrepreneurs, and society in general, always for the benefit of the entire city.

That is what we tell the rest of the country in the Commission for Peace. We must be able to create better institutions, cross-sectoral agreements, and of course reconciliation.

We must leave hatred and vengeance behind us. This country rebuilt will have the future it deserves and we all dream of.

What makes a leader is to be able to turn a vision into a reality. What is it that moves you, what are you most passionate about? Can you highlight any particular moments of your life?

I think my formative years. It’s a different process, very liberal, familiar. You enjoy going to college, your friends, your environment.

Now of course, my work in this company is completely spontaneous and natural. I certainly enjoy it.

Here we share a common purpose that unites us as people and as a business organization, which is simply walking in other people’s shoes, always through the respect and trust that are needed to produce wonderful and positive things.

My personal daily exercise is to stop to think for a while and reflect on the things I have done well, to recognize my weaknesses with humbleness, and be sure that we can always do much better working as a team.

I think that is what being a leader is all about.