Grupo Aval Acciones y Valores (GRUPOAVAL) Q2 2024 earnings summary

Executive summary

• Management team renewed with key appointments at holding and subsidiary levels, including new CEOs for Banco de Bogotá, Corficolombiana, and AV Villas.

• Strategic focus on sustainability, diversity, and inclusion, with multiple ESG recognitions and new corporate VPs for sustainability and financial efficiency.

• Attributable net income for 2Q24 was Ps 204.3 billion, up 22.9% year-over-year and 79.6% sequentially.

• Gross loans grew 4.8% year-over-year to Ps 193.2 trillion; deposits rose 10.1% to Ps 198.4 trillion.

• Market share gains in gross loans, commercial, consumer, and mortgage segments over the last twelve months.

Financial highlights

• Consolidated assets reached Ps 316.6 trillion, up 6.2% year-over-year.

• Net interest margin (NIM) for banking segment at 4.5%, consolidated NIM at 3.4%.

• Cost of risk improved to 2.1%, down 83 bps sequentially and 10 bps year-over-year.

• Efficiency ratio rose to 54.7% due to lower other income; cost-to-assets ratio improved to 2.7%.

• Net income for the quarter was COP 204 billion, with return on average equity at 4.9%.

Outlook and guidance

• Loan growth for 2024 expected between 7.5% and 8%, with commercial loans at 9–9.5% and home loans at 5–6%.

• FY24 GDP growth guidance for Colombia is 1.75%; inflation expected at 5.6% by year-end; central bank rate at 8.5–8.75%.

• Return on average equity guidance for 2024 set between 2.6% and 5%.

• Positive trends anticipated for NIM and cost of risk in 2025, with normalization expected as monetary policy eases.

• Strong performance in banking and pension segments expected to continue, while merchant banking faces lower contributions.