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 ROAE 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-on-year to Ps. 194.5 trillion, with market share gains in consumer and mortgage segments.

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

• Corporate synergies expanded, including the rebranding of ATH as Aval Valor Compartido (AVC) and the creation of Corporate Vice-Presidencies for Sustainability and Financial Assets.

• 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 Ps. 415.7 billion for the quarter.

• Net interest margin (NIM) rose to 3.9%, up 47 bps sequentially and 111 bps year-over-year.

• Gross loans reached Ps. 194.5 trillion; deposits rose 8.7% year-over-year to Ps. 196 trillion.

• 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.

Outlook and guidance

• 2024 loan growth expected at 6.5%-7% (commercial: 7.5%-8%, retail: 5%-6%).

• 2024 NIM guidance: total NIM at 3.6%, NIM on loans at 4.35%, banking segment NIM at 4.4%.

• 2024 ROE expected at 6.25%.

• 2025 outlook: loan growth around 10% (commercial: 9%, retail: 11%), NIM at 4.4%, ROE at 11%.

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