Andean Banks: Close race in Colombia with right in the lead; raise POs, Davivienda top pick

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Andean Banks: Close race in Colombia with right in the lead; raise POs, Davivienda top pick

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Andean Banks

Close race in Colombia with right in the

lead; raise POs, Davivienda top pick

Price Objective Change

Likely market-friendly outcome with room for moderation 21 June 2026

With 99.99% of ballots counted, right-wing candidate Abelardo de la Espriella has Equity

secured 49.66% of the vote, narrowly ahead of Iván Cepeda of the ruling left-wing party Latin America

at 48.70%. According to our economist, Alexander Muller, deep polarization may complicate Banks

governance and could prompt de la Espriella to soften his hawkish stance on domestic Ernesto Gabilondo >>

security and fiscal consolidation. Cepeda’s speech suggests he is conceding defeat. Research Analyst

Merrill Lynch (Mexico)

+52 55 5201 3428

ernesto.gabilondo@bofa.comDe la Espriella economic plan: fiscal cuts and deregulation

De la Espriella proposes significant fiscal consolidation, including a 40% reduction in Mario Pierry

government size—an unrealistic target, according to our Colombian Chief Economist, ResearchBofAS Analyst

Alexander Muller. A more feasible outcome would be a ~3pp of GDP adjustment over four +1 646 743 0047

mario.pierry@bofa.com

years, primarily through spending cuts and potentially asset sales—the path of least

resistance. Tax hikes would likely be a last resort but may prove necessary given rigid AntonioResearch RuetteAnalyst >>

spending (over 90% of the budget is inflexible). IMF engagement also appears likely. To Merrill Lynch (Brazil)

+55 11 2188 4225

support growth, Muller expects deregulation across sectors such as oil & gas and construction, antonio.ruette@bofa.com

along with the repeal of rules requiring pension funds to repatriate foreign investments.