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

Executive summary

• Management team renewed with key appointments at both holding and subsidiary levels, including new CEOs and VPs, to support strategic execution.

• Significant focus on sustainability, diversity, and inclusion, with multiple ESG awards and new initiatives across subsidiaries.

• Attributable net income for 2Q24 was COP 204.3 billion, up 79.6% quarter-over-quarter and 22.9% year-over-year, with EPS at COP 8.6 per share.

• Gross loans reached COP 193.2 trillion, up 2.4% sequentially and 4.8% year-over-year, with market share gains in all major segments.

• Deposits rose 4.8% quarter-over-quarter and 10.1% year-over-year, totaling COP 198.4 trillion.

Financial highlights

• Net interest margin (NIM) was 3.4%, up 5 bps sequentially; net interest income increased 21.9% year-over-year to COP 1,921.3 billion.

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

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

• Total assets reached COP 317 trillion, up 3.2% quarter-over-quarter and 6.2% year-over-year.

• Fee income ratio increased to 23.3%, up 182 bps quarter-over-quarter.

Outlook and guidance

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

• Cost of risk net of recoveries projected at 2.2%, cost to assets at 2.7%, and efficiency ratio between 20% and 25%.

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

• FY24 GDP growth guidance for Colombia is 1.75%; inflation guidance is 5.6%, with central bank rate expected at 8.5–8.75%.

• Positive trends anticipated for NIM and cost of risk into 2025, with no quantitative guidance yet.