US bonds boost Banrep results

The decrease in interest rates for United States Treasury bondsthat is, the appreciation of its price, is one of the main factors that are generating a better result for Bank of the Republic, which at the end of the first quarter registered profits of $2.9 trillion.

The reason is that since international reserves are mainly invested in US Treasuries. and the rates of these papers have been falling in recent months, that is, they have appreciated, a positive effect is generated, of profitability of said resources.

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For Camilo Pérez, Director of Economic Research and Market Analysis Banco de Bogotá“that is where the profits come from, mainly, from Banco de la República”.

The economic and financial analyst assures that the TES titles (Colombian internal public debt) also help somewhat to the good result of the reserves and the result of the Colombian central bank.

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It must be remembered that in 2020 the Banco de la República reached an all-time high in profits per $7.5 trillion and, in 2019, it was $7.1 trillion, as a result of favorable international conditions.

On that occasion, the entity said that the above was achieved thanks to the return of some investments in bonds abroad. Bonds purchased at high rates appreciated when international rates fell rapidly and unexpectedly in response to the action of central banks due to the pandemic.

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But the Issuer does not always generate profits, since there are years in which it can generate losses, in response to unfavorable conditions in the international economy and have nothing to do with the entity’s response capacity to achieve its economic and social objectives.

In addition, given its condition, the Banco de la República does not have the express obligation to generate profits like a commercial banksince it depends largely on the behavior of international markets.

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For his part, Ana Vera, chief economist at the firm In On Capital, He assures that, mainly, it is the rebound that fixed-income assets have had globally and others such as gold, which are part of the investments maintained by the Banco de la República, generate the positive result.

And it is that in just four months the result of the Colombian central bank changed from losses of $1.04 trillion in November 2022to the aforementioned profits of $2.9 trillion at the end of the third month of the year.

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In addition, in the monthly result, March was very positive for the accounts of the Banco de la República, with profits of $1.7 trillion.

According to the report of the Colombian central bank, in the first quarter of the year the entity’s assets amounted to $341 billion, liabilities closed at $202 billion and equity was consolidated at $138 billion.

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In March 2022 the Bank of the Republicwar recorded losses of $2.05 billion.
In 2022, the Issuer obtained results for $1.77 trillion, of which $1.5 trillion corresponded to profit for the year and $265,000 million to accumulated earnings from previous periods.

The Issuer’s board of directors approved transferring to the National Government the sum of $1.6 trillion.

The total assets of the Bank of the Republicat the end of 2022, closed at $339 billion, with a growth of 14.5% compared to 2021.

In 2021, the Bank obtained a profit of $632,000 million, $6.85 trillion less than in 2020. The lower result of 2021 compared to the previous year was due to the significant decrease in the yield of international reserves.

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