Grupo Aval Acciones y Valores (GRUPOAVAL) Q3 2024 earnings summary

Executive summary

• Attributable net income surged to Ps. 415.7 billion, up 103.4% sequentially and 541.4% year-over-year, with ROE at 9.7% and ROAA at 0.9%, driven by improved cost of risk, stronger NIM, and cost control.

• Gross loans grew 0.7% quarter-on-quarter and 4.3% year-over-year to Ps. 194.5 trillion, with market share gains in all major segments.

• Deposits rose 8.7% year-over-year to Ps. 196 trillion, supporting funding growth.

• Efficiency ratio improved to 50.7%, with cost to assets at 2.6% and OPEX up 3.1% year-over-year.

• ESG achievements included record Dow Jones Sustainability Index score, expanded sustainable loan portfolio, and increased female leadership.

Financial highlights

• Net income attributable to shareholders was COP 415 billion for the quarter.

• Net interest margin (NIM) increased 47 bps quarter-on-quarter to 3.9%, with NIM on loans at 4.2%.

• Total assets increased 1.3% quarter-on-quarter and 7.3% year-on-year to Ps. 320.6 trillion.

• Attributable shareholders' equity rose 6.1% year-over-year to Ps. 17.4 trillion.

• Efficiency ratios improved: cost to assets at 2.6% and cost to income at 50.7%.

Outlook and guidance

• 2024 guidance: loan growth 6.5%-7%, commercial loans 7.5%-8%, retail loans 5%-6%.

• 2024 NIM expected at 3.6%, NIM on loans at 4.35%, cost of risk at 2.2%, ROE at 6.25%.

• 2025 guidance: loan growth ~10%, commercial 9%, retail 11%, NIM 4.4%, NIM on loans 4.75%, ROE 11%.

• Long-term ROE target is north of 15%.

• FY24 GDP growth guidance for Colombia is 1.75%; inflation expected at 5.4% by year-end; central bank rate projected at 9.25%.