Welcome to Davivienda's second quarter 2021 earnings conference call. My name is Hilda, and I'll be your operator for today's call. Today's presentation is for investors and analysts only. Therefore, questions from the media will not be taken. Today, joining us from Bogotá, Colombia, is Mr. Efraín Forero Fonseca, Chief Executive Officer, and Mr. Ricardo León Otero, Chief Risk Officer. During the call, they will be discussing in depth the quarterly results released. If you have not yet received a copy of the earnings report, please visit our investor kit or the financial information section at ir.davivienda.com. At this time, all participants are in a listen-only mode. Please note that this conference is being recorded. Afterward, management will be available for a question and answer session. Before proceeding, let me mention that any forward-looking statements are being made under the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. Actual performance could differ materially from that anticipated in any forward-looking statements due to macroeconomic conditions, market risks, and other factors beyond our control. It is now my pleasure to turn the call over to Mr. Efraín Forero, Chief Executive Officer. Thank you. Good morning, and welcome to Davivienda's second quarter of 2021 earnings conference call. I hope you all continue to stay safe and healthy. Thank you very much for joining us for our regular call. I will briefly walk you through the macroeconomic highlights, then we will discuss key financial trends, the progress we are making in our ESG strategy, digital transformation, and other key initiatives. When looking at Colombia's economy evolution on slide three, it is important to recall that Colombia went through a new wave of contagions during May and June. However, the latest figures show that 30 million Colombians have received at least one dose of the vaccine, and nearly 30 million have received the total dose. During April and May, the economic activity registered an average annual growth rate of 21%, favored by the opening of the economy, liquidity injection to SMEs, and the social transfer by the government. This positive rebound in the economy is despite the demonstration and social unrest experienced during May that caused the shutdown of local roads and major highways, affecting the normal dynamic of the economy. Consequently, inflation show a strong rebound during the second quarter, reaching a level of 3.6% compared to 1.5% recorded at the end of March. By the end of this year, we expect to close with the level above 4%. Overall economy trends improved during the quarter, and while there are risks, the likelihood of improvement continues to increase. We expect better growth than the previous quarter in terms of GDP, closing the year at levels between 7%-7.5%. Despite Colombia having lost its investment grade, we have seen foreign appetite for Colombia's debt as the net inflows rose to COP 10.8 trillion in the second quarter. The latter demonstrates the market confidence in Colombia, thanks to the economic dynamics and the likelihood that the revised tax reforms will likely pass with significant changes as the government consulted widely on its proposals. Moving on to Central America, we can on slide four see the main macroeconomic highlights of the region. We observed a better performance than the previous quarter, where Honduras and El Salvador showed higher growth, while Panama has the lower growth dynamics. In general, we observe inflationary pressures derive from the current situation. However, regarding remittances in the region, we have seen positive inflows, especially in Honduras and El Salvador, even higher than pre-pandemic periods. We expect GDP growth for the region between 4%-5%. For the case of Panama, we see a rebound of around 12%. Moving on to slide five, I will briefly talk about the main financial results and other key topics. Accumulated net profit reached COP 533 billion, increasing 54% compared to last year, leading to a return on equity of 0.6% for the last 12-month period. This result came on the back of a better dynamics on net interest income due to business volume growth, better expectation on the cost of risk, and recovery on operating income to levels above pre-pandemic figures. Our gross loan portfolio increased 2.6% over the quarter, mainly driven by the behavior of mortgages and commercial loans in Colombia and Central America. Total PDL ratio continued to show a positive trend due to disbursements dynamic on some write-offs, resulting in a level of 3.9%. Our 12-month cost of risk decreased to 3.76% due to the recalibration of our risk model, including the updated macro expectation and better risk performance of our loan book. Ricardo will cover this topic later. Moving on to other key innovation and digital transformation initiatives, I am glad to announce that we continue to advance in the process of creating a new digital-native bank. For this purpose, we received the regulator's authorization to incorporate RappiPay financing company, along with Rappi. We still have to comply with some more legal requirements before starting the operation of this new entity. We will keep you informed along the way. We continue to expect the beginning of our operation by the fourth Q or first Q of 2022. This quarter, we have been recognized for our innovation model by the Colombian Minister of Science with the Research, Development, and Innovation Unit certification. This recognition reflects our innovation model's efforts that rely on R&D activities and systematic structure that allow us to be at the forefront of the latest market trends. In this sense, I am glad to announce that we are working with IDB Group, Banco de la República, and the innovation sandbox of the Colombian regulator to launch the pilot of Colombia's first blockchain bond. We will issue the bond, and IDB Invest will underwrite the entire issue. With this pilot, we will try the whole life cycle of the debt, including secondary markets, trading, and redemption. Last not least, we extended our alliance with Google to improve our IT infrastructure, continue to migrate processes to the cloud, and develop artificial intelligence tools to improve response time with customers, increase agility, and gain efficiency. Please continue to slide six. Let's turn to our ESG highlights. Let me briefly recap our main results, where we aim to create value for our stakeholders on the economic, social, and environmental dimensions. On the environmental side, our green financing portfolio reached almost COP 2.86 trillion, increasing 4% compared to last quarter. We had an active participation in financing sustainable construction projects or companies dedicated to supporting the development of a low carbon footprint and promoting a more sustainable environment. On the other hand, we continue working to reduce our carbon footprint, decreasing it by 18% compared to last year. On the social front, our portfolio dedicated to social housing and women entrepreneurs reached almost COP 7.57 trillion, increasing compared to both periods. I want to share with you also, we recently heeded the call of Vice President Kamala Harris to continue driving economic development and financing inclusion in Central America. The U.S. government led this coalition to promote business-friendly environments, greater investment, and long-term sustainable economic development to stimulate growth in Honduras, Guatemala, and El Salvador. On the corporate governance front, aiming to adopt international best practice, we increased our board of directors to seven principal members this year, out of which four are independent and one of them is a woman. In addition, we decided to merge our corporate governance committee and sustainability committee into one. The new ESG committee will be in charge of the supervision, review, and implementation of policies and guidelines, reporting directly to the board of directors. Davivienda's sustainability strategy recognizes that the environmental social dimensions are fundamental to achieving company sustainable development and the well-being of our stakeholders. In this sense, we have created and published the responsible investment policy and the statement on diversity and inclusion to continue developing our ESG agenda. Please move to slide seven. We have made significant progress over the last year in our digital transformation journey, as you can see on the right side of the slide. Accumulated digital sales represent 53% of the total sales, showing a positive trend compared to last year. In addition, monetary transactions through our digital channels increased their participation from 48% last year to 54% of the total monetary transactions. As you can see at the bottom of the slide, digital deposits, loans, and investments show relevant increase over the year. Moving on to slide eight, DaviPlata, our digital-native bank, continue to show positive results as well. Our customer base increased around 500,000 customers during the quarter, reaching 12.7 million. With DaviPlata, we have coverage of 98% of Colombia's municipalities and almost 40% of the adult population. We continue to attract customers from other banks and customers who only have DaviPlata as an active financial product in the system. One of the most important results is the increase in the outstanding digital deposit, reaching COP 563 billion, increasing 1.7x compared to last year. Accumulated transaction income during the first semester reached COP 35 billion, increasing 0.8x compared to last year. Transactions, e-cards, and total payment volume showed positive trends during the second quarter of this year. To conclude my presentation, I would like to say that the results achieved this quarter allow us to be more confident about how the economy is evolving. We have updated our outlook despite the third wave of contagions and the impact generated by the social unrest in Colombia. We expect that the recovery of the countries where we operate will be a little faster, thanks to the speed of vaccine rollouts, allowing a quicker opening of economies and a decrease in population lockdowns. Nonetheless, we have to wait to see how the loan portfolio evolves and if another contagion spike affects the recovery path. Now, let me turn the call over to Mr. Ricardo León, our Risk Executive Vice President, to continue with the presentation of the bank's financial results. Thank you, Efraín. Good morning, everyone. I'm glad to join you today. Please move on to slide number nine, where we will analyze the assets evolution. Total assets closed around COP 140 trillion, increasing 3% over the quarter and decreasing 1.5% on an annual basis. When excluding the exchange rate devaluation, assets would have increased by 2.5% quarterly. Cash and interbank increased over the first quarter as a result of higher money market operation, mainly in Colombia, and increased over June 2020 due to a base effect of the previous year when the bank increased short-term liquidity to face the initial effects of the pandemic. Regarding investments, the contraction over both periods reflect a lower position in Colombia's trading portfolio, which is natural for this portfolio strategy and depends on market conditions. Gross loans increased by 2.6% during the quarter and by 1.3% over the year, reflecting recovery signs in Colombia and Central American economies. We will see further details of the loan book on the next slide. Our loan loss reserves closed at COP 5.7 trillion, decreasing around 5% quarterly due to write-off, which reached close to COP 1.2 trillion in the consolidated operation. However, on an annual basis, loan loss reserves increased by 12.5%, underlining our provisioning efforts. Colombia's and Central America's assets in dollars showed quite similar behavior. As of June, Colombia accounted for close to 75% of the consolidated operation and Central America for the remaining 25%. Please move on to slide 10. In line with the economic trends mentioned by Mr. Efraín, gross loans increased by 2.6% quarter to quarter, explained by dynamic of the social housing and leasing segments within the mortgage portfolio. Disbursements to corporates and SMEs within the commercial loan portfolio, an increase in the consumer portfolio mainly led by the payable segment, which was partially offset by the quarter's write-off. The exchange rate effect, which explained 0.4% of the quarter's growth. On a normal basis, the loan portfolio increased by 1.3%, despite the 11.9% growth of the mortgage portfolio. The commercial book is still impacted by a base effect compared to the last year. However, it has grown close to 5.3% since December 2020. Something similar occurs in the consumer portfolio, where we have seen some positive behavior in disbursements in the last few months. In the international operation, the quarter's loans growth came mainly from the consumer portfolio, which increased by 2.6%, driven by the behavior in Honduras and El Salvador. On an annual basis, the consumer segment showed a 9.3% growth, while mortgage, a 5.8% increase. Moving on to slide number 11, we present an update of the relief and the behavior. By the end of June, around 9% of Colombia's and Central America's loan book was under some kind of relief. In the case of Colombia, the debtors' relief program was extended until August this year, and we observed more companies adhering to this program as a result of impact seen from strikes during May and June. When looking at the payment behavior of Colombia's relief loans, around 91% of the portfolio is up to date, and the portion of the past-due loans over 90 days is 3.5%. In Central America, loans under relief continue to gradually decrease as the programs already ended in most of the countries. We see that around 93% of the relief portfolio is up to date, and past-due loans over 90 days account for 3%. Although we have seen collections reaching pre-pandemic levels, we remain cautious about the relief portfolio, as there might be customers that remain affected going forward. Please move on to slide 12, where we can see the evolution of past-due loans, cost of risk, and loans by status. As you can see on the top left table, total PDL over 90 days decreased 8 basis points over the quarter, mainly due to the consumers' book ratio. The commercial portfolio PDLs increase is related to impacts in services, infrastructure, and transportation sectors. As for the consumer portfolio, past-due loans show a decrease due to write-off during the quarter, as well as better behavior of recent vintage. In the case of mortgage book, most of the deterioration is explained by COP 326 billion securitization of low-risk portfolio in June. We also see a bigger portion of social housing within the loan book, which has marginally higher risk compared to the other segment. Finally, take into account that mortgage write-off take place much later than in the consumer and commercial segment. It is important to highlight that this is our lower risk segment with our loan-to-value ratio close to 45%, so it doesn't generate big concerns going forward. At the bottom of the slide, you can observe our cost of risk closed at 2.52% for the second quarter and at 3.76% for the last 12 months. In the same provision, expenses closed at COP 700 million for the quarter and reached COP 1.8 trillion for the first half of the year. This result comes from updates in our forward-looking parameters, which aim to reflect better macroeconomic expectations for the rest of the year and from our efforts to contain further deterioration in the loan performance. As a result of this improvement in expectations, coverage needs are naturally lower. This explains lower coverage level for our stages when compared to last quarter, when we remained more conservative regarding further impact in our loan book. As you may see, the ratios remain at adequate levels, higher than the figures since one year ago. Please move on to slide number 13. Funding sources grew 3.2% over the quarter and decreased 7.6% on an annual basis. Excluding the exchange rate effect, funding sources increased by 2.7% quarterly. Demand deposits remain growing on a quarter- and annual basis, increasing its share over total funding. Meanwhile, term deposits continue to decrease and now account for 28% of funding sources. Bonds increased both over the quarter and the year due to the $500 million AT1 issuance, as well as bond issuance for $94 million in Costa Rica. Credits increased over the quarter due to El Salvador and Costa Rica funding strategies and decreased compared to June last year due to payments of loans with multilaterals. During the last 12 months, our funding structure has slightly changed, with demand deposits and bonds increasing its share, resulting in positive impacts for our financial expenses. I would like to invite you to slide number 14, where you will see our capital structure. Our total capital and equity ratio as of June closed at 18.64%, increasing 195 basis points over the quarter. This is explained by two effects, an increase of 23 basis points in our Core CET1 due to higher profits, and the second inclusion of the AT1 instrument issued in April this year into our ratios. Our Tier 2 decreased by 16 basis points due to lower weight of subordinated instruments. As you can see, we have a comfortable level over the fully loaded requirements shown on the left side of the slide. Please move to slide number 15, where we present our margins. When looking at the quarter's behavior, we observe that the growth financial margin increased by 16%, mainly due to higher financial income and lower financial expenses from securities with entities and term deposits. As a result, the annualized NIM for the quarter closed at 6.41%, which represents an 83 basis point increase over the previous period. On accumulated figures, the growth financial margin contracted by 1% as a result of, first, lower loan income related to the book repricing, mix changing, and higher competition observed during the year. Second, lower income related to the investment portfolio devaluation, mainly seen during the first quarter of 2021. Finally, it is important to mention that these effects were partially offset by financial expenses, which continued to decrease by taking advantage of low interest rates and the funding mix. As a result, our 12-month net interest margin ratio closed at 6.08%, remaining relatively stable over the quarter and increasing 21 basis points over the year. However, it is important to note that these net interest margin ratios do not reflect the result of our hedging strategy, which aims to mitigate interest rate risk and foreign exchange movement. In this sense, when taking into account changes and derivative income, we see that the quarter NIM closed at 6.65% and the ratio for the last 12 months at 6.30%. As we saw before, provision expenses decreased 38% quarter-on-quarter and 1.6% on an accumulated basis, which ended up in a net financial margin close to COP 1.3 trillion for the second quarter and of COP 1.8 trillion for the year. Please continue to slide number 16. The second quarter's expenses increased by 10.7%, mainly due a one-off payment to employees within the collective agreement framework, which is updated every three years, as well as expenses related to insurances, marketing, and IT. On accumulated basis, OpEx increased by around 5%. When excluding personal non-recurring expenses, OpEx would have increased by 7% quarterly and by 3.4% on accumulated basis. 12-month cost-to-income ratio closed at 46.3%, decreasing over the quarter and the year. Please move on to slide number 17 to analyze the bank's profit. Operating income remained stable over the quarter and increased by around 24% on accumulated figures due to a higher billing activity, handling fees, among other banking services. Change in derivative income growth at COP 66 billion in the quarter and at COP 270 billion by the first half of the year, reflecting our hedging strategy for market movement as the exchange rate devaluation, while compensating for investment income losses as explained before. Net profit for the quarter closed around COP 432 billion and reached COP 534 billion for the year, increasing by around 54% when compared to the same period last year. As a result, our return on average equity for the quarter reached 13% and 4.6% for the last 12 months. To finish the presentation, please move on to slide 18, where we present our guidance. Given the better recovery trends seen in the economies where we operate, we are updating the numbers for our business this year. In any case, we are closely monitoring the credit risk situation of our portfolio as there are still impact across some segments, and we can continue to face uncertainty given the evolution of the pandemic. We expect our consolidated loan book to grow between 5%-7%, mainly explained by the following behavior: 3%-5% growth of the commercial portfolio, moderated growth in the consumer segment between 3%-4%, and an increase between 11%-13% in the mortgage book. The 90-day PDL ratio should close around 4%, where we see some additional pressure in the mortgage book. Given the effects we have explained in previous calls related to asset repricing, changes in asset mix, and lower investment income, our net interest margin should end the year at around 6%. We expect our cost of risk to grow this year at around 2.9% t o 111%. Regarding operating income, it should end the year with an increase between 20%-25%, improving compared to the pre-pandemic levels. We're expecting an OpEx growth within 4%-6%. Please take into account that this figure includes our digital transformation projects and initiative and the FX impact. Finally, our return on average equity should close between 7%-9% for 2021. Thank you for your attention. At this time, we can move on to the question and answer session. Thank you. With that, we will begin the question and answer session. We will first take the questions from the phone call, and then we will read the webcast questions. If you have a question, please press star and then One on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star and then One on your touchtone phone. For webcast participants, click the button with the question mark at the bottom of the webcast screen. We're standing by for questions. We have a question from Olavo Arthuzo from UBS. Okay. Good morning, everybody, and thank you for this opportunity asking a question. I actually would like to explore only one topic here, mainly related to the mid to long-term review of the bank. Taking this opportunity that we have the management. This quarter, the bank presented a very important rebound of profitability. As the new guidance for this year points to high single digits, it should decrease along the next quarter when compared to this quarter. Besides this, the stock is trading below book, which is kind of justified by the ROE below the cost of capital for the bank, at least during the next couple of years. My point here, guys, is that beyond the discussion on the macro and political scenario in Colombia and the sustainable ROE for the bank, I would like to shift the discussion to both DaviPlata and the partnership with Rappi that is gaining shape. These two type of business are continually attracting attention from the market, and I see this project as a potential catalyst for the stock and a booster for the bank's profitability in the medium to long term. Given this backdrop, I have three questions in regard to this topic. First, how much attention from the management team these two initiatives have in the strategic pipeline of the bank? My second question, I would like to have a number from you guys about the number of clients the bank expect to have enrolled to DaviPlata, because we are talking about almost 13 million clients so far. What is the target for DaviPlata? Also the number of clients expected to have a current account within this new approved partnership with Rappi, for the creation of a digital bank. How much clients does the bank expect to have in this digital bank for the next year or the next following years? What is the goal? My third and last question, what are the main competitors in Colombia of these two initiatives, DaviPlata and the digital bank with Rappi? If you could share some names and how much competitive they are, it would be great. Thank you for this. Good morning, Olavo. Thank you for your question. The first question related to the mid-term review and how we are expecting the ROE and other figures for the bank. The first thing is that we are expecting a recovery this year, as we could see in our figures. For the next year, we're expecting ROE close to 11%-12.5%, obviously improving the cost of risk. We're expecting a cost of risk around 2.6%. In terms of 2023 and the next year, we think that our cost of risk will be more normalized around 2.2%, 2.3%. Obviously, the ROE will be around 12%-14%. Obviously, if the economy has been recovering in a good way in the next year, we are expecting that our ROE in long-term return to figures close to 14%-16%. That is our view about the near future and our view after 2023. I just wanted to understand more about these new ventures of the bank, because I just wanted to shift this topic from the profitability, looking solely to the core business of the bank, but trying to understand the potential related to DaviPlata, and especially with this new digital bank with Rappi. Being very straight to the point, how much clients do you expect to achieve with this partnership with Rappi during the next three following years? What is the goal in terms of number of clients with this partnership? Thank you for the question. I am Efraín Forero. I'm going to speak about our general strategy and mainly related about DaviPlata, as well as our alliance that we are about to close with Rappi. First, in general terms, we have three fronts in Davivienda. One, we want to become a completely digital bank. Let's call that the traditional bank. We are doing very well about that, and about 70% of our sales we expect to be able to have at the end of the year in the traditional bank, let's say. On the other hand, we have another strategy that is DaviPlata. What we want there is to have finally a native bank. We are doing very well so far. We have about 30 million customers, as you mentioned, and we expect to have about 60 million customers in the year 2022. About 30% of those customers are customers that actually have different businesses with other banks. That is a very powerful benefit for Davivienda. Since we have these new customers with a very low cost, and we use that information to offer those customers with new products for Davivienda. That is already happening. On the other hand, we want to have in DaviPlata, a bank that is willing to offer customers with value-added solutions. We are doing several alliance, and we expect to have their marketplace that allow customer individuals to take advantage of the offer that we can make with different alliance. For instance, we are actually paying about COP 2 million- COP 2.8 million payments every two months with the subsidies of the government. What we want is to offer them in DaviPlata's app, different type of options so that they can buy groceries, buy insurance, buy different things that allow them to use much better their money, the benefit of the subsidy. That's what we are working to build an ecosystem in DaviPlata. We believe that it's going to be a new operation, a bank that we are planning and preparing the organization so that it is going to be autonomous, DaviPlata, supported by Davivienda. At the same time, we have another third focus that is our different alliance, in which Rappi is one of them. About two years ago, we signed an alliance with Rappi that is already giving us very good result. Actually, we have about 700,000 new customers that come from that alliance. We launched, it was in March, the credit card business that we are now having about 200,000 new customers that are going to have this new card that is very attractive for customers. We already have 30,000 of them that are being used, and we have a very good result so far. It's a new concept, we have a lot of expectation about this product in our alliance. About three months ago, we also announced the creation of a new institution, Corporación Financiera with Rappi, in which we are really creating a new native digital bank that is going to work within the Rappi app. It is going to offer customers with different financial services, and we expect to be one of the main players in this new market, that we are pretty sure that it's going to be in Colombia and Central America very soon. We have already known that we would have Nubank here in Colombia. All of us have listened about what it is doing right now in the market. We have the presence of Nubank related. Who are going to be the new players? We already have as well Mercado Pago, Mercado Libre. That's going to be another very new player. It's going to be very important, we believe, about that. At the same time, obviously, we will have other traditional banks that are coming to Colombia. We are preparing ourselves with these three strategies to be able to grow our market share in a very important way in the coming years, let's say semester or months. Things are going to change very quickly in Colombia, and we believe that we are leading in Colombia this process because we have these three strategies. In which we want to become a player that is going to increase the share of the market, increase our efficiency, increase our ability to go to all of these customers, mainly in the retail banking in this country. Okay. Totally amazing. Thank you very much for this. It was very helpful. You're welcome. Thank you. As a reminder, if you have any questions, please press star one on your touchtone phone, and for webcast participants, you can click the button with the question mark at the bottom of the webcast screen to submit your questions. We are standing by. At this moment, we show no questions. I would like to turn the floor back over to our presenters for closing comments. Mr. Forero, please proceed. Thank you very much for everyone for being with us today here. It is very good for us to see that things are going better. We believe that the recovery of the economies in the different countries in which we are working are going to keep in the way it's going. If so happen, well, we will have a very better result, financial results, as we mentioned during the presentation. We feel confident about it. We are working very hard in all our digital processes that we mentioned. We believe that finally, at the end of this, we will get over the problems that we are facing, and we are optimistic about the future. Obviously, we know that there are different uncertainties in the problem with the COVID-19. However, we believe that things are going to be much better in the coming months. Thank you very much. Thank you. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.