Filed Pursuant to Rule 424(b)(3)
Prospectus		Registration No. 333-283549

Extraordinary General Shareholders’ Meeting of Bancolombia S.A.

CORPORATE STRUCTURE CHANGES PROPOSAL

Bancolombia S.A. (“Bancolombia” or the “Bank”, or prior to completion of the Corporate Structure Changes, “we”, “our” or “us”) will call upon an extraordinary general meeting of Bancolombia’s shareholders (the “Extraordinary General Shareholders’ Meeting”) to vote on certain matters relating to the modification of the corporate structure of Bancolombia and its affiliates through the creation of a new holding company named Grupo Cibest S.A. (“Grupo Cibest,” or following completion of the Corporate Structure Changes, “we”, “our” or “us”) and certain related corporate transactions (the “Corporate Structure Changes”). As part of the Corporate Structure Changes, each common share of Bancolombia will be exchanged for one common share of Grupo Cibest and each preferred share of Bancolombia will be exchanged for one preferred share of Grupo Cibest, except for shares of Bancolombia held by Grupo Cibest (the “Share Exchange”). Holders of each American depositary share representing four preferred shares of Bancolombia (a “Bancolombia ADS”), will receive one new American depositary share, which will represent four preferred shares of Grupo Cibest (a “Grupo Cibest ADS”).

In connection with the Share Exchange, Grupo Cibest will issue 509,703,584 of its common shares to holders of Bancolombia’s common shares and 452,122,416 of its preferred shares to holders of Bancolombia’s preferred shares. Bancolombia’s common shares and preferred shares are listed on the Bolsa de Valores de Colombia (the “Colombian Securities Exchange”) and trade under the symbols “BCOLOMBIA” and “PFBCOLOM,” respectively. American depositary shares representing Bancolombia’s preferred shares are listed on the New York Stock Exchange (“NYSE”) under the symbol “CIB.” We expect Grupo Cibest’s common shares and preferred shares will be listed on the Colombian Securities Exchange under the symbols CIBEST and PFCIBEST, respectively, and American depositary shares representing its preferred shares will be listed on the NYSE under the symbol “CIB”.

We believe that the Corporate Structure Changes will allow us to optimize our capital structure and capital allocation strategy, strengthen our financial and non-financial businesses, enhance strategic flexibility, increase visibility into the organization’s value and mitigate risk as a lending institution.

Certain elements of the Corporate Structure Changes, as set forth in more detail herein, must be approved by the holders of Bancolombia’s common shares and preferred shares at the Extraordinary General Shareholders’ Meeting to be held at the main offices of Bancolombia located at Carrera 48 # 26 – 85, 11^th floor, Medellín, Colombia on April 23, 2025 at 10:00 a.m. local time. We refer to the elements of the Corporate Structure Changes that are subject to shareholder approval as the “Corporate Structure Changes Approval Matters.” At the Extraordinary General Shareholders’ Meeting, the holders of Bancolombia’s common shares and preferred shares will vote on the approval of the Corporate Structure Changes Approval Matters.

This prospectus has been prepared for holders of Bancolombia’s common shares, preferred shares and American depositary shares residing in the United States to provide information about the proposed Corporate Structure Changes, Share Exchange, the Extraordinary General Shareholders’ Meeting and related matters. We encourage you to read this document in its entirety, including the section entitled “Risk Factors” that begins on page 11.

Holders of Bancolombia’s common shares and holders of Bancolombia’s preferred shares will be entitled to attend and vote, either in person or by representative by granting powers of attorney in writing to authorized representatives, in accordance with Colombian law, at the Extraordinary General Shareholders’ Meeting. Holders of Bancolombia’s common shares and holders of Bancolombia’s preferred shares on the date of the Extraordinary General Shareholders’ Meeting will be entitled to receive notice of and to vote at the Extraordinary General Shareholders’ Meeting.

Holders of American depositary shares as of March 19, 2025 will be entitled to instruct The Bank of New York Mellon, as depositary, as to how to vote the preferred shares represented by their American depositary shares at the Extraordinary General Shareholders’ Meeting in accordance with the procedures set forth in this prospectus.

Your vote is important, regardless of the number of shares you own.

Juan Carlos Mora Uribe

Chief Executive Officer

Bancolombia S.A.

IF YOU HOLD COMMON OR PREFERRED SHARES OF BANCOLOMBIA YOU ARE ENTITLED TO VOTE OR OTHERWISE HAVE A SAY ON THE TRANSACTION. WHILE WE HAVE DESCRIBED IN THIS PROSPECTUS THE GENERAL PROCEDURES FOR VOTING YOUR BANCOLOMBIA COMMON OR PREFERRED SHARES, YOU SHOULD CONSULT YOUR COLOMBIAN COUNSEL ON HOW TO COMPLY WITH THOSE PROCEDURES, AND WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US ONE. IF YOU ARE A HOLDER OF BANCOLOMBIA ADSs, YOU WILL RECEIVE INSTRUCTIONS FROM THE DEPOSITARY FOR THE BANCOLOMBIA ADS PROGRAM ON HOW TO SUBMIT VOTING INSTRUCTIONS FOR YOUR SECURITIES.

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the securities to be issued in connection with the Share Exchange or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated March 21, 2025 and is expected to be first mailed to shareholders on or about such date.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form F-4 to register under the Securities Act of 1933, as amended (the “Securities Act”) Grupo Cibest’s common shares and preferred shares (including preferred shares to be represented by American depositary shares) to be issued in connection with the Share Exchange. This prospectus is a part of that registration statement. As allowed by SEC rules, this prospectus does not contain all the information you can find in the registration statement or the exhibits to the registration statement.

The SEC’s rules allow us to “incorporate by reference” information into this prospectus. This means that we can disclose important information to you by referring you to another document. Any information referred to in this way is considered part of this prospectus from the date we file that document. Any reports filed by Bancolombia with the SEC after the date of this prospectus and prior to the date of the Extraordinary General Shareholders’ Meeting will be incorporated by reference into this prospectus and will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules).

We incorporate by reference into this prospectus the following documents or information filed by Bancolombia with the SEC:

 

(1)

Bancolombia’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023 filed with the SEC on March 26, 2024 (the “2023 Annual Report”);

 

(2)

Bancolombia’s report on Form 6-K filed with the SEC on August 14, 2024 presenting financial information for the quarter ended June 30, 2024, including but not limited to management’s discussion  & analysis on the results of the operation and the financial situation of Bancolombia, in relation to the results reported in the quarterly financial statements;

 

(3)

Bancolombia’s report on Form 6-K filed with the SEC on November 14, 2024 presenting financial information for the quarter ended September 30, 2024, including but not limited to management’s discussion  & analysis on the results of the operation and the financial situation of Bancolombia, in relation to the results reported in the quarterly financial statements;

 

(4)

any of Bancolombia’s future annual reports on Form 20-F or any amendments to the 2023 Annual Report filed with the SEC under the U.S. Securities Exchange Act of 1934, as amended after the date of this prospectus and prior to the date of the Extraordinary General Shareholders’ Meeting; and

 

(5)

any future reports on Form 6-K that Bancolombia furnishes to the SEC after the date of this prospectus and prior to the date of the Extraordinary General Shareholders’ Meeting that are identified in such reports as being incorporated by reference in Bancolombia’s registration statement on Form F-4 of which this prospectus forms a part.

We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus. You may request a copy of these filings by writing or telephoning Bancolombia at its principal executive offices at the following address:

Bancolombia S.A.

Carrera 48 # 26-85 Avenida Los Industriales

Medellín, Colombia

Attention: Investor Relations

e-mail:ir@bancolombia.com.co

Telephone Number: (57) 604 404 1918

If you would like to request documents from us, please do so by April 10, 2025 in order to receive them before the Extraordinary General Shareholders’ Meeting.

 

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You should rely only on the information contained in this prospectus to vote on the Corporate Structure Changes Approval Matters. We have not authorized anyone to provide you with information different from that contained in the prospectus. This prospectus is dated March 21, 2025. You should not assume that the information contained in this prospectus is accurate as of any other date.

 

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TABLE OF CONTENTS

 

		Page
Exchange Rates			1
Forward-Looking Information			2
Summary			4
Bancolombia S.A.			4
The Corporate Structure Changes			5
Ownership of Grupo Cibest After the Corporate Structure Changes			7
Technical Study Rights and Withdrawal Rights			7
Conditions to the Completion of the Corporate Structure Changes			8
The Extraordinary General Shareholders’ Meeting			8
Accounting Treatment of the Corporate Structure Changes			9
U.S. Income Tax Consequences of the Share Exchange			9
Regulatory Matters			10
Completion and Effectiveness of the Corporate Structure Changes			10
Stock Exchange Listings			10
Questions About the Corporate Structure Changes			10
Risk Factors			11
Risks Relating to the Corporate Structure Changes and Share Exchange			11
Risks Relating to Grupo Cibest Common Shares, Preferred Shares and American Depositary Shares			13
The Extraordinary General Shareholders’ Meeting			15
Time, Place and Purpose			15
Voting Rights, Record Date and Votes Required			15
Share Ownership of Directors and Senior Management			16
Voting by Representative for Holders of Bancolombia’s Common and Preferred Shares			16
Voting Rights of Holders of Bancolombia ADSs			16
The Corporate Structure Changes			18
Background of the Corporate Structure Changes			18
Reasons for the Corporate Structure Changes			18
Certain Regulatory Capital Ratios and Financial Information			21
Exchange of Bancolombia S.A. Common Shares, Preferred Shares and American Depositary Shares Into Grupo Cibest Common Shares, Preferred Shares and American Depositary Shares			21
Governance Structure and Management Positions			22
Conditions to the Completion of the Corporate Structure Changes			22
Completion and Effectiveness of the Corporate Structure Changes			23
U.S. Income Tax Consequences of the Share Exchange			23
Accounting Treatment of the Corporate Structure Changes			23
Regulatory Matters			24
Technical Study Rights and Withdrawal Rights			24
Bylaws of Grupo Cibest			25
Information About Bancolombia S.A.			26
Supervision and Regulation of Grupo Cibest			29
Principal Regulations Applicable to Holding Companies			29
Principal Regulations Applicable to Bancolombia and Grupo Cibest’s Other Regulated Subsidiaries			29
Description of Bancolombia’s Capital Stock			30

 

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		Page
Description of Grupo Cibest’s Capital Stock			31
Capital Stock			31
Registration and Transfer			31
Voting Rights			32
Dividends			34
Preemptive Rights and Other Anti-Dilution Provisions			35
Liquidation Rights			35
Rights of Dissenting Shareholders			36
Other Provisions			36
Description of Grupo Cibest American Depositary Shares			38
American Depositary Shares			38
Dividends and Other Distributions			38
Deposit, Withdrawal and Cancellation			40
Voting Rights			40
Fees and Expenses			41
Payment of Taxes			42
Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities			42
Amendment and Termination			43
Limitations on Obligations and Liability			44
Requirements for Depositary Action			45
Your Rights to Receive the Shares Underlying the Grupo Cibest ADSs			45
Direct Registration System			45
Shareholder Communications; Inspection of Register of Holders of Grupo Cibest ADSs			46
Jury Trial Waiver			46
Restrictions and Requirements Regarding Foreign Investment in Colombia			46
Comparison of Rights of Bancolombia S.A. Shareholders and Grupo Cibest Shareholders			49
Tax Considerations			50
United States Taxation			50
Colombian Tax Considerations			55
Colombian Foreign Exchange Controls and Securities Regulations			58
Exchange Controls			58
Securities Regulations			58
Management of Grupo Cibest			59
Board of Directors of Grupo Cibest			59
Committees of the Board of Directors of Grupo Cibest			63
Senior Management of Grupo Cibest			65
Compensation of Directors and Senior Management			67
Share Ownership			68
Related Party Transactions			68
Legal Matters			69
Experts			69
Index to Financial Statements			A-1
Annex I			I-1
Annex II			II-1
Annex III			III-1
Annex IV			IV-1

 

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RISK FACTORS

As a result of the establishment of a holding company structure through the proposed Corporate Structure Changes, Bancolombia’s and Grupo Cibest’s businesses will be subject to the following new or increased risks. In addition to the risks described below, Bancolombia and Grupo Cibest will continue to be subject to the risks described in the documents that Bancolombia has filed with the SEC that are incorporated by reference into this prospectus. You should carefully consider the following risk factors as well as the other information contained or incorporated into this prospectus in deciding whether to vote in favor of the Corporate Structure Changes Approval Matters.

Risks Relating to the Corporate Structure Changes and Share Exchange

We may fail to realize the anticipated benefits of the Corporate Structure Changes and Share Exchange.

The success of the Corporate Structure Changes will depend, in large part, on the ability of Grupo Cibest to realize the anticipated benefits from the Corporate Structure Changes.

The Corporate Structure Changes and the integration of any companies Grupo Cibest may acquire in the future into the new holding company structure could require a significant amount of time, financial resources and management attention. The realization of the anticipated benefits of the new holding company structure may be blocked, delayed or reduced as a result of many factors, some of which may be outside of our control. These factors include:

 

•

difficulties in successfully designing and implementing any unforeseen necessary new or enhanced risk management operations and controls or information technology systems, personnel, policies and procedures as a result of the Corporate Structure Changes;

 

•

failure to leverage Grupo Cibest’s holding company structure to realize operational efficiencies;

 

•

difficulties in reorganizing personnel, networks and administrative functions;

 

•

restrictions under applicable financial conglomerates regulations and other regulations on transactions between the holding company and, or among, its subsidiaries; and

 

•

unforeseen contingent risks relating to the Corporate Structure Changes that may become apparent in the future.

Accordingly, we may not be able to realize the anticipated benefits of the new holding company structure that will be created pursuant to the Corporate Structure Changes.

Grupo Cibest will depend on limited forms of funding to fund its operations.

Grupo Cibest will have no significant assets other than the shares of its subsidiaries. Its primary sources of funding and liquidity will be dividends from its subsidiaries, sales of the interests in its subsidiaries and direct borrowings and issuances of equity or debt securities at the holding company level. Grupo Cibest’s ability to meet its obligations to its direct creditors and employees and its other liquidity needs and regulatory requirements will depend on timely and adequate dividend distributions from its subsidiaries and its ability to sell its securities or obtain credit from its lenders.

The ability of the subsidiaries of Grupo Cibest, including Bancolombia, to pay dividends to Grupo Cibest will depend on the financial condition and operating results of such subsidiaries. In the future, the subsidiaries of Grupo Cibest may enter into agreements, such as credit agreements with lenders or indentures relating to senior or subordinated debt instruments, that impose restrictions on their ability to make distributions to Grupo Cibest, and the terms of future obligations and the operation of Colombian law could prevent such subsidiaries from making sufficient distributions to Grupo Cibest to allow it to make payments on its outstanding obligations. See

 

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“Risk Factors—As a holding company, Grupo Cibest will largely depend on receiving dividends from its subsidiaries to pay dividends on its common and preferred shares.” Any delay in receipt of or shortfall in payments to Grupo Cibest from its subsidiaries could result in Grupo Cibest’s inability to meet its liquidity needs and regulatory requirements.

In addition, creditors of Grupo Cibest will generally not be able to assert claims on the assets of the subsidiaries of Grupo Cibest. As for any holding company, Grupo Cibest’s inability to sell its securities or obtain funds from its lenders on favorable terms, or at all, could also result in Grupo Cibest’s inability to meet its liquidity needs and regulatory requirements.

As a holding company, Grupo Cibest will largely depend on receiving dividends from its subsidiaries to pay dividends on its common and preferred shares.

Since the principal assets at the holding company level will be the shares of its subsidiaries, Grupo Cibest’s ability to pay dividends on its common and preferred shares will largely depend on dividend payments from those subsidiaries. The ability of Grupo Cibest’s subsidiaries to pay dividends may be subject to regulatory restrictions under applicable law.

With respect to Colombian law, which is applicable to Bancolombia and certain other subsidiaries of Grupo Cibest incorporated under Colombian law, under the Colombian Commerce Code, a company must distribute at least 50% of its annual net profits to all shareholders, payable in cash, or as determined by the shareholders, within a period of one year following the date on which the shareholders determine the dividends. If the total amount of all reserves of a company exceeds its outstanding capital, this percentage is increased to 70%. The minimum dividend requirement of 50% or 70%, as the case may be, may be waived by a favorable vote of the holders of 78% of a company’s common shares present at the meeting. Under Colombian law, annual net profits are to be applied as follows:

 

•

first, an amount equivalent to 10% of net profits is allocated to the legal reserve until such reserve is equal to at least 50% of the paid-in capital;

 

•

second, payment of the minimum dividend on the preferred shares; and

 

•

third, allocation of the remainder of the net profits is determined by the holders of a majority of the common shares entitled to vote on the recommendation of the board of directors and the President and may, subject to further reserves required by the bylaws, be distributed as dividends. In accordance with Colombian law, the dividends payable to the holders of common shares cannot exceed the dividends payable to holders of the preferred shares.

Grupo Cibest’s subsidiaries may not continue to meet the applicable legal and regulatory requirements for the payment of dividends in the future. If they fail to do so, they may stop paying or reduce the amount of the dividends they pay to Grupo Cibest, which would have an adverse effect on its ability to pay dividends on its common and preferred shares.

The pro forma regulatory capital ratios and financial information included in this prospectus are presented for illustrative purposes only and may not be an indication of the Bancolombia or Grupo Cibest’s, as applicable, regulatory capital ratios or financial condition following the Corporate Structure Changes.

The historical pro forma and estimated pro forma regulatory capital ratios and financial information contained in this prospectus are presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of Bancolombia’s regulatory capital ratios or Grupo Cibest’s financial condition following the Corporate Structure Changes. The assumptions used in preparing the historical pro forma and pro forma estimated regulatory capital ratios and financial information may prove to be inaccurate, and other factors may affect Bancolombia’s regulatory capital ratios or Grupo Cibest’s financial condition following the Corporate Structure Changes, which may cause such regulatory capital ratios and financial condition to differ materially from what is presented in this prospectus.

 

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The exercise of Withdrawal Rights in respect of a significant number of common shares or preferred shares could increase the costs of the Share Exchange, reduce the capital of Grupo Cibest and hurt its financial condition.

While under Colombian law, shareholders who own, individually or collectively, at least 5% of the outstanding shares of Bancolombia may exercise a Technical Study Right, Bancolombia has already commissioned a technical study which has been completed by SBI for the Corporate Structure Changes. The exchange ratio resulting from such technical study is binding on all shareholders unless a Supermajority determines to change the exchange ratio. If the Supermajority determines to change the exchange ratio, shareholders who do not agree to the exchange ratio determined by such Supermajority have Withdrawal Rights such that the shareholders have the right to withdraw and have their shares purchased in cash by Bancolombia at the price set forth in the independent technical study. If shareholders exercise their Withdrawal Rights, we will be required to pay for the shares by expending funds to purchase such shares, which could increase the costs of the Share Exchange and reduce or adversely affect the capital of Grupo Cibest and its financial condition. Given that (i) by means of the Share Exchange, each common share of Bancolombia will be exchanged for one common share of Grupo Cibest, and each preferred share of Bancolombia will be exchanged for one preferred share of Grupo Cibest, and therefore the Corporate Structure Changes will not alter shareholders’ relative holdings any manner and (ii) an independent technical study has already been completed, we do not anticipate that a Supermajority will vote to change the exchange ratio.

Holders of Bancolombia ADSs will not have the ability to exercise Withdrawal Rights associated with the preferred shares underlying their depositary shares.

Bancolombia’s shareholders may exercise certain Withdrawal Rights under Colombian law as described herein. However, if you are a holder of Bancolombia ADSs, you will not have the ability to exercise the Withdrawal Rights in respect of the Share Exchange even if you oppose it, and the depositary will not take any action in respect of exercising these rights, even if requested to do so by Bancolombia ADS holders.

Risks Relating to Grupo Cibest Common Shares, Preferred Shares and American Depositary Shares

There has been no prior market for Grupo Cibest common shares, preferred shares or American depositary shares, and the Share Exchange may not result in an active or liquid market for Grupo Cibest common shares, preferred shares or American depositary shares.

Grupo Cibest has been formed as a new entity in connection with the Corporate Structure Changes. Accordingly, there will be no public market for Grupo Cibest common shares, preferred shares or ADSs prior to their issuance in connection with the Share Exchange. We expect that Grupo Cibest will list its common shares and preferred shares on the Colombian Securities Exchange at the time of the Share Exchange and will list the Grupo Cibest ADSs on the NYSE. However, an active public market in Grupo Cibest common shares, preferred shares or ADSs may not develop or be sustained after their issuance.

The initial market price of Grupo Cibest common shares, preferred shares and ADSs immediately after their issuance is expected to be determined, among other things, by the market prices of Bancolombia common shares, preferred shares and ADSs prior to the Share Exchange. The initial market price of Grupo Cibest common shares, preferred shares and ADSs may not be indicative of prices that will prevail in the trading market over a longer period. You may not be able to resell your Grupo Cibest common shares, preferred shares or ADSs at or above the initial market price. Market prices of Colombian companies’ stock have been and continue to be volatile. Volatility in the price of Grupo Cibest common shares, preferred shares and ADSs may be caused by factors outside of Grupo Cibest’s control and may be unrelated or disproportionate to Grupo Cibest’s operating results.

Ownership of Grupo Cibest common shares and preferred shares are restricted under Colombian law.

We are organized as a stock company (sociedad anónima). Our corporate existence is subject to the rules applicable to commercial companies, principally the Colombian Commercial Code which requires stock

 

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companies to have a minimum of five shareholders at all times and provides that no single shareholder may own 95% or more of our subscribed capital stock. Article 262 of the Colombian Commerce Code prohibits our subsidiaries from acquiring our stock. These rules will similarly be applicable to Grupo Cibest following the Corporate Structure Changes.

Under the Financial Statute, any transaction resulting in an individual or entity holding 10% or more of the outstanding shares of any Colombian financial institution, including transactions resulting in holding American depositary shares representing 10% or more of outstanding shares, is subject to the prior authorization of the SFC. This restriction will be indirectly applicable to Grupo Cibest as the parent of Bancolombia. The SFC must evaluate any proposed transaction resulting in a change of ownership of 10% or more of the outstanding shares of a Colombian financial institution based on the criteria and guidelines specified in the Financial Statute. Transactions entered into without the prior approval of the SFC are null and void and cannot be recorded in the institution’s stock ledger. These restrictions are equally applicable to Colombian and foreign investors. To the extent that you enter into a transaction that exceeds the applicable limits set forth above without the prior authorization of the SFC, such transaction will be null and void and cannot be recorded in our stock ledger.

A holder of Grupo Cibest ADSs will not be able to exercise Withdrawal Rights provided under Colombian law unless it has withdrawn the underlying Grupo Cibest preferred shares and become a direct shareholder.

In some limited circumstances, certain shareholders may exercise Withdrawal Rights under Colombian law. However, holders of Grupo Cibest ADSs will not be able to exercise such rights and the depositary will not do so on their behalf. The deposit agreement, among Grupo Cibest, The Bank of New York Mellon, as depositary (referred to herein as the “depositary” with respect to the Bancolombia ADSs and the Grupo Cibest ADSs), Grupo Cibest ADS holders and all other persons indirectly or beneficially holding Grupo Cibest ADSs (the “Grupo Cibest deposit agreement”) will not require the depositary to take any action in respect of exercising any such rights. In such a situation, holders of Grupo Cibest ADSs would have to withdraw the underlying preferred shares from the American depositary share facility (and incur charges relating to such withdrawal) and become Grupo Cibest’s direct shareholders prior to the date of the shareholders’ meeting at which the relevant transaction is to be approved, in order to exercise Withdrawal Rights under Colombian law.

A holder of Grupo Cibest preferred shares or ADSs may not be able to enforce a judgment of a foreign court against Grupo Cibest.

Grupo Cibest is a corporation with limited liability organized under the laws of Colombia. We expect that substantially all of its directors and officers will reside in Colombia, and all or a significant portion of the assets of such directors and officers and a substantial majority of Grupo Cibest’s assets will be located in Colombia. As a result, it may not be possible for holders of Grupo Cibest common shares, preferred shares or ADSs to effect service of process within the United States, or to enforce in the United States against Grupo Cibest or its directors and officers judgments obtained in United States courts based on the civil liability provisions of the federal securities laws of the United States. There may be doubt as to the enforceability in Colombia, either in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated on the U.S. federal securities laws, as the Supreme Court of Justice of Colombia (Corte Suprema de Justicia de Colombia), determines whether to enforce a U.S. judgment predicated on the U.S. securities laws through a procedural system known under Colombian law as exequatur.

Grupo Cibest’s bylaws contain an arbitration provision that provides for the exclusive jurisdiction of an arbitral tribunal to be seated at the Medellín Chamber of Commerce. The arbitration provision provides that any conflict arising between the shareholders and Grupo Cibest or between the shareholders and Grupo Cibest’s directors, or between the shareholders themselves which have not been resolved by direct agreement must be resolved by the arbitral tribunal. However, if the parties bring before the Colombian courts any conflict that arises between them, and none of them objects to the judicial proceeding, it will be understood that the parties have waived the arbitration clause in favor of the proceeding before the Colombian courts.

 

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THE EXTRAORDINARY GENERAL SHAREHOLDERS’ MEETING

Time, Place and Purpose

The Extraordinary General Shareholders’ Meeting is scheduled to be held at the main offices of Bancolombia located at Carrera 48 # 26 – 85, 11^th floor, Medellín, Colombia on April 23, 2025 at 10:00 a.m. local time. The Extraordinary General Shareholders’ Meeting is being held so that the holders of Bancolombia’s common shares and holders of Bancolombia’s preferred shares can consider and vote upon certain matters.

Specifically, Bancolombia shareholders will be asked to vote on the following matters, among others:

(1) The approval of Bancolombia’s unconsolidated financial statements as of June 30, 2024, for purposes of the Corporate Structure Changes set forth in items (2), (3) and (4);

(2) The approval of the Merger (fusión por absorción), including the Merger Agreement (an English translation of the Merger Agreement is included as Annex I to this prospectus);

(3) The approval of the Asset Distribution (escisión parcial por absorción), including the Asset Distribution Agreement (an English translation of the Asset Distribution Agreement is included as Annex II to this prospectus);

(4) The approval of the Bancolombia Distribution (escisión parcial por absorción), including the Bancolombia Distribution Agreement (an English translation of the Bancolombia Distribution Agreement is included as Annex III to this prospectus);

(5) The approval of the amendment of the requirements for the appointment of Members of the Board of Directors;

(6) The approval of the amendment of the Bylaws and the elimination of Board of Directors positions;

(7) The approval of the election of the Board of Directors for the period April 2025-March 2027;

(8) The approval of the compensation of the Board of Directors; and

(9) The approval of the change in the allocation of the occasional reserve and an extraordinary dividend proposal.

We refer to the items listed above in (1)—(4) as the “Corporate Structure Changes Approval Matters.”

Voting Rights, Record Date and Votes Required

Holders of common shares and holders of preferred shares recorded on Bancolombia’s shareholder register as of the date of the Extraordinary General Shareholders’ Meeting will be entitled to vote, either in person or by representative by granting powers of attorney in writing to authorized representatives, in accordance with Colombian law, at the Extraordinary General Shareholders’ Meeting. Holders of Bancolombia ADSs as of March 19, 2025 will be entitled to instruct the depositary as to how to vote the preferred shares represented by such holders’ Bancolombia ADSs at the Extraordinary General Shareholders’ Meeting. Each common share and each preferred share present or represented at the meeting will be entitled to one vote on the matters for which the shareholder is entitled to vote. The depositary sets the voting record date with respect to Bancolombia ADSs.

The approval of the Corporate Structure Changes Approval Matters at the Extraordinary General Shareholders’ Meeting will require (i) at least 50% plus one share of all shares issued by Bancolombia, including common and preferred shares, to be present at the Extraordinary General Shareholders’ Meeting, either in person or through a representative in accordance with Colombian law, and that (ii) at least 50% plus one share of all of Bancolombia’s common and preferred shares present at the Extraordinary General Shareholders’ Meeting, either in person or through a representative in accordance with Colombian law, vote in favor of the Corporate Structure Changes Approval Matters.

 

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The approval of items (5), (6), (7), (8) and (9) will require (i) at least 50% plus one share of all of Bancolombia’s common shares to be present at the Extraordinary General Shareholders’ Meeting, either in person or through a representative in accordance with Colombian law and that (ii) at least 50% plus one share of all of Bancolombia’s common shares present at the Extraordinary General Shareholders’ Meeting, either in person or through a representative in accordance with Colombian law, vote in favor of the approval of these items.

Share Ownership of Directors and Senior Management

As of October 31, 2024, the latest date for which such information is currently available, Juan David Escobar owns 88 common shares, and Bancolombia’s senior management and directors do not otherwise own common or preferred shares of Bancolombia.

However, senior management are paid 30% of their yearly bonus in units of a fund, managed by Protección S.A., which invests exclusively in common and preferred shares of Bancolombia. Each contribution has a vesting period of three (3) years after it is made, and the management decisions over those shares are made by Protección S.A., in its role as investment manager.

The board of directors are paid 30% of their compensation in units of a fund, managed by Protección S.A., which invests exclusively in common and preferred shares of Bancolombia. Each contribution has a vesting period of two (2) years after it is made, and the management decisions over those shares are made by Protección S.A., in its role as investment manager.

Voting by Representative for Holders of Bancolombia’s Common and Preferred Shares

Holders of Bancolombia’s common shares and holders of Bancolombia’s preferred shares may vote either in person at the Extraordinary General Shareholders’ Meeting or by representative by granting powers of attorney in writing to authorized representatives, in accordance with Colombian law. Bancolombia recommends sending a scanned copy of the power of attorney to asamblea@bancolombia.com.co, no later than April 22 at 3:00 p.m. Powers of attorney may not be granted to Bancolombia employees nor to any other person directly or indirectly related to the management of Bancolombia.

Voting Rights of Holders of Bancolombia ADSs

Holders of Bancolombia ADSs as of March 19, 2025 will be entitled to instruct the depositary as to how to vote the preferred shares represented by such holders’ Bancolombia ADSs at the Extraordinary General Shareholders’ Meeting. The Bank of New York Mellon will mail a voting instruction card to registered holders of Bancolombia ADSs as of March 19, 2025. Voting instructions may be delivered to the depositary by completing, signing and delivering a voting instruction card to the depositary prior to the applicable cut-off date. For a holder’s voting instructions to be valid, the depositary must receive the voting instruction card by no later than 12:00 p.m. (New York Time) on April 17, 2025. Persons that hold Bancolombia ADSs in accounts with brokers or other securities intermediaries should receive voting instructions from their broker or other securities intermediaries and must follow those instructions in order to give voting instructions. Although there is no guarantee, the depositary will try to vote the preferred shares represented by a holder’s Bancolombia ADSs in accordance with the instructions of the holder, as far as practical and subject to the requirements of Colombian law. Holders of Bancolombia ADSs will be able to change their voting instructions after they send their voting instruction card by sending a revised voting card to the depositary, or in accordance with the instructions received from their securities intermediaries. However, such revised voting instructions will not be valid unless they are received by the cutoff date and time specified on the voting card or in the instructions from the securities intermediary.

In accordance with the terms of the deposit agreement for the Bancolombia ADSs (the “Bancolombia deposit agreement”), The Bank of New York Mellon will, to the extent it does not receive timely voting instructions from a holder of Bancolombia ADSs, vote the shares represented by such unvoted Bancolombia ADSs in the same manner and in the same proportion on each matter as the holders of all of the outstanding preferred shares are voted on any particular matter.

 

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If you are a holder of Bancolombia ADSs and have further questions as to how to exercise your voting rights, you should contact the depositary at:

The Bank of New York Mellon

240 Greenwich Street, 8W, New York, NY 10286

www.adrbnymellon.com

Michael Vexler

Telephone: (+1) 212-815-2838

e-mail: michael.vexler@bnymellon.com

Angela Soares

Telephone: (+1) 212-815-5822

e-mail: angela.soares@bny.com

 

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THE CORPORATE STRUCTURE CHANGES

Background of the Corporate Structure Changes

Bancolombia’s board of directors has determined that it would be beneficial for shareholders of Bancolombia to vote on the Corporate Structure Changes Approval Matters and other matters identified in “The Extraordinary General Shareholders’ Meeting—Time, Place and Purpose.”

Accordingly, Bancolombia anticipates providing notice on March 21, 2025 of the calling of the Extraordinary General Shareholders’ Meeting at which holders of Bancolombia’s common shares and preferred shares will vote on the Corporate Structure Changes Approval Matters and other matters identified in “The Extraordinary General Shareholders’ Meeting—Time, Place and Purpose.”

Reasons for the Corporate Structure Changes

The purpose of the Corporate Structure Changes is to reorganize Bancolombia and its affiliates under a holding company structure. We expect that the establishment of a holding company structure will allow us to optimize our capital structure and capital allocation strategy, strengthen our financial and non-financial businesses, enhance strategic flexibility, increase visibility into the organization’s value and mitigate risk as a lending institution.

We believe that the establishment of a holding company structure will allow us to:

 

i)

Optimize our capital structure and capital allocation strategy: The Corporate Structure Changes will result in Grupo Cibest becoming the parent company of, in addition to Bancolombia, Banistmo, Banagrícola S.A., Grupo Agromercantil, and Nequi as well as other entities for which Bancolombia is currently the parent company. We expect that Grupo Cibest will be able to more efficiently allocate capital for each subsidiary according to the needs of each business. In addition, we anticipate that the improvements to the capital structure of Bancolombia and its affiliates resulting from the Corporate Structure Changes will facilitate opportunities for portfolio growth or the distribution of future dividends. In addition, and as part of the capital allocation strategy following the Corporate Structure Changes, the introduction of a holding company structure will allow for the possibility of share repurchase programs in the future (subject to shareholder approval), which are not possible under our current structure.

 

ii)

Strengthen our financial and non-financial businesses: Grupo Cibest will be able to continue exploring new non-financial business alternatives separately from regulated financial entities in order to maximize value for investors and continue contributing to the growth of the organization. Because Grupo Cibest, as an intermediate holding company according to Colombia Financial Conglomerate Law, will not have capital adequacy requirements, Grupo Cibest will have the flexibility to carry out non-financial businesses through entities that will not require additional capital, therefore optimizing common equity tier 1 capital. The holding company structure will provide the organization the flexibility required so that future strategic growth opportunities can be developed independently from regulated financial entities.

 

iii)

Enhance strategic flexibility: Future acquisitions made by Grupo Cibest will not have an impact on the regulatory capital of the regulated financial entities and will also shield the regulated financial entities from risks or additional capital requirements associated with these transactions. Additionally, the divestment or impairment of investments that are not directly owned by Bancolombia will not have an impact on Bancolombia’s solvency, providing Grupo Cibest with certain investment opportunities that are not available to Bancolombia currently.

 

iv)

Increase visibility into our value: We believe the Corporate Structure Changes will increase visibility into the real value of our organization and its various components. Currently, ascribing a value to our

 

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business is complicated by the fact that Bancolombia is both a parent company of financial and non-financial entities and an operating company at the same time. Banistmo, Banagrícola S.A. (parent of Banco Agrícola), Grupo Agromercantil (parent of BAM), Wenia, Nequi and certain of our other subsidiaries becoming separate subsidiaries of Grupo Cibest, rather than subsidiaries of Bancolombia, will facilitate the independent valuation of each of those entities as well as Bancolombia. We believe the Corporate Structure Changes will enhance how investors view and value our organization by making it easier for the market to understand and determine its fair value.

 

v)

Mitigate risk as a lending institution: The Corporate Structure Changes will mitigate risks to Bancolombia arising from its current regional exposure and multi-sector businesses. Because Bancolombia will cease to be the parent company for various non-Colombian entities, Bancolombia will be insulated from potential risks arising in those other jurisdictions. Additionally, the Corporate Structure Changes will provide for the separation of the financial businesses from most of the existing non-financial businesses, largely isolating Bancolombia’s statement of financial position from the risks associated with such non-financial businesses. Finally, Bancolombia’s solvency ratio will be subject to less exchange rate volatility as a result of the significant reduction of dollar-denominated investments in its statement of financial position.

As part of the Corporate Structure Changes, by means of the Share Exchange, each common share of Bancolombia will be exchanged for one common share of Grupo Cibest, and each preferred share of Bancolombia will be exchanged for one preferred share of Grupo Cibest, except for shares of Bancolombia held by Grupo Cibest. Holders of each Bancolombia ADS, which represents four preferred shares of Bancolombia, will receive one Grupo Cibest ADS, which will represent four preferred shares of Grupo Cibest.

In addition to the Share Exchange, Bancolombia will distribute certain assets, liabilities and equity of certain of its subsidiaries that will become direct subsidiaries of Grupo Cibest in the Corporate Structure Changes. Specifically, in connection with the Corporate Structure Changes, (i) Bancolombia Panama will distribute Banagrícola S.A. and Grupo Agromercantil to Sociedad Beneficiaria BC Panamá S.A.S., (ii) Sociedad Beneficiaria BC Panamá S.A.S. will merge into Bancolombia, (iii) Banca de Inversion will distribute certain assets, including Wenia, Wompi, Renting, Nequi and Negocios Digitales and other smaller investments in Internacional Ejecutiva de Aviación S.A., Puntos Colombia S.A.S. and Holding Bursátil Regional S.A, to Bancolombia and (iv) Bancolombia will distribute Banistmo, Grupo Agromercantil, Banagrícola S.A., Negocios Digitales, Nequi, Renting, Wompi and Wenia, as well as smaller investments in Puntos Colombia S.A.S., P.A. Cadenalco 75 Años, Protección S.A. and Internacional Ejecutiva de Aviación S.A.S. to Grupo Cibest. Bancolombia Panama, Bancolombia Puerto Rico Internacional Inc. (“Bancolombia Puerto Rico”), Fiduciaria Bancolombia S.A. (“Fiduciaria Bancolombia”), Valores Bancolombia S.A. Comisionista de Bolsa (“Valores Bancolombia”) and Banca de Inversion will remain wholly-owned subsidiaries of Bancolombia. Following the Bancolombia Distribution, Bancolombia will become a wholly-owned subsidiary of Grupo Cibest and Grupo Cibest will make an in kind contribution of 5.01% of Bancolombia’s common shares to four of its wholly-owned subsidiaries to comply with the Colombian Commercial Code which requires stock companies to have a minimum of five shareholders at all times and provides that no single shareholder may own 95% or more of a stock company’s subscribed capital stock.

 

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Bancolombia’s organizational structure prior to the Corporate Structure Changes is illustrated by the following chart:

 

 

Grupo Cibest’s organizational structure after giving effect to the Corporate Structure Changes is illustrated by the following chart:

 

 

We may decide to make further changes to Grupo Cibest’s organizational structure after completion of the Corporate Structure Changes as we seek to maximize management efficiency under the new holding company structure. For example, subsequent to the establishment of Grupo Cibest, we plan to review the conversion of certain of Bancolombia’s remaining subsidiaries to direct subsidiaries of Grupo Cibest, as it might be advantageous for future business development. In addition, new companies may be added as subsidiaries of Grupo Cibest as strategically necessary through acquisitions or other strategic transactions.

Upon the completion of the Corporate Structure Changes, Bancolombia will continue to be the issuer of its bonds that are outstanding at the time of the Corporate Structure Changes.

Bancolombia, its affiliates and subsidiaries will continue to offer the same products and services in the same manner as they are currently offered. Clients will continue to be serviced through the same existing channels, and products will maintain the same terms and conditions, without any change or modification.

 

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Certain Regulatory Capital Ratios and Financial Information

As discussed above, it is expected that the Corporate Structure Changes will help improve the capital structure of Bancolombia and its affiliates in order to maximize opportunities for portfolio growth or the distribution of future dividends and share repurchase programs.

Set forth below are (i) certain pro forma regulatory capital ratios and financial information giving effect to the Corporate Structure Changes on Bancolombia as of June 30, 2024 and (ii) certain estimated pro forma financial information for Grupo Cibest as of December 31, 2024 and for the year ended December 31, 2024.

Certain Bancolombia Pro Forma Regulatory Capital Ratios and Financial Information

On a pro forma basis giving effect to the Corporate Structure Changes, as of June 30, 2024, on a consolidated basis Bancolombia’s (i) primary capital to risk-weighted assets ratio (“Tier 1 Capital Ratio”) would have been 10.33% (as compared to 10.98% on a historical basis without giving effect to the Corporate Structure Changes), (ii) Solvency Ratio, which is calculated by the ordinary basic capital after deductions plus additional capital (tier 2) divided by the financial institution’s total risk-weighted assets and off-balance sheet items plus market risk and operational risk on a consolidated basis would have been 12.52% (as compared to 12.60% on a historical basis without giving effect to the Corporate Structure Changes).

Certain Grupo Cibest Estimated Pro Forma Financial Information

In addition, we project that on a pro forma basis giving effect to the Corporate Structure Changes, Grupo Cibest’s (i) “Double Leverage Ratio”, which is calculated as Grupo Cibest’s (on an individual basis) investments in subsidiaries plus goodwill and intangibles divided by its equity, as of December 31, 2024, will be approximately 103%, (ii) Tangible Common Equity Ratio (“TCE Ratio”), which is calculated as Grupo Cibest’s (on a consolidated basis) tangible common equity divided by its tangible assets, as of December 31, 2024, will be approximately 9%, (iii) the Debt / Net Income Ratio, which is calculated as Grupo Cibest’s (on an individual basis) total debt divided by its net income, as of December 31, 2024, will be approximately 0.6x and (iv) dividend coverage, which is calculated as Grupo Cibest’s (on an individual basis) total debt divided by dividends received from operating subsidiaries, for the year ended December 31, 2024 will be approximately 0.4x.

The foregoing historical pro forma and estimated pro forma Tier 1 Capital Ratio, Solvency Ratio, Double Leverage Ratio, TCE Ratio, Debt / Net Income Ratio and dividend coverage are presented for informational purposes only. Bancolombia’s pro forma Tier 1 Capital Ratio and Solvency Ratio are not necessarily indicative of what such measures would have been had the Corporate Structure Changes been completed as of June 30, 2024. In addition, Grupo Cibest’s estimated Double Leverage Ratio, TCE Ratio, Det / Net Income Ratio and dividend coverage for the year ended December 31, 2024 are forward-looking information, are subject to many risks and uncertainties and reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results and cause the above projections not to be achieved can be found under “Risk Factors” in this prospectus and elsewhere in the documents incorporated in this prospectus by reference. Readers are therefore cautioned to not place undue reliance on such data.

Exchange of Bancolombia S.A. Common Shares, Preferred Shares and American Depositary Shares Into Grupo Cibest Common Shares, Preferred Shares and American Depositary Shares

As part of the Share Exchange, each common share of Bancolombia will be exchanged for one common share of Grupo Cibest, and each preferred share of Bancolombia will be exchanged for one preferred share of Grupo Cibest, except for shares of Bancolombia held by Grupo Cibest. The holder of each Bancolombia ADS, which represents four preferred shares of Bancolombia, will receive one Grupo Cibest ADS, which will represent four preferred shares of Grupo Cibest.

 

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For common shares or preferred shares held by Bancolombia’s shareholders in book-entry form, Depósito Centralizado de Valores de Colombia—Deceval S.A. (“Deceval”) will cancel Bancolombia’s deposit eligibility once the Share Exchange is completed, and no action regarding a surrender will be required by the holders of such shares.

On the effective date of the Share Exchange, the newly issued Grupo Cibest common shares and preferred shares will be deposited with Deceval, which will be the clearing agency for such stock, and the Deceval will register the newly issued Grupo Cibest common shares and preferred shares in book-entry form in the names of the holders of Bancolombia’s common shares and preferred shares of record as of the effective date of the Share Exchange as consideration for the common shares and preferred shares of Bancolombia previously surrendered or cancelled.

When the Grupo Cibest preferred shares issued in respect of the Bancolombia preferred shares underlying the Bancolombia ADSs are credited to the account of The Bank of New York Mellon, as depositary, at Fiduciaria Bancolombia, Fiduciaria Bancolombia will notify The Bank of New York Mellon of such deposit. The depositary will deposit those Grupo Cibest ADSs under the Grupo Cibest deposit agreement. We describe such Grupo Cibest deposit agreement under “Description of Grupo Cibest American Depositary Shares.” After the Grupo Cibest preferred shares are deposited, the depositary will call for surrender of all Bancolombia ADSs to be exchanged on a one-for-one basis into Grupo Cibest ADSs. A form of the Grupo Cibest deposit agreement is filed as an exhibit to the registration statement on Form F-4 of which this prospectus forms a part.

Persons that hold Bancolombia ADSs in accounts with brokers or other securities intermediaries do not need to take any action and Grupo Cibest ADSs will automatically be credited to their accounts, replacing the Bancolombia ADSs. Persons that are registered holders of uncertificated Bancolombia ADSs also do not need to take any action. The depositary will deem their Bancolombia ADSs to have been surrendered and will register uncertificated Grupo Cibest ADSs in the names of those holders. The depositary will mail letters of transmittal to registered holders of certificated Bancolombia ADSs. Upon receipt from a registered holder of a signed letter of transmittal, together with the American Depositary Receipt or Receipts evidencing that holders Bancolombia ADSs, the depositary will register uncertificated Grupo Cibest ADSs in the name of that holder. The Bank of New York Mellon and Bancolombia have agreed to waive the payment of fees chargeable by the depositary to the holders of Bancolombia ADSs in connection with the Share Exchange.

Any taxes or governmental charges payable by holders of American depositary shares will be charged by The Depository Trust Company, or DTC, participants to the accounts of the beneficial owners of Bancolombia ADSs (as of the close of business on the day prior to the effective date of the Share Exchange), and will be remitted to The Bank of New York Mellon, as depositary for the Bancolombia ADSs, by DTC and its participants on behalf of the beneficial owners.

Governance Structure and Management Positions.

Upon completion of the Corporate Structure Changes, it is expected that the board of directors and senior management of Bancolombia will become the board of directors and senior management of Grupo Cibest. See “Management of Grupo Cibest.”

Conditions to the Completion of the Corporate Structure Changes

The completion of the Corporate Structure Changes is subject to satisfaction of the following conditions:

 

•

Approval by the SFC of the Corporate Structure Changes;

 

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•

Approval by the regulatory authorities in each of Panamá and Guatemala of the aspects of the Corporate Structure Changes relevant to such jurisdiction as determined by applicable law;

 

•

The approval of the listing of Grupo Cibest’s common shares and preferred shares in Colombia by the SFC and the Colombian Securities Exchange; and

 

•

The approval of the Corporate Structure Changes Approval Matters by the holders of Bancolombia common shares and preferred shares at the Extraordinary General Shareholders’ Meeting.

Under Colombian law, certain shareholders who oppose the Share Exchange may exercise certain Technical Study Rights and Withdrawal Rights. See “The Corporate Structure Changes—Technical Study Rights and Withdrawal Rights.”

Completion and Effectiveness of the Corporate Structure Changes

We will complete the Corporate Structure Changes when all the conditions to completion of the Corporate Structure Changes are satisfied, including the requisite approvals of the SFC, and other relevant regulatory authorities, which have been obtained as of February 28, 2025, and the approval of the Corporate Structure Changes Approval Matters by Bancolombia’s shareholders. See “The Corporate Structure Changes—Conditions to the Completion of the Corporate Structure Changes.” It is anticipated that the Corporate Structure Changes, including the Share Exchange, will become effective as soon as practicable, but in any case within 45 calendar days after the date of the Extraordinary General Shareholders’ Meeting.

U.S. Income Tax Consequences of the Share Exchange

The exchange of Bancolombia common shares, preferred shares or ADSs for corresponding interests in Grupo Cibest will generally not be a taxable transaction for U.S. tax purposes. A U.S. holder’s tax basis in Grupo Cibest common shares, preferred shares or ADSs received in the Share Exchange will generally equal the U.S. holder’s tax basis in the Bancolombia common shares, preferred shares or ADSs exchanged (subject to certain adjustments described under “Tax Considerations—United States Taxation”), and a U.S. holder’s holding period in Grupo Cibest common shares, preferred shares or ADSs received will generally include the holder’s holding period in Bancolombia common shares, preferred shares or ADSs exchanged. If you exercise your Withdrawal Rights for your common shares or preferred shares and we purchase such shares for cash, the transaction will be treated for U.S. tax purposes as a taxable sale of your shares. See “Tax Considerations—United States Taxation.”

Accounting Treatment of the Corporate Structure Changes

The Corporate Structure Changes involving Bancolombia’s shareholders is a transaction among entities under common control, for which there is no specifically applicable accounting standard under IFRS. In the absence of an IFRS accounting standard that specifically applies to a transaction, the management of the relevant company must use its judgment in developing and applying an accounting policy in accordance with paragraphs 10 and 11 of International Accounting Standard 8, Accounting Policies, Changes in Accounting Estimates and Errors. In making such judgment, the management of the company may consider similar accounting standards and accepted industry practices, and accordingly, we expect that the Corporate Structure Changes will be accounted for as a transaction among entities under common control applying the pooling of interests method of accounting. Upon the completion of the Corporate Structure Changes, Grupo Cibest will initially recognize the transferred assets and liabilities at their book value as of the date of the Corporate Structure Changes in its consolidated financial statements, and no goodwill will be recognized in connection with the transaction.

In addition, the unconsolidated financial statements of Bancolombia as of June 30, 2024 being presented for approval by Bancolombia’s common shareholders at the Extraordinary General Shareholders’ Meeting were prepared in accordance with Colombian Banking GAAP.

 

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Regulatory Matters

We have summarized below the material regulatory requirements affecting the Corporate Structure Changes, including the Share Exchange. Although we have not yet received all of the required approvals we discuss below, we anticipate that we will receive all required approvals prior to the initial notice to shareholders of the Extraordinary General Shareholders’ Meeting.

Under Colombian Law, we are required to obtain an approval for each transaction step of the Corporate Structure Changes in Colombia from the SFC. We submitted an application for approval of each transaction step of the Corporate Structure Changes in Colombia from the SFC on August 30, 2024. Through Resolution 0356 of February 28, 2025, the SFC resolved to: (i) not object to the merger of Sociedad Beneficiaria BC Panamá S.A.S., into Bancolombia; (ii) approve the distribution of certain assets and subsidiaries of Banca de Inversión Bancolombia to Bancolombia and (iii) approve the distribution of certain assets and subsidiaries of Bancolombia to Grupo Cibest. With the non-objection and the approvals issued by the SFC, all of the required regulatory authorizations regarding the Corporate Structure Changes have been obtained.

Under Panamanian Law, the distribution of Banagrícola S.A. and Grupo Agromercantil by Bancolombia Panama to Sociedad Beneficiaria BC Panamá S.A.S. and the change of ownership of Banistmo must be approved by the Superintendency of Banks in Panamá. We submitted an application for such approvals during the month of September 2024, and we have received all required authorizations from the Superintendency of Banks in Panamá on October 10, 2024. The Superintendency of Capital Markets in Panama, must be notified the changes in ownership of Valores Banitsmo. We expect to notify the Superintendency of Capital Markets in Panamá of the transaction shortly after the initial filing by Bancolombia with the SEC of the registration statement on Form F-4 of which this prospectus forms a part.

The authorities in El Salvador and Guatemala must approve the change in ownership of each entity registered in the relevant jurisdiction. We submitted applications for such approvals, and we have received all required authorizations from the authorities on January 27, 2025.

Stock Exchange Listings

We expect to apply to list Grupo Cibest’s common shares and preferred shares on the Colombian Securities Exchange and to list the Grupo Cibest ADSs on the NYSE. We expect Grupo Cibest’s common shares and preferred shares will be listed on the Colombian Securities Exchange under the symbols CIBEST and PFCIBEST, respectively, and Grupo Cibest ADSs will be listed on the NYSE under the symbol “CIB”.

Technical Study Rights and Withdrawal Rights

Under Colombian law, shareholders who own, individually or collectively, at least 5% of the outstanding shares of Bancolombia may exercise a Technical Study Right. An independent technical study, the SBI Opinion, has already been completed for the Corporate Structure Changes. Because an independent technical study has already been completed and the exchange ratio has been determined by such initial independent technical study, shareholders may not request a secondary independent technical study. The exchange ratio resulting from the independent technical study is binding on all shareholders, unless a Supermajority determines to change the exchange ratio. If a Supermajority determines to change the exchange ratio, shareholders who do not agree to the exchange ratio determined by the Supermajority will have the right to withdraw and have their shares purchased in cash at the price set forth in the independent technical study within the month following the date of the meeting.

The SBI Opinion

Bancolombia retained SBI in May 2024 to complete the technical study in connection with the Corporate Structure Changes. Under Colombian law, the independent technical study must be done by a national or foreign professional firm designated by mutual agreement between the interested entities. SBI was selected because SBI demonstrated the experience and independence requirements that are required in order to provide the technical study under Colombian law, including having no prior material relationship with Bancolombia in the past 2

 

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years. The suitability and independence of such firm to conduct the independent technical study is required to be assessed by the SFC. The suitability and independence of SBI is being assessed by the SFC. At the date of this prospectus, SBI has presented to the SFC documents that demonstrate their professional suitability, moral solvency and experience for their evaluation by the SFC.

Prior Relationships

During the two-year period prior to the date of the SBI Opinion, no material relationship existed between SBI or its affiliates or unaffiliated representatives and Bancolombia or any of its affiliates pursuant to which compensation was received by SBI.

Procedures

In connection with the preparation of its opinion, SBI reviewed the following documents: 1) the financial statements as of June 30, 2024 for Bancolombia and Banca de Inversion including the opinion issued by PWC Contadores y Auditores S.A.S. and the interim financial statements as of June 30, 2024 of Bancolombia Panama with an annex of the main balance sheet accounts and investments to be spun off using the same accounting standards and policies as those used for Bancolombia, (2) pro-forma financial statements for the divested, beneficiary and merged companies in each of the Transaction Steps, (3) the terms of exchange for the shareholders of Bancolombia and Banca de Inversion, (4) the notices submitted to the SFC for the merger of Sociedad Beneficiaria BC Panamá S.A.S. into Bancolombia, the distribution of certain assets by Banca de Inversion to Bancolombia and the distribution of certain assets by Bancolombia to Grupo Cibest and (5) the drafts of the Bancolombia Distribution Agreement and the Asset Distribution Agreement.

Methodology

In order to determine the value of the shares in the Transaction Steps, SBI utilized book value methodology in accordance with IAS27 issued by the International Accounting Standards Board which is to be used for changes in corporate structures. SBI used a cut-off of June 30, 2024.

Conclusions

The SBI Opinion concluded that the valuation methodology used and the corporate structure that will result from the Corporate Structure Changes will not cause any material improvement or impairment of assets to shareholders and thus, that the terms and results are reasonable and equitable. Additionally, SBI concluded that the Bancolombia Distribution would not result in any benefit or detriment to the shareholders of Bancolombia, as a whole or individually. The SBI Opinion also concluded that the Corporate Structure Changes does not result in any unfair profit for any person within the Corporate Structure Changes.

An English translation of the SBI Opinion dated August 26, 2024, which sets forth assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken in connection with the SBI Opinion, is included as Annex IV to this prospectus. You are encouraged to read the opinion in its entirety for a discussion of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the scope of the review undertaken by SBI in rendering the SBI Opinion. The SBI Opinion is not a recommendation as to how any shareholder should vote with respect to the Corporate Structure Changes or any other matter. The summary of the SBI Opinion set forth above is qualified in its entirety by reference to the full text of the opinion.

Bylaws of Grupo Cibest

The bylaws of Grupo Cibest are intended to be essentially equivalent to those of Bancolombia, with the rights of shareholders and corporate governance provisions remaining substantially the same. The only changes are those needed to reflect the status of Grupo Cibest as a holding company rather than an operating bank. The bylaws of Grupo Cibest will be filed as an exhibit to the registration statement on Form F-4 filed by Bancolombia with the SEC, of which this prospectus forms a part.

 

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INFORMATION ABOUT BANCOLOMBIA S.A.

For information about us, including an overview of Bancolombia’s business, organizational structure and property and a review of Bancolombia’s operations and financial results, see the 2023 Annual Report. The following information supplements certain information about Bancolombia appearing under the headings corresponding to the headings below in the 2023 Annual Report, as of June 30, 2024 and for the six-month periods ended June 30, 2024 and 2023 and for the three-month periods ended June 30, 2024 and 2023.

Selected Financial Data

Condensed Consolidated Interim Statement of Financial Position of Bancolombia and its Subsidiaries

As of June 30, 2024 and December 31, 2023

(Stated in millions of Colombian pesos)

 

		Note		June 30, 2024				December 31, 2023
ASSETS
Cash and cash equivalents		4			31,465,176				39,799,609
Financial assets investments		5.1			30,573,634				25,674,195
Derivative financial instruments		5.2			3,444,239				6,252,270
Financial assets investments and derivative financial instruments					34,017,873				31,926,465
Loans and advances to customers					268,108,682				253,951,647
Allowance for loans, advances and lease losses					(16,680,835	)			(16,223,103	)
Loans and advances to customers, net		6			251,427,847				237,728,544
Assets held for sale and inventories, net					993,902				906,753
Investment in associates and joint ventures					2,850,311				2,997,603
Investment properties		8			5,423,018				4,709,911
Premises and equipment, net		9			6,048,006				6,522,534
Right-of-use assets, lease					1,668,641				1,634,045
Goodwill and intangible assets, net		7			9,191,298				8,489,697
Deferred tax, net		10			796,955				685,612
Other assets, net					8,316,045				7,528,036
TOTAL ASSETS					352,199,072				342,928,809
LIABILITIES AND EQUITY
LIABILITIES
Deposits by customers		11			257,869,276				247,941,180
Interbank deposits and repurchase agreements and other similar secured borrowing					1,105,983				1,076,436
Derivative financial instruments		5.2			3,680,218				6,710,364
Borrowings from other financial institutions		12			12,938,759				15,648,606
Debt instruments in issue		13			16,107,674				14,663,576
Lease liabilities					1,817,740				1,773,610
Preferred shares					555,152				584,204
Current tax					695,645				164,339
Deferred tax, net		10			2,128,321				1,785,230
Employee benefit plans					895,682				882,954
Other liabilities		14			14,199,672				12,648,581
TOTAL LIABILITIES					311,994,122				303,879,080

 

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		Note				June 30, 2024				December 31, 2023
EQUITY
Share capital							480,914				480,914
Additional paid-in-capital							4,857,454				4,857,454
Appropriated reserves			16				22,632,835				20,044,769
Retained earnings							2,675,951				2,515,278
Net income attributable to equity holders of the Parent Company							3,103,246				6,116,936
Accumulated other comprehensive income, net of tax							5,469,515				4,074,161
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT COMPANY							39,219,915				38,089,512
Non-controlling interest							985,035				960,217
TOTAL EQUITY							40,204,950				39,049,729
TOTAL LIABILITIES AND EQUITY							352,199,072				342,928,809

The notes to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus form an integral part of these Condensed Consolidated Interim Financial Statements.

Condensed Consolidated Interim Statement of Income of Bancolombia and its Subsidiaries

For the six-month periods ended June 30, 2024 and 2023 and the three-month periods ended June 30, 2024 and 2023

(Stated in millions of Colombian pesos, except earnings per share stated in units of pesos)

 

		For the six-month periods ended June 30												Quarterly
		Note				2024				2023				2024				2023
Interest on loans and financial leases
Commercial							8,358,202				8,595,698				4,160,195				4,392,859
Consumer							4,340,212				5,175,769				2,188,049				2,583,004
Mortgage							2,032,457				2,112,444				1,019,405				996,325
Financial leases							1,872,129				1,899,985				917,304				971,439
Small business loans							104,983				87,351				51,279				41,868
Total interest income on loans and financial leases							16,707,983				17,871,247				8,336,232				8,985,495
Interest on debt instruments using the effective interest method			17.1				497,912				503,397				240,138				253,026
Total interest on financial instruments using the effective interest method							17,205,895				18,374,644				8,576,370				9,238,521
Interest income on overnight and market funds							126,418				103,627				64,595				48,436
Interest and valuation on financial instruments			17.1				708,556				(20,467	)			302,510				(212,274	)
Total interest and valuation on financial instruments							18,040,869				18,457,804				8,943,475				9,074,683
Interest expenses			17.2				(7,695,965	)			(8,166,276	)			(3,756,886	)			(4,141,013	)

 

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		For the six-month periods ended June 30										Quarterly
		Note		2024				2023				2024				2023
Net interest margin and valuation on financial instruments before impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments					10,344,904				10,291,528				5,186,589				4,933,670
Credit impairment charges on loans, advances and financial leases, net		6			(2,957,924	)			(4,102,779	)			(1,623,061	)			(2,058,130	)
Credit recovery (impairment) for other financial instruments, net					24,161				(25,065	)			4,278				(24,070	)
Total credit impairment charges, net					(2,933,763	)			(4,127,844	)			(1,618,783	)			(2,082,200	)
Net interest margin and valuation on financial instruments after impairment on loans and financial leases and off balance sheet credit instruments and other financial instruments					7,411,141				6,163,684				3,567,806				2,851,470
Commissions income		17.3			3,699,938				3,451,440				1,948,046				1,767,456
Commissions expenses		17.3			(1,669,168	)			(1,451,846	)			(918,235	)			(769,458	)
Total commissions, net					2,030,770				1,999,594				1,029,811				997,998
Other operating income		17.4			1,370,413				2,109,605				741,084				1,119,725
Dividends and net income on equity investments		17.5			(140,768	)			228,906				(225,575	)			112,270
Total operating income, net					10,671,556				10,501,789				5,113,126				5,081,463
Operating expenses
Salaries and employee benefits		18.1			(2,683,347	)			(2,676,774	)			(1,348,396	)			(1,353,981	)
Other administrative and general expenses		18.2			(2,437,740	)			(2,339,859	)			(1,259,988	)			(1,198,981	)
Taxes other than income tax		18.2			(780,826	)			(694,729	)			(389,932	)			(346,834	)
Impairment, depreciation and amortization		18.3			(564,675	)			(531,273	)			(289,733	)			(271,177	)
Total operating expenses					(6,466,588	)			(6,242,635	)			(3,288,049	)			(3,170,973	)
Profit before income tax					4,204,968				4,259,154				1,825,077				1,910,490
Income tax		10			(1,058,203	)			(1,012,699	)			(363,323	)			(426,328	)
Net income					3,146,765				3,246,455				1,461,754				1,484,162
Net income attributable to equity holders of the Parent Company					3,103,246				3,177,268				1,439,774				1,460,491
Non-controlling interest					43,519				69,187				21,980				23,671
Basic and Diluted earnings per share to common shareholders, stated in units of Colombian pesos		19			3,256				3,333				1,511				1,533

The notes to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus form an integral part of these Condensed Consolidated Interim Financial Statements.

 

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SUPERVISION AND REGULATION OF GRUPO CIBEST

Principal Regulations Applicable to Holding Companies

As an issuer of securities traded on the Colombian Securities Exchange, Grupo Cibest will be subject to the control of the SFC, under Law 964 of 2005 and Decree 2555 of 2010. This oversight includes the verification of compliance with all local laws related to corporate governance of issuers, which includes, among others, disclosure of certain information to the market, periodic reports to be furnished to the SFC and the market, as well as minimum corporate governance requirements.

Additionally, according to Law 1870 of 2017, Grupo Cibest will be a part of the conglomerate defined as the Sura-Bancolombia financial conglomerate, which includes all supervised entities in Colombia, all intermediate holding companies and all foreign financial entities for Sura and Bancolombia, which involves cross-border consolidated supervision based on four pillars: (i) integrated risk management, (ii) prudential requirements, (iii) cooperation and information exchange and (iv) protocols for cross-border investment management.

Once the Corporate Structure Changes are completed, Grupo Cibest’s financial subsidiaries, including banks, stock brokerage firms and trust companies, will be subject to the regulations of the jurisdictions in which they operate, and to the oversight of the local authorities. These regulations do not extend automatically to Grupo Cibest, as it is not a financial institution.

Principal Regulations Applicable to Bancolombia and Grupo Cibest’s Other Regulated Subsidiaries

For a description of regulations applicable to Bancolombia in Colombia and regulated financial entities in other jurisdictions that will be subsidiaries of Grupo Cibest, see “Item 4.B.8 Business Overview—Supervision and Regulation” in the 2023 Annual Report, which is incorporated by reference into this prospectus.

 

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DESCRIPTION OF BANCOLOMBIA’S CAPITAL STOCK

For a description of the material terms of Bancolombia’s capital stock under its bylaws currently in effect, and of certain relevant provisions of Colombian corporate law, see “Item 10.B. Memorandum and Articles of Association” in the 2023 Annual Report, which is incorporated by reference into this prospectus.

 

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DESCRIPTION OF GRUPO CIBEST’S CAPITAL STOCK

The following description of Grupo Cibest’s common and preferred shares is a summary of the material terms of Grupo Cibest’s bylaws and Colombian corporate law regarding Grupo Cibest’s common and preferred shares and the holders thereof. They may not contain all of the information that is important to you. To understand them fully, you should read the form of Grupo Cibest’s bylaws which are filed as an exhibit to the registration statement on Form F-4 filed by Bancolombia with the SEC, of which this prospectus forms a part. The following description is qualified in its entirety by reference to Grupo Cibest’s bylaws and applicable law.

Capital Stock

Total Shares. Upon the completion of the Corporate Structure Changes, Grupo Cibest’s authorized capital stock will be COP 700 billion divided into 1,400,000,000 shares of a par value of COP 500 each, which must belong to one of the following classes: (i) common shares, (ii) privileged shares; and (iii) shares with preferred dividend and no voting rights (“preferred shares”). Pursuant to Articles 5 and 8 of the bylaws, all shares issued will have the same par value.

Common Shares. Following completion of the Corporate Structure Changes, we anticipate that 509,704,584 common shares of Grupo Cibest will be outstanding.

Preferred Shares. Following completion of the Corporate Structure Changes, we anticipate that 452,122,416 preferred shares of Grupo Cibest will be outstanding.

Stock Options. Bancolombia does not currently have any stock options outstanding and following completion of the Corporate Structure Changes, no stock options of Grupo Cibest will be outstanding.

Registration and Transfer

The Grupo Cibest common and preferred shares will be evidenced by a dematerialized global certificate held for custody by Deceval, in registered form without dividend coupons attached. Grupo Cibest will maintain a stock registry through Deceval and only those holders listed in that stock registry as holders of common or preferred shares will be recognized by Grupo Cibest as holders of common or preferred shares. Each registration or transfer of common or preferred shares will be effected only by the book entry record on such stock registry. Any such registration will be effected without charge to the person requesting such registration, but subject to payment by such person of any taxes, stamp duties or other governmental charges payable in connection therewith. The Bank of New York Mellon, which will act as depositary for the Grupo Cibest American depositary receipt (or “ADR”) facility, or the depositary’s nominee shall be the registered holder on behalf of beneficial owners of Grupo Cibest ADSs representing the preferred shares, which will be deposited with Fiduciaria Bancolombia, as agent of the depositary (the “custodian”).

In general, transfers of shares of listed companies in Colombia are required to be effected through the Colombian Securities Exchange. The following transfers, however, are not required to be effected through the Colombian Securities Exchange: (i) transfers between shareholders that have the same beneficial owner provided that such condition is previously evidenced to the SFC; (ii) transfers by operation of law (such as inheritance, liquidation of companies or judicial decisions, among others); (iii) transfers as payment in kind provided that a one year pre-existence of the payment obligation is evidenced to the SFC; and (iv) transfers whose amount do not exceed the value of 66,000 Unidades de Valor Real (or “UVRs”, a Colombian inflation-adjusted monetary index calculated by the Board of Directors of the Central Bank of Colombia and generally used for pricing home-mortgage loans; as of June 30, 2024 approximately U.S.$5,936). Neither Grupo Cibest nor the depositary will be liable for any failure to comply with the ownership limitation or failure to respond to any request for information to determine compliance with the ownership limitation.

 

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Colombian securities regulations forbid a shareholder to prearrange transactions on shares of listed companies unless the prearrangement is disclosed publicly and to the SFC at least one month in advance.

Under the Financial Statute, any transaction resulting in an individual or entity holding 10% or more of the outstanding shares of any Colombian financial institution, including transactions resulting in holding American depositary shares representing 10% or more of outstanding shares, is subject to the prior authorization of the SFC. This restriction will be indirectly applicable to Grupo Cibest as the parent of Bancolombia. The SFC must evaluate any proposed transaction resulting in a change of ownership of 10% or more of the outstanding shares of a Colombian financial institution based on the criteria and guidelines specified the Financial Statute. Transactions entered into without the prior approval of the SFC are null and void and cannot be recorded in the institution’s stock ledger. These restrictions are equally applicable to Colombian and foreign investors. To the extent that you enter into a transaction that exceeds the applicable limits set forth above without the prior authorization of the SFC, such transaction will be null and void and cannot be recorded in our stock ledger.

Voting Rights

Common Shares.

The holders of common shares will be entitled to vote on the basis of one vote per share on any matter subject to approval at a general shareholders’ meeting. These general meetings may be ordinary meetings or extraordinary meetings.

Ordinary general shareholders’ meetings will occur at least once a year but no later than three months after the end of the prior fiscal year, for the following purposes: (i) to consider the approval of Grupo Cibest’s annual report, including the financial statements for the preceding fiscal year; (ii) to review the annual report prepared by the external auditor; (iii) to determine the compensation for the members of the board of directors, and the external auditor (the external auditor compensation will be determined every two years); (iv) to elect, every two years, the members of the board of directors and the external auditor; and (v) to determine the dividend policy and the allocation of profits, if any, of the preceding fiscal year, as well as any retained earnings from previous fiscal years.

Extraordinary general shareholders’ meetings may take place when duly called for a specified purpose or purposes. The general shareholders’ meeting may validly meet without prior notice, when holders representing all outstanding shares are duly represented at the meeting.

Quorum for both ordinary and extraordinary general shareholders’ meetings to be convened at first call will require the presence of two or more shareholders representing at least half plus one of the outstanding shares entitled to vote at the relevant meeting. If a quorum is not present, a subsequent meeting will be called at which the presence of one or more holders of shares entitled to vote at the relevant meeting will constitute a quorum, regardless of the number of shares represented.

General shareholders’ meetings may be called by the board of directors, the CEO or the external auditor of Grupo Cibest.

In addition, two or more shareholders representing at least 10% of the outstanding shares will have the right to request that a general shareholders’ meeting be convened. Notice of ordinary meetings and extraordinary meetings convened to approve fiscal year-end financial statements, the increases of authorized capital, the reduction of the outstanding capital, the merger, spin-off or sale of more than 25% of the assets, liabilities and contracts, and the election of members of the board, will be required to be published in one newspaper of wide circulation at Grupo Cibest’s principal place of business at least 15 business days prior to such meeting. Notice of other meetings will be required to be published in one newspaper of wide circulation at Grupo Cibest’s principal place of business at least 5 calendar days prior to such meeting listing the matters to be addressed at such meeting.

 

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Except when Colombian law or Grupo Cibest’s bylaws will require a special majority, action may be taken at a general shareholders’ meeting by the vote of two or more shareholders representing a majority of shares represented at the meeting. Pursuant to Colombian law and/or Grupo Cibest’s bylaws, special majorities will be required to adopt the following corporate resolutions:

 

(i)

a favorable vote of at least 70% of the shares represented at a general shareholders’ meeting will be required to approve the issuance of shares without preemptive rights available for shareholders;

 

(ii)

a favorable vote of at least 78% of the holders of represented common shares to decide not to distribute as dividend at least 50% of the annual net profits of any given fiscal year. If the amount of the reserves exceeds one hundred per cent (100%) the subscribed capital, the previous percentage will be raised to seventy per cent (70%);

 

(iii)

a favorable vote of at least 80% of the holders of represented common shares and 80% of the holders of outstanding preferred shares to approve the payment of the dividend in shares; and

 

(iv)

a favorable vote of at least 70% of the holders of common shares and of outstanding preferred shares to effect a decision to impair the conditions or rights established for such preferred shares, or a decision to convert those preferred shares into common shares.

Preferred Shares.

The holders of preferred shares will not be entitled to receive notice of, attend to or vote at any general shareholders’ meeting except as described below.

The holders of preferred shares will be entitled to vote on the basis of one vote per share at any shareholders’ meeting, whenever a shareholders’ vote is required on the following matters, in addition to those indicated above:

 

(i)

When voting amendments that could impair the preferred shares’ rights, or the conversion of the preferred shares to common shares, a favorable vote of a minimum of seventy percent (70%) of the holders of outstanding common shares and of outstanding preferred shares.

 

(ii)

When voting the anticipated dissolution, merger or transformation of the corporation or change of its corporate purpose.

 

(iii)

When the preferred dividend has not been fully paid during two consecutive fiscal years. In this event, holders of such shares will retain their voting rights until the corresponding dividends have been fully paid to them.

 

(iv)

When the general shareholders’ meeting orders the payment of dividends with issued shares. In this event a favorable vote of at least 80% of the holders of represented common shares and 80% of the holders of outstanding preferred shares shall be required.

 

(v)

if at the end of a fiscal year, Grupo Cibest’s profits are not enough to pay the minimum dividend and the Superintendence of Finance, by its own decision or upon request of holders of at least ten percent (10%) of preferred shares, determines that benefits were concealed or shareholders were misled with regard to benefits received from Grupo Cibest by Grupo Cibest’s directors or officers decreasing the profits to be distributed, the Superintendence of Finance may resolve that holders of preferred shares may participate with speaking and voting rights at the general shareholders’ meeting, in the terms established by law.

 

(vi)

When the registration of shares at the Colombian Securities Exchange or at the Superintendence of Finance, is suspended or canceled. In this event, voting rights will be maintained until the irregularities that resulted in such cancellation or suspension are resolved.

 

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Grupo Cibest must cause a notice of any meeting at which holders of preferred shares are entitled to vote to be mailed to each record holder of preferred shares. Each notice will be required to include a statement stating: (i) the date of the meeting; (ii) a description of any resolution to be proposed for adoption at the meeting on which the holders of preferred shares are entitled to vote; and (iii)  instructions for the delivery of proxies.

Dividends

Common Shares.

Once the unconsolidated financial statements are approved by the general shareholders meeting, the appropriation for the payment of taxes of the corresponding taxable year has been made, and the transfers to the reserves have been performed, then they can determine the allocation of distributable profits, if any, of the preceding year.

Under the Colombian Commercial Code, a company must distribute at least 50% of its annual net profits to all shareholders, payable in cash, or as determined by the shareholders, within a period of one year following the date on which the shareholders determine the dividends. If the total amount segregated in all reserves of a company exceeds its outstanding capital, this percentage is increased to 70%. The minimum common stock dividend requirement of 50% or 70%, as the case may be, may be waived by a favorable vote of the holders of 78% of a company’s common stock present at the meeting. Under Colombian law and Grupo Cibest’s bylaws annual net profits are to be applied as follows:

 

(i)

first, an amount equivalent to 10% of net profits is segregated to build a legal reserve until that reserve is equal to at least 50% of Grupo Cibest’s paid-in capital;

 

(ii)

second, payment of the minimum dividend on the preferred shares; and

 

(iii)

third, allocation of the net profits is determined by the holders of a majority of the common shares entitled to vote on the recommendation of the board of directors and the President and may, subject to further reserves required by the bylaws, be distributed as dividends.

Under Grupo Cibest’s bylaws, the dividends payable to the holders of common shares cannot exceed the dividends payable to holders of the preferred shares. Grupo Cibest’s bylaws will require Grupo Cibest to maintain a reserve fund equal to 50% of paid-in capital. All common shares that are fully paid-in and outstanding at the time a dividend or other distribution is declared will be entitled to share equally in that dividend or other distribution.

The general shareholders’ meeting may allocate a portion of the profits to welfare, education or civic services, or to support economic organizations of Grupo Cibest’s employees.

Preferred Shares.

Holders of preferred shares will be entitled to receive dividends based on the net profits of the preceding fiscal year, after deducting losses affecting the capital and once the amount that shall be legally set apart for the legal reserve has been deducted, but before creating or accruing for any other reserve, of a non-cumulative minimum preferred dividend equal to one percent (1%) yearly of the subscription price of the preferred share, provided this dividend is higher than the dividend assigned to common shares. If this is not the case, the dividend will be increased to an amount that is equal to the per share dividend on the common shares. The dividend received by holders of common shares may not be higher than the dividend assigned to preferred shares.

Payment of the preferred dividend will be made at the time and in the manner established in the general shareholders’ meeting and with the priority indicated by Colombian law.

 

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In the event that the holders of preferred shares have not received the minimum dividend for a period in excess of two consecutive fiscal years, they will acquire certain voting rights. See “Description of Grupo Cibest’s Capital Stock—Voting Rights—Preferred Shares.”

General Considerations Relating to Dividends.

In the general shareholders’ meeting, shareholders will determine the effective date, the system and the place for payment of dividends, including payment in installments.

Dividends declared on the common shares and the preferred shares will be payable to the record holders of those shares, as they are recorded on Grupo Cibest’s stock registry, on the appropriate record dates as determined by the Colombian Stock Exchange.

Any dividend in shares payable by Grupo Cibest will be paid in common shares to the holders of common shares and in preferred shares to the holders of preferred shares. Nonetheless, shareholders at the general shareholders’ meeting may authorize the payment in common shares to all shareholders.

In accordance with Colombian law, any dividend in shares will require the approval of at least 80% of the shares represented at the shareholders’ meeting where such vote is taking place. In the event that such voting majority is not obtained, shareholders may individually elect to receive a stock dividend or a cash dividend.

Preemptive Rights and Other Anti-Dilution Provisions

Under Grupo Cibest’s bylaws, the holders of common shares will determine in their meeting the amount of authorized capital stock, and the board of directors will have the power to (a) order the issuance and regulate the terms of subscription of common shares up to the total amount of authorized capital stock and (b) regulate the issuance of shares with rights to a preferential dividend but without the right to vote, when expressly delegated at the general shareholders’ meeting. The issuance of preferred shares will always be required to be first approved at the general shareholders’ meeting, which will determine the nature and extent of any privileges, according to the bylaws and Colombian law.

Grupo Cibest’s bylaws and Colombian law will require that, whenever Grupo Cibest issues new shares of any outstanding class, it must offer the holders of each class of shares the right to purchase a number of shares of such class sufficient to maintain their existing percentage ownership of the aggregate capital stock of Grupo Cibest. These rights are called preemptive rights. See Item 3. “Key Information—D. Risk Factors—Preemptive rights may not be available to holders of American Depositary Receipts (“ADRs”) evidencing ADSs” in the 2023 Annual Report.

Shareholders at a general meeting of shareholders may suspend preemptive rights with respect to a particular capital increase by a favorable vote of at least seventy per cent (70)% of the shares represented at the meeting. Preemptive rights will be required to be exercised within the period stated in the share placement terms of the increase, which cannot be shorter than 15 business days following the publication of the notice of the public offer of that capital increase. From the date of the notice of the share placement terms, preemptive rights may be transferred separately from the corresponding shares.

Liquidation Rights

Grupo Cibest will be dissolved if certain events take place, including the following:

 

•

Grupo Cibest’s term of existence, as stated in the bylaws, expires without being extended by the shareholders prior to its expiration date;

 

•

by decision of the general shareholders’ meeting; and

 

•

in certain other events expressly provided for by Colombian law and Grupo Cibest’s bylaws.

 

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Upon dissolution, a liquidator must be appointed by the general shareholders’ meeting to wind up its affairs.

Upon liquidation, holders of fully paid preferred shares will be entitled to receive in Colombian pesos, out of the surplus assets available for distribution to shareholders, pari passu with any of the other shares ranking at that time pari passu with the preferred shares, an amount equal to the nominal value of those preferred shares before any distribution or payment may be made to holders of common shares or any other shares at that time ranking junior to the preferred shares with regard to participation in Grupo Cibest’s surplus assets. If, upon any liquidation, assets that are available for distribution among the holders of preferred shares and liquidation parity shares are insufficient to pay in full their respective liquidation preferences, then those assets will be distributed among those holders pro-rata in accordance with the respective liquidation preference amounts payable to them.

Subject to the preferential liquidation rights of holders of preferred shares, all fully paid common shares will be entitled to participate equally in any distribution upon liquidation. Partially paid common shares must participate in a distribution upon liquidation in the same proportion that those shares have been paid at the time of the distribution.

To the extent there are surplus assets available for distribution after full payment to the holders of common shares of the nominal value of the common shares, the surplus assets will be distributed among all holders of shares of capital stock pro-rata in accordance with their respective holdings of shares.

Rights of Dissenting Shareholders

Under the Colombian Commerce Code, shareholders are bound by all general decisions made at shareholders’ meetings, except that dissenting or shareholders absent from a shareholders’ meeting have redemption rights when a merger, transformation or spin-off is approved at such shareholders’ meeting that impairs the economics rights of the shareholders or would increase their level of liability. Additionally, in the event Grupo Cibest were to withdraw its listing from the stock exchange, dissenting or absent shareholders have redemption rights. Further, shareholders who do not agree with decisions made at shareholders’ meetings have the right to challenge decisions that do not conform to requirements under Colombian law or the bylaws.

Other Provisions

Limits on Purchases and Sales of Capital Stock by Related Parties

Pursuant to the Colombian Commerce Code, the members of Grupo Cibest’s board of directors and certain of Grupo Cibest’s principal executive officers (administradores) may not, directly or indirectly, buy or sell shares of Grupo Cibest’s capital stock while they hold their positions, except when dealing with nonspeculative operations and in that case they need to obtain the prior authorization of the board of directors passed with the vote of two-thirds of its members (excluding, in the case of transactions by a director, such director’s vote) or when deemed relevant by the board of directors of Grupo Cibest with the authorization of the shareholders’ meeting the affirmative vote of the ordinary majority foreseen in the bylaws, excluding the vote of the petitioner.

Redemption

Under Colombian law, Grupo Cibest may repurchase shares of its capital stock, as long as any repurchases are approved at a shareholders’ meeting and the repurchases meet certain Colombian law requirements.

Limitations on the Rights to Hold Securities

There are no limitations in Grupo Cibest’s bylaws or Colombian law on the rights of Colombian residents or foreign investors to own the shares of Grupo Cibest, or on the right to hold or exercise voting rights with respect to those shares.

 

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Restrictions on Change of Control Mergers, Acquisitions or Corporate Restructuring of the Company

Under Colombian law and Grupo Cibest’s bylaws, the general shareholders’ meeting has full and exclusive authority to approve any corporate restructuring including, mergers or spin-offs upon authorization by the Colombian Superintendence of Finance.

Ownership Threshold Requiring Public Disclosure

Grupo Cibest will be required to disclose to the Superintendence of Finance at the end of each fiscal quarter the names of the shareholders of Grupo Cibest, indicating at least, the twenty-five shareholders with the highest number of shares.

Colombian securities regulations set forth the obligation to disclose any material event or relevant fact. Any transfer of shares equal to or greater than 5% of Grupo Cibest’s capital stock or any person acquiring a percentage of shares that would make him the beneficial owner of 5% or more of Grupo Cibest’s capital stock, is a material event, and therefore, must be disclosed to the market through the channels set forth by the Superintendence of Finance.

Changes in the Capital of the Company

There will be no conditions in Grupo Cibest’s bylaws governing changes in Grupo Cibest’s capital stock that are more stringent than those required under Colombian law.

 

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DESCRIPTION OF GRUPO CIBEST AMERICAN DEPOSITARY SHARES

Unless otherwise indicated, all references in this section to “American Depositary Shares” or “ADSs” are to Grupo Cibest American depositary shares and all references to “shares” are to Grupo Cibest preferred shares.

American Depositary Shares

The Bank of New York Mellon, as depositary, will register and deliver Grupo Cibest ADSs. Each Grupo Cibest ADS will represent four preferred shares (or a right to receive four preferred shares) deposited with Fiduciaria Bancolombia, as custodian for the depositary in Colombia. Each Grupo Cibest ADS will also represent any other securities, cash or other property that may be held by the depositary. The deposited shares together with any other securities, cash or other property held by the depositary are referred to as the deposited securities. The depositary’s office at which the Grupo Cibest ADSs will be administered and its principal executive office are located at 240 Greenwich Street, New York, New York 10286.

You may hold Grupo Cibest ADSs either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of Grupo Cibest ADSs, registered in your name, or (ii) by having uncertificated Grupo Cibest ADSs registered in your name, or (B) indirectly by holding a security entitlement in Grupo Cibest ADSs through your broker or other financial institution that is a direct or indirect participant in the DTC. If you hold Grupo Cibest ADSs directly, you are a registered Grupo Cibest ADS holder, also referred to as a Grupo Cibest ADS holder. This description assumes you are a Grupo Cibest ADS holder. If you hold the Grupo Cibest ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of Grupo Cibest ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

Registered holders of uncertificated Grupo Cibest ADSs will receive statements from the depositary confirming their holdings.

As a Grupo Cibest ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Colombian law and a company’s bylaws govern shareholder rights. The depositary will be the holder of the shares underlying your Grupo Cibest ADSs. As a registered holder of Grupo Cibest ADSs, you will have Grupo Cibest ADS holder rights. The new Grupo Cibest deposit agreement to be entered into among Grupo Cibest, the depositary, ADS holders and all other persons indirectly or beneficially holding Grupo Cibest ADSs will set out Grupo Cibest ADS holder rights as well as the rights and obligations of the depositary. New York law will govern the Grupo Cibest deposit agreement and the Grupo Cibest ADSs.

The following is a summary of the material provisions of the new Grupo Cibest deposit agreement. For more complete information, you should read the entire Grupo Cibest deposit agreement and the form of ADR. A form of the Grupo Cibest deposit agreement is filed as an exhibit to the registration statement on Form F-4 of which this prospectus forms a part.

Dividends and Other Distributions

How will you receive dividends and other distributions on the shares?

The depositary has agreed to pay or distribute to Grupo Cibest ADS holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, upon payment or deduction of its fees and expenses. You will receive these distributions in proportion to the number of shares your Grupo Cibest ADSs represent.

 

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Cash. The depositary will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the Grupo Cibest deposit agreement allows the depositary to distribute the foreign currency only to those Grupo Cibest ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the Grupo Cibest ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest. Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See “Tax Considerations – Taxation of Distributions.” The depositary will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some of the value of the distribution.

Shares. The depositary may distribute additional Grupo Cibest ADSs representing any shares we distribute as a dividend or free distribution. The depositary will only distribute whole Grupo Cibest ADSs. It will sell shares which would require it to deliver a fraction of a Grupo Cibest ADS (or Grupo Cibest ADSs representing those shares) and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional Grupo Cibest ADSs, the outstanding Grupo Cibest ADSs will also represent the new shares. The depositary may sell a portion of the distributed shares (or Grupo Cibest ADSs representing those shares) sufficient to pay its fees and expenses in connection with that distribution.

Rights to purchase additional shares. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary may (i) exercise those rights on behalf of Grupo Cibest ADS holders, (ii) distribute those rights to Grupo Cibest ADS holders or (iii) sell those rights and distribute the net proceeds to Grupo Cibest ADS holders, in each case after deduction or upon payment of its fees and expenses. To the extent the depositary does not do any of those things, it will allow the rights to lapse. In that case, you will receive no value for them. The depositary will exercise or distribute rights only if we ask it to and provide satisfactory assurances to the depositary that it is legal to do so. If the depositary will exercise rights, it will purchase the securities to which the rights relate and distribute those securities or, in the case of shares, new Grupo Cibest ADSs representing the new shares, to subscribing Grupo Cibest ADS holders, but only if Grupo Cibest ADS holders have paid the exercise price to the depositary. U.S. securities laws may restrict the ability of the depositary to distribute rights or Grupo Cibest ADSs or other securities issued on exercise of rights to all or certain Grupo Cibest ADS holders, and the securities distributed may be subject to restrictions on transfer.

Other Distributions. The depositary will send to Grupo Cibest ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case Grupo Cibest ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than Grupo Cibest ADSs) to Grupo Cibest ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution. U.S. securities laws may restrict the ability of the depositary to distribute securities to all or certain Grupo Cibest ADS holders, and the securities distributed may be subject to restrictions on transfer.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any Grupo Cibest ADS holders. We have no obligation to register Grupo Cibest ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of Grupo Cibest ADSs, shares, rights or anything else to Grupo Cibest ADS holders. This means that you may not receive the distributions we make on our shares or any value for them if it is illegal or impractical for us to make them available to you.

 

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Deposit, Withdrawal and Cancellation

How are Grupo Cibest ADSs issued?

The depositary will deliver Grupo Cibest ADSs if you or your broker deposits shares or evidence of rights to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of Grupo Cibest ADSs in the names you request and will deliver the Grupo Cibest ADSs to or upon the order of the person or persons that made the deposit.

How can Grupo Cibest ADS holders withdraw the deposited securities?

You may surrender your Grupo Cibest ADSs to the depositary for the purpose of withdrawal. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the shares and any other deposited securities underlying the Grupo Cibest ADSs to the Grupo Cibest ADS holder or a person the Grupo Cibest ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible. However, the depositary is not required to accept surrender of Grupo Cibest ADSs to the extent it would require delivery of a fraction of a deposited share or other security. The depositary may charge you a fee and its expenses for instructing the custodian regarding delivery of deposited securities.

How do Grupo Cibest ADS holders interchange between certificated Grupo Cibest ADSs and uncertificated Grupo Cibest ADSs?

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated Grupo Cibest ADSs. The depositary will cancel that ADR and will send to the Grupo Cibest ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated Grupo Cibest ADSs. Upon receipt by the depositary of a proper instruction from a registered holder of uncertificated Grupo Cibest ADSs requesting the exchange of uncertificated Grupo Cibest ADSs for certificated Grupo Cibest ADSs, the depositary will execute and deliver to the Grupo Cibest ADS holder an ADR evidencing those Grupo Cibest ADSs.

Voting Rights

How do you vote?

Grupo Cibest ADS holders may instruct the depositary how to vote the number of deposited shares their Grupo Cibest ADSs represent. If we request the depositary to solicit your voting instructions (and we are not required to do so), the depositary will notify you of a shareholders’ meeting and send or make voting materials available to you. Those materials will describe the matters to be voted on and explain how Grupo Cibest ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. The depositary will try, as far as practical, subject to the laws of Colombia and the provisions of our bylaws, to vote or to have its agents vote the shares or other deposited securities as instructed by Grupo Cibest ADS holders or as described in the following sentence. If we asked the depositary to solicit your instructions at least 30 days before the meeting date but the depositary does not receive voting instructions from you by the specified date and we confirm that: (i) we wish a proxy to be given under this sentence, and (ii) we reasonably do not know (A) that there is any substantial opposition to the matter and (B) that the matter is materially adverse to the interests of shareholders, then, the depositary will consider you to have instructed it to give a proxy to Fiduciaria Bancolombia or any successor thereto or such other person as we may designate as permitted under Colombia law to vote the number of deposited shares represented by your ADSs in the same manner and in the same proportion that all deposited shares are voted on the respective matter. If we do not request the depositary to solicit your voting instructions, you can still send voting instructions, and, in that case, the depositary may try to vote as you instruct, but it is not required to do so.

 

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Except by instructing the depositary as described above, you will not be able to exercise voting rights unless you surrender your Grupo Cibest ADSs and withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares. In any event, the depositary will not exercise any discretion in voting deposited securities and it will only vote or attempt to vote as instructed or as described in the preceding paragraph.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the shares represented by your Grupo Cibest ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise voting rights and there may be nothing you can do if the shares represented by your Grupo Cibest ADSs are not voted as you requested.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the Depositary to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date.

Fees and Expenses

 

Persons depositing or withdrawing shares or Grupo Cibest ADS holders must pay:		For:
$5.00 (or less) per 100 Grupo Cibest ADSs (or portion of 100 Grupo Cibest ADSs)		Issuance of Grupo Cibest ADSs, including issuances resulting from a distribution of shares or rights or other property   Cancellation of Grupo Cibest ADSs for the purpose of withdrawal, including if the Grupo Cibest deposit agreement terminates
$.05 (or less) per Grupo Cibest ADS		Any cash distribution to Grupo Cibest ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of Grupo Cibest ADSs		Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders
$.05 (or less) per Grupo Cibest ADS per calendar year		Depositary services
Registration or transfer fees		Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
Expenses of the depositary		Cable (including SWIFT) and facsimile transmissions (when expressly provided in the Grupo Cibest deposit agreement) Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any Grupo Cibest ADSs or shares underlying Grupo Cibest ADSs, such as stock transfer taxes, stamp duty or withholding taxes		As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities		As necessary

The depositary collects its fees for delivery and surrender of Grupo Cibest ADSs directly from investors depositing shares or surrendering Grupo Cibest ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors

 

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or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to Grupo Cibest ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the Grupo Cibest ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from Grupo Cibest ADS holders. In performing its duties under the Grupo Cibest deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

The depositary may convert currency itself or through any of its affiliates, or the custodian or we may convert currency and pay U.S. dollars to the depositary. Where the depositary converts currency itself or through any of its affiliates, the depositary acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Grupo Cibest deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained by it or its affiliate in any currency conversion under the Grupo Cibest deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Grupo Cibest ADS holders, subject to the depositary’s obligation to act without negligence or bad faith. The methodology used to determine exchange rates used in currency conversions made by the depositary is available upon request. Where the custodian converts currency, the custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the method by which that rate will be determined will be the most favorable to Grupo Cibest ADS holders, and the depositary makes no representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated with the rate. In certain instances, the depositary may receive dividends or other distributions from us in U.S. dollars that represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained or determined by us and, in such cases, the depositary will not engage in, or be responsible for, any foreign currency transactions and neither it nor we make any representation that the rate obtained or determined by us is the most favorable rate and neither it nor we will be liable for any direct or indirect losses associated with the rate.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your Grupo Cibest ADSs or on the deposited securities represented by any of your Grupo Cibest ADSs. The depositary may refuse to register any transfer of your Grupo Cibest ADSs or allow you to withdraw the deposited securities represented by your Grupo Cibest ADSs until those taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your Grupo Cibest ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of Grupo Cibest ADSs to reflect the sale and pay to Grupo Cibest ADS holders any proceeds, or send to Grupo Cibest ADS holders any property, remaining after it has paid the taxes.

Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities

The depositary will not tender deposited securities in any voluntary tender or exchange offer unless instructed to do so by a Grupo Cibest ADS holder surrendering Grupo Cibest ADSs and subject to any conditions or procedures the depositary may establish.

If deposited securities are redeemed for cash in a transaction that is mandatory for the depositary as a holder of deposited securities, the depositary will call for surrender of a corresponding number of Grupo Cibest ADSs

 

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and distribute the net redemption money to the holders of called Grupo Cibest ADSs upon surrender of those Grupo Cibest ADSs.

If there is any change in the deposited securities such as a sub-division, combination or other reclassification, or any merger, consolidation, recapitalization or reorganization affecting the issuer of deposited securities in which the depositary receives new securities in exchange for or in lieu of the old deposited securities, the depositary will hold those replacement securities as deposited securities under the Grupo Cibest deposit agreement. However, if the depositary decides it would not be lawful and practical to hold the replacement securities because those securities could not be distributed to Grupo Cibest ADS holders or for any other reason, the depositary may instead sell the replacement securities and distribute the net proceeds upon surrender of the Grupo Cibest ADSs.

If there is a replacement of the deposited securities and the depositary will continue to hold the replacement securities, the depositary may distribute new Grupo Cibest ADSs representing the new deposited securities or ask you to surrender your outstanding Grupo Cibest ADSs in exchange for new Grupo Cibest ADSs identifying the new deposited securities.

If there are no deposited securities underlying Grupo Cibest ADSs, including if the deposited securities are cancelled, or if the deposited securities underlying Grupo Cibest ADSs have become apparently worthless, the depositary may call for surrender of those Grupo Cibest ADSs or cancel those Grupo Cibest ADSs upon notice to the Grupo Cibest ADS holders.

Amendment and Termination

How may the Grupo Cibest deposit agreement be amended?

We may agree with the depositary to amend the Grupo Cibest deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of Grupo Cibest ADS holders, it will not become effective for outstanding Grupo Cibest ADSs until 30 days after the depositary notifies Grupo Cibest ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your Grupo Cibest ADSs, to agree to the amendment and to be bound by the ADRs and the Grupo Cibest deposit agreement as amended.

How may the Grupo Cibest deposit agreement be terminated?

The depositary will initiate termination of the Grupo Cibest deposit agreement if we instruct it to do so. The depositary may initiate termination of the Grupo Cibest deposit agreement if:

 

•

90 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment;

 

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we delist the Grupo Cibest ADSs from an exchange in the United States on which they were listed and do not list the Grupo Cibest ADSs on another exchange in the United States or make arrangements for trading of Grupo Cibest ADSs on the U.S. over-the-counter market;

 

•

we delist our shares from an exchange outside the United States on which they were listed and do not list the shares on another exchange outside the United States;

 

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the depositary has reason to believe the Grupo Cibest ADSs have become, or will become, ineligible for registration on Form F-6 under the Securities Act;

 

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we appear to be insolvent or enter insolvency proceedings;

 

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all or substantially all the value of the deposited securities has been distributed either in cash or in the form of securities;

 

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•

there are no deposited securities underlying the Grupo Cibest ADSs or the underlying deposited securities have become apparently worthless; or

 

•

there has been a replacement of deposited securities.

If the Grupo Cibest deposit agreement will terminate, the depositary will notify Grupo Cibest ADS holders at least 90 days before the termination date. At any time after the termination date, the depositary may sell the deposited securities. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the Grupo Cibest deposit agreement, unsegregated and without liability for interest, for the pro rata benefit of the Grupo Cibest ADS holders that have not surrendered their Grupo Cibest ADSs. Normally, the depositary will sell as soon as practicable after the termination date.

After the termination date and before the depositary sells, Grupo Cibest ADS holders can still surrender their Grupo Cibest ADSs and receive delivery of deposited securities, except that the depositary may refuse to accept a surrender for the purpose of withdrawing deposited securities or reverse previously accepted surrenders of that kind that have not settled if it would interfere with the selling process. The depositary may refuse to accept a surrender for the purpose of withdrawing sale proceeds until all the deposited securities have been sold. The depositary will continue to collect distributions on deposited securities, but, after the termination date, the depositary is not required to register any transfer of Grupo Cibest ADSs or distribute any dividends or other distributions on deposited securities to Grupo Cibest ADS holders (until they surrender their Grupo Cibest ADSs) or give any notices or perform any other duties under the Grupo Cibest deposit agreement except as described in this paragraph.

Limitations on Obligations and Liability

Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of Grupo Cibest ADSs

The Grupo Cibest deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

 

•

are only obligated to take the actions specifically set forth in the Grupo Cibest deposit agreement without negligence or bad faith, and the depositary will not be a fiduciary or have any fiduciary duty to holders of Grupo Cibest ADSs;

 

•

are not liable if we are or it is prevented or delayed by law or by events or circumstances beyond our or its ability to prevent or counteract with reasonable care or effort from performing our or its obligations under the Grupo Cibest deposit agreement;

 

•

are not liable if we or it exercises discretion permitted under the Grupo Cibest deposit agreement;

 

•

are not liable for the inability of any holder of Grupo Cibest ADSs to benefit from any distribution on deposited securities that is not made available to holders of Grupo Cibest ADSs under the terms of the Grupo Cibest deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the Grupo Cibest deposit agreement;

 

•

have no obligation to become involved in a lawsuit or other proceeding related to the Grupo Cibest ADSs or the Grupo Cibest deposit agreement on your behalf or on behalf of any other person;

 

•

may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person;

 

•

are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and

 

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•

the depositary has no duty to make any determination or provide any information as to our tax status, or any liability for any tax consequences that may be incurred by Grupo Cibest ADS holders as a result of owning or holding Grupo Cibest ADSs or be liable for the inability or failure of a Grupo Cibest ADS holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

In the Grupo Cibest deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

Requirements for Depositary Action

Before the depositary will deliver or register a transfer of Grupo Cibest ADSs, make a distribution on Grupo Cibest ADSs, or permit withdrawal of shares, the depositary may require:

 

•

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;

 

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satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

 

•

compliance with regulations it may establish, from time to time, consistent with the Grupo Cibest deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver Grupo Cibest ADSs or register transfers of Grupo Cibest ADSs when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

Your Rights to Receive the Shares Underlying the Grupo Cibest ADSs

Grupo Cibest ADS holders have the right to cancel their Grupo Cibest ADSs and withdraw the underlying shares at any time except:

 

•

when temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of shares is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our shares;

 

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when you owe money to pay fees, taxes and similar charges; or

 

•

when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to Grupo Cibest ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the Grupo Cibest deposit agreement.

Direct Registration System

In the Grupo Cibest deposit agreement, all parties to the Grupo Cibest deposit agreement acknowledge that the Direct Registration System, also referred to as DRS, and Profile Modification System, also referred to as Profile, will apply to the Grupo Cibest ADSs. DRS is a system administered by DTC that facilitates interchange between registered holding of uncertificated Grupo Cibest ADSs and holding of security entitlements in Grupo Cibest ADSs through DTC and a DTC participant. Profile is a feature of DRS that allows a DTC participant, claiming to act on behalf of a registered holder of uncertificated Grupo Cibest ADSs, to direct the depositary to register a transfer of those Grupo Cibest ADSs to DTC or its nominee and to deliver those Grupo Cibest ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the Grupo Cibest ADS holder to register that transfer.

 

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In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Grupo Cibest deposit agreement understand that the depositary will not determine whether the DTC participant that is claiming to be acting on behalf of a Grupo Cibest ADS holder in requesting registration of transfer and delivery as described in the paragraph above has the actual authority to act on behalf of the Grupo Cibest ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the Grupo Cibest deposit agreement, the parties agree that the depositary’s reliance on and compliance with instructions received by the depositary through the DRS/Profile system and in accordance with the Grupo Cibest deposit agreement will not constitute negligence or bad faith on the part of the depositary.

Shareholder Communications; Inspection of Register of Holders of Grupo Cibest ADSs

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The depositary will send you copies of those communications or otherwise make those communications available to you if we ask it to. You have a right to inspect the register of holders of Grupo Cibest ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the Grupo Cibest ADSs.

Jury Trial Waiver

The Grupo Cibest deposit agreement provides that, to the extent permitted by law, Grupo Cibest ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the Grupo Cibest ADSs or the Grupo Cibest deposit agreement, including any claim under the U.S. federal securities laws. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law.

You will not, by agreeing to the terms of the Grupo Cibest deposit agreement, be deemed to have waived our or the depositary’s compliance with U.S. federal securities laws or the rules and regulations promulgated thereunder.

Restrictions and Requirements Regarding Foreign Investment in Colombia

The following is a very brief summary of certain restrictions on foreign investment in Colombia and does not purport to be complete.

Colombia’s International Investment Regime, Part 17 of Decree 1068 of 2015, as amended (the “International Investment Regime”) regulates the manner in which non-resident entities and individuals can invest in Colombia and participate in the Colombian securities markets. Among other requirements, the regime mandates registration of certain foreign exchange transactions with the Central Bank of Colombia (the “Central Bank”) and specifies procedures to authorize and administer certain types of foreign investments. International investments are regulated by the Central Bank by means of External Resolution 1 of 2018 and External Circular DCIP 83, both as amended, setting forth in detail regulation and procedures regarding foreign investment in Colombia.

Investors who wish to hold Grupo Cibest ADSs will be required to submit to the custodian certain information and comply with certain registration procedures required under the foreign investment regulations in connection with foreign exchange controls regarding currency conversion (generally COP/USD, related to the foreign investment). Holders of American depositary receipts who wish to withdraw the underlying preferred shares will also have to comply with certain registration and reporting procedures. See “Description of Grupo Cibest American Depositary Receipts—Deposit, Transfer and Withdrawal.” Under Colombian foreign investment regulations, the failure of a non-Colombian resident investor to report or register foreign exchange transactions relating to investments in Colombia with the Central Bank, on a timely basis, may prevent the investor from obtaining remittance rights, constitute an exchange control infraction and result in a fine.

 

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Approval was obtained from the SFC for the depositary facility established for Bancolombia ADSs as an institutional fund pursuant to the International Investment Regime. In addition, the SFC authorized the initial and subsequent deposits of preferred shares with the custodian for the purpose of issuing Bancolombia ADSs. Under such law, the custodian acted as the local administrator of such fund and had certain reporting obligations to the Central Bank and to the SFC. Any subsequent approval of the SFC will not be required in connection with the Share Exchange and establishment of the Grupo Cibest ADS facility.

As Bancolombia and certain other subsidiaries of Grupo Cibest incorporated under Colombian law will be wholly-owned subsidiaries of Grupo Cibest, pursuant to the Colombian Financial Statute (Estatuto Orgánico del Sistema Financiero—Decree 663 of 1993—the “Financial Statute”), no individual or corporation may hold, directly or indirectly, 10% or more of a Colombian financial institution’s capital stock without the prior authorization of the SFC.

Any Grupo Cibest ADS holders that is not a resident of Colombia and wishes to surrender Grupo Cibest ADSs for the purpose of withdrawal of deposited securities must deliver to the depositary a written notice specifying either that those preferred shares or other deposited securities:

 

•

have been or are to be sold in Colombia simultaneously with such withdrawal of the preferred shares or other deposited securities; or

 

•

are to be held by such former Grupo Cibest ADS holder, or to its order, without sale, in which case such owner or beneficial owner must acknowledge its obligations to register its investment under the foreign investment regulations, if applicable, and make the required foreign exchange report to the Central Bank.

Such non-resident withdrawing Grupo Cibest ADS holder must also deliver or cause to be delivered to the Central Bank a written notice relating to the sales price realized (net of sales commissions paid or payable to a Colombian securities broker) in respect of the sale of preferred shares (or other deposited securities, as the case may be) and such other certifications as may be required from time to time under applicable Colombian law.

A Grupo Cibest ADS holders that is not a Colombian resident who withdraws preferred shares or other deposited securities to or for its or his own account or the account of a non-resident third party and who does not sell or cause to be sold such preferred shares or other deposited securities in Colombia simultaneously with such withdrawal will be subject to the foreign investment regulations and will be required individually to comply with one of the authorized forms of foreign investment in securities of Colombian issuers described below:

 

•

investment through an institutional fund; or

 

•

investment through an individual fund.

Such former Grupo Cibest ADS holder or third party may be required to register its foreign capital investment in the preferred shares (i.e., the purchase price of preferred shares plus any securities brokerage commissions paid to Colombian brokers) deposited pursuant to the terms of the Grupo Cibest deposit agreement by or on behalf of such owner or beneficial owner, or the purchase price of American depositary shares, if American depositary shares were purchased from a prior owner or beneficial owner thereof, with the Central Bank, in accordance with the requirements of the exchange declaration used, or through the foreign exchange information system, as applicable.

ADS holders that are not residents of Colombia should consult with their investment adviser prior to any withdrawal of preferred shares in the event that such securities may not be sold or held by such owner or beneficial owner in Colombia at the time of such withdrawal. Neither Grupo Cibest, the depositary nor the custodian will have any liability or responsibility whatsoever under the Grupo Cibest deposit agreement or

 

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otherwise for any action or failure to act by any owner or beneficial owner relating to its obligations under the foreign investment regulations or any other Colombian law or regulation relating to foreign investment in Colombia in respect of a withdrawal or sale of preferred shares or other deposited securities, including, without limitation, any failure to comply with a requirement to register such investment pursuant to the terms of the foreign investment regulations prior to such withdrawal or any failure to report foreign exchange transactions to the Colombian Central Bank, as the case may be. In addition, the Grupo Cibest deposit agreement provides that the registered holder or beneficial owner will be responsible for the report of any false information relating to foreign exchange transactions to the custodian or the Central Bank in connection with deposits or withdrawals of preferred shares or other deposited securities.

 

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COMPARISON OF RIGHTS OF BANCOLOMBIA S.A. SHAREHOLDERS

AND GRUPO CIBEST SHAREHOLDERS

We are, and Grupo Cibest will be, organized under the laws of the Republic of Colombia. Any differences, therefore, in the rights of holders of Bancolombia’s common shares and holders of Grupo Cibest common shares or in the rights of holders of Bancolombia’s preferred shares and holders of Grupo Cibest preferred shares would arise primarily from differences in Bancolombia’s and Grupo Cibest’s respective bylaws.

There will be no material differences in the rights of holders of Bancolombia’s common shares and holders of Grupo Cibest common shares or in the rights of holders of Bancolombia’s preferred shares and holders of Grupo Cibest preferred shares under Bancolombia’s bylaws and the bylaws of Grupo Cibest. In addition, there will be no material adverse changes in the rights of holders of Bancolombia ADSs compared to those of holders of Grupo Cibest ADSs under the applicable deposit agreements.

 

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TAX CONSIDERATIONS

United States Taxation

This section describes the material United States federal income tax consequences of the Share Exchange for a U.S. holder (as defined below) of Bancolombia common shares, preferred shares or ADSs. This summary applies to you only if you hold Bancolombia common shares, preferred shares or ADSs, and will hold your Grupo Cibest common shares, preferred shares, or ADSs, as capital assets for tax purposes. In addition, this summary only applies to you if you acquire your Grupo Cibest common shares, preferred shares, or ADSs pursuant to the Share Exchange. This discussion addresses only United States federal income taxation and does not discuss all of the tax consequences that may be relevant to you in light of your individual circumstances, including foreign, state or local tax consequences, estate and gift tax consequences, and tax consequences arising under the Medicare contribution tax on net investment income or the alternative minimum tax. Furthermore, this discussion does not describe all of the tax consequences that may apply to a U.S. holder that is subject to special rules, such as:

 

•

a dealer in securities or currencies;

 

•

a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;

 

•

a bank or financial institution;

 

•

a life insurance company;

 

•

a tax-exempt organization;

 

•

a person that actually or constructively owns shares that represent 5% or more of the voting power or value of the shares of Bancolombia or Grupo Cibest;

 

•

a person that holds Bancolombia or Grupo Cibest common shares, preferred shares or ADSs as part of a straddle or a hedging or conversion transaction for United States federal income tax purposes; or

 

•

a person whose functional currency for tax purposes is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. There is currently no comprehensive income tax treaty between the United States and Colombia.

If an entity or arrangement that is treated as a partnership for United States federal income tax purposes holds Bancolombia or Grupo Cibest common shares, preferred shares or ADSs, the United States federal income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding Bancolombia or Grupo Cibest common shares, preferred shares or ADSs should consult its tax advisor with regard to the United States federal income tax treatment of an investment in such common shares, preferred shares or ADSs.

For purposes of this summary, you are a “U.S. holder” if you are a holder as described above that is the beneficial owner of Bancolombia or Grupo Cibest common shares, preferred shares or ADSs and are:

 

•

a citizen or resident of the United States;

 

•

a U.S. domestic corporation (or an entity treated as a domestic corporation);

 

•

an estate whose income is subject to United States federal income tax regardless of its source; or

 

•

a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

 

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In general, for United State federal income tax purposes, if you are the beneficial owner of Bancolombia or Grupo Cibest ADSs, you will be treated as the beneficial owner of the preferred shares represented by those Bancolombia or Grupo Cibest ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange a Bancolombia or Grupo Cibest ADS for the preferred share represented by the Bancolombia or Grupo Cibest ADS.

The tax treatment of your Bancolombia or Grupo Cibest common shares, preferred shares or ADSs will depend in part on whether or not (i) Bancolombia is currently classified, or has been classified during your holding period for the Bancolombia common shares, preferred shares or ADSs, as a passive foreign investment company, or PFIC, for United States federal income tax purposes and (ii) Grupo Cibest will be classified as a PFIC for United States federal income tax purposes. Except as discussed below under “PFIC Rules”, this discussion assumes that Bancolombia has not been, and Grupo Cibest will not be, classified as a PFIC for United States federal income tax purposes.

You should consult your own tax advisers concerning the U.S. federal, state, local, and other tax consequences of participating in the Share Exchange and of owning, and disposing of Bancolombia or Grupo Cibest common shares, preferred shares or ADSs in your particular circumstances.

Consequences of Receiving Grupo Cibest Shares or ADSs Pursuant to the Share Exchange

Bancolombia’s special U.S. tax counsel, Sullivan & Cromwell LLP, will provide an opinion which will be filed as an exhibit to the registration statement on Form F-4 filed by Bancolombia with the SEC, of which this prospectus forms a part. In the opinion of our special U.S. tax counsel, based on certain assumptions and subject to certain exceptions, (i) U.S. holders will not recognize gain or loss for U.S. tax purposes when they exchange Bancolombia common shares, preferred shares or ADSs for Grupo Cibest common shares, preferred shares or ADSs pursuant to the Share Exchange, (ii) a U.S. holder’s tax basis in Grupo Cibest common shares, preferred shares or ADSs received in the Share Exchange will equal the U.S. holder’s tax basis in its Bancolombia common shares, preferred shares or ADSs, except that a U.S. holder’s tax basis in its Grupo Cibest ADSs may be increased by any fees it pays to the depositary with respect to the cancellation of the Bancolombia ADSs and the issuance of the Grupo Cibest ADSs, and (iii) a U.S. holder’s holding period in Grupo Cibest common shares, preferred shares or ADSs received will include the holder’s holding period in its Bancolombia common shares, preferred shares or ADSs. In particular, this opinion does not apply to a U.S. holder (i) who actually or constructively holds shares that represent 5% or more of the voting power or value of the shares of Bancolombia or (ii) to the extent that Bancolombia was classified as a PFIC at any time during the period in which the U.S. holder held Bancolombia common shares, preferred shares or ADSs.

It is likely that a U.S. holder will not be entitled to deduct any fees it pays to the depositary with respect to the cancellation of the Bancolombia ADSs and the issuance of the Grupo Cibest ADSs. Rather, it is likely that a U.S. holder will increase its basis in its Grupo Cibest ADSs by the amount of such fees.

Consequences of Owning Grupo Cibest Common Shares, Preferred Shares and ADSs

Grupo Cibest common shares, preferred shares and ADSs that you receive pursuant to the Share Exchange generally will be subject to the same U.S. tax rules as Bancolombia common shares, preferred shares or ADSs that you deliver in exchange for them.

Taxation of Distributions

The gross amount of any dividend Grupo Cibest pays out of its current or accumulated earnings and profits (as determined for United States federal income tax purposes), other than certain pro-rata distributions of its common shares or preferred shares, including the amount of any Colombian tax withheld, will be treated as a dividend that is subject to United States federal income taxation. If you are a non-corporate U.S. holder,

 

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dividends paid to you on the preferred shares or ADSs that constitute qualified dividend income will be taxable to you at preferential rates applicable to long-term capital gains provided that you hold the preferred shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date (or, if the dividend is attributable to a period or periods aggregating over 366 days, provided that you hold the preferred shares or ADSs for more than 90 days during the 181-day period beginning 90 days before the ex-dividend date) and meet other holding period requirements. Dividends Grupo Cibest pays with respect to the Grupo Cibest ADSs generally will be qualified dividend income provided that, in the year that you receive the dividend, the Grupo Cibest ADSs are readily tradable on an established securities market in the United States. Grupo Cibest expects that the Grupo Cibest ADSs will be listed on the NYSE, and it therefore expects that the Grupo Cibest ADSs will be treated as readily tradable on an established securities market in the United States; however, there can be no assurance that Grupo Cibest ADSs will in fact be readily tradable on an established securities market. Because the preferred shares will not be listed on any United States securities market, it is unclear whether dividends Grupo Cibest pays with respect to the preferred shares will also be qualified dividend income. Dividends Grupo Cibest pays with respect to its common shares and dividends Grupo Cibest pays on the preferred shares or ADSs that do not qualify for the preferential rates described above will be subject to taxation at ordinary income tax rates.

The dividend amount that you include in income will include any Colombian tax withheld from the dividend payment even though you do not in fact receive it. The dividend is taxable to you when you, in the case of common shares or preferred shares, or the depositary, in the case of ADSs, receive the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of the dividend distribution that you must include in your income will be the U.S. dollar value of the Colombian Peso payments made, determined at the spot Colombian Peso / U.S. dollar rate on the date the dividend is distributed, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend is distributed to the date you, or the depositary on your behalf, converts the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis in the common shares, preferred shares or ADSs and thereafter as capital gain. However, Grupo Cibest does not expect to calculate earnings and profits in accordance with United States federal income tax principles. Accordingly, you should expect to generally treat distributions with respect to common shares, preferred shares or ADSs as dividends.

Subject to certain limitations, the Colombian tax withheld from distributions on your common shares, preferred shares or ADSs will be creditable or deductible against your United States federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to preferential rates. To the extent a refund of the tax withheld is available to you under Colombian law, the amount of tax withheld that is refundable will not be eligible for credit against your United States federal income tax liability. The rules governing foreign tax credits are complex, and U.S. holders should consult their tax advisors regarding the creditability of foreign taxes in their particular circumstances.

For foreign tax credit purposes, dividends will generally be income from sources outside the United States and will generally be “passive” income for purposes of computing the foreign tax credit allowable to you.

The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.

Sale or Other Disposition

If you sell or otherwise dispose of your Grupo Cibest common shares, preferred shares or ADSs, you will recognize capital gain or loss for United States federal income tax purposes equal to the difference between the

 

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U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your common shares, preferred shares or ADSs. Capital gain of a non-corporate U.S. holder is generally taxed at preferential rates where the property is held for more than one year. The deductibility of capital losses is subject to limitations. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.

PFIC Rules

We believe that Bancolombia and Banistmo should not currently be treated as a PFIC for United States federal income tax purposes, and we currently expect that Bancolombia and Banistmo will not become a PFIC in the foreseeable future. Because we expect that Grupo Cibest’s primary assets will be its ownership of all of the shares of Bancolombia and Banistmo, we likewise expect that Grupo Cibest will not become a PFIC in the foreseeable future. However, the determination as to whether Bancolombia, Banistmo or Grupo Cibest is a PFIC is a factual determination that is made annually and thus may be subject to change. In addition, our current position in this regard is based on our position that Bancolombia and Banistmo qualify for a special rule that treats income recognized by a bank in the active conduct of a banking business as active income for PFIC purposes (the “active bank exception”). It is possible, however, that Bancolombia or Banistmo may not satisfy the requirements of the active bank exception in the current or a future taxable year, or that the U.S. Internal Revenue Service may issue guidance in the future under which Bancolombia or Banistmo would not satisfy the requirements of the active bank exception. In such a case, Bancolombia’s or Banistmo’s interest income would be treated as passive income for PFIC purposes in which case Bancolombia or Banistmo would likely be treated as a PFIC. If Bancolombia were treated as a PFIC, Grupo Cibest would likely be treated as a PFIC and if Banistmo were treated as a PFIC, Grupo Cibest may potentially be treated as a PFIC. Accordingly, it is possible that Bancolombia could be a PFIC in the current taxable year or that Grupo Cibest could be a PFIC in a future taxable year.

In general, Bancolombia, Banistmo or Grupo Cibest will be a PFIC in a taxable year if:

 

•

at least 75% of the corporation’s gross income for the taxable year is passive income or

 

•

at least 50% of the value, determined on the basis of a quarterly average, of the corporation’s assets in such taxable year is attributable to assets that produce or are held for the production of passive income.

“Passive income” generally includes dividends, interest, gains from the sale or exchange of investment property rents and royalties (other than certain rents and royalties derived in the active conduct of a trade or business) and certain other specified categories of income. If a foreign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation’s income.

If Grupo Cibest is treated as a PFIC, you will generally be subject to special rules with respect to:

 

•

any gain you realize on the sale or other disposition of your shares or ADSs and

 

•

any excess distribution that Grupo Cibest makes to you (generally, any distributions to you during a single taxable year, other than the taxable year in which your holding period in the shares or ADSs begins, that are greater than 125% of the average annual distributions received by you in respect of the shares or ADSs during the three preceding taxable years or, if shorter, your holding period for the shares or ADSs that preceded the taxable year in which you receive the distribution).

Under these rules:

 

•

the gain or excess distribution will be allocated ratably over your holding period for the shares or ADSs,

 

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•

the amount allocated to the taxable year in which you realized the gain or excess distribution or to prior years before the first year in which Bancolombia or Grupo Cibest was a PFIC with respect to you will be taxed as ordinary income,

 

•

the amount allocated to each other prior year will generally be taxed at the highest tax rate in effect for that year, and

 

•

the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.

If Grupo Cibest is a PFIC and, at any time, has a non-U.S. subsidiary that is classified as a PFIC, you generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if Grupo Cibest (or its subsidiary) receives a distribution from, or disposes of all or part of our interest in, the lower-tier PFIC or if you otherwise were deemed to have disposed of an interest in the lower-tier PFIC.

Unless you make certain elections, your Grupo Cibest common shares, preferred shares or ADSs will generally be treated as stock in a PFIC if Grupo Cibest or Bancolombia was a PFIC at any time during your holding period in your Grupo Cibest or Bancolombia common shares, preferred shares or ADSs, even if Grupo Cibest is not currently a PFIC.

In addition, unless you make certain elections, if Bancolombia was a PFIC at any time during your holding period in your Bancolombia common shares, preferred shares or ADSs and Grupo Cibest is not a PFIC in its first taxable year, you may be required to recognize gain (which would be treated as an excess distribution and subject to the rules above) in respect of the excess, if any, of the fair market value of the Grupo Cibest common shares, preferred shares or ADSs that you receive in the Share Exchange over your adjusted tax basis in the Bancolombia common shares, preferred shares or ADSs that you surrender in the Share Exchange. Alternatively, you may be required to treat the Grupo Cibest common shares, preferred shares or ADSs received in the Share Exchange in exchange for Bancolombia common shares, preferred shares or ADSs as stock in a PFIC even though Grupo Cibest will not be a PFIC.

In addition, notwithstanding any election you make with regard to your Grupo Cibest common shares, preferred shares or ADSs, dividends that you receive from Grupo Cibest will not constitute qualified dividend income to you if Grupo Cibest is a PFIC (or is treated as a PFIC with respect to you) either in the taxable year of the distribution or the preceding taxable year. Dividends that you receive that do not constitute qualified dividend income are not eligible for taxation at the preferential rates applicable to qualified dividend income. Instead, you must include the gross amount of any such dividend paid by Grupo Cibest out of its accumulated earnings and profits (as determined for United States federal income tax purposes) in your gross income, and it will be subject to tax at rates applicable to ordinary income.

If you own common shares, preferred shares or ADSs during any year that Bancolombia or Grupo Cibest is a PFIC with respect to you, you may be required to file IRS Form 8621.

Information with Respect to Foreign Financial Assets

Owners of “specified foreign financial assets” with an aggregate value in excess of USD 50,000 (and in some circumstances, a higher threshold) may be required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” may include financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are held for investment and not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United States persons

 

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(including Bancolombia or Grupo Cibest common shares, preferred shares and ADSs), (ii) financial instruments and contracts that have non-United States issuers or counterparties, and (iii) interests in foreign entities. You are urged to consult your tax advisors regarding the application of this reporting requirement to your ownership of your Bancolombia or Grupo Cibest common shares, preferred shares or ADSs.

FATCA Withholding

Under FATCA, a 30% withholding tax will be imposed on certain payments to certain non-U.S. financial institutions that fail to comply with information reporting requirements or certification requirements in respect of their direct and indirect United States shareholders and/or United States accountholders. To avoid becoming subject to the 30% withholding tax on payments to them, Grupo Cibest and other non-U.S. financial institutions may be required to report information to the IRS regarding the holders of common stock, preferred shares or ADSs and to withhold on a portion of payments under the common shares, preferred shares or ADSs to certain holders that fail to comply with the relevant information reporting requirements (or hold common shares, preferred shares or ADSs directly or indirectly through certain non-compliant intermediaries). However, under proposed Treasury regulations, such withholding will not apply to payments made before the date that is two years after the date on which final regulations defining the term “foreign passthru payment” are enacted. As such regulations have not been enacted, it is impossible to determine at this time what impact, if any, this legislation will have on holders of the common shares, preferred shares and ADSs.

Treatment of Withdrawing Shareholders

In the event a shareholder exercises its Withdrawal Rights and we purchase all of your Bancolombia common shares or preferred shares from you for cash, you will realize gain or loss that will be subject to taxation in the manner described in “—Sale or Other Disposition” above.

U.S. Information Reporting and Backup Withholding Rules

Payments of dividends and sales proceeds with respect to your Bancolombia or Grupo Cibest common shares, preferred shares or ADSs that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the holder (i) is a corporation or other exempt recipient and demonstrates this when required or (ii) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.

Colombian Tax Considerations

The following discussion is a summary of the Colombian tax consequences for non-Colombian holders of Bancolombia ADSs from the exchange of Bancolombia ADSs into Grupo Cibest ADSs.

For purposes of this discussion, a non-Colombian holder means a holder who is:

(i) A non-resident of Colombia for foreign exchange matters.

(ii) A corporation with its head office, principal place of business or effective place of management is located outside of Colombia; or

(iii) A company incorporated under non-Colombian laws.

The discussion regarding Colombian Law set forth below is based on the Colombian tax laws currently in effect. This discussion is not exhaustive and may not cover all possible tax considerations which may apply to a

 

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particular stockholder. The non-Colombian holders of Bancolombia ADSs are advised to consult their tax advisors as to the overall tax consequences to them of the exchange of stocks, including, in particular, the tax consequences under Colombian law.

Consequences of the Corporate Structure Changes

Sections 319-3 to section 319-6 of the Colombian Tax Code (the “CTC”) provides a non-recognition regime for domestic corporations’ distributions or escisiones as defined by Colombian law and their shareholders allowing them to defer the effects of any gain or loss until a later date, such as the disposal of shares.

These provisions establish the criteria that a spin-off must meet in order to be eligible for tax-neutral reorganization and the application of non-recognition rules. The criteria depend on the classification of the spin off. According to section 319-5, reorganizational spin-offs involve the spin-off corporation and the beneficiary corporation being related parties prior to the transaction (as is the case with Bancolombia and Grupo Cibest).

Requirements for Nonrecognition Treatment

Sections 319-4 and 319-6 of the CTC impose minimum participation and minimum consideration requirements, as well as a business-unit requirement, to defer the recognition of gains or losses arising from the transfer of property and shares.

Under the business-unit requirement, the property being transferred in the spin-off must constitute an operating company or business unit. This means that the individual assets being carved out must collectively form a functioning business entity capable of operating independently once the spin-off is completed.

Tax Consequences to Holders

Upon the completion of the Corporate Structure Changes, Grupo Cibest is required to issue new shares while Bancolombia cancels its shares, except for the shares of Bancolombia held by Grupo Cibest. This share issuance and cancellation does not trigger a taxable gain or loss for the holders of Bancolombia, provided that the requirements are met, and the Corporate Structure Changes qualifies for the non-recognition regime.

To ensure the non-recognition regime applies, the tax basis of Grupo Cibest’s shares should correspond to the tax basis that shareholders had in Bancolombia prior to the transaction. Consequently, if a shareholder disposes of the Grupo Cibest shares, any resulting tax gain or loss is determined based on the excess of the fair market value of the shares over the retained tax basis.

The Colombian tax regime does not have a rule specifically dealing with the income tax effects of an exchange, conversion or other of ADRs or ADSs. Nonetheless, the current position of the Colombian Tax Service (DIAN) is that the ADRs are considered a different and independent security from the underlying shares that are in custody by the depositary. In this sense, from the interpretation of the general rules regarding sourcing of income and taxation of non-resident holders, the ADRs held abroad are not deemed to be Colombian assets. Consequently, even if the Corporate Structure Changes were regarded as a separate transaction not subject to the tax neutrality of the Corporate Structure Changes, said transaction would not trigger Colombian income or gains for the non-resident holders of the ADRs.

Further to the above, the Corporate Structure Changes should not fall under the offshore transfers regime and, as such, such operation should not be deemed as a taxable indirect transfer of the underlying shares of Bancolombia.

At any rate, we consider that the fact that the Corporate Structure Changes as a whole results from a tax-neutral reorganization that meets the requirements described above, all the consequential parts should be treated accordingly for Colombian tax purposes.

 

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Taxation of Dividends on Holding American Depositary Receipts

Income Tax

American Deposit Receipts are held through a foreign capital fund in Colombia, subject to a specific tax regulatory regime. Under section 18-1 of the CTC, American Depositary Receipts are considered foreign portfolio investments and are subject to the following treatment:

 

•

Dividends subject to Corporate Income Tax (“CIT”) at the corporate level are taxed at a rate of 20%.

 

•

Dividends that did not pay CIT at the corporate level are subject to equalization tax at 25% upon distribution, plus a 20% dividend tax on top of it.

The applicable tax is collected via withholding tax on the accrual or cash basis.

Industry and Commerce Tax

Industry and commerce tax (“ICT”) is a territorial tax levied on industrial, commercial and services activities performed by the taxpayer within a Colombian municipality. ICT is paid in the municipality where the activity is performed over the gross revenue at rates ranging between 0.2% and 2%. Each municipality fixes the rate and how the tax should be collected and paid to the municipal tax office.

Dividends received by holders are not subject to any special rule and therefore are subject to industry and commerce tax if they are derived from a commercial activity at a rate of 0.5%.

Taxation of Capital Gains from Inheritances, Legacies, or Donations of American Depositary Shares

Unlike many other jurisdictions, Colombia does not tax estates on the transfer at death. However, section 302 of the CTC, stipulates that any income received from inheritances, legacies and donations will be considered as a capital gain payable by the recipient.

The taxable base of the capital gain is the value that the assets have in the estate of the deceased or donor as of December 31 of the year immediately preceding the date of the settlement of the estate, or of the completion of the donation.

Tax Treaties

There is not a Double Taxation Treaty between Colombia and the United States.

 

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COLOMBIAN FOREIGN EXCHANGE CONTROLS AND SECURITIES REGULATIONS

Exchange Controls

The Colombian Foreign Exchange Regime allows Colombian residents to acquire in the exchange market the currencies required to carry out their operations. For such purpose, the Colombian Foreign Exchange establishes certain procedures that must be followed in order to carry out foreign exchange operations, which are known as “transferring of currencies”, through the exchange market. This transferring must be carried out through an Intermediary of the Exchange Market (such as commercial banks in Colombia), or through compensation accounts (bank accounts abroad opened by Colombian residents registered before the Central Bank). Therefore, there are no limitations regarding the import or export of capital, including the availability of cash and cash equivalents for use by the Group. Nevertheless, these operations must be carried out by following the applicable procedures.

The Foreign Exchange Statute, Law 9 of 1991, outlines the Colombian foreign exchange regime which relates to matters such as imports and exports of goods, foreign indebtedness, and guarantees in foreign currencies, among others. Additionally, Decree 1068 of 2015 and Decree 119 of 2017, as amended, set forth an International Investment Regime which provides for rules applicable to foreign residents who invest in the Colombian securities markets and undertake other types of investments, prescribes registration before the Central Bank of certain foreign exchange transactions, and specifies procedures pursuant to which certain types of foreign investments are to be authorized and administered. Both, the Foreign Exchange Statute and the International Investment Regime are regulated by External Resolution No. 1 of 2018 and External Regulating Circular DCIP-83, both as amended, of the Board of Directors of the Central Bank.

Under Colombian law and the expected bylaws of Grupo Cibest, foreign investors will receive the same treatment as Colombian citizens with respect to ownership and the voting rights of Grupo Cibest ADSs and preferred shares of Grupo Cibest, as well as the remittance abroad of dividends, or any other type of proceedings derived from any type of securities investments duly registered before the Colombian Central Bank. For a detailed discussion of ownership restrictions see Item 4. “Information on the Company—B. Business Overview—B.8. Supervision and Regulation—Ownership and Management Restrictions” in the 2023 Annual Report.

Securities Regulations

Ownership Threshold Requiring Public Disclosure

We must disclose to the SFC at the end of each fiscal quarter the names of the shareholders of Bancolombia, indicating at least, the twenty-five shareholders with the highest number of shares. Furthermore, certain affiliates of these shareholders must also be disclosed, together with information regarding relevant ultimate beneficial owners.

Colombian securities regulations set forth the obligation to disclose any material event or relevant fact. Any transfer of shares equal to or greater than 5% of Bancolombias’s capital stock or any person acquiring a percentage of shares that would make him the beneficial owner of 5% or more of Bancolombia’s capital stock, is a material event, and therefore, must be disclosed to the market through the channels set forth by the SFC.

 

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MANAGEMENT OF GRUPO CIBEST

Board of Directors of Grupo Cibest

The members of the board of directors of Bancolombia will become the members of the board of directors of Grupo Cibest. Grupo Cibest’s board of directors, will be composed of seven directors at the time of the Corporate Structure Changes, elected for a two-year term, with no alternate directors.

According to Decree 3923 of 2006, the election of independent directors must be in a separate ballot from the ballot to elect the rest of directors, unless the reaching of the minimum number of independent directors required by law or by the bylaws is assured, or when there is only one list that includes the minimum number of required independent directors. According to Law 964 of 2005, 25% of the members of the board of directors shall be independent. An “independent director” is a director who is NOT: (i) an employee or director of the issuer or any of its parent or subsidiary companies, including all those persons acting in said capacity during the year immediately preceding that in which they were appointed, except in the case of an independent member of the board of directors being re-elected; (ii) shareholders, who either directly or by virtue of an agreement direct, guide or control the majority of the entity’s voting rights or who determine the majority composition of the administration, the board of directors or other corporate bodies of this same entity; (iii) a partner or employee of any association or firm that provides advisory or consultancy services to the issuer or to companies who belong to the same economic group to which the issuer in question belongs, in the event that income obtained from such services represents for said association or firm twenty percent (20%) or more of its total operating income; (iv) an employee or director of a foundation, association or institution that receives significant donations from the issuer. The term “significant donations” is quantified as being twenty percent (20%) or more of the total amount of donations received by the respective institution; (v) an administrator of any entity on whose board of directors a legal representative of the issuer participates; and (vi) any person who receives from the issuer any kind of remuneration different from fees as a member of the board of directors, of the audit committee or any other committee set up by the board of directors.

The Good Governance Code, aiming to strengthen the independence of the board, establishes the following criteria to qualify a director as non-independent:

 

i.

Employees, directors or members of senior management of Grupo Cibest and its affiliates or subsidiaries, or former employees, directors or members of senior management of Grupo Cibest and its affiliates or subsidiaries, during the two-year period immediately prior to the appointment, except in the case of the re-election of an independent person.

 

ii.

Any of the following persons: (a) the Relevant Shareholders of Grupo Cibest (as this term is defined in the Good Governance Code); or (b) any person that determines the majority composition of Grupo Cibest’s administrative or management bodies.

 

iii.

Shareholders, employees or advisers to shareholders, who directly or through an agreement, direct, guide or control more than ten percent (10%) of the voting rights of the entity or constitute the majority of the entity´s administrative, management or control bodies.

 

iv.

Partners or employees of associations or companies that provide services to, or receive payments from Grupo Cibest or its affiliates or subsidiaries, for: (i) a value greater than $250,000 or corresponding to two percent (2%) or more of the total income of the applicable association or company (whichever is higher) for the last three years, or (ii) when the income for said association or company represents twenty percent (20%) or more of the association’s or company´s operating income for the prior year.

 

v.

Partners or employees of legal entities or similar (e.g. trusts) that have made payments to Grupo Cibest or its affiliates, subsidiaries or controllers, for a value greater than $1 million or corresponding to two percent (2%) of the total income of the respective company or association (whichever is higher) in the last three years, excluding interest payments or financial services rendered by Grupo Cibest or any of the affiliates or subsidiaries of Grupo Cibest in the ordinary course of business.

 

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vi.

Employees, directors or members of senior management of legal entities or similar (e.g., trusts) that receive significant donations from Bancolombia or Grupo Cibest, or from individuals or corporate entities that own shares of Grupo Cibest that represent zero-point five percent (0.5%) or more of the voting rights of Grupo Cibest. A donation will be considered significant when it represents more than twenty percent (20%) of donations received by the corresponding institution.

 

vii.

Directors or legal representatives of an entity whose board of directors includes a legal representative of Grupo Cibest.

 

viii.

People who receive from Grupo Cibest or its affiliates or subsidiaries any remuneration other than fees as members of the board of directors, the audit committee or any other committee created by the board of directors, or who have received remuneration for an amount greater than $120,000 for 12 months, in the last three years.

 

ix.

Current partners or employees, or individuals who were, within the past three years, partners or employees of the external auditors.

 

x.

Directors or members of senior management of another entity with respect to which any of the current directors, or members of senior management of Grupo Cibest is a member of the compensation committee.

Additionally, the board of directors shall not include members who, individually or collectively, have labor-related ties with Grupo Cibest, in such a number that they could constitute the majority required to adopt decisions. No majority of the board of directors may consist of individuals with certain familial or other relationships. If the board of directors is elected in contravention of this rule, it shall be deemed invalid, and the previous board of directors will continue to exercise its functions. In such cases, the previous board of directors must immediately convene a shareholders’ meeting to conduct a new election. Any decisions adopted by the board with a majority that violates this rule shall be void.

Elections are made under a proportional representation voting system. Under that system: (i) each holder of common shares is entitled at the ordinary general shareholders’ meeting to nominate for election one or more directors; (ii) each nomination of one or more directors constitutes a group for the purposes of the election; (iii) each group of nominees must be listed in the order of preference for nominees in that group to be elected; (iv) once all groups have been nominated, holders of common shares may cast one vote for each common share held in favor of a particular group of nominees. Votes may not be cast for particular nominees in a group; they may be cast only for the entire group; (v) the total number of votes cast in the election is divided by the number of directors to be elected. The resulting quotient is the quota of votes necessary to elect particular directors. For each time that the number of votes cast for a group of nominees is divisible by the quota of votes, one nominee from that group is elected, in the order of the list of that group; and (vi) when no group has enough remaining votes to satisfy the quota of votes necessary to elect a director, any remaining board seat or seats are filled by electing the highest remaining nominee from the group with the highest number of remaining votes cast until all available seats have been filled.

The directors of Grupo Cibest must abstain from participating, directly or through an intermediary, on their own behalf or on behalf of a third party, in activities that may compete against Grupo Cibest or in conflict-of-interest transactions that may generate a conflict-of-interest situation, unless they follow the procedure established for this purpose by the Bylaws, the Good Governance Code, or any other regulations or policy applicable as a result of belonging to a financial conglomerate.

Pursuant to the bylaws of Grupo Cibest, the board of directors has the power to authorize the execution of any agreement, within the corporate purpose of Grupo Cibest, and to adopt the necessary measures in order for Grupo Cibest to accomplish its purpose, except for agreements that, by law, can only be authorized at the shareholders’ meeting. Furthermore, the board of directors must authorize certain transactions such as the issuance of bonds or common shares up to the total amount of authorized capital stock.

 

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We expect Grupo Cibest’s board of directors to meet regularly on a monthly basis to discuss and resolve various corporate matters. The board may also convene for additional extraordinary meetings upon request of the board, the General Secretary or the President.

Directors

Below are Bancolombia’s current directors who are expected to serve as Grupo Cibest’s directors following the Corporate Structure Changes:

 

Name		Expected Position at Grupo Cibest
Ricardo Jaramillo Mejía		Director
Juan David Escobar Franco		Director
Andrés Felipe Mejía Cardona		Director
Arturo Condo Tamayo		Director
Luis Fernando Restrepo Echavarría		Director
Silvina Vatnick		Director
Sylvia Escovar Gómez		Director

Ricardo Jaramillo Mejía was born in 1972. Mr. Jaramillo is an Engineer from the university Escuela de Ingeniería de Antioquia and has an MBA from Boston University Graduate School of Management. Mr. Jaramillo is the President of Grupo Sura, Holding of the Financial Conglomerate Sura-Bancolombia, where he previously served as Vice-president of Business and Finance Development. He also served as CEO, CFO, and Project Manager in Banca de Inversion, as well as Fiduciaria Bancolombia. He has been a member of the Boards of Directors of Suramericana, SURA Asset Management, Arus, Grupo Argos and Renting. He was also part of the Directive Council of Asociación Medellín Cultural, Orquesta Filarmónica de Medellín and Universidad EIA. Mr. Jaramillo has been a non-independent member of Bancolombia’s Board of Directors since his appointment in June 2024.

Juan David Escobar Franco was born in 1969. Mr. Escobar is a Systems Engineer from Universidad EAFIT and has a post-graduate degree in Electronic Business from Tecnológico de Monterrey and an MBA from the same institution. He holds a master in Actuarial Science from Georgia State, and has studied High Management Studies at the Kellogg School of Management, and Digital Transformation at University of Virginia, among other courses associated to project management and direction. Mr. Escobar is the CEO of Seguros Sura Colombia, where he had previously served as Insurance Vice-president, Actuarial Manager and Director of the Automobile Department. Mr. Escobar has been a non-independent member of Bancolombia’s Board of Directors since his appointment in 2020. He has been a member of different boards of directors in the corporate and social sectors.

Andrés Felipe Mejía Cardona was born in 1962. Mr. Mejía is an Economist from Michigan University and has an MBA from Eafit, Studies in Strategic Planning from Universitat de Barcelona, Senior Management from Universidad de los Andes and was part of the Program EXPRO of International Business at CBI Rotterdam, Holland. Mr. Mejía has extensive professional experience in foreign trade and international markets. He is CEO of MU Mecanicos Unidos S.A.S., a company dedicated to metal casting and manufacturer of the Victoria brand. He has been member of the Board of Directors of Edatel, ISA, Isagen, Fabricato, Internexa, XM and Protección S.A. Mr. Mejía has been an independent member of Bancolombia’s Board of Directors since his appointment in 2016.

Arturo Condo Tamayo was born in 1967. Mr. Condo holds a Doctorate in business strategy and competitiveness from Harvard Business School. He is President of Universidad EARTH, a Costa Rican institution that educates leaders on sustainability in rural areas and in the past has been President of INCAE Business School and Director of the Latin American Center for Competitiveness and Sustainable Development (LACCSD). He has been a professor in strategy, competitiveness and sustainable development. Currently he is a consultant in strategic planning and competitive, corporate and internationalization strategies for Latin American

 

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and Asian companies and organizations. He has also been an advisor to multilateral organizations like the IDB and the World Bank. In 2014, he launched Keyword Centroamérica, a strategic information company he chairs. He is a founding member of Central American Private Sector Initiative (CAPSI), a group of regional leaders focused on improving Central Americans quality of life through regional actions and of the Global Shapers Community in San Jose, Costa Rica, which is part of the World Economic Forum. He has been recognized by the World Economic Forum (WEF) as a Young Global Leader (YGL). He is a founding board member of the Global Business Oath Project, a project that seeks to change the ethical behavior of business leaders. Mr. Condo was also one of the founders and promoters of the Fintech Association of Central America and the Caribbean in 2016 and a board member of the fintech Impesa (2015-2017). He is a Board Member of Voces Vitales Costa Rica-NGO, Earth Ventures and The Common Project. Mr. Condo has been an independent member of Bancolombia’s Board of Directors since his appointment in 2016.

Luis Fernando Restrepo Echavarría was born in 1958. Mr. Restrepo has a bachelor’s degree in Industrial Management from Georgia Institute of Technology and an MBA degree from the University of Chicago. He has been affiliated with The Marmon Group of Chicago and was part of the Leadership Rotational Program in Chicago at The Rego Company (Planning Production and Industrial Engineering), Hammond Organ Company (Financial and Cost Accounting) and Marmom Keystones (sales). Mr. Restrepo currently serves as CEO of Crystal S.A.S., a company dedicated to the production and commercialization in Latin America of brands such as Gef, Punto Blanco, Baby Fresh and Galax. He is currently a member of the Board of Directors of: Constructora Conconcreto S.A, Etiflex S.A (Lithography) and Espumas Plásticas S.A.S-Comodisimos and he previously served on the Board of Directors of Asociación Nacional de Empresarios de Colombia-ANDI. He is also a member of the Advisory Board of the President of Georgia Tech in the U.S.A. Mr. Restrepo has been an independent member of Bancolombia’s Board of Directors since his appointment in 2016. He has been the Chairman of the Board of Directors of Bancolombia since April 26, 2022.

Silvina Vatnick was born in 1959. Ms. Vatnick is a Ph.D. candidate in macroeconomics and international finance from Columbia University, New York, economist from the University of Buenos Aires and holds a master’s degree in economics from UCEMA. Her professional development has been focused on macroeconomic issues, financial and regulatory stability, corporate governance, access to finance, sustainability, and entrepreneurship. She possesses solid technical expertise, and a close understanding of the economy in Latin America, particularly in countries like Colombia and Guatemala. Ms. Vatnick also has extensive experience in the management of institutional affairs. She is co-founder and director of Global Outcomes LLC, a strategic advisory firm for companies, governments, and public and private institutions interested in Latin America and the world. She is currently Senior Advisor to the U.S. Treasury Department’s Office of Technical Assistance on financial and regulatory stability issues. She’s also a member of the Corporate Governance Task Force at the OECD. In March 2021, she was appointed as an independent member of Bancolombia’s Board of Directors. In May 2021, she was identified by the Board of Bancolombia as the audit committee financial expert.

Sylvia Escovar Gómez was born in 1961. Mrs. Escovar is an economist from Universidad de los Andes. She has worked as chief economist of the World Bank’s resident mission in Colombia and was head of the External Credit Division of the National Planning Department (“Departamento Nacional de Planeación” or “DNP”). She served as Head of the Economic Research Service of Banco de la República, Head of the National Public Policy Evaluation System of the DNP and General Director of the FES Leadership Foundation. She was Undersecretary of Education and Undersecretary of Finance in Bogotá D.C. and had previously served as Financial Vice President of Fiducolombia. For the last 18 years she has been affiliated with Organización Terpel S.A., where she has held different positions such as Commercial Vice President, National Fuels Manager, and Financial and Administrative Manager. She served as Chief Executive Officer from 2012 until December 2020. Since January 2021, she has been a strategic advisor to the Board of Directors of Terpel S.A. and a member of the boards of directors of the subsidiaries of this organization. She is Director of EPS Sanitas and ETB S.A. In March 2020, she was appointed as an independent member of the Bancolombia’s Board of Directors.

No arrangements or understandings have been made by major shareholders, customers, suppliers or others pursuant to which any of the above directors were selected.

 

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Committees of the Board of Directors of Grupo Cibest

Upon completion of the Corporate Structure Changes, we expect that the board of directors of Grupo Cibest will form four committees to serve under the board: the Audit Committee, the Designation, Compensation and Development Committee, the Good Governance Committee and the Risk Committee. Each committee member will be appointed by the board of directors.

Audit Committee

Grupo Cibest’s Board of Directors, in compliance with Colombian issuer regulations, will maintain an Audit Committee that is expected to be comprised of three members, including all independent directors, at least one of whom will be an expert in accounting or finance.

The Audit Committee will have a charter approved by the Board of Directors to establish its composition, organization, objectives, duties, responsibilities and extension of its activities. The main purpose of this Committee will be to support the Board of Directors by overseeing the effectiveness of Grupo Cibest’s internal controls through the evaluation of policies, standards, and procedures; the reliability and timeliness of financial information; and the protection of the company’s assets. Other specific responsibilities of the Committee will include: (i) to assist the Board of Directors in decision-making related to the internal control system and its improvement; (ii) to evaluate the structure of the internal control system in order to determine whether the designed procedures reasonably protect the company’s assets; (iii) to continuously evaluate compliance with the standards and policies that make up the control environment; (iv) to monitor compliance with the instructions given by the Board of Directors regarding the internal control system; (v) overseeing the integrity of the financial statements, financial reporting process and systems of internal accounting and financial controls; (vi) to ensure the reliability and timeliness of the information disclosed to the market, including disclosures related to ESG matters; (vii) to present its recommendation to the Board of Directors regarding the appointment of the Vice-president of Internal Audit; (viii) to approve the Annual Internal Audit Plan, as well as its annual budget and resource plan; (ix) to present to the Shareholders’ Assembly, through the Board of Directors, the candidates for the position of External Auditor; (x) to supervise the services of the External Auditor, evaluating their quality and effectiveness, and to inform the Board of Directors about situations that may threaten their independence or limit their access to information; (xi) to study the reports presented by the External Auditor, Internal Audit, and external auditors on weaknesses detected in the evaluation of the effectiveness of the internal control system, as well as other internal control reports prepared by these bodies; (xii) to review the financial statements and present them to the Board of Directors for consideration; (xiii) to recommend to the Board of Directors for approval the guidelines on ethics matters; (xiv) to propose to the Board of Directors controls to prevent, detect, and respond appropriately to fraud risks; (xv) to evaluate initiatives aimed at preventing cybersecurity risks, and monitor cybersecurity management, be informed about cybersecurity incidents, and review the information security and cybersecurity policies before submission to the Board for approval on an annual basis; (xvi) to review non-recurrent operations with related parties, according to what is stated in the Good Governance Code; and (xvii) to evaluate and advise the potential conflicts of interest of directors and senior management. The Audit Committee must also study, report, and recommend measures to be taken in cases of fraud that may have affected the quality of the financial information, for which it may rely on the Corporate Ethics Committee.

Further, the Internal Auditor of Grupo Cibest will report to the Audit Committee. Likewise, Grupo Cibest is expected to have an Ethics Committee that will report to the Audit Committee and will be in charge of defining general policy issues and giving guidelines on ethics, conduct and integrity, as well as defining corporate positions in the face of difficult ethical dilemmas. From time to time, the Audit Committee may carry out diagnostic studies of the ethical culture in Grupo Cibest.

The Audit Committee is expected to meet and report to the Board of Directors at least quarterly and present an annual report of its activities at the General Shareholders’ Meeting.

The shareholders will establish the remuneration of the members of the Audit Committee in their general meeting.

 

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Designation, Compensation and Development Committee

This committee is expected to be composed of three members of the Board of Directors which will be elected by the Board itself. At least two members will be independent directors. The Manager of Human Resources of Grupo Cibest is expected to act as secretary of this committee.

The Designation, Compensation and Development committee will recommend to the Board of Directors the policies and provisions for the hiring, remuneration, compensation, and development of senior management of Grupo Cibest. Likewise, it is expected to continuously survey the goals of the different compensation programs regarding the performance of the officers and assess the efficacy of such programs.

The duties of the designation, compensation and development committee are expected to include: (i) determining the corporate policies of human resources, establishing the selection, evaluation, compensation, and development processes for senior management; (ii) establishing the objective criteria under which Grupo Cibest hires its principal officers; (iii) proposing objective criteria under which Grupo Cibest hires senior management and designs succession plans; and (iv) issuing recommendations for the Board of Directors concerning appointments and compensation of the president and senior management.

The shareholders will establish the remuneration of the members of the Committee in their general meeting.

Good Governance Committee

The Good Governance Committee is expected to be composed of at least three members of the Board of Directors, of which at least one will be an independent director. Grupo Cibest’s CEO is expected to attend this committee on a permanent basis.

The Good Governance Committee will have a charter approved by the Board of Directors that governs aspects such as composition and invitees to meetings, roles and responsibilities of the Committee and its internal rules.

The main purpose of this Committee will be to assist Grupo Cibest’s Board of Directors in overseeing compliance with Corporate Governance measures. Other specific responsibilities of the Committee will include: (i) to propose and review the criteria to be followed for the composition of the Board of Directors and the evaluation of the suitability of the candidates proposed by shareholders; (ii) overseeing the definition of profiles of the members of the Board of Directors and the search process of candidates to be elected as members of the Board of Directors; (iii) to review in advance and present to the Board of Directors proposals for modifications, changes, or adjustments to the Bylaws and the Good Governance Code; (iv) to promote the training of the directors; (v) to propose the annual agenda of the Board of Directors; (vi) to review the results of the evaluation process of the Board of Directors; (vi) to approve the group’s ESG strategy, following the guidelines set by the Board of Directors for this purpose; (vii) to monitor the periodic compliance with the group’s ESG strategy.

This Committee is also expected to support the Board of Directors in cases related to the implementation of succession policies of the Board of Directors and its remuneration.

The shareholders will establish the remuneration of the members of the Committee in their general meeting.

Risk Committee

Grupo Cibest’s Risk Committee is expected to consist of three members of the Board of Directors, of which at least one will be an independent director.

The main purpose of this Committee will be to serve as a support for approval, follow-up, and control of Grupo Cibest’s risk management system, corporate policies and strategies for risk management. In addition, this

 

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Committee is expected to assist Grupo Cibest’s Board of Directors in aspects such as the definition of Grupo Cibest´s risk appetite and the monitoring of the Group´s risk profile, expected loss, profitability and funds required to manage the Group´s risks.

Among other responsibilities, the Risk Committee is expected to evaluate and present to the Board of Directors proposals for delegating responsibilities and establishing operational limits for various areas, related to the different risk management systems.

This Committee will also be in charge of the oversight of the methodology, procedures, and tools for managing cybersecurity risks and the corresponding policies manual; keeping the Board of Directors informed of the cybersecurity risk management effectiveness; and assessing the causes of cybersecurity breaches and the mitigation measures adopted on an ongoing basis. The committee is expected to receive management reports on cybersecurity risk exposure, substantial changes to exposure, tolerance level, compliance and mitigation initiatives.

Risks related to sustainability are expected to be overseen by the Risk Committee which will support the Board of Directors in its management and oversight.

The Risk Committee will have a charter approved by the Board of Directors which establishes its composition, organization, objectives, duties, responsibilities and scope of its activities.

The shareholders will establish the remuneration of the members of the Committee in their general meeting.

Senior Management of Grupo Cibest

Below are Bancolombia’s senior management who are expected to serve as Grupo Cibest’s senior management following the Corporate Structure Changes:

 

Name		Position
Juan Carlos Mora Uribe		Chief Executive Officer
Mauricio Botero Wolff		Chief Financial and Strategy Officer
Mauricio Rosillo Rojas		Chief Business Officer
Julián Mora Gómez		Chief Corporate Officer
Jaime Alberto Villegas Gutierrez		Chief Corporate Services Officer
Rodrigo Prieto Uribe		Chief Risks Officer
José Mauricio Rodriguez		Chief Internal Audit Officer
Cipriano López Gonzalez		Innovation Vice President
Claudia Echavarria Uribe		Chief Legal Officer and General Counsel

Juan Carlos Mora Uribe was born in 1965. He has been CEO of Bancolombia since May 2016. Prior to his appointment as CEO of Bancolombia, he was Bancolombia´s Corporate Innovation and Digital Transformation Vice President since 2015. He holds a B.A degree from Universidad Eafit and an M.B.A degree from Babson College. Mr. Mora has experience in diverse areas of corporate finance and investment banking. Mr. Mora performed the role of Vice President of Risk in 2005 and was then appointed as Chief Corporate Services Officer until 2015. Currently, he chairs the Comité Universidad Empresa Estado-CUEE board along with the President of la Universidad de Antioquia.

Mauricio Botero Wolff was born in 1978. He has been the CFO since August, 2024. Mr. Botero is a Business Engineer from EIA University, with a degree in economics from Los Andres University. He received his MBA in Strategy and Finance as a Fulbright Scholar from Emory University. Additionally, he is part of the CFO Program at Columbia Business School. He’s held different positions at Grupo Bancolombia. Among others,

 

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he held positions in the Treasury Vice Presidency, he led the Investor Relations, Corporate Projects and Acquisitions teams, and he assumed the Vice-presidency of Administrative Services and Security in 2016, which later evolved in 2022 to the Vice-presidency of Customer and Employee Services.

Mauricio Rosillo Rojas was born in 1969. He has been the Business Vice President of Bancolombia since December 2023. Mr. Rosillo holds a law degree from Pontificia Universidad Javeriana, and obtained a degree in financial legislation from Universidad de Los Andes, a master’s degree in commercial and economic law from the University of Georgia, and additional training in European Community law from the Free University of Brussels. Mr. Rosillo has held several positions in the public and private sectors, including General Secretary of Federación Colombiana de Compañías de Leasing (Fedeleasing), Interim Colombian Superintendency of Cooperatives (“Superintendente de Economia Solidaria (encargado)”), Director of Financial Regulation of the Colombian Ministry of Finance, Supervisor of the Securities Market of the Colombian Securities Exchange and President of the Colombian Self-Regulatory Organization (Autoregulador del Mercado de Valores-AMV). He was the Chief Legal Officer of Bancolombia from December 2008 until September 2019, when he was appointed as Corporate Vice President, a position that he held until 2023 before his appointment as Vice President of Business of Bancolombia. The Business Vice-Presidency is responsible for leading the individual banking, small and medium enterprises and corporate business segments, as well as consolidating other support areas such as marketing, products, customer service and analytics, among others.

Julián Mora Gómez was born in 1976. He has been the Corporate Vice President since December 2023. He holds a law degree from Universidad Pontificia Bolivariana in Medellin, and obtained a degree in insurance from the same university, and an M.B.A. from the EADA Business School. Mr. Mora has worked in various roles in Bancolombia for more than 20 years, as a lawyer and commercial and regional manager of Fiduciaria Bancolombia, director of industry and trade of Banca de Inversion, CEO of Fiduciaria Bancolombia, and as Chief Compliance Officer for Grupo Bancolombia, Valores Bancolombia, Fiduciaria Bancolombia and Banca de Inversion from January 2022 until his appointment in 2023 as Corporate Vice President. He has also performed as Professor in Pontificia Universidad Javeriana in Bogotá. The Corporate Vice Presidency oversees Human Resources Vice Presidency, Compliance Vice Presidency and Reputation and Communications Vice Presidency.

Jaime Alberto Villegas Gutierrez was born in 1965. He has been the Vice President of Corporate Services since November 2016. He holds an industrial engineering degree from Universidad de los Andes and a graduate degree in finance from the same University. He has worked in the financial, operations and technology department of financial institutions such as Standard Chartered Bank, in Colombia, Peru, United Arab Emirates and Singapore. The Corporate Services Vice Presidency is responsible for supplying corporate, administrative, technological, operational, and project support services required by the business units to fulfill the promises made to customers, ensuring the normal development of activities of Grupo Bancolombia in Colombia and abroad.

Rodrigo Prieto Uribe was born in 1973. He has been the Corporate Risks Vice President since March 2011. He is a civil engineer and has a master’s degree in economics from Universidad de los Andes and a master’s degree in finance from Instituto Tecnológico y de Estudios Superiores de Monterrey. Mr. Prieto has worked at Bancolombia holding several positions at different departments in Risk, Investment Banking, Financial Planning, Strategic Planning, and Corporate Project Management. He has also been a professor at several universities including Universidad EAFIT, Escuela de Ingeniería de Antioquia and Universidad de los Andes. The Corporate Risks Vice Presidency is responsible for the design of Bancolombia’s risk management strategy, and the leadership of its execution and the determination of the risk appetite.

José Mauricio Rodriguez was born in 1972. He has been the Vice President of Internal Audit since August 2020. He has more than 20 years of experience in auditing, and has been working for Grupo Bancolombia since 1994 where he has held different positions in the Group, including Vice President of Internal Audit at Banco Agrícola, Bancolombia’s subsidiary at El Salvador. José Mauricio is a Certified Public Accountant from Universidad de Medellín and an IT Technician from Politecnico Colombiano. He also holds an Executive MBA

 

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from Centro Universitario Villanueva and an undergraduate degree in Finance from Universidad de Medellín. Mr. Rodríguez is also certified in risk (CRMA) by IIA-The Institute of Internal Auditors- and is licensed to perform quality assessments (QA).

Cipriano López Gonzalez was born in 1974. He has been the Innovation Vice President since 2019. He is a mechanical engineer from Bolivariana Pontifical University, holds an MBA degree from the Bordeaux School of Business in France, and has participated in complementary executive programs in the universities of Harvard, Stanford and Wharton Business School. He has previously worked for SAB-Miller Group as Negotiating Director, DANONE Group in France as the officer in charge of the cereal products category for Europe, and with L’Oreal in France and Spain. From 2010 to 2018 he was CEO of Haceb Industries, where he led the process of innovation and digital transformation, developing new businesses, alliances and a customer-centered culture.

Claudia Echavarria Uribe was born in 1979. She has been Bancolombia’s Chief Legal Officer and General Counsel since December 2019. She is a lawyer from Universidad Pontificia Bolivariana, has a Master of Law degree from Columbia University Law School and is a member of the New York Bar. Most recently she was the Corporate Vice President and the General Counsel of Almacenes Exito and previously she held different positions at the legal department of Bancolombia and in Banca de Inversion between 2004 and 2015.

There are no family relationships between the directors and senior management of Bancolombia listed above. No arrangements or understandings have been made by major shareholders, customers, suppliers or others pursuant to which any of the above members of senior management were selected.

Compensation of Directors and Senior Management

Grupo Cibest. The form and amount of the compensation to be paid to each of Grupo Cibest’s directors will be the same as those approved by the General Assembly of Bancolombia for its directors, unless otherwise determined by the General Assembly of Grupo Cibest in any period following the completion of the Corporate Structure Changes. The policies regarding compensation to be paid to each of Grupo Cibest’s executive officers in any period following the completion of the Corporate Structure Changes will be determined by the Designation, Compensation and Development Committee of Grupo Cibest’s Board of Directors.

Bancolombia S.A. Of the persons nominated to become directors of Grupo Cibest, seven were Bancolombia’s directors during the year ended December 31, 2023. In 2023, we paid each director who resides in Colombia a fee of COP 12.17 million per month for membership on the Board, and another fee of COP 12.17 million for participating in Support Committees. In 2023, we paid each director who does not reside in Colombia a fee of USD 3.195 per month for membership on the Board, and another fee of USD 3.195 for participating in Support Committees. In addition, they receive an allowance of USD 266 per day when they must travel. In accordance with the current policy, 70% of director fees are paid in cash each month and the remaining 30% is paid through a contribution in an investment fund that invests in Bancolombia shares. Directors only have the right to withdraw money from the fund after two years following the respective contributions. The directors received no other compensation or benefits, and there is no stock option plan for them. Consistent with Colombian law, we do not publish information regarding the compensation of the Bancolombia’s individual officers.

During the years ending December 31, 2023, 2022 and 2021, we paid fees to the directors of COP 2,306, COP 1,937 and COP 1,655, respectively, as compensation for attending meetings of the Board and its Committees. The payments to senior management in the same periods were COP 18,387, COP 15,776 and COP 10,487 for short-term retributions and COP 312, COP 552 and COP 604 for long-term retributions. In 2022, there was a consolidation of the contributions of the Senior Management Pension Plan for COP 36,962, and there were payments for post-employment benefits of COP 827 in 2023, COP 642 in 2022 and 3,207 in 2021.

 

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Share Ownership

As part of the Share Exchange, holders of Bancolombia’s preferred shares will receive one Grupo Cibest preferred share for every preferred share they own and holders of Bancolombia’s common shares will receive one Grupo Cibest common share for every common share they own. Accordingly, after the completion of the Share Exchange, we expect that the persons nominated to become directors of Grupo Cibest, as a group, will hold an aggregate of 88 Grupo Cibest common shares, representing less than 0.00% of the outstanding Grupo Cibest common shares and less than 0.00% of Grupo Cibest’s total shares outstanding. The persons nominated to become directors of Grupo Cibest do not own any preferred shares of Bancolombia and thus will not own any preferred shares of Grupo Cibest.

Stock Options. Bancolombia does not currently have any stock options outstanding and following completion of the Corporate Structure Changes, no stock options of Grupo Cibest will be outstanding.

For further information regarding Bancolombia’s major stockholders, see “Item 7.A. Major Stockholders” in the 2023 Annual Report, which is incorporated by reference into this prospectus.

Related Party Transactions

For further information regarding related party transactions, see “Item 7.B. Related Party Transactions” in the 2023 Annual Report, which is incorporated by reference into this prospectus.

 

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LEGAL MATTERS

The validity of the common shares and preferred shares of Grupo Cibest that will be issued in the Share Exchange will be passed on for Bancolombia by Brigard Urrutia Abogados SAS, Bancolombia’s Colombian counsel. Sullivan & Cromwell LLP, Bancolombia’s special U.S. tax counsel, will pass on certain U.S. federal income tax consequences of the Share Exchange to U.S. holders of Bancolombia’s common shares, preferred shares or ADSs.

EXPERTS

The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2023 have been so incorporated in reliance on the report of PwC Contadores y Auditores S.A.S., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

 

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INDEX TO FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Interim Financial Statements of Bancolombia and its Subsidiaries

 

Condensed Consolidated Interim Statement of Financial Position as of June 30, 2024 and December 31, 2023			A-2
Condensed Consolidated Interim Statement of Income for the three and six month periods ended June 30, 2024 and 2023			A-3
Condensed Consolidated Interim Statement of Comprehensive Income for the three and six month periods ended June 30, 2024 and 2023			A-4
Condensed Consolidated Interim Statement of Changes in Equity for the six month periods ended June 30, 2024 and 2023			A-5
Condensed Consolidated Interim Statement of Cash Flow for the six month period ended June 30, 2024 and 2023			A-7
Notes to Consolidated Financial Statements			A-9

 

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CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

As of June 30, 2024 and December 31, 2023

(Stated in millions of Colombian pesos)

 

		Note		June 30, 2024				December 31, 2023
ASSETS
Cash and cash equivalents		4			31,465,176				39,799,609
Financial assets investments		5.1			30,573,634				25,674,195
Derivative financial instruments		5.2			3,444,239				6,252,270
Financial assets investments and derivative financial instruments					34,017,873				31,926,465
Loans and advances to customers					268,108,682				253,951,647
Allowance for loans, advances and lease losses					(16,680,835	)			(16,223,103	)
Loans and advances to customers, net		6			251,427,847				237,728,544
Assets held for sale and inventories, net					993,902				906,753
Investment in associates and joint ventures					2,850,311				2,997,603
Investment properties		8			5,423,018				4,709,911
Premises and equipment, net		9			6,048,006				6,522,534
Right-of-use assets, lease					1,668,641				1,634,045
Goodwill and intangible assets, net		7			9,191,298				8,489,697
Deferred tax, net		10			796,955				685,612
Other assets, net					8,316,045				7,528,036
TOTAL ASSETS					352,199,072				342,928,809
LIABILITIES AND EQUITY
LIABILITIES
Deposits by customers		11			257,869,276				247,941,180
Interbank deposits and repurchase agreements and other similar secured borrowing					1,105,983				1,076,436
Derivative financial instruments		5.2			3,680,218				6,710,364
Borrowings from other financial institutions		12			12,938,759				15,648,606
Debt instruments in issue		13			16,107,674				14,663,576
Lease liabilities					1,817,740				1,773,610
Preferred shares					555,152				584,204
Current tax					695,645				164,339
Deferred tax, net		10			2,128,321				1,785,230
Employee benefit plans					895,682				882,954
Other liabilities		14			14,199,672				12,648,581
TOTAL LIABILITIES					311,994,122				303,879,080
EQUITY
Share capital					480,914				480,914
Additional paid-in-capital					4,857,454				4,857,454
Appropriated reserves		16			22,632,835				20,044,769
Retained earnings					2,675,951				2,515,278
Net income attributable to equity holders of the Parent Company					3,103,246				6,116,936
Accumulated other comprehensive income, net of tax					5,469,515				4,074,161
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT COMPANY					39,219,915				38,089,512
Non-controlling interest					985,035				960,217
TOTAL EQUITY					40,204,950				39,049,729
TOTAL LIABILITIES AND EQUITY					352,199,072				342,928,809

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

 

A-2

CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME

BANCOLOMBIA S.A. AND ITS SUBSIDIARIES

For the six-months periods ended June 30, 2024 and 2023 and the three-months period ended June 30, 2024 and 2023

(Stated in millions of Colombian pesos, except earnings per share stated in units of pesos)

 

				For the six-month periods ended June 30								Quarterly
		Note		2024				2023				2024				2023
Interest on loans and financial leases
Commercial					8,358,202				8,595,698				4,160,195				4,392,859
Consumer					4,340,212				5,175,769				2,188,049				2,583,004
Mortgage					2,032,457				2,112,444				1,019,405				996,325
Financial leases					1,872,129				1,899,985				917,304				971,439
Small business loans					104,983				87,351				51,279				41,868
Total interest income on loans and financial leases					16,707,983				17,871,247				8,336,232				8,985,495
Interest on debt instruments using the effective interest method		17.1			497,912				503,397				240,138				253,026
Total Interest on financial instruments using the effective interest method					17,205,895				18,374,644				8,576,370				9,238,521
Interest income on overnight and market funds					126,418				103,627				64,595				48,436
Interest and valuation on financial instruments		17.1			708,556				(20,467	)			302,510				(212,274	)
Total interest and valuation on financial instruments					18,040,869				18,457,804				8,943,475				9,074,683
Interest expenses		17.2			(7,695,965	)			(8,166,276	)			(3,756,886	)			(4,141,013	)
Net interest margin and valuation on financial instruments before impairment on loans and financial leases, off balance sheet credit instruments and other financial instruments					10,344,904				10,291,528				5,186,589				4,933,670
Credit impairment charges on loans, advances and financial leases, net		6			(2,957,924	)			(4,102,779	)			(1,623,061	)			(2,058,130	)
Credit recovery (impairment) for other financial instruments, net					24,161				(25,065	)			4,278				(24,070	)
Total credit impairment charges, net					(2,933,763	)			(4,127,844	)			(1,618,783	)			(2,082,200	)
Net interest margin and valuation on financial instruments after impairment on loans and financial leases and off balance sheet credit instruments and other financial instruments					7,411,141				6,163,684				3,567,806				2,851,470
Commissions income		17.3			3,699,938				3,451,440				1,948,046				1,767,456
Commissions expenses		17.3			(1,669,168	)			(1,451,846	)			(918,235	)			(769,458	)
Total commissions, net					2,030,770				1,999,594				1,029,811				997,998
Other operating income		17.4			1,370,413				2,109,605				741,084				1,119,725
Dividends and net income on equity investments		17.5			(140,768	)			228,906				(225,575	)			112,270
Total operating income, net					10,671,556				10,501,789				5,113,126				5,081,463
Operating expenses
Salaries and employee benefits		18.1			(2,683,347	)			(2,676,774	)			(1,348,396	)			(1,353,981	)
Other administrative and general expenses		18.2			(2,437,740	)			(2,339,859	)			(1,259,988	)			(1,198,981	)
Taxes other than income tax		18.2			(780,826	)			(694,729	)			(389,932	)			(346,834	)
Impairment, depreciation and amortization		18.3			(564,675	)			(531,273	)			(289,733	)			(271,177	)
Total operating expenses					(6,466,588	)			(6,242,635	)			(3,288,049	)			(3,170,973	)
Profit before income tax					4,204,968				4,259,154				1,825,077				1,910,490
Income tax		10			(1,058,203	)			(1,012,699	)			(363,323	)			(426,328	)
Net income					3,146,765				3,246,455				1,461,754				1,484,162
Net income attributable to equity holders of the Parent Company					3,103,246				3,177,268				1,439,774				1,460,491
Non-controlling interest					43,519				69,187				21,980				23,671
Basic and Diluted earnings per share to common shareholders, stated in units of Colombian pesos		19			3,256				3,333				1,511				1,533

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

 

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