Colombia's Grupo Aval posts solid Q3

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Wednesday, November 30, 2016

Grupo Aval, Colombia's largest financial group, recorded net income of 614bn pesos (US$193mn) in Q3, up 2.1% over the previous quarter and 38% year-on-year.

The result was driven by expanding net interest income (5.3% q-o-q and 7.5% y-o-y) as well as net fees revenue (1.2% q-o-q and 16.4% y-o-y).

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Net interest margin saw a slight improvement in Q3 to 5.6% from 5.3% in the previous quarter.

Return on average equity dropped slightly to 16.2% from 16.3%, and above the 12.8% from 3Q15.

Loan growth slowed down in Q3, as total net loans reached 143tn pesos, up 0.7% q-o-q and 4.4% y-o-y.

Past due loans over 30 days over total loans showed a slight improvement, to 2.7% from 2.8% in the previous quarter, but 20 basis points higher than at the same quarter of 2015.

"A reduction in provision expenses, an improvement in its efficiency indicator, and a good operational dynamic generated a positive impact on Grupo Aval's profit, annually as well as quarterly," research firm Alianza Valores said.

Grupo Aval is composed of Banco de Bogota (approximately 14% of loans in Colombia's banking system), Banco de Occidente (7.3%), Banco Popular (4.4%), Banco AV Villas (2.5%), BAC Credomatic, pension fund administrator Porvenir and Corficolombiana.