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-on-year, with EPS at COP 15.2 per share, driven by gains in market share for deposits and loans, especially mortgages at a record 16.6%.

• Core business trends improved despite high interest rates and weak capital markets; NIM on loans was stable, with retail NIM at a two-year high.

• Operational efficiency initiatives, digital transformation, and customer experience enhancements were key priorities.

• ESG achievements included a significant rise in Merco ESG rankings, a published 2024 Sustainability Report, solar energy projects, and increased board diversity.

• Non-financial sector income rose 33.6% sequentially, driven by infrastructure and energy & gas.

Financial highlights

• Assets grew 7.5% year-on-year to COP 330 trillion (Ps 329.9 trillion); gross loans up 5.4% year-on-year to Ps 198.8 trillion, led by mortgages (+22%) and consumer loans (+3.9%).

• Deposits rose 9.8% year-on-year to Ps 207.8 trillion, with a deposits-to-net loans ratio of 1.09x.

• Attributable net income was COP 362 billion (Ps 361.5 billion), or COP 15.2 per share, up 28.5% from Q4 2024 and 217.8% year-on-year.

• Return on average assets was 1%, and return on average equity was 8.4% for the quarter.

• Total NIM increased 12 bps year-on-year to 3.5%; NIM on retail loans expanded to 5.8% year-on-year.

Outlook and guidance

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

• Consolidated NIM expected around 4%, with NIM on loans at 4.5%.

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

• Return on equity guidance revised to 10%-11%, down from previous 11% area, reflecting slower NIM recovery.

• FY25 GDP growth guidance for Colombia is 2.7%, with inflation expected at 4.7%.