Business Context and Reporting Period
Company: Grupo Aval Acciones Y Valores S.A.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Quarter 2026 (ended March 31, 2026)
Business Overview: Leading financial conglomerate in Colombia operating through four commercial banks, the largest private pension fund manager (Porvenir), and the largest merchant bank (Corficolombiana). The group also operates in infrastructure, energy, and agribusiness.
Key Financial Metrics
| Metric | 1Q26 | 4Q25 (Pro Forma) | 1Q25 (Pro Forma) |
|---|---|---|---|
| Net Income (Attributable to Parent) | Ps 336.6 billion | Ps 344.4 billion | Ps 361.5 billion |
| Earnings Per Share (EPS) | Ps 14.2 | Ps 14.5 | Ps 15.2 |
| Return on Average Equity (ROAE) | 7.4% | 7.5% | 8.4% |
| Return on Average Assets (ROAA) | 0.9% | 0.7% | 1.0% |
| Total Assets | Ps 337,606.4 billion | Ps 348,936.7 billion | Ps 329,850.3 billion |
| Gross Loans | Ps 193,689.0 billion | Ps 190,878.4 billion | Ps 182,686.4 billion |
| Customer Deposits | Ps 216,837.3 billion | Ps 207,405.2 billion | Ps 194,158.7 billion |
| Net Interest Margin (Total) | 3.34% | 3.00% | 3.80% |
| Cost of Risk (Net) | 1.80% | 1.70% | 2.10% |
| Loans Past Due >90 Days | 3.13% | 3.30% | 3.80% |
| Efficiency Ratio (Cost to Income) | 53.9% | 54.9% | 50.2% |
Material Changes vs. Prior Periods
- Profitability Decline: Net income attributable to owners decreased 2.3% quarter-over-quarter (QoQ) and 6.9% year-over-year (YoY). This decline was primarily driven by a one-time equity tax enacted by the Colombian government, which reduced net income by Ps 210.1 billion and increased operating expenses by Ps 311.7 billion. Excluding this tax, ROAE would have been 12.0%.
- Asset Quality Improvement: Loans past due more than 90 days improved to 3.13%, down 16 basis points (bps) from 4Q25 and 69 bps from 1Q25. The cost of risk decreased 36 bps YoY to 1.8%.
- Loan and Deposit Growth: Gross loans grew 1.5% QoQ and 6.0% YoY, driven by a 16.8% YoY increase in mortgages. Customer deposits grew 4.5% QoQ and 11.7% YoY.
- Discontinued Operations: The group completed the sale of Multi Financial Group Inc. (MFG) in March 2026. Financial results for prior periods have been restated on a pro forma basis to exclude MFG for comparability.
- Trading Income Surge: Net trading income increased significantly to Ps 540.0 billion (up 132.6% YoY), driven by a recovery in investment securities performance following year-end volatility.
Guidance, Outlook, and Risks
- Management Commentary: Management highlighted a positive trend in asset quality and cost of risk within the banking segment. The merchant banking segment showed strong performance due to the infrastructure sector, which contributed significantly to gross profit from sales of goods and services (up 90.7% QoQ).
- Forward-Looking Statements: The filing contains forward-looking statements regarding economic conditions, interest rates, and currency rates. Actual results may differ materially due to these factors.
- Risks and Contingencies:
- Regulatory/Tax Risk: The one-time equity tax significantly impacted Q1 results. Future regulatory changes in Colombia remain a risk.
- Market Risk: No material changes in market risk exposure were reported compared to 4Q25.
- Currency Risk: A 12.7% yearly appreciation of the Colombian Peso negatively impacted growth metrics for USD-denominated loans when reported in Pesos.
- Corporate Governance: The company updated its Code of Corporate Governance and re-elected the Board of Directors. Compliance with the "Código País" was reported at 91%.
Investor Verification Checklist
- Equity Tax Impact: Verify the sustainability of earnings by analyzing the "adjusted" ROAE of 12.0% versus the reported 7.4% to understand the true operational performance.
- Discontinued Operations: Confirm the final accounting treatment of the MFG sale and ensure pro forma adjustments are correctly applied when comparing historical data.
- Asset Quality Trends: Monitor the 90+ day delinquency ratio (currently 3.13%) to ensure the improvement trend continues, particularly in the commercial and consumer loan segments.
- Infrastructure Volatility: Assess the sustainability of the 90.7% QoQ jump in gross profit from the infrastructure sector, which is sensitive to inflation expectations and concession revenues.
- Dividend Policy: Review the impact of the equity tax on retained earnings and potential future dividend payouts, as the tax is non-deductible.