Grupo Aval Acciones y Valores (NYSE:AVAL) reported second-quarter attributed net income of COP 577 billion, up 17% from the same period a year earlier, as loan and deposit growth, investment-portfolio performance and stable credit quality supported results.
Return on average equity reached 12.7% for the quarter, while return on average assets was 1.1%. Chief Executive Officer María Lorena Gutiérrez Botero said the quarterly profit was the group’s “highest quality result since March 2022,” reflecting strengthening profitability, controlled risk and efficiency gains.
Loan growth and funding
Gross loans increased 2.1% from the first quarter and 7.6% year over year, reaching COP 198 trillion. Peso-denominated lending rose 2.4% sequentially and 9.3% from a year earlier. Commercial loans grew 2.4% during the quarter, while consumer lending rose 1.1% and mortgages increased 2.9%.
Within consumer lending, personal loans grew 4.5% from the prior quarter and 18.2% year over year, while credit-card balances rose 4.5% sequentially. Payroll loans, which account for 53% of the consumer portfolio, contracted 1.2% both sequentially and annually.
Chief Financial Officer Diego Solano said the group has been repositioning its consumer portfolio away from its historical overweight in payroll lending and toward personal loans and credit cards. He said the strategy is intended to reduce sensitivity to interest rates and improve average loan yields. The acquired Itaú retail business is expected to accelerate that shift.
Total deposits rose 2.1% during the quarter and 11.5% year over year to COP 221 trillion. Total funding reached COP 292 trillion, up 3.8% sequentially and 11% annually. Grupo Aval’s deposits-to-net-loans ratio increased to 117%, which Solano described as a healthy position amid potential volatility associated with Colombia’s presidential election.
Margins, investments and asset quality
Net interest income totaled COP 3.6 trillion, increasing 68.4% from the first quarter and 43.1% from the year-earlier quarter. Total net interest margin rose 217 basis points sequentially to 5.51%, aided by strong trading income from fixed-income investments during what management characterized as an exceptionally favorable capital-markets period.
The consolidated net interest margin on loans was 4.41%, broadly unchanged from 4.4% in the first quarter. In the banking segment, net interest margin on loans expanded 21 basis points to 5.19%, supported by repricing of floating-rate commercial loans and a lower pass-through of central-bank rate increases to deposit costs.
Solano said that, excluding derivatives used to hedge investment income, consolidated net interest margin would have been 4.6% and investment margin would have been 5.1%. The company expects approximately a 2% investment margin in its second-half planning assumptions, reflecting a more cautious outlook following the unusually strong first half.
Credit metrics remained largely stable. The 90-day past-due loan ratio was 3.13%, unchanged from the prior quarter and 44 basis points lower than a year earlier. The 30-day past-due ratio was 4.41%, up 10 basis points sequentially but down 45 basis points annually. Net cost of risk was 1.9%, up 8 basis points from the first quarter and 5 basis points from a year ago.
Responding to analyst questions, Solano said management was not broadly concerned about asset quality, though it was monitoring potential effects from the recent earthquake and pressure on sectors affected by the stronger peso.
Technology and strategic initiatives
Grupo Aval outlined a technology strategy centered on shared digital capabilities across its financial entities. Chief Technology Officer Ernesto Gutiérrez de Piñeres said 67% of customers now conduct transactions through digital channels.
The group is developing a common digital core, its Delos management-intelligence platform and the Aurora cloud infrastructure strategy. Aurora combines public-cloud capabilities from AWS and Microsoft Azure with private-cloud partnerships involving IBM and Kyndryl. Gutiérrez de Piñeres said the effort is intended to improve resiliency, scalability and security while shifting technology spending toward a more flexible model.
A new digital personal-loan solution is scheduled to go live in the fourth quarter, according to management. Grupo Aval also said an artificial-intelligence-enabled solution at Nexa BPO is expected to handle 30% of a personal-installment flow.
Separately, Grupo Aval said Banco de Bogotá, Banco de Occidente, Banco Popular and Grupo Aval Holding contributed their Corficolombiana investments to a special-purpose vehicle on June 19. Each entity retained its indirect stake in Corficolombiana. The company said the transaction was designed to simplify the ownership structure.
Outlook and macroeconomic conditions
Management maintained its 2026 return-on-average-equity guidance of about 9.25%, below the second-quarter rate. Solano cited cautious assumptions for investment income, the cumulative effect of higher policy rates and possible effects from the earthquake.
- Loan growth is expected to be about 10.5% for 2026, including commercial-loan growth of about 8% and retail growth of about 14%.
- Consolidated net interest margin is projected near 4.2%, with net interest margin on loans around 4.4%.
- Net cost of risk is expected near 1.9%, while cost to assets is forecast at approximately 2.9%.
Banco de Bogotá Chief Economist Camilo Pérez said Colombia’s economy grew 2.3% in the second quarter, supported by consumption, public administration and utilities, but said agriculture, mining, manufacturing and construction remained weak. Grupo Aval expects Colombia’s gross domestic product to grow about 2.4% in 2026.
Pérez said annual inflation reached 6% in July and is expected to end the year at 6.8%. Colombia’s central bank raised its policy rate to 12% in June and held it steady in July. Grupo Aval’s economic team expects the rate could rise to 12.5% in coming months.
About Grupo Aval Acciones y Valores (NYSE:AVAL)
Grupo Aval Acciones y Valores SA is a leading Colombian financial holding company that offers a diversified range of banking and financial services across Latin America. As one of the largest financial conglomerates in Colombia, Grupo Aval provides commercial and retail banking, leasing, insurance brokerage, pension fund management and investment banking through its principal subsidiaries.
Its core banking operations are conducted through a network of well-established institutions, including Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas, which together serve individual consumers, small and medium-sized enterprises and large corporate clients.
