Grupo Aval Acciones y Valores (GRUPOAVAL) Q1 2025 earnings summary

Executive summary

• Attributable net income for 1Q25 was COP 362 billion (Ps 361.6 billion), up 28.5% sequentially and over 3.2x year-over-year, with EPS at COP 15.2 per share and ROAE at 8.4%.

• Gross loans grew 5.4% year-over-year to COP 198.8 trillion, with deposits up 9.8% to COP 207.8 trillion; market share gains were notable in mortgages (16.6%) and consumer loans.

• Loan portfolio quality improved, with 90-day PDLs at 3.7% (down 41 bps YoY), and cost of risk declined to 2.0%, mainly due to better consumer loan performance.

• Operational efficiency initiatives, digital transformation, and customer experience enhancements were prioritized, including AI partnerships and loyalty programs.

• ESG achievements included improved Merco ESG rankings, expanded diversity, impactful social/environmental projects, and a solar energy rollout.

Financial highlights

• Total assets grew 7.5% year-over-year to COP 330 trillion; attributable shareholders’ equity rose 4.4% to COP 17.2 trillion.

• Net interest margin (NIM) increased to 3.5% (up 12 bps YoY); NIM on retail loans reached 5.8% year-over-year.

• Efficiency ratio improved to 50.8%, with OPEX down 5.2% sequentially; cost to assets at 2.7%.

• ROAA was 1.0% and ROAE 8.4% for the quarter.

• Customer deposits accounted for 75.2% of total funding.

Outlook and guidance

• Loan growth for 2025 expected at ~9%, with commercial loans at 7% and retail loans at 11%, slightly below previous guidance.

• Consolidated NIM projected at ~4%, with NIM on loans at 4.5%; banking segment NIM at 4.7%.

• Cost of risk net of recoveries expected at 1.95%, better than prior guidance.

• Return on equity forecasted in the 10%-11% range for 2025.

• Guidance assumes a prudent scenario regarding pension reform and macroeconomic risks.