Banco Davivienda S.A. ($PFDAVVNDA)

Welcome to Davivienda Group's First Quarter of 2026 Earnings Conference Call. I'm Karen, and I'll be your operator for today's call. Today's presentation is for investors and analysts only. Therefore, questions from the media will not be addressed. Today, Mr. Javier Suarez, Chief Executive Officer; and Mr. Pedro Bohórquez, VP of Strategic Risk and Financial Planning, will join us to discuss the quarterly results that have been released. If you have not yet received a copy of the earnings report and presentation, please visit the Davivienda Group's Investor kit or the Financial Information section at daviviendagroup.com. [Operator Instructions] Before proceeding, let me mention that any forward-looking statements are being made under the safe harbor provided by the Securities Litigation Reform Act of 1995. Actual performance could differ materially from anticipated in any forward-looking statements due to macroeconomic conditions, market risks and other factors beyond our control. [Operator Instructions] I am now pleased to turn the call over to Mr. Javier Suarez, Chief Executive Officer.

Good morning, and thank you for joining us today for Davivienda Group's First Quarter of 2026 Earnings Conference Call. During the first quarter, we continued advancing on the priorities we shared in our previous call. Preserving a strong risk profile, maintaining sound capital and liquidity levels, strengthening our funding structure and advancing our integration agenda. Before going into the financial results, I would like to begin by explaining the basis of presentation for this quarter as comparability remains an important element to properly read our figures. Please go to Slide 3. For the balance sheet both fourth quarter of 2025 and first quarter of 2026 already reflect the full consolidation of the integrated operations. Therefore, balance sheet items are comparable for these periods. For the income statement, the situation is different. The first quarter of 2026 is the only period that reflects a full quarter of Davivienda Group's consolidated results since the fourth quarter of 2025 included just 1 month of results from the integrated operations and therefore, does not provide a fully comparable base. Finally, since Davivienda Group does not yet have 12 months of comparable history under its current structure, income statement indicators will be presented on a quarterly annualized basis. Once we build more history, we will progressively move toward year-to-date and 12-month indicators. Banco Davivienda figures are provided for reference purposes only. On the following slides, I will cover the macro environment. Please move on to Slide 4, where we will review the macroeconomic environment in Colombia. Colombia's economy continued to expand at the beginning of 2026, although at a more moderate pace. According to the Economic Activity Index, activity grew 1.5% on average during January and February mainly supported by services and household consumption. Inflation remained one of the main macroeconomic challenges, increasing from 5.10% in December to 5.68% in April driven by food prices, housing, utilities, restaurants and hotels. Core inflation also remained elevated, confirming persisting underlying price pressures and reinforcing the market's view that convergence toward the Central Bank's target range will take longer than previously expected. In this context, the Central Bank adopted a more restrictive monetary stance, implementing two increases to the monetary policy rate so far this year taking it from 9.25% to 11.25% currently. These decisions also reflect a cautious approach in a still challenging fiscal environment. Regarding the exchange rate, the Colombian peso appreciated by 2.6% during the quarter, supported by higher oil prices and a wider interest rate differential versus international rates. For us, this appreciation generated a negative translation effect on U.S. dollar-denominated balances when expressed in Colombian pesos. Looking ahead, our base case scenario for the country in a transitional year is for GDP to grow around 2.2% in 2026, annual inflation to close near 6.5%, and the monetary policy rate to end the year at around 11.75%. Despite the inflationary cycle and increasing interest rates, our disciplined approach to origination allows us to protect growth opportunities in strong profiles and support adequate risk-adjusted returns. In addition, we continue to actively manage our balance sheet position, limiting interest rate impact on our margins. Now turning to Slide 5. The Colombian financial system continued to show positive credit dynamics during the first quarter of 2026. Annual loan growth reached around 9%, partly reflecting the recovery trend accumulated over previous quarters. Following the increase in the monetary policy rate and higher funding costs, lending rates increased across segments during the quarter, particularly in consumer and commercial loans. This situation could moderate credit demand during the coming months, especially as household willingness to take on new financial obligations has shown some decrease. From an asset quality perspective, the system ratios remained broadly stable during the first months of the year. The total 90-day PDL stood close to 2.9%, broadly in line with year-end levels with no material deterioration across the main portfolios. This suggests that the credit cycle remains under control, although the higher rate environment requires continued monitoring. Despite current positive dynamics, the combination of higher interest rates, inflation pressures and a slightly weaker demand reinforces the importance of disciplined origination and active risk management consistent with the approach we continue to follow at Davivienda Group. Moving on to Central America on Slide 6. The region continued to show resilient macroeconomic conditions during the first quarter of 2026, with positive activity across the countries where we operate and generally low inflation levels compared to other economies in the region. In Costa Rica, economic activity remains strong supported by the free trade zone regime and services. The economy continued to grow above its historical average during the first 2 months of the year, while inflation remained in negative territory, although with some early signs of upward pressure from higher oil prices. The Central Bank kept its policy rate stable at 3.25%. Regarding the exchange rate, the Costa Rican colón appreciated 6.8% against the dollar during the quarter, supported by strong foreign currency inflows. From a balance sheet perspective, this appreciation had a positive translation effect on our colón-denominated operations, partially offsetting the negative impact from the Colombian peso appreciation against the dollar. However, from a P&L perspective, the colón's appreciation generated a negative effect in FX and derivatives, mainly associated with our hedging strategies to protect capital and solvency ratios from exchange rate volatility. In El Salvador, recent activity indicators also showed favorable growth, supported by construction and domestic demand. Remittances remain an important support for household consumption although their role has moderated compared to last year. Despite recent increases due to food and fuel-related pressures, inflation remains under control. In Honduras, economic activity remained relatively stable and close to its historical average. Inflation decreased compared to year-end 2025 and remain within the Central Bank's target range. The monetary policy rate has stayed unchanged. And at 5.75%, while the Lempira continued its gradual depreciation path under the framework agreed with the IMF. Finally, Panama continued to show solid activity supported by transportation and services with recent monthly indicators growing close to 5%. Inflation remained low, although slightly higher than at year-end, also reflecting the impact of higher international oil prices. Sovereign ratings and outlooks remain unchanged during the quarter. Overall, Central American economies continue to offer attractive structural opportunities, reinforcing their value for Davivienda Group's regional footprint and supporting the diversification of our balance sheet across markets, mitigating volatility in Colombia. At the same time, we remain attentive to the evolution of oil prices, remittances and exchange rate dynamics which could influence economic activity and our business performance. Please move on to Slide 7, where I will highlight our main financial results for the quarter. Our gross loans reached COP 202.3 trillion, increasing 1.8% during the quarter. This performance reflects positive lending dynamics under Davivienda Group's current perimeter while maintaining a disciplined approach to origination in a more demanding macroeconomic environment. Our net interest margin, including FX and derivatives, closed at 5.67%, reflecting a resilient margin performance supported by our active balance sheet management as well as short-term neutral stance to interest rate shocks. Cost of risk closed at 2.14%, showing a strong credit risk profile supported by the continued improvement of Banco Davivienda's asset quality and the gradual normalization of provision expenses in Davibank. Please keep in mind that the fourth quarter cost of risk for Banco Davivienda was initially low given lower provisioning needs during that period. Reported net profit for the quarter was COP 305 billion. These results include the full impact of the wealth tax and certain one-off effects associated with Davibank. When adjusting for Davibank's one-offs and amortizing the wealth tax throughout the year, recurring return on average equity stood at 8.39%. This view avoids annualizing the full wealth tax impact as it were repeated every quarter and provides a clear reading of the group's earnings generation in this first full quarter under the new structure. Additionally, on a pro forma basis, fully excluding the wealth tax impact net profit would have reached COP 585 billion, while return on average equity would have stood at 10.72%. This view helps illustrate the group's profitability before the effect of this extraordinary tax burden. Please bear in mind that 2026 will be a year in which synergies and integration costs will mostly offset each other. Going forward, as the integration progresses synergies should become more visible, supporting improvements in the group's profitability and efficiency metrics. Banco Davivienda's CET1 ratio reached 11.95%, increasing 32 basis points quarter-over-quarter and 77 basis points year-over-year, confirming that we continue to operate with a solid capital position to support growth and the integration's next steps. Overall, these results show that Davivienda Group starts its new stage with a larger balance sheet, resilient margins, controlled risk dynamics and strong capital levels. Please move on to the next slide, where I will share an update on DaviPlata, our neobank. During the quarter, low-amount deposits reached COP 1.23 trillion, growing 7% quarter-over-quarter and 29% year-over-year. This confirms the platform's relevance as a growing source of transactional deposits for the group, supported by a broader and more competitive value proposition. At the same time, as we continue developing new savings features such as interest-bearing pockets, our focus is to retain balances, increase engagement and strengthen customer activity within the platform. Credit continues to be one of the main pillars of the DaviPlata's monetization strategy. The credit portfolio reached COP 142.8 billion, more than 6x last year's balance. This performance reflects the increasing relevance of digital credit within the platform, supported by analytics capabilities, digital origination and our controlled risk appetite. It's important to mention that similar to what we've done at Davivienda, we made temporary origination adjustments during the quarter to anticipate potential deterioration that could arise from the current macroeconomic environment. However, DaviPlata continues to show strong growth potential and a positive contribution to our digital credit strategy. Regarding activity, monetary transactions reached COP 213 million, increasing 25% year-over-year, while purchases reached COP 4.6 trillion, growing 7% annual. On a quarterly basis, purchases and transactional income showed a seasonal decline, which is normal during the first quarter of the year. At the same time, we're broadening the platform's ecosystem beyond traditional money movement. We are expanding our digital marketplace with a stronger focus on prepaid services and entertainment while also advancing in mobility solutions, including top-ups for Bogotá's public transport system. These initiatives are mainly designed as engagement drivers to increase activity and customer loyalty while supporting a stronger cross-selling and deeper customer relationships over time. DaviPlata generated COP 68.1 billion in income during the quarter, increasing 7% quarterly and 59% year-over-year, mainly supported by a higher FTP contribution, which benefited from the increase in interest rates as well as by the growing relevance of loan income. Overall, the platform continues to build a more diversified revenue base. Going forward, our focus will remain on increasing recurrence within the platform and expanding the financial product offering while targeting segments with higher relationship potential, including young customers, employees and micro businesses. Pedro will now detail how our strategic discipline translated into this quarter's solid financial performance. Pedro, over to you.

Thank you, Javier. Please move on to the next slide, where I will cover the evolution of our gross loan portfolio. During the quarter, Davivienda Group's gross loan portfolio increased by 1.8%, reaching COP 202.3 trillion. Growth was concentrated in segments and geographies where we continue to see attractive risk-adjusted returns while maintaining a selective approach in businesses more sensitive to the current macro environment. In terms of portfolio mix, commercial loans represent around 44% of the total book, mortgages close to 30% and consumer loans around 26%. This composition reflects the diversified nature of the group. By segment, commercial loans increased by 3.2% during the quarter, mainly due to stronger disbursement activity in Colombia, particularly in sectors such as energy, commerce and services. The consumer portfolio slightly decreased by 0.2% during the quarter. This performance reflects a more cautious environment due to both higher interest rates and our disciplined approach to origination. At the same time, consumer lending in Central America continued to show positive dynamics in dollar terms. Mortgage loans grew by 1.3% during the quarter, mainly supported by the residential housing segment in Colombia. Please move on to Slide 10, where we will review the evolution of past due loans and coverage. The group continued to show a solid credit risk profile during the quarter. The total 90-day PDL ratio closed at 3.65%, improving 10 basis points compared to the previous quarter. At the same time, coverage levels continue to strengthen, reflecting both the quality of the integrated portfolio and the group's continued focus on gradually increasing provisions for the consumer and commercial portfolios. By segment, the commercial book showed an improvement in asset quality, supported by portfolio growth during the quarter, proactive collection management and better performance in specific commercial exposures under active monitoring. In consumer lending, the 90-day PDL ratio increased slightly, while coverage decreased marginally. This behavior reflects the context in Colombia, where we have seen some deterioration in credit cards and payroll loans earlier this year, in line with the expected evolution of loan vintages. As mentioned before, we have tightened our credit policies to safeguard the portfolio against further headwinds while maintaining a high concentration of assets in Stage 1. In mortgages, asset quality and coverage also improved, reflecting better origination dynamics and collection performance, especially in Colombia. Overall, these figures confirm that Davivienda Group is starting this new stage with a healthy risk profile, strong protection levels and a solid foundation to support growth going forward. Let's turn to Slide 11. This slide provides an outlook on the group's performance in the consumer business in Colombia by combining Banco Davivienda and Davibank's operation in the country. We observed a stabilization in disbursements as we have tightened origination standards and adjusted approval criteria in the more rate sensitive and higher risk segments. In terms of vintages, we are closely monitoring the performance of new loans to ensure that new cohorts remained within our risk framework. Provision levels for the quarter came in line with our expectations and with the guidance for the year, reflecting a temporary impact from the changing interest rate cycle and inflation dynamics. Overall, provision levels have room to continue improving in the midterm, particularly at Davibank Colombia, which is gradually converging to more normalized levels. Please move on to Slide 12, where we will review the evolution of provision expenses and the composition of the loan portfolio by stages. The composition of the loan portfolio by stages remained sound during the quarter. Stage 1 represented 90.9% of total loans, while Stage 2 stood at 5.1% and Stage 3 at 4.0%. This confirms that the group maintains a healthy risk structure. Coverage by stages also remains consistent with a prudent risk management approach. Stage 3 coverage stood at 56.8%, while the combined coverage of Stage 2 and Stage 3 was increased to 33.3%. These levels reflect our continued focus on maintaining adequate reserve buffers across the cycle. Provision expenses reached COP 1.08 trillion during the quarter and cost of risk stood at 2.14% on a quarterly annualized basis, consistent with our expectations for the year. From a regional perspective, Colombia represented 84% of total provision expenses, while Central America represented the remaining 16%. This composition is aligned with the size and the current moment of the cycle for each region. In Colombia, provision dynamics reflect a combination of larger, more consumer-focused portfolio. In Central America, provision remained aligned with the region's solid asset quality and lower cost of risk compared to the group average. Please move on to Slide 13, where we will review the evolution of funding sources and liquidity. Davivienda Group's funding sources reached COP 226.3 trillion, increasing 2.6% during the quarter, mainly supported by deposits, which continue to represent the core of our funding structure. Both demand and term deposits grew during the quarter, mainly driven by institutional clients in Colombia. This was partially offset by lower funds in Central America in line with the liquidity normalization after the integration. Other funding sources such as bonds and credits decreased during the quarter, mainly due to maturities, amortizations and the impact of the appreciation of the Colombian peso on instruments denominated in foreign currency. In Colombia, our funding mix continued to show progress in the transactional deposit strategy. Low and mid-cost demand deposits increased their share from 30% in the fourth quarter to 30.8% in the first quarter, while high-cost deposit decreased from 13.1% to 11.8%. This reflects our focus on deepening customer relationships under a broader client base even in an environment of higher interest rates. Liquidity levels also remained strong. Banco Davivienda Colombia and Davibank Colombia continue to operate with comfortable short-term liquidity buffers, and the group maintains a stable long-term liquidity profile. Overall, our funding strategy remains centered on stability and diversification, which are key elements to support resilience in changing interest rate environments. On Slide 14, we will review our capital structure. Davivienda Group's consolidated shareholders' equity reached COP 21.7 trillion, decreasing 1.2% during the quarter due to dividend distribution and FX appreciation. However, the tangible equity ratio for the group closed at 7.4%, remaining at healthy levels and reflecting the group's capacity to support its consolidated balance sheet. Global leverage closed at 101.6%, increasing compared to the previous quarter due to a reduction in Davivienda Group's stand-alone shareholders' equity, which was affected by the recognition of the wealth tax in addition to the reason previously mentioned. Excluding the wealth tax impact, double leverage would have been 100.4%. In any case, current levels remain comfortable and consistent with the flexibility we expect from the holding company structure. CET1 for our main operating subsidiary, Banco Davivienda closed at 11.95%, increasing 32 basis points quarter-over-quarter and 77 basis points year-over-year, mainly due to the quarter's profits together with a reduction in credit and operational risk-weighted assets. The total capital ratio stood at 16.22%. Overall, capital levels confirm that both the group and Banco Davivienda continue to operate with solid positions to support growth, absorb volatility and advance in the integration agenda. Please move to Slide 15, where we will analyze our margins. When including FX and derivatives, NII reached COP 3.25 trillion, with Colombia representing approximately 82% of the total, and Central America, the remaining 18%. Within Colombia, Banco Davivienda Colombia remained the main contributor to the group's financial margin. Performance was supported by the size and mix of the loan portfolio as well as by its balance sheet management aimed at limiting potential impacts on interest rate shocks. Although funding costs increased during the quarter, the operation continued to benefit from its transactional deposit strategy. Davibank Colombia also contributed positively to the group's margin, supported by the composition of its portfolio with a relevant participation of consumer loans and credit cards, but with a more liability-sensitive profile in the short term. In Central America, net interest income was supported by its diversified regional loan portfolio. However, the contribution of FX and derivatives was negative during the quarter, mainly due to our hedging strategy used to protect solvency and structural capital position from exchange rate volatility, particularly in the context of the strong appreciation of the Costa Rica colón. In addition, the margin was temporarily pressured by higher funding costs related to the excess liquidity built ahead of the integration. At the group level, NIM, including FX and derivatives stood at 5.67% on a quarterly annualized basis, reflecting a resilient margin profile in a more demanding rate environment, supported by active ALM management, disciplined funding strategy and a broadly neutral position to interest rate shocks in the short term. Please move on to Slide 16, where we will review nonfinancial income and operating expenses. Nonfinancial income reached COP 978 billion during the quarter, representing 23.1% of total income, confirming the relevance of fees within the group's revenue structure. From a regional perspective, Colombia represented approximately 80% of nonfinancial income, while Central America contributed the remaining 20%. In Colombia, nonfinancial income was mainly supported by transactional activity as well as strong cash management and credit card fee generation, particularly of Davibank. In Central America, this line reflects the recurring contribution of fees and services across the region. On the expense side, total OpEx reached COP 2.6 trillion, equivalent to a 57.7% cost-to-income ratio for the quarter. Fully excluding the wealth tax, expenses were COP 2.3 trillion and cost to income was 55.5%. By region, Colombia represented approximately 77% of total expenses, while Central America represented 23%, broadly aligned with the operating footprint and scale of each platform. Expenses reflect the larger size of the organization as well as inflation and salary adjustments. We continue to manage expenses with discipline while gradually advancing in the integration agenda and materialization of synergies across the group. Overall, our efficiency levels remain aligned with the expected path of capture of integration benefits over time. Please move on to Slide 17, where we will review the group's net profit. Davivienda Group's reported profit was COP 305 billion for the quarter. On a recurring basis, ROE will have been 8.39%. On a pro forma basis, fully excluding the wealth tax, net profit will have reached COP 585 billion. This view helps illustrate the group's earnings generation before the effect of this extraordinary tax. Under the same pro forma view, ROE stood at 10.72%, return on average tangible equity at 11.89% and ROA at 0.87%, all on a quarterly annualized basis. Overall, these results show that Davivienda Group has started this new stage with an improving earnings base. Please move on to Slide 18, where we present our 2026 guidance for Davivienda Group. In general terms, we are reaffirming the guidance we shared with you on our previous call. On growth, we expect gross loans to increase between 8% and 10% for the year. By segment, commercial loans are expected to grow between 10% and 12%. Consumer loans are expected to grow between 6% and 8% and mortgage loans between 7% and 9%. Overall, the loan portfolio is evolving in line with the strategy we want to pursue in 2026, supporting growth across all segments while maintaining discipline in origination and allocating capital to portfolios where risk and return remain well balanced. In terms of asset quality, we expect the 90-day PDL ratio to close the year between 3.3% and 3.8%, continuing an improvement path. We also expect coverage to keep increasing, closing around 110%, supported by our provisioning discipline and the quality of the integrated portfolios. We expect NIM, including FX and derivatives to be between 5.7% and 6% by year-end, reflecting the neutral position of our balance sheet to interest rate shocks. The first quarter closed at 5.67%, broadly in line with the expected range. Cost of risk is expected to range between 2.1% and 2.3%. The first quarter closed at 2.14%, also within guidance, reflecting controlled risk dynamics and the continued normalization of provision expenses. We anticipate a slight increase in the next quarters as the economy absorbs the impact of higher inflation and the minimum wage hike. This trend is already factored into our projections to ensure a prudent provision. Nonfinancial income is expected to grow between 8% and 10%, supported by the broader scale of the group fee generation and transactional activity. Regarding efficiency, we expect cost to income to remain around 55%. This is consistent with our view that synergy benefits and integration-related costs are expected to broadly offset one another during 2026 with more visible efficiency gains materializing in the following years. Finally, we expect ROE to remain between 8% and 10%. This range incorporates the wealth tax impact. Overall, our first quarter results are consistent with the guidance we shared with the market. We remain focused on disciplined growth, resilient margins, controlled risk, capital on strength and a gradual capture of integration benefits. With this, we can move on to the Q&A session. Thank you.

[Operator Instructions] The first question comes from Mr. Brian Flores from Citibank.

Can you hear me?

We can hear you okay, Mr. Flores.

Just quick 2 questions here. The first one is on funding costs. We know you have previously faced some pressures here. And now I just wanted to ask you now with the hiking cycle here, if we should expect some resiliency in margins? I know you -- just wanted to hear from you how are you positioning that, particularly on your funding cost? And then the second one is on asset quality. Just wondering if you think we have reached a peak in terms of delinquency cycle in Colombia or if you think inflation comes back and bites particularly on the consumer side. Any color on that would be great.

Brian, thank you for your questions. On the first one on funding costs, we -- actually, our balance sheet is neutral at this time. It's slightly asset sensitive for the short term. So we shouldn't have any issues with the rising interest rates. So we don't expect any deteriorations on margin based on the trend on interest rates. That's been something that we've been working on for the last 2.5 years, and we've moved the balance sheet from liability sensitive to neutral. So I think right on time for this interest rate hike, we are in a position in which the margin should be resilient. In terms of asset quality, as Pedro mentioned in the remarks, we've already incorporated in our guidance and the deterioration in the consumer portfolio based on the macro shocks that we experienced at the beginning of the year on minimum wage and inflation. So the numbers that you're seeing on the guidance already reflect that specific deterioration. So in terms of cost of risk, we are moving to -- we are maintaining the same guidance of 2.1% to 2.3%, and that's already reflecting that. We were expecting an improvement in those numbers, but it's being offset by the effects of the macro shocks.

Our next question comes from Mr. Ernesto Gabilondo from Bank of America.

My first question will be related to the latest update on the presidential election. I don't know if you can provide any color on what are the latest polls indicating? And my second question is on your ROE guidance. When looking into it, it seems the only indicator that is probably not on your expectation is the cost-to-income ratio. So can you elaborate on what will be the drivers to improve the efficiency ratio towards your target of around 55% in 2026? I don't know if this OpEx or is coming from nonfinancial revenues?

Thank you, Ernesto, for your questions. On the presidential election, well, the elections have been actually consolidated into 3 candidates, 1 from left and 2 from center, right and right. And polls are very close in terms of who's going to go to the second round. We expect the first round, which is coming at the end of this month to be the left candidate, Cepeda will -- should move on to the second election. And then on the right, that's still open. That's an open election, we still don't know exactly what's going to happen. And then we'll have to see -- wait and see what happens on the second round. It's open. There's no clear candidate that has an advantage on the polls for that second round. It depends on the polls that you look at. So it's pretty much wide open. So we are expecting -- we are very expectant to see what's going to happen in the coming weeks. In terms of our ROE guidance, that incorporates, as you mentioned, the cost to income. Cost to income is around 55%, and that guidance is a little bit better than what we are experiencing in part because we are not expecting the wealth tax that had an impact on the first quarter. So we're, of course, assuming that the wealth tax was a one-off. And then if you correct for that, then we should be getting to this 55%, taking into account that this year is a year in which we are expecting the benefits of the synergies of the integration will be offset with the 1-year expenses that we are having for the integration itself. So it's pretty much -- they even out, so we don't see any benefits from synergies in this year. We expect them to improve in the coming years. So the 55% is actually what we were experiencing taking aside the wealth tax.

We're now moving to our webcast questions. The first question comes from Mr. Juan Camilo Cifuentes from Citi. He says, Juan Camilo from Citi. Congrats on the results. Regarding the expectations for the year, where do you expect the loan book growth to come from? If consumer lending has remained more conservative and the mortgage book is expected to remain stable, given the sector performance in Colombia, is the growth coming from the commercial segment?

Juan Camilo, thank you for your question. Yes, we are expecting a higher growth in the commercial book. The 8% to 10%, if you look into its components, commercial is going to be around 10%, a little bit higher probably. And consumer and mortgage, we're expecting them to be on the lower end of the guidance, around 8%. On the average, that gives us the 8% to 10% range. We're expecting mortgages to grow at a slightly lower rate because of the effect of higher interest rates on the mortgage loans and as well as the end of the subsidies from the government. So those 2 factors combined make us have the expectation of lower growth on the mortgage portfolio looking forward. In the consumer book, we're actually coming from a negative numbers last year. The numbers are getting better, and we're expecting this around 7%, 8% growth on the consumer loan, which is still lower than the overall growth for the complete portfolio.

[Operator Instructions] We have another question from Mr. Brian Flores from Citibank.

I have a question on your view maybe on the midterm, right? Because we know for this year, the surcharge or the higher tax rate for the financial system is off the table. But we do know that whoever wins is going to be very likely leaning towards targeting the sector again for higher fiscal revenues, right? I think expenditures will continue pressuring the fiscal balance. So I just wanted to hear from you in the sense of do you expect the banking system to be targeted again? Do you consider in your projections for the midterm some, I don't know, an additional charge here for banks. Just wanted to hear from you because, for example, in Brazil, the temporary measures ended up being permanent after the pandemic. And we know naturally politically, I think the financial sector tends to be targeted, right? So I just wanted to hear from you as to what are you thinking? What are you budgeting? I think for the midterm, it would be just great to hear from you.

Thank you, Brian. As you mentioned, the wealth tax is a tax that we are expecting it to be a one-off. We were incorporating in our guidance an additional charge on our tax rate is already 40%, which is 5% higher than the general tax rate of 35%. We're expecting a higher tax rate, but that was compensated with the wealth tax. We are not incorporating in our projections, in our guidance any additional raises in the tax rates. But as you mentioned, that's something that could be open for discussion with the new government. But we are -- at this time, we're not incorporating any guidance on -- any specific guidance assuming any increases in the tax rates. If you look at many of the tax structures, the rates that are in the tax structure in Colombia, the system is already heavily charged in relative terms to other sectors of the economy. So we would expect that to be taken into account. But as you mentioned, that's something that is open for discussion.

We now go with Mr. Carlos Gomez from HSBC.

I actually have the same question about the tax rate. If you could give your best estimate as to what the effective tax rate might be for '26 and '27. Beyond that, perhaps a little bit more color on the Davivienda -- sorry, DaviPlata whereas the has had any impact on it? And what do you think monetization path will be for the next couple of years?

Thank you, Carlos, for your questions. In terms of DaviPlata, what we're seeing is a credit strategy that is based on the transactional information that we have, not only the information, but the fact that we have the platform to reach out to other segments of the market in which other traditional platforms are not able to reach as well as a platform for collection purposes. So we're taking the information as well as the capacity of the platform to increase our credit exposure in DaviPlata. That's a small ticket operations. It's growing. We believe that it has still ample space to grow, and it's a market in which we were very hesitant a couple of years ago because of the cycle, the part of the cycle that we were in the consumer loans. But now that the numbers are more stable, and we have a better structure, better risk models, and we believe we are very confident that there's still room to grow. The quality of that portfolio is actually performing very well. So our expectations are that we will keep growing, and that will be a source of monetization. There are -- another monetization path that we're following are the fact that we are moving from a wallet to a digital bank, which you not only have the ability to move money through P2P transfers, but also having the access to debit cards, credit cards, interest-bearing accounts, that's actually making the DaviPlata offer a complete offer for some segments of the market. Those products have their income revenues that will be impacting DaviPlata positively. So we see monetization both through credit as well as through other products that are income-generating products.

At this time, there seems to be no further questions. I want to turn the call back to Mr. Javier Suarez for any closing remarks. Mr. Suarez, the floor is yours.

Thank you very much for being here with us this morning. We're very glad to share our results for this first quarter. As you can see in the information that we presented, the integration is going along the lines that we were expecting at this time in terms of the processes going according to plans in terms of technology, in terms of processes, in terms of the teams that are integrating. We are confirming the opportunities that we saw when we entered into the transaction. And we are actually in the process of getting the new regulatory approvals that are needed for this part of the process. And we expect the transition to be finalized by -- before the end of this year and that's going with plan. Even though we are working -- the team is working hard on the integration, we are very, very happy to see that the numbers in terms of our business as usual are going according to plan. We are actually growing as expected. The cost of risk is as expected. The expenses are under control. So we see that the 2 tracks, managing the bank -- the business as usual of the bank as well as the integration are actually going along our expectations. So we are expecting to see numbers in line with those 2 facts in the coming calls. We know that the environment is an uncertain environment, uncertain environment in the macro side as well as the political uncertainties, but -- so we expect that to come out in a positive way, and we'll be giving you more details on the coming call. Thank you very much for being here with us this morning, and have a good rest of the day.

Thank you very much. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect from the call.