Colombia's Bancolombia ups dividend despite crisis

By Javier Mozzo

MEDELLIN, Colombia, March 2 (Reuters) - While more and more banks around the world seek state bailouts, Colombia's largest bank voted on Monday to give shareholders a bigger share of last year's record net profit, and announced new investments.

Bancolombia BIC.CN(CIB.N) shareholders approved a 9.9 percent increase in their yearly dividend at the bank's annual meeting, although the company's president warned that 2009 would be a tough year due to the global economic crisis.

Loan portfolio growth is expected to slow sharply this year, Bancolombia President Jorge Londono told reporters.

"When the economy's growing at a rate of more than 7 percent like it did in 2007, all businesses do well. When it grows by 2 percent, they don't do as well," he said.

Colombia's Bancolombia does not expect to emerge from this year unscathed by the world financial and economic crisis, but directors still think loan portfolios will grow by about 8 percent compared with 17 to 18 percent in 2008.

As well as agreeing the dividend of 624 pesos ($0.24) per share, Bancolombia announced plans to auction the first tranche of $391 million in subordinated debt later this week and invest between $125 million and $150 million in new technology.

Colombia's economy is slowing, hit by the global credit squeeze and lower export earnings.

Gross domestic product rose only about 3 percent last year and the stock market plunged by 30 percent, but the banking sector emerged in reasonable shape.