A Petro Wealth Tax Crushed Colombia’s Bank Profits in Q1 2026

Colombia · Banking

On paper, Colombia’s banks had a normal quarter: loans grew, deposits rose, and almost everyone made money. Yet the headline profits at the country’s biggest lenders fell, some sharply. The reason is not a weak economy or bad loans, but a single policy decision in Bogota, a reminder of how directly politics now reaches into corporate balance sheets.

What did the Colombia bank profits ranking show?

The Rio Times, the Latin American financial news outlet, reports that the Colombia bank profits ranking for the first quarter, drawn from financial regulator data, was led by Bancolombia with COP 1.3 trillion ($350 million), followed by Davivienda with COP 545 billion ($147 million) and Banco de Bogota with COP 354 billion ($95 million). Of the 30 banks operating in the country, only three reported losses: Pichincha, Itau and Lulo Bank.

The rest of the top tier featured foreign-owned lenders. Banco GNB Sudameris posted COP 210 billion ($57 million), BBVA Colombia COP 202 billion ($55 million), Citibank COP 182 billion ($49 million) and Banco de Occidente COP 149 billion ($40 million). On the surface, it looked like a healthy, broadly profitable sector.

Why did the biggest banks’ profits fall?

Because of a new wealth tax. Early in 2026, President Petro declared an economic emergency to address a flooding crisis in the Cordoba region, and the central mechanism was a wealth tax on financial institutions, one that would have ranked among the world’s highest in its original form. After pushback from the banking association, the levy was softened into financing commitments and relief for flood victims, but it still bit hard.

The numbers show the scale of the hit. Bancolombia, the country’s largest bank, posted its weakest profit in five years, with its holding company Grupo Cibest reporting COP 1.5 trillion ($404 million), down 16% year on year. Davivienda’s net income fell about 45%, while Grupo Aval’s attributable net profit dropped 6.9% to COP 336 billion ($90 million), as the tax added COP 312 billion ($84 million) in costs and erased COP 210 billion ($57 million) in earnings.

How healthy are the banks underneath the tax?

Solid, by the operating numbers. Bancolombia said its core performance stayed strong, with Grupo Cibest’s assets up 6.9% to COP 389 trillion ($105 billion), its loan book up 6.5% to COP 262 trillion ($70 billion), and customer deposits up 10.4% to COP 272 trillion ($73 billion). Chief executive Juan Carlos Mora highlighted regional integration, with about 33 million clients across Colombia and Central America.

Grupo Aval struck a similar note. Its president, Maria Lorena Gutierrez, told investors that a new monetary-tightening cycle and higher funding costs continue to pressure margins, while pointing to improvements in loan quality, risk costs and efficiency. In short, the balance-sheet damage was a one-off political cost, not a sign of underlying weakness.

Which banks bucked the trend?

The foreign-owned lenders. BBVA Colombia posted the most striking gain, with profit up 507.9% year on year, the highest among the large banks. Santander Colombia reported a 222% jump in net profit to COP 25 billion ($7 million), with its gross operating margin up 43% and its loan book near COP 7.8 trillion ($2.1 billion).

Santander also marked a leadership change. Martha Woodcock stepped down as president after 28 years with the group, with Marcel Patino Sedan, authorized by the regulator, named as her successor. The contrast underscores how the wealth tax fell hardest on the largest domestic banks rather than the broader sector.

What should investors and analysts watch next?

• Whether the tax recurs: if the wealth levy is one-off, profits should normalize; a repeat would keep pressuring the largest banks.
• Loan quality and risk costs: the operating health beneath the tax depends on credit holding up as rates stay high.
• The May 31 election: a change of government could reshape the tax-and-regulation stance toward banks.
• Foreign-bank momentum: whether BBVA and Santander Colombia’s outsized gains hold signals shifting competitive dynamics.
• Regional integration: Bancolombia’s Central American push and digital bets like Nequi and Wenia shape its growth beyond Colombia.

More: Colombia news in English, every day from The Rio Times.

Frequently Asked Questions

Which bank had the highest Colombia bank profits in Q1 2026?

Bancolombia led with COP 1.3 trillion ($350 million), followed by Davivienda with COP 545 billion ($147 million) and Banco de Bogota with COP 354 billion ($95 million). However, Bancolombia’s figure was down 25.9% year on year, its weakest quarterly profit in five years.

Why did Colombian bank profits fall?

A wealth tax from President Petro’s economic-emergency decree hit the sector. Declared to fund flood relief in Cordoba, the levy added large one-off costs to bank balance sheets, cutting earnings at the biggest lenders even as their loans, deposits and operating performance stayed solid.

How much did the tax cost the banks?

At Grupo Aval, the tax added COP 312 billion ($84 million) in operating costs and erased COP 210 billion ($57 million) in profit; without it, earnings would have been COP 546 billion ($147 million) rather than COP 336 billion ($90 million). Bancolombia and Davivienda saw double-digit profit declines.

Which banks grew despite the tax?

Foreign-owned lenders. BBVA Colombia profit surged 507.9% year on year, the highest among large banks, and Santander Colombia’s net profit jumped 222% to COP 25 billion ($7 million), helped by a 43% rise in gross operating margin and loan-book growth.

Who is leaving Santander Colombia?

Martha Woodcock stepped down as president of Santander Colombia after 28 years with the group. The board named Marcel Patino Sedan as her successor, following authorization from the financial regulator, as the bank reported strong first-quarter growth.

Connected Coverage

The disruptive challenger reshaping this market is covered in our reporting on how Nubank became Colombia’s fifth-largest bank without a branch. The monetary backdrop is detailed in our piece on how the central bank’s own profits fell 43% in Q1, and the leadership churn in our coverage of Banco de Bogota’s executive change

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error