AVAL

Business Context and Reporting Period

Company: Grupo Aval Acciones Y Valores S.A. (NYSE: AVAL)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Third Quarter ended September 30, 2025 (3Q25)
Filing Date: November 14, 2025
Business Overview: Leading financial conglomerate in Colombia operating through four commercial banks (Banco de Bogotá, Banco de Occidente, Banco Popular, Banco AV Villas), the largest private pension fund manager (Porvenir), and the largest merchant bank (Corficolombiana). Operations also extend to Panama via Multibank.

Key Financial Metrics

Profitability and Efficiency Ratios

• ROAE (Return on Average Equity): 11.5% (vs. 11.3% in 2Q25; 9.7% in 3Q24)
• ROAA (Return on Average Assets): 1.0% (vs. 1.1% in 2Q25; 0.9% in 3Q24)
• Net Interest Margin (NIM): 4.35% (vs. 4.00% in 2Q25; 3.89% in 3Q24)
• Cost of Risk: 1.9% (vs. 1.7% in 2Q25; 1.9% in 3Q24)
• Efficiency Ratio: 50.7% (vs. 52.0% in 2Q25; 50.7% in 3Q24)
• Loan Quality (90+ Days PDL): 3.4% (vs. 3.5% in 2Q25; 4.3% in 3Q24)

Material Changes vs. Prior Periods

• Profit Growth: Attributable net income increased 25.3% year-over-year (YoY) and 5.3% quarter-over-quarter (QoQ), driven by improved net interest income and lower cost of risk.
• Asset Expansion: Gross loans grew 4.6% YoY to Ps 203.4 trillion, led by an 18.6% increase in mortgages and 4.1% in consumer loans. Total assets rose 7.2% YoY.
• Deposit Growth: Customer deposits increased 8.5% YoY to Ps 212.6 trillion, outpacing loan growth and improving the deposit-to-loan ratio to 108.5%.
• Asset Quality Improvement: The 90+ days past due loans ratio improved by 93 basis points YoY to 3.4%, reaching the lowest level since 4Q22. Cost of risk remained stable at 1.9% YoY.
• Non-Interest Income: Net income from commissions and fees rose 11.5% YoY. However, gross profit from sales of goods and services (infrastructure) declined 11.6% YoY.

Guidance, Outlook, and Risks

• Outlook: Management highlights a positive trend in the banking segment regarding NIM, asset quality, and cost of risk. The pension and severance fund management segment also showed positive performance.
• Risk Management: The filing states there were no material changes in exposure to relevant risks compared to the June 2025 report, nor were any new relevant risks identified.
• Market Risks: A 3.6% yearly appreciation of the Colombian Peso negatively impacted growth metrics for USD-denominated loans when converted to Pesos.
• Forward-Looking Statements: The report includes standard disclaimers that actual results may differ due to economic conditions, interest rates, and currency fluctuations.
• Debt Structure: The holding company (Grupo Aval Acciones y Valores S.A.) and Grupo Aval Limited combined had a net indebtedness of Ps 4,903.1 billion as of September 30, 2025. Double leverage stood at 120.6%.

Investor Verification Checklist

• Asset Quality Sustainability: Verify the continued improvement in 90+ days PDL ratios and the adequacy of the 1.31x coverage ratio for 90+ days PDLs.
• Infrastructure Exposure: Investigate the 11.6% YoY decline in gross profit from sales of goods and services, attributed to the infrastructure sector, to assess future revenue stability.
• Currency Impact: Monitor the impact of Peso appreciation on the valuation of USD-denominated assets and liabilities.
• Non-Controlling Interest: Note that non-controlling interest represents 46.8% of total equity; verify the minority stake distribution across subsidiaries (e.g., Banco de Bogotá, Corficolombiana).
• Regulatory Compliance: Confirm the status of the external audit opinion for Colombian regulatory filings, which was noted as ongoing at the time of this report.