UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report Of Foreign Private Issuer
Pursuant To Rule 13a-16 Or 15d-16 Of
The Securities
Exchange Act Of 1934
For the month of September 2017
Commission File Number: 000-54290
Grupo Aval Acciones y Valores S.A.
(Exact name of registrant as specified
in its charter)
Carrera 13 No. 26A - 47
Bogotá D.C., Colombia
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
GRUPO
AVAL ACCIONES Y VALORES S.A.
TABLE
OF CONTENTS
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ITEM
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1.
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Report of Second Quarter 2017 Consolidated Results
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2.
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Second Quarter 2017 Consolidated Earnings Results Presentation
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Item 1
Report of 2Q2017
consolidated
results
Information
reported in Ps billions
(1)
and under IFRS
(1) We refer to billions as thousands of millions.
Grupo
Aval Acciones y Valores S.A. (“Grupo Aval”) is an issuer of securities in Colombia and in the United States, registered
with Colombia’s National Registry of Shares and Issuers (Registro Nacional de Valores y Emisores) and the United States
Securities and Exchange Commission (“SEC”). As such, it is subject to the control of the Superintendency of Finance
and compliance with applicable U.S. securities regulation as a “foreign private issuer” under Rule 405 of the U.S.
Securities Act of 1933. Grupo Aval is not a financial institution and is not supervised or regulated as a financial institution
in Colombia.
As
an issuer of securities in Colombia, Grupo Aval is required to comply with periodic reporting requirements and corporate governance,
however, it is not regulated as a financial institution or as a holding company of banking subsidiaries and, thus, is not required
to comply with capital adequacy regulations applicable to banks and other financial institutions. All of our banking subsidiaries
(Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas), Porvenir and Corficolombiana, are subject to
inspection and surveillance as financial institutions by the Superintendency of Finance.
Although
we are not a financial institution, until December 31, 2014 we prepared the unaudited consolidated financial information included
in these quarterly reports in accordance with the regulations of the Superintendency of Finance for financial institutions and
generally accepted accounting principles for banks to operate in Colombia, also known as Colombian Banking GAAP because we believe
that presentation on that basis most appropriately reflected our activities as a holding company of a group of banks and other
financial institutions.
However,
in 2009 the Colombian Congress enacted Law 1314 establishing the implementation of IFRS in Colombia. As a result, since January
1, 2015 financial entities and Colombian issuers of publicly traded securities such as Grupo Aval must prepare financial statements
in accordance with IFRS. IFRS as applicable under Colombian regulations differs in certain aspects from IFRS as currently issued
by the IASB.
The
unaudited consolidated financial information included in this document is presented in accordance with IFRS as currently issued
by the IASB. Details of the calculations of non-GAAP measures such as ROAA and ROAE, among others, are explained when required
in this report.
Because
of our recent migration to IFRS and recent implementation of IFRS accounting principles, the unaudited consolidated
financial information for the first and second quarters of 2017, and the second quarter of 2016, may be subject to further
amendments.
This
report may include forward-looking statements, which actual results may vary from those stated herein as a consequence of changes
in general, economic and business conditions, changes in interest and currency rates and other risks factors as evidenced in our
Form 20-F available at the SEC webpage. Recipients of this document are responsible for the assessment and use of the information
provided herein. Grupo Aval will not have any obligation to update the information herein and shall not be responsible for any
decision taken by investors in connection with this document. The content of this document and the unaudited figures included
herein are not intended to provide full disclosure on Grupo Aval or its affiliates.
When
applicable, in this document we refer to billions as thousands of millions.
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1
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Bogotá,
August 29
th
, 2017. GRUPO AVAL ACCIONES Y VALORES S.A. (“Grupo Aval”) reports a consolidated attributable
net income result of Ps 470.8 billion for 2Q17 versus a Ps 587.0 billion figure reported for 1Q17. ROAE for the quarter was 12.4%
and ROAA for the quarter was 1.3%.
The
following are the main highlights of our 2Q17 results under IFRS (1/2):
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•
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Contrary
to our expectations, the Colombian economy did not reactivate in the first semester of
this year and instead showed only marginal growth at 1.2% and 1.3% during the first two
quarters, significantly less than the 2.25% to 2.50% growth expected. A collateral damage
of this lackluster economic performance is a deterioration in urban unemployment, which
increased by 60 bps. in the last year and by 100 bps. since 2015.
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•
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A
slow moving economy always results in lesser commercial credit demand. It also tends
to exacerbate credit problems, such as Electricaribe, and to magnify the effect of these
problems in the cost of risk ratios of the financial system. A rising unemployment rate
tends to accelerate consumer loan delinquencies and the booking of provisions for foreseeable
loan losses. Aval has not been impervious to these impacts as can be seen in this semester’s
results.
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•
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As
predictable, the economy has also had consequences in the performance of the non-financial
sector in which we participate through Corficolombiana. Additionally, 4G infrastructure
construction – and financing - is off to a slow start as the financial sector awaits
anxiously the resolution of the Ruta del Sol debacle and with it the first payment
that
the Government
offered to make for approximately half of the US$800 million outstanding
financial debt owed by CRDS to the largest Colombian banks.
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•
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In
the midst of this economic scenario, our Total Gross Loans, excluding interbank and overnight
funds, grew by 2.7% in the first semester (+2.2% excluding the impact of FX movement
in our Central American operation), as a result of a contraction of 0.7% in the first
quarter (+0.4% excluding the impact of FX) and growth of 3.4% in the second quarter (+1.8%
excluding FX impacts); in the last twelve months Gross Loans grew by 8.9% (+7.6% excluding
FX movements), evidencing a deceleration during 2017 in sync with the economy.
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•
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During
the second quarter, our 30 day PDLs and NPLs deteriorated by 17 bps and 27 bps up to
3.8% and 2.5% respectively, driven primarily by a deterioration in our consumer and microcredit
portfolios. Consumer loan 30day PDLs and NPLs deteriorated by 40 bps and 37 bps during
the quarter. This worrisome deterioration, although generalized in the colombian financial
system, is currently our main area of focus. On the other hand, most of the deterioration
in our Commercial Loan PDLs and NPLs in the last year has been driven by Electricaribe
where our exposure amounts to approx. US$200 million.
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•
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As
a result of the deterioration mentioned above, our consolidated cost of risk increased
by almost 80 bps during the quarter to 2.9% before recoveries and 2.7% after recoveries.
Provisions in connection with Electricaribe accounted for approximately 30 pbs. of the
increase and the general deterioration of the mentioned loan portfolios contributed with
the rest.
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•
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Total
Deposits grew by 4.3% in the first semester (+3.9% excluding the impact of FX movement
in our Central American operation), as a result of growth of 2.0% in the first quarter
(+3.1% excluding the impact of FX) and growth of 2.3% in the second quarter (+0.7% excluding
the impact of FX); in the last twelve months Deposits grew by 9.6% (+8.3% excluding FX
movements), once again evidencing a deceleration during 2017 in sync with the economy.
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2
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The
following are the main highlights of our 2Q17 results under IFRS (2/2):
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Partly
as a consequence of the growth slowdown, the second quarter was one in which our consolidated
equity ratios improved. Our total equity to total assets ratio improved from 10.4% in
March 31, 2017 to 10.7% in June 30, 2017 and our tangible capital ratio improved from
7.4% to 7.6%.
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•
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Furthermore,
as of June 30, 2017 all our banks continued to show strong Tier 1 and full solvency levels
(between 9.4% and 11.2% and between 11.2% and 14.2%, respectively).
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•
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Recently,
the strength in our capital position drove two Rating Agencies to change their outlook
of both Banco de Bogotá and Grupo Aval’s ratings from negative to stable.
This is a great accomplishment after multiple years of discussions with both of them.
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•
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The
NIM of our consolidated operation improved by 22 bps to 6.1% during the quarter and by
52 basis points versus this same ratio as during 2Q16. Our consolidated NIM on loans
expanded by 14 bps to 7.0% during the quarter and by 46 bps versus 2Q16. Our consolidated
NIM on total investments expanded by 72 bps to 1.4% during the quarter and by 57 bps
versus 1Q17. These increases were mainly driven by a 28bps decrease in our average cost
of funds during 2Q17 and 21 bps vs 2Q16.
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•
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Our
gross fee Income grew by 1.3% in the quarter when compared to the first quarter of 2017.
This growth was supported on a strong performance of our banking fees (73% of total fees)
which increased 3.4% in the quarter.
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•
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Our
other operating income for the period was Ps. 493.1 billion for the quarter versus Ps.
533.1 billion in the previous quarter. This result was mainly affected by the performance
of Corficolombiana’s investments in the infrastructure sector, delays in the 4G
infrastructure concessions and by the effect of the general slowdown of the economy in
the performance of other non-financial sectors in which Corficolombiana holds equity
positions.
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•
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Our
consolidated efficiency ratio, measured as cost to income, was 46.9% in 2Q17, versus
45.9% during 1Q17 and 47.2% during 2Q16. This quarter’s deterioration is partially
explained by a seasonality of the expenses.
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•
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Attributable
net income for the quarter was Ps 470.8 billion or 21 pesos per share, compared to Ps.
587 billion in 1Q17. As mentioned before, the result for the quarter was negatively affected
by a 42% increase (Ps. 313 billion) in provision expenses, a third of which is explained
by provisions associated with Electricaribe and also by greater provisions required in
our consumer portfolio and our SME portfolio.
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3
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Grupo
Aval Acciones y Valores S.A.
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Consolidated
Financial Statements Under Full IFRS
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Information
in Ps. Billions
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2Q16
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1Q17
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2Q17
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Consolidated
Statement of Financial Position
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2Q16
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1Q17
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2Q17
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Δ
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2Q17
vs. 1Q17
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2Q17
vs. 2Q16
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Cash and cash equivalents
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21,004.5
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24,542.3
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22,958.8
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-6.5%
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9.3%
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Total financial assets held
for trading through profit or losses
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4,777.4
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5,063.0
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4,995.8
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-1.3%
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4.6%
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Total available for sale
financial assets
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20,257.6
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18,063.6
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17,165.3
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-5.0%
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-15.3%
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Investments held to maturity
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2,265.6
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2,636.8
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2,688.7
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2.0%
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18.7%
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Other financial assets at
fair value through profit or losses
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1,978.7
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2,117.7
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2,174.9
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2.7%
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9.9%
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Total loans and receivables,
net
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142,286.7
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151,304.0
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157,100.3
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3.8%
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10.4%
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Tangible assets
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6,729.9
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6,430.9
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6,539.6
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1.7%
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-2.8%
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Goodwill
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6,696.6
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6,644.0
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6,903.1
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3.9%
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3.1%
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Concession arrangements
rights
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2,415.1
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2,816.2
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2,883.7
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2.4%
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19.4%
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Other assets
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7,274.2
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7,493.9
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7,378.3
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-1.5%
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1.4%
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Total
assets
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215,686.2
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227,112.6
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230,788.5
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1.6%
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7.0%
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Derivative instruments held
for trading
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910.0
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581.6
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602.7
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3.6%
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-33.8%
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Deposits from clients at
amortized cost
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137,016.2
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146,736.3
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150,117.8
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2.3%
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9.6%
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Interbank borrowings and
overnight funds
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8,702.2
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7,984.8
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6,590.1
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-17.5%
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-24.3%
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Borrowings from banks and
others
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16,540.5
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18,368.5
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19,199.0
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4.5%
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16.1%
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Bonds
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17,240.2
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16,275.4
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17,152.4
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5.4%
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-0.5%
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Borrowings from development
entities
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2,739.4
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2,790.1
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2,801.7
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0.4%
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2.3%
|
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Other liabilities
|
|
8,756.4
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10,670.4
|
|
9,603.0
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-10.0%
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9.7%
|
|
Total
liabilities
|
|
191,904.8
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203,407.2
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206,066.8
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1.3%
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7.4%
|
|
Equity
attributable to owners of the parent company
|
|
15,083.7
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14,881.8
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15,523.4
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4.3%
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2.9%
|
|
Non-controlling
interests
|
|
8,697.7
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|
8,823.6
|
|
9,198.3
|
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4.2%
|
5.8%
|
|
Total
equity
|
|
23,781.4
|
|
23,705.4
|
|
24,721.7
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4.3%
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4.0%
|
|
Total
liabilities and equity
|
|
215,686.2
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227,112.6
|
|
230,788.5
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1.6%
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7.0%
|
|
|
|
|
|
|
|
|
|
|
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Consolidated
Statement of Income
|
|
2Q16
|
|
1Q17
|
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2Q17
|
|
D
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Interest income
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|
4,254.9
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|
4,728.9
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|
4,728.5
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0.0%
|
11.1%
|
|
Interest expense
|
|
2,056.7
|
|
2,189.1
|
|
2,092.1
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|
-4.4%
|
1.7%
|
|
Net
interest income
|
|
2,198.3
|
|
2,539.8
|
|
2,636.4
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3.8%
|
19.9%
|
|
Impairment loss on loans
and accounts receivable
|
|
728.1
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|
791.3
|
|
1,110.7
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|
40.4%
|
52.6%
|
|
Impairment loss on other
financial assets
|
|
77.1
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|
5.6
|
|
10.0
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79.6%
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-87.0%
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|
Recovery of charged-off
assets
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|
(61.0)
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|
(54.9)
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|
(66.2)
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20.4%
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8.5%
|
|
Impairment
loss on financial assets, net
|
|
744.2
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|
741.9
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1,054.6
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42.1%
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41.7%
|
|
Net income from commissions
and fees
|
|
1,043.0
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1,130.2
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1,134.3
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0.4%
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8.8%
|
|
Net trading income
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|
201.0
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|
32.2
|
|
283.4
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|
N.A.
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41.0%
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|
Net income from financial
instruments designated at fair value
|
|
45.3
|
|
44.2
|
|
58.0
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31.5%
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28.1%
|
|
Total other income (expense)
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|
698.1
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|
546.8
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|
289.1
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|
-47.1%
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-58.6%
|
|
Total other expenses
|
|
2,057.9
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|
2,192.3
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2,181.3
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-0.5%
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6.0%
|
|
Income
before income tax expense
|
|
1,383.6
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|
1,358.9
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|
1,165.4
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-14.2%
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-15.8%
|
|
Income
tax expense
|
|
469.3
|
|
445.2
|
|
396.6
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|
-10.9%
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-15.5%
|
|
Income
from continued operations
|
|
914.2
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|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Income from discontinued operations
|
|
-
|
|
-
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|
(0.0)
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|
N.A
|
N.A
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|
Net
income before non-controlling interest
|
|
914.2
|
|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Non-controlling interest
|
|
313.1
|
|
326.7
|
|
298.0
|
|
-8.8%
|
-4.8%
|
|
Net
income attributable to the owners of the parent company
|
|
601.1
|
|
587.0
|
|
470.8
|
|
-19.8%
|
-21.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
ratios
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
YTD
2016
|
YTD
2017
|
|
Net Interest Margin(1)
|
|
5.3%
|
|
5.8%
|
|
5.9%
|
|
5.4%
|
5.8%
|
|
Net Interest Margin (including net trading
income)(1)
|
|
5.6%
|
|
5.9%
|
|
6.1%
|
|
5.6%
|
5.9%
|
|
Efficiency ratio(2)
|
|
47.2%
|
|
45.9%
|
|
46.9%
|
|
45.6%
|
46.4%
|
|
ROAA(3)
|
|
1.7%
|
|
1.6%
|
|
1.3%
|
|
1.6%
|
1.5%
|
|
ROAE(4)
|
|
16.3%
|
|
15.4%
|
|
12.4%
|
|
14.5%
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
30 days PDL / Total loans and leases (5)
|
|
2.9%
|
|
3.6%
|
|
3.8%
|
|
2.9%
|
3.8%
|
|
Provision expense / Average loans and leases
(6)
|
|
2.1%
|
|
2.1%
|
|
2.9%
|
|
2.0%
|
2.5%
|
|
Allowance / 30 days PDL (5)
|
|
0.91
|
|
0.81
|
|
0.83
|
|
0.91
|
0.83
|
|
Allowance / Total loans and leases
|
|
2.7%
|
|
2.9%
|
|
3.1%
|
|
2.7%
|
3.1%
|
|
Charge-offs / Average loans and leases (6)
|
|
1.9%
|
|
1.7%
|
|
1.7%
|
|
1.8%
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases, net / Total assets
|
|
66.0%
|
|
66.6%
|
|
68.1%
|
|
66.0%
|
68.1%
|
|
Deposits / Total loans and leases, net
|
|
96.3%
|
|
97.0%
|
|
95.6%
|
|
96.3%
|
95.6%
|
|
Equity / Assets
|
|
11.0%
|
|
10.4%
|
|
10.7%
|
|
11.0%
|
10.7%
|
|
Tangible equity ratio (7)
|
|
7.9%
|
|
7.4%
|
|
7.6%
|
|
7.9%
|
7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding (EoP)
|
|
22,281,017,159
|
|
22,281,017,159
|
|
22,281,017,159
|
|
22,281,017,159
|
22,281,017,159
|
|
Shares outstanding (Average)
|
|
22,281,017,159
|
|
22,281,017,159
|
|
22,281,017,159
|
|
22,281,017,159
|
22,281,017,159
|
|
Common share price (EoP)
|
|
1,160.0
|
|
1,165.0
|
|
1,255.0
|
|
1,160.0
|
1,255.0
|
|
Preferred share price (EoP)
|
|
1,180.0
|
|
1,170.0
|
|
1,255.0
|
|
1,180.0
|
1,255.0
|
|
BV/ EoP shares in Ps.
|
|
677.0
|
|
667.9
|
|
696.7
|
|
677.0
|
696.7
|
|
EPS
|
|
27.0
|
|
26.3
|
|
21.1
|
|
47.9
|
47.5
|
|
|
|
|
|
|
|
|
|
|
|
|
P/E (8)
|
|
10.9
|
|
11.1
|
|
14.8
|
|
12.3
|
13.2
|
|
P/BV (8)
|
|
1.7
|
|
1.8
|
|
1.8
|
|
1.7
|
1.8
|
(1)
NIM is calculated as Net Interest Income divided by the average of Interest Earning Assets; (2) Efficiency Ratio is calculated
as personnel plus administrative and other expenses divided by net interest income plus net trading income, other income and fees
and other services income, net (excluding others); (3) ROAA is calculated as Income before Minority Interest divided by the average
of total assets for each quarter; (4) ROAE is calculated as Net Income attributable to Grupo Aval’s shareholders divided
by the average of shareholders´ attributable equity for each quarter; (5) Total loans excluding interbank and overnight
funds and 30 days past due include interest accounts receivables; (6) Refers to average gross loans for the period; (7) Tangible
Equity Ratio is calculated as Total Equity minus Intangibles (excluding those related to concessions) divided by Total Assets
minus intangibles (excluding those related to concessions); (B) Based on Preferred share prices.
|
4
|
|
Statement
of Financial Position Analysis
1.
Assets
Total
assets as of June 30
th
, 2017 totaled Ps 230,788.5 billion showing an increase of 7.0% versus June 30
th
,
2016, and of 1.6% versus March 31
st
, 2017. Growth in assets was mainly driven by a 10.4% year over year growth in total
loans and receivables, net to Ps 157,100.3 billion. When excluding FX movement in our Central American operation (“excluding
FX”), asset growth would have been 5.7% versus June 30
th
, 2016 and assets remained basically unchanged versus
March 31
st
, 2017, and for total loans and receivables, net growth would have been 9.0% and 2.2%, respectively.
1.1
Loans and receivables
Total
gross loans and receivables increased by 8.9% between June 30
th
, 2016 and June 30
th
, 2017 to Ps 155,708.0
billion (7.6% excluding FX) mainly driven by (i) a 13.5% increase in Mortgage and housing leases to Ps 15,390.9 billion (10.5%
excluding FX), (ii) a 12.0% increase in Consumer loans and leases to Ps 48,393.2 billion (10.3% excluding FX), and (iii) a 6.7%
increase in Commercial loans and leases to Ps 91,519.3 billion (5.8% excluding FX). Interbank & overnight funds increased
by 99.2% to Ps 6,268.5 billion (95.8% excluding FX).
Allowance
for impairment of loans and receivables was Ps 4,876.1 billion as of June 30
th
, 2017 taking net loans and receivables
to Ps 157,100.3 billion, 10.4% higher than in June 30
th
, 2016.
|
Total
loans and receivables, net
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Loans
and receivables
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases
|
|
85,805.4
|
|
88,730.3
|
|
91,519.3
|
|
3.1%
|
6.7%
|
|
Consumer loans and leases
|
|
43,224.0
|
|
46,854.2
|
|
48,393.2
|
|
3.3%
|
12.0%
|
|
Mortgages and housing leases
|
|
13,556.3
|
|
14,613.9
|
|
15,390.9
|
|
5.3%
|
13.5%
|
|
Microcredit loans and leases
|
|
394.2
|
|
396.1
|
|
404.6
|
|
2.1%
|
2.6%
|
|
Loans
and receivables
|
|
142,980.0
|
|
150,594.5
|
|
155,708.0
|
|
3.4%
|
8.9%
|
|
Interbank & overnight funds
|
|
3,147.5
|
|
5,099.3
|
|
6,268.5
|
|
22.9%
|
99.2%
|
|
Total
loans and leases operations and receivables portfolio
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
Allowance
for impairment of loans and receivables
|
|
(3,840.8)
|
|
(4,389.7)
|
|
(4,876.1)
|
|
11.1%
|
27.0%
|
|
Allowance for impairment
of commercial loans
|
|
(1,851.8)
|
|
(2,072.7)
|
|
(2,306.7)
|
|
11.3%
|
24.6%
|
|
Allowance for impairment
of consumer loans
|
|
(1,808.4)
|
|
(2,119.7)
|
|
(2,347.4)
|
|
10.7%
|
29.8%
|
|
Allowance for impairment
of mortgages
|
|
(125.5)
|
|
(131.9)
|
|
(151.1)
|
|
14.5%
|
20.4%
|
|
Allowance for impairment
of microcredit loans
|
|
(55.1)
|
|
(65.4)
|
|
(71.0)
|
|
8.6%
|
28.7%
|
|
Total
loans and receivables, net
|
|
142,286.7
|
|
151,304.0
|
|
157,100.3
|
|
3.8%
|
10.4%
|
|
5
|
|
The following table shows
the gross loan composition per product of each of our loan categories.
|
Gross
loans
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
General purpose
|
|
57,867.0
|
|
59,814.7
|
|
61,848.3
|
|
3.4%
|
6.9%
|
|
Working capital
|
|
15,483.0
|
|
15,342.2
|
|
16,015.5
|
|
4.4%
|
3.4%
|
|
Financial leases
|
|
8,301.8
|
|
9,563.0
|
|
9,565.5
|
|
0.0%
|
15.2%
|
|
Funded by development banks
|
|
2,834.5
|
|
2,569.1
|
|
2,558.9
|
|
-0.4%
|
-9.7%
|
|
Overdrafts
|
|
509.4
|
|
651.0
|
|
585.2
|
|
-10.1%
|
14.9%
|
|
Operating leases
|
|
402.1
|
|
355.5
|
|
547.1
|
|
53.9%
|
36.1%
|
|
Credit cards
|
|
407.8
|
|
434.8
|
|
398.8
|
|
-8.3%
|
-2.2%
|
|
Commercial
loans and leases
|
|
85,805.4
|
|
88,730.3
|
|
91,519.3
|
|
3.1%
|
6.7%
|
|
Personal loans
|
|
26,581.9
|
|
28,700.9
|
|
29,401.4
|
|
2.4%
|
10.6%
|
|
Credit cards
|
|
11,034.2
|
|
12,143.3
|
|
12,736.9
|
|
4.9%
|
15.4%
|
|
Automobile and vehicle
|
|
5,316.8
|
|
5,702.0
|
|
5,923.5
|
|
3.9%
|
11.4%
|
|
Financial leases
|
|
197.2
|
|
210.0
|
|
232.7
|
|
10.8%
|
18.0%
|
|
Overdrafts
|
|
93.8
|
|
97.9
|
|
98.7
|
|
0.8%
|
5.2%
|
|
Other
|
|
0.1
|
|
0.0
|
|
0.0
|
|
-7.9%
|
-52.7%
|
|
Consumer
loans and leases
|
|
43,224.0
|
|
46,854.2
|
|
48,393.2
|
|
3.3%
|
12.0%
|
|
Mortgages
|
|
12,729.7
|
|
13,695.7
|
|
14,428.6
|
|
5.4%
|
13.3%
|
|
Housing leases
|
|
826.6
|
|
918.2
|
|
962.3
|
|
4.8%
|
16.4%
|
|
Mortgages
and housing leases
|
|
13,556.3
|
|
14,613.9
|
|
15,390.9
|
|
5.3%
|
13.5%
|
|
Microcredit
loans and leases
|
|
394.2
|
|
396.1
|
|
404.6
|
|
2.1%
|
2.6%
|
|
Loans
and receivables
|
|
142,980.0
|
|
150,594.5
|
|
155,708.0
|
|
3.4%
|
8.9%
|
|
Interbank & overnight funds
|
|
3,147.5
|
|
5,099.3
|
|
6,268.5
|
|
22.9%
|
99.2%
|
|
Total
loans and leases operations and receivables portfolio
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
Over
the last twelve months, consumer credit cards and mortgages have driven our loan portfolio growth in accordance with our banks’
strategic plans as well as growth in commercial financial leases mostly reflecting Promigas’s projects.
Commercial
loans grew by 6.7% between June 30
th
, 2016 and June 30
th
, 2017 as compared to the 4.3% year over year growth
reported a quarter earlier. In Colombia we evidenced a slight pickup led by general purpose loans, which grew by 6.8% between
June 30
th
, 2016 and June 30
th
, 2017, up from 4.5% in March 31
st
, 2017 as compared to a year earlier.
As for Central America, commercial loans grew by 14.7% between June 30
th
, 2016 and June 30
th
, 2017 compared
to the 5.1% for March 31
st
, 2017; when excluding FX, growth would have been 9.8% and 9.3%, respectively. The pickup
in our Central American operations, excluding FX, is mainly attributable to an acceleration in working capital loans (24.9% in
2Q17 vs 20.5% in 1Q17) and financial leases (8.6% in 2Q17 vs 5.4% in 1Q17).
Consumer
loans growth over the last quarter was mainly driven by personal loans and credit cards. In Colombia personal loans grew by 1.5%
between March 31
st
, 2017 and June 30
th
, 2017 and credit cards grew by 3.7% over the same period. Growth
of our Central American operations excluding FX was driven by automobile and vehicle with a 3.0% growth and personal loans which
grew by 0.5%.
|
6
|
|
The
following table shows the gross loan composition per entity. During the last twelve months, Banco AV Villas showed the highest
growth rate within our banking operation in Colombia, driven by a strong performance in personal loans and credit cards with 14.7%
and 35.3% increases as compared to June 30
th
, 2016, respectively.
|
Gross
loans / Bank ($)
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Banco de Bogotá
|
|
93,778.0
|
|
99,672.5
|
|
104,159.1
|
|
4.5%
|
11.1%
|
|
Domestic
|
|
53,380.4
|
|
55,697.6
|
|
57,314.9
|
|
2.9%
|
7.4%
|
|
Central America
|
|
40,397.6
|
|
43,974.9
|
|
46,844.3
|
|
6.5%
|
16.0%
|
|
Banco de Occidente
|
|
26,779.8
|
|
27,853.7
|
|
28,193.8
|
|
1.2%
|
5.3%
|
|
Banco Popular
|
|
15,814.8
|
|
16,457.9
|
|
16,656.7
|
|
1.2%
|
5.3%
|
|
Banco AV Villas
|
|
9,019.4
|
|
9,865.9
|
|
10,594.5
|
|
7.4%
|
17.5%
|
|
Corficolombiana
|
|
1,711.5
|
|
2,871.0
|
|
3,167.1
|
|
10.3%
|
85.0%
|
|
Eliminations
|
|
(976.0)
|
|
(1,027.3)
|
|
(794.8)
|
|
-22.6%
|
-18.6%
|
|
Total
Grupo Aval
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
loans / Bank (%)
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
|
|
|
|
|
|
|
|
|
Banco de Bogotá
|
|
64.2%
|
|
64.0%
|
|
64.3%
|
|
|
|
|
Domestic
|
|
36.5%
|
|
35.8%
|
|
35.4%
|
|
|
|
|
Central America
|
|
27.6%
|
|
28.2%
|
|
28.9%
|
|
|
|
|
Banco de Occidente
|
|
18.3%
|
|
17.9%
|
|
17.4%
|
|
|
|
|
Banco Popular
|
|
10.8%
|
|
10.6%
|
|
10.3%
|
|
|
|
|
Banco AV Villas
|
|
6.2%
|
|
6.3%
|
|
6.5%
|
|
|
|
|
Corficolombiana
|
|
1.2%
|
|
1.8%
|
|
2.0%
|
|
|
|
|
Eliminations
|
|
-0.7%
|
|
-0.7%
|
|
-0.5%
|
|
|
|
|
Total
Grupo Aval
|
|
100%
|
|
100%
|
|
100%
|
|
|
|
As
detailed below, of the total gross loans of Grupo Aval, 71.1% are domestic and 28.9% are foreign (reflecting the Central American
operations). Total foreign gross loans grew 16.0% during the past 12 months and 6.5% in the quarter. Excluding FX, yearly and
quarterly growth for our Central American operations would have been 11.0% and 0.8%, respectively.
|
Gross
loans
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases
|
|
69,498.6
|
|
71,465.6
|
|
72,808.1
|
|
1.9%
|
4.8%
|
|
Consumer loans and leases
|
|
28,668.2
|
|
31,067.2
|
|
31,587.5
|
|
1.7%
|
10.2%
|
|
Mortgages and housing leases
|
|
5,234.7
|
|
5,889.6
|
|
6,094.4
|
|
3.5%
|
16.4%
|
|
Microcredit loans and leases
|
|
394.2
|
|
396.1
|
|
404.6
|
|
2.1%
|
2.6%
|
|
Interbank & overnight funds
|
|
1,934.1
|
|
2,900.4
|
|
4,237.6
|
|
46.1%
|
119.1%
|
|
Total
domestic loans
|
|
105,729.9
|
|
111,718.8
|
|
115,132.1
|
|
3.1%
|
8.9%
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases
|
|
16,306.8
|
|
17,264.7
|
|
18,711.2
|
|
8.4%
|
14.7%
|
|
Consumer loans and leases
|
|
14,555.8
|
|
15,787.0
|
|
16,805.7
|
|
6.5%
|
15.5%
|
|
Mortgages and housing leases
|
|
8,321.6
|
|
8,724.3
|
|
9,296.4
|
|
6.6%
|
11.7%
|
|
Microcredit loans and leases
|
|
-
|
|
-
|
|
-
|
|
-
|
-
|
|
Interbank & overnight funds
|
|
1,213.4
|
|
2,198.9
|
|
2,030.9
|
|
-7.6%
|
67.4%
|
|
Total
foreign loans
|
|
40,397.6
|
|
43,974.9
|
|
46,844.3
|
|
6.5%
|
16.0%
|
|
Total
loans and leases operations and receivables portfolio
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
7
|
|
During
last year the quality of our loan portfolio has evidenced a deterioration in line with a slower pace of the economy and a slight
weakening in urban and national unemployment metrics, 30 days PDL to total loans closed 2Q17 in 3.8% compared to 3.6% in 1Q17
and 2.9% 2Q16. The ratio of 90 days PDL to total loans was 2.5% for 2Q17 compared to 2.2% in 1Q17 and 1.8% in 2Q16. Finally, the
ratio of CDE Loans to total loans was 5.0% in 2Q17, 4.7% in 1Q17 and 4.0% in 2Q16.
Commercial
loans’ 30 days PDL ratio was 3.0% for 2Q17, 2.9% for 1Q17 and 2.2% for 2Q16; 90 days NPL ratio was 2.5%, 2.2% and 1.6%,
respectively. Consumer loans’ 30 days PDL ratio was 5.2% for 2Q17, 4.8% for 1Q17 and 4.4% for 2Q16; 90 days NPL ratio was
2.7%, 2.3% and 2.1%, respectively. Mortgages’ 30 days PDL ratio was 3.5% for 2Q17, 3.4% for 1Q17 and 3.1% for 2Q16; 90 days
NPL ratio was 1.9%, 1.7% and 1.7%, respectively.
|
Total
loans and leases operations and receivables portfolio
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
''A'' normal risk
|
|
133,225.6
|
|
138,137.6
|
|
142,184.4
|
|
2.9%
|
6.7%
|
|
''B'' acceptable risk
|
|
4,053.0
|
|
5,343.5
|
|
5,714.5
|
|
6.9%
|
41.0%
|
|
''C'' appreciable risk
|
|
2,788.2
|
|
3,745.5
|
|
4,072.4
|
|
8.7%
|
46.1%
|
|
''D'' significant risk
|
|
1,918.7
|
|
2,137.1
|
|
2,419.7
|
|
13.2%
|
26.1%
|
|
''E'' unrecoverable
|
|
994.5
|
|
1,230.8
|
|
1,317.1
|
|
7.0%
|
32.4%
|
|
Loans
and receivables
|
|
142,980.0
|
|
150,594.5
|
|
155,708.0
|
|
3.4%
|
8.9%
|
|
Interbank and overnight funds
|
|
3,147.5
|
|
5,099.3
|
|
6,268.5
|
|
22.9%
|
99.2%
|
|
Total
loans and leases operations and receivables portfolio
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
CDE
loans / Total loans (*)
|
|
4.0%
|
|
4.7%
|
|
5.0%
|
|
|
|
|
Past
due loans
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Performing
|
|
83,953.7
|
|
86,118.6
|
|
88,776.5
|
|
3.1%
|
5.7%
|
|
Between 31 and 90 days past due
|
|
442.7
|
|
629.9
|
|
492.8
|
|
-21.8%
|
11.3%
|
|
+90 days past due
|
|
1,409.0
|
|
1,981.8
|
|
2,250.1
|
|
13.5%
|
59.7%
|
|
Commercial
loans and leases
|
|
85,805.4
|
|
88,730.3
|
|
91,519.3
|
|
3.1%
|
6.7%
|
|
Performing
|
|
41,339.0
|
|
44,621.2
|
|
45,891.5
|
|
2.8%
|
11.0%
|
|
Between 31 and 90 days past due
|
|
979.0
|
|
1,149.6
|
|
1,204.9
|
|
4.8%
|
23.1%
|
|
+90 days past due
|
|
906.1
|
|
1,083.4
|
|
1,296.9
|
|
19.7%
|
43.1%
|
|
Consumer
loans and leases
|
|
43,224.0
|
|
46,854.2
|
|
48,393.2
|
|
3.3%
|
12.0%
|
|
Performing
|
|
13,139.6
|
|
14,123.4
|
|
14,854.7
|
|
5.2%
|
13.1%
|
|
Between 31 and 90 days past due
|
|
192.1
|
|
244.9
|
|
248.9
|
|
1.6%
|
29.6%
|
|
+90 days past due
|
|
224.7
|
|
245.6
|
|
287.2
|
|
17.0%
|
27.9%
|
|
Mortgages
and housing leases
|
|
13,556.3
|
|
14,613.9
|
|
15,390.9
|
|
5.3%
|
13.5%
|
|
Performing
|
|
344.4
|
|
338.8
|
|
342.3
|
|
1.0%
|
-0.6%
|
|
Between 31 and 90 days past due
|
|
18.1
|
|
17.6
|
|
19.2
|
|
9.1%
|
6.0%
|
|
+90 days past due
|
|
31.7
|
|
39.7
|
|
43.1
|
|
8.5%
|
35.9%
|
|
Microcredit
loans and leases
|
|
394.2
|
|
396.1
|
|
404.6
|
|
2.1%
|
2.6%
|
|
Loans
and receivables
|
|
142,980.0
|
|
150,594.5
|
|
155,708.0
|
|
3.4%
|
8.9%
|
|
Interbank
& overnight funds
|
|
3,147.5
|
|
5,099.3
|
|
6,268.5
|
|
22.9%
|
99.2%
|
|
Allowance
for impairment of commercial loans
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
30
Days PDL / Total loans (*)
|
|
2.9%
|
|
3.6%
|
|
3.8%
|
|
90
Days PDL / Total loans (*)
|
|
1.8%
|
|
2.2%
|
|
2.5%
|
(*) Total loans
excluding interbank and overnight funds. 30 days past due and 90 days past due are calculated on a capital plus interest accounts
receivable basis.
|
8
|
|
Grupo
Aval’s coverage ratios remained basically unchanged during the quarter. Coverage over our 90 days PDL was 1.3x for 2Q17
and 1Q17. Allowance to CDE Loans was 0.6x for 2Q17 and 1Q17, and allowance to 30 days PDL was 0.8x for 2Q17 and 1Q17. Impairment
loss, net of recoveries of charged off assets to average total loans was 2.7% in 2Q17 versus 1.9% in 1Q17. Charge-offs to average
total loans was 1.7% in 2Q17, 1.7% in 1Q17 and 1.9% in 2Q16.
|
Total
loans and leases operations and receivables portfolio
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for impairment / CDE loans
|
|
0.7
|
|
0.6
|
|
0.6
|
|
Allowance for impairment / 30 Days
PDL
|
|
0.9
|
|
0.8
|
|
0.8
|
|
Allowance for impairment / 90 Days
PDL
|
|
1.5
|
|
1.3
|
|
1.3
|
|
Allowance
for impairment / Total loans (*)
|
|
2.7%
|
|
2.9%
|
|
3.1%
|
|
|
|
|
|
|
|
|
|
Impairment
loss / CDE loans
|
|
0.5
|
|
0.4
|
|
0.6
|
|
Impairment loss / 30 Days PDL
|
|
0.7
|
|
0.6
|
|
0.8
|
|
Impairment loss / 90 Days PDL
|
|
1.1
|
|
0.9
|
|
1.1
|
|
Impairment loss / Average total loans
(*)
|
|
2.1%
|
|
2.1%
|
|
2.9%
|
|
Impairment
loss, net of recoveries of charged-off assets / Average total loans (*)
|
|
1.9%
|
|
1.9%
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
Charge-offs
/ Average total loans (*)
|
|
1.9%
|
|
1.7%
|
|
1.7%
|
|
(*) Total loans excluding interbank and overnight funds. 30 days
past due and 90 days past due are calculated on a capital plus interest accounts
receivable basis.
|
|
|
|
|
|
1.2
Financial assets held for investment
Total
financial assets held for investment decreased 7.7% to Ps 27,024.6 billion between June 30
th
, 2016 and June 30
th
,
2017, and by 3.1% versus March 31
st
, 2017. Ps 21,440.4 billion of our total gross portfolio is invested in debt securities,
which decreased by 10.6% between June 30
th
, 2016 and June 30
th
, 2017 and by 5.1% since March 31
st
,
2017. Ps 2,850.4 billion of our total gross investment securities is invested in equity securities, which increased by 23.6% between
June 30
th
, 2016 and June 30
th
, 2017 and by 11.9% versus March 31
st
, 2017.
The
average yield on our debt and equity investment securities (held for trading through profit or losses, available for sale, held
to maturity and Interbank & Overnight funds) was 5.9% for 2Q17 compared to 5.5% for 1Q17 and 5.6% in 2Q16.
|
Financial
assets held for investment
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Debt securities
|
|
2,189.2
|
|
2,651.1
|
|
2,389.1
|
|
-9.9%
|
9.1%
|
|
Equity securities
|
|
1,575.5
|
|
1,796.2
|
|
2,047.8
|
|
14.0%
|
30.0%
|
|
Derivative instruments
|
|
1,012.7
|
|
615.7
|
|
559.0
|
|
-9.2%
|
-44.8%
|
|
Total
financial assets held for trading through profit or losses
|
|
4,777.4
|
|
5,063.0
|
|
4,995.8
|
|
-1.3%
|
4.6%
|
|
Debt securities
|
|
19,527.4
|
|
17,313.5
|
|
16,362.7
|
|
-5.5%
|
-16.2%
|
|
Equity securities
|
|
730.2
|
|
750.2
|
|
802.7
|
|
7.0%
|
9.9%
|
|
Total
available for sale financial assets
|
|
20,257.6
|
|
18,063.6
|
|
17,165.3
|
|
-5.0%
|
-15.3%
|
|
Investments held to maturity
|
|
2,265.6
|
|
2,636.8
|
|
2,688.7
|
|
2.0%
|
18.7%
|
|
Other financial assets at fair
value through profit or losses
|
|
1,978.7
|
|
2,117.7
|
|
2,174.9
|
|
2.7%
|
9.9%
|
|
Total
financial assets held for investment
|
|
29,279.2
|
|
27,881.2
|
|
27,024.6
|
|
-3.1%
|
-7.7%
|
|
9
|
|
1.3
Cash and Cash Equivalents
As
of June 30
th
, 2017 cash and cash equivalents had a balance of Ps 22,958.8 billion showing a 9.3% increase versus June
30
th
, 2016 and a decrease of 6.5% versus March 31
st
, 2017 (7.5% and -8.2% excluding FX).
The
ratio of cash and cash equivalents to deposits was 15.3% in June 30
th
, 2017 and June 30
th
, 2016.
1.4
Goodwill and Other Intangibles
Goodwill
and other intangibles as of June 30
th
, 2017 reached Ps 10,573.5 billion, increasing by 7.9% versus June 30
th
,
2016 and 3.5% versus March 31
st
, 2017.
Goodwill
as of June 30
th
, 2017 was Ps 6,903.1 billion, increasing by 3.1% versus June 30
th
, 2016 and 3.9% versus
March 31
st
, 2017, explained by fluctuations in the exchange rate.
Other
intangibles, defined as “concession arrangement rights”, reflect the value of road concessions and other financial
assets mainly recorded at Corficolombiana, and grew by 19.4% June 30
th
, 2016 and 2.4% versus March 31
st
,
2017.
2.
Liabilities
As
of June 30
th
, 2017 funding represented 95.0% of total liabilities and other liabilities represented 5.0%.
2.1
Funding
Total
Funding (Total Financial Liabilities at Amortized Cost) which includes (i) Deposits, (ii) Interbank borrowings and overnight
funds, (iii) Borrowings from banks and others, (iv) Bonds, and (v) Borrowing from development entities had a balance of Ps
195,861.1 billion as of June 30
th
, 2017 showing an increase of 7.5% versus June 30
th
, 2016 and of 1.9%
versus March 31
st
, 2017 (6.2% increase and 0.4% increases excluding FX). Total deposits represented 76.6% of total
funding as of the end of 2Q17, 76.4% for 1Q17 and 75.2% for 2Q16.
Average
cost of funds was 4.3% in 2Q17, 4.6% in 1Q17 and 4.5% in 2Q16. The decline in average cost of funds was a consequence of a declining
interest rate scenario in Colombia.
|
10
|
|
2.1.1
Deposits
|
Deposits
from clients at amortized cost
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Checking accounts
|
|
14,825.0
|
|
10,995.2
|
|
10,907.6
|
|
-0.8%
|
-26.4%
|
|
Other deposits
|
|
418.8
|
|
579.0
|
|
441.5
|
|
-23.8%
|
5.4%
|
|
Non-interest
bearing
|
|
15,243.8
|
|
11,574.3
|
|
11,349.1
|
|
-1.9%
|
-25.5%
|
|
Checking accounts
|
|
15,231.9
|
|
22,567.6
|
|
22,178.1
|
|
-1.7%
|
45.6%
|
|
Time deposits
|
|
55,425.5
|
|
62,182.6
|
|
64,872.1
|
|
4.3%
|
17.0%
|
|
Savings deposits
|
|
51,114.9
|
|
50,411.8
|
|
51,718.5
|
|
2.6%
|
1.2%
|
|
Interest
bearing
|
|
121,772.4
|
|
135,162.1
|
|
138,768.7
|
|
2.7%
|
14.0%
|
|
Deposits
from clients at amortized cost
|
|
137,016.2
|
|
146,736.3
|
|
150,117.8
|
|
2.3%
|
9.6%
|
Of
our total deposits as of June 30
th
, 2017 checking accounts represented 22.0%, time deposits 43.2%, savings accounts
34.5%, and other deposits 0.3%.
The
following table shows the deposits composition by bank. During the last twelve months, Banco Popular showed the highest growth
rate in deposits within our banking operation in Colombia.
|
Deposits
/ Bank ($)
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Banco de Bogotá
|
|
87,407.5
|
|
95,809.9
|
|
97,954.2
|
|
2.2%
|
12.1%
|
|
Domestic
|
|
50,907.8
|
|
55,965.4
|
|
55,288.8
|
|
-1.2%
|
8.6%
|
|
Central America
|
|
36,499.6
|
|
39,844.4
|
|
42,665.4
|
|
7.1%
|
16.9%
|
|
Banco de Occidente
|
|
24,824.4
|
|
24,706.8
|
|
25,935.1
|
|
5.0%
|
4.5%
|
|
Banco Popular
|
|
13,928.8
|
|
15,229.7
|
|
15,136.6
|
|
-0.6%
|
8.7%
|
|
Banco AV Villas
|
|
9,225.2
|
|
9,485.9
|
|
9,769.1
|
|
3.0%
|
5.9%
|
|
Corficolombiana
|
|
3,962.0
|
|
3,971.8
|
|
3,996.0
|
|
0.6%
|
0.9%
|
|
Eliminations
|
|
(2,331.6)
|
|
(2,467.7)
|
|
(2,673.2)
|
|
8.3%
|
14.7%
|
|
Total
Grupo Aval
|
|
137,016.2
|
|
146,736.3
|
|
150,117.8
|
|
2.3%
|
9.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
/ Bank (%)
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
|
|
|
Banco de Bogotá
|
|
63.8%
|
|
65.3%
|
|
65.3%
|
|
|
|
|
Domestic
|
|
37.2%
|
|
38.1%
|
|
36.8%
|
|
|
|
|
Central America
|
|
26.6%
|
|
27.2%
|
|
28.4%
|
|
|
|
|
Banco de Occidente
|
|
18.1%
|
|
16.8%
|
|
17.3%
|
|
|
|
|
Banco Popular
|
|
10.2%
|
|
10.4%
|
|
10.1%
|
|
|
|
|
Banco AV Villas
|
|
6.7%
|
|
6.5%
|
|
6.5%
|
|
|
|
|
Corficolombiana
|
|
2.9%
|
|
2.7%
|
|
2.7%
|
|
|
|
|
Eliminations
|
|
-1.7%
|
|
-1.7%
|
|
-1.8%
|
|
|
|
|
Total
Grupo Aval
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
|
|
|
11
|
|
2.1.2 Borrowings from Banks
and Other (includes borrowings from development entities)
As of June
30
th
, 2017 borrowings from banks and other totaled Ps 22,000.8 billion, showing a 14.1% increase versus June 30
th
,
2016 and a 4.0% increase versus March 31
st
, 2017. Excluding FX, borrowings from banks and other increased 11.3% versus
2Q16 and 1.2% versus 1Q17.
2.1.3 Bonds
Total bonds
as of June 30
th
, 2017 totaled Ps 17,152.4 billion showing a decrease of 0.5% versus June 30
th
, 2016 and
an increase of 5.4% versus March 31
st
, 2017. Excluding FX, bonds decreased 0.8% versus 2Q16 and increased 4.8% versus
1Q17.
3. Non-controlling Interest
Non-controlling
Interest in Grupo Aval reflects: (i) the minority stakes that third party shareholders hold in each of its direct consolidated
subsidiaries (Banco de Bogotá, Banco de Occidente, Banco Popular, Banco AV Villas and Corficolombiana), and (ii) the minority
stakes that third party shareholders hold in the consolidated subsidiaries at the bank level (mainly Porvenir). As of June 30
th
,
2017 non-controlling interest was Ps 9,198.3 billion which increased by 5.8% versus June 30
th
, 2016 and 4.2% versus
March 31
st
, 2017. Total non-controlling interest remained stable during the last quarter on 37.2% of total equity.
Total non-controlling interest derives from the sum of the combined minority interests of our banks and of Grupo Aval, applying
eliminations associated with the consolidation process of Grupo Aval.
|
Direct
& indirect ownership of main subsidiaries
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Banco de Bogotá
|
|
68.7%
|
|
68.7%
|
|
68.7%
|
|
-
|
-
|
|
Banco de Occidente
|
|
72.3%
|
|
72.3%
|
|
72.3%
|
|
-
|
-
|
|
Banco Popular
|
|
93.7%
|
|
93.7%
|
|
93.7%
|
|
-
|
-
|
|
Banco AV Villas
|
|
79.9%
|
|
79.9%
|
|
79.9%
|
|
-
|
-
|
|
BAC Credomatic
(1)
|
|
68.7%
|
|
68.7%
|
|
68.7%
|
|
-
|
-
|
|
Porvenir
(2)
|
|
75.7%
|
|
75.7%
|
|
75.7%
|
|
0
|
0
|
|
Corficolombiana
(3)
|
|
44.5%
|
|
44.5%
|
|
44.6%
|
|
7
|
7
|
|
Grupo Aval Limited
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
-
|
-
|
|
Grupo Aval International Ltd.
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
-
|
-
|
(1)
BAC Credomatic is fully owned by Banco de Bogotá; (2) Grupo Aval indirectly owns a 100% of Porvenir as follows: 20.0% in
Grupo Aval, 46.9% in Banco de Bogotá and 33.1% in Banco de Occidente. Porvenir's results consolidate into Banco de Bogotá;
(3) Grupo Aval increased its direct ownership in Corficolombiana mainly due to stock dividend distributions and acquisitions through
open market transactions.
4. Attributable Shareholders’
Equity
Attributable shareholders’
equity as of June 30
th
, 2017 was Ps 15,523.4 billion, showing an increase of 2.9% versus June 30
th
, 2016
and of 4.3% versus March 31
st
, 2017.
|
12
|
|
Income
Statement Analysis
Our net income attributable
to shareholders for 2Q17 of Ps 470.8 billion shows a 21.7% decrease versus 2Q16 and a 19.8% decrease versus 1Q17.
|
Consolidated
Statement of Income
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Interest income
|
|
4,254.9
|
|
4,728.9
|
|
4,728.5
|
|
0.0%
|
11.1%
|
|
Interest expense
|
|
2,056.7
|
|
2,189.1
|
|
2,092.1
|
|
-4.4%
|
1.7%
|
|
Net
interest income
|
|
2,198.3
|
|
2,539.8
|
|
2,636.4
|
|
3.8%
|
19.9%
|
|
Impairment loss on loans
and accounts receivable
|
|
728.1
|
|
791.3
|
|
1,110.7
|
|
40.4%
|
52.6%
|
|
Impairment loss on other
financial assets
|
|
77.1
|
|
5.6
|
|
10.0
|
|
79.6%
|
-87.0%
|
|
Recovery of charged-off
assets
|
|
(61.0)
|
|
(54.9)
|
|
(66.2)
|
|
20.4%
|
8.5%
|
|
Impairment
loss on financial assets, net
|
|
744.2
|
|
741.9
|
|
1,054.6
|
|
42.1%
|
41.7%
|
|
Net income from commissions
and fees
|
|
1,043.0
|
|
1,130.2
|
|
1,134.3
|
|
0.4%
|
8.8%
|
|
Net trading income
|
|
201.0
|
|
32.2
|
|
283.4
|
|
N.A.
|
41.0%
|
|
Net income from financial
instruments designated at fair value
|
|
45.3
|
|
44.2
|
|
58.0
|
|
31.5%
|
28.1%
|
|
Total other income (expense)
|
|
698.1
|
|
546.8
|
|
289.1
|
|
-47.1%
|
-58.6%
|
|
Total other expenses
|
|
2,057.9
|
|
2,192.3
|
|
2,181.3
|
|
-0.5%
|
6.0%
|
|
Income
before income tax expense
|
|
1,383.6
|
|
1,358.9
|
|
1,165.4
|
|
-14.2%
|
-15.8%
|
|
Income
tax expense
|
|
469.3
|
|
445.2
|
|
396.6
|
|
-10.9%
|
-15.5%
|
|
Income
from continued operations
|
|
914.2
|
|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Income from discontinued operations
|
|
-
|
|
-
|
|
(0.0)
|
|
N.A
|
N.A
|
|
Net
income before non-controlling interest
|
|
914.2
|
|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Non-controlling interest
|
|
313.1
|
|
326.7
|
|
298.0
|
|
-8.8%
|
-4.8%
|
|
Net
income attributable to the owners of the parent company
|
|
601.1
|
|
587.0
|
|
470.8
|
|
-19.8%
|
-21.7%
|
1. Net Interest Income
|
Net
interest income
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
1,975.5
|
|
2,128.2
|
|
2,081.9
|
|
-2.2%
|
5.4%
|
|
Interbank and overnight
funds
|
|
25.8
|
|
67.7
|
|
73.0
|
|
7.7%
|
183.1%
|
|
Consumer
|
|
1,740.0
|
|
1,960.2
|
|
2,002.2
|
|
2.1%
|
15.1%
|
|
Mortgages and housing leases
|
|
278.6
|
|
305.8
|
|
312.5
|
|
2.2%
|
12.2%
|
|
Microcredit
|
|
28.8
|
|
29.1
|
|
29.4
|
|
1.1%
|
2.2%
|
|
Loan
portfolio interest
|
|
4,048.7
|
|
4,491.0
|
|
4,499.0
|
|
0.2%
|
11.1%
|
|
Interests on investments
in debt securities
|
|
206.2
|
|
238.0
|
|
229.5
|
|
-3.5%
|
11.3%
|
|
Total
interest income
|
|
4,254.9
|
|
4,728.9
|
|
4,728.5
|
|
0.0%
|
11.1%
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Checking accounts
|
|
69.1
|
|
86.8
|
|
77.8
|
|
-10.4%
|
12.5%
|
|
Time deposits
|
|
827.6
|
|
917.8
|
|
930.7
|
|
1.4%
|
12.4%
|
|
Savings deposits
|
|
523.5
|
|
574.6
|
|
499.0
|
|
-13.2%
|
-4.7%
|
|
Total
interest expenses on deposits
|
|
1,420.3
|
|
1,579.2
|
|
1,507.4
|
|
-4.6%
|
6.1%
|
|
Borrowings
|
|
580.5
|
|
567.7
|
|
543.9
|
|
-4.2%
|
-6.3%
|
|
Interbank borrowings and
overnight funds
|
|
167.6
|
|
82.7
|
|
80.8
|
|
-2.2%
|
-51.8%
|
|
Borrowings from banks and
others
|
|
133.2
|
|
187.2
|
|
185.2
|
|
-1.1%
|
39.0%
|
|
Bonds
|
|
279.6
|
|
297.8
|
|
277.9
|
|
-6.7%
|
-0.6%
|
|
Borrowings
from development entities
|
|
55.9
|
|
42.2
|
|
40.8
|
|
-3.4%
|
-27.0%
|
|
Total
interest expense
|
|
2,056.7
|
|
2,189.1
|
|
2,092.1
|
|
-4.4%
|
1.7%
|
|
Net
interest income
|
|
2,198.3
|
|
2,539.8
|
|
2,636.4
|
|
3.8%
|
19.9%
|
|
13
|
|
Our
net interest income increased by 19.9% to Ps 2,636.4 for 2Q17 versus 2Q16 and by 3.8% versus 1Q17. The increase versus 2Q16 was
derived from a 11.1% increase in total interest income and a 1.7% increase in total interest expense. The improvement versus 1Q17
was driven by a decline in cost of funds.
Our
Net Interest Margin
(1)
was 6.1% for 2Q17, 5.9% in 1Q17, and 5.6% in 2Q16. Net Interest Margin on Loans was 7.0% for
2Q17, 6.8% in 1Q17 and 6.5% in 2Q16. On the other hand, our Net Investments Margin was 1.4% in 2Q17 versus 0.6% in 1Q17 and 0.8%
in 2Q16.
In
Colombia, our Net Interest Margin
(1)
was 5.9% for 2Q17, 5.6% in 1Q17, and 5.0% in 2Q16. Net Interest Margin on Loans
was 6.8% for 2Q17, 6.6% in 1Q17 and 6.1% in 2Q16. On the other hand, our Net Investments Margin was 1.6% in 2Q17 versus 0.1% in
1Q17 and 0.0% in 2Q16.
In
Central America, our Net Interest Margin
(1)
was 6.4% for 2Q17, 6.6% in 1Q17, and 7.1% in 2Q16. Net Interest Margin
on Loans was 7.5% for 2Q17, 7.4% in 1Q17 and 7.7% in 2Q16. On the other hand, our Net Investments Margin was 0.5% in 2Q17 versus
1.9% in 1Q17 and 3.1% in 2Q16.
Our
Net Interest Margin from our financial operation (excluding non-financial sector and holding company) was 6.3% for 2Q17, 6.1%
in 1Q17 and 5.8% in 1Q16. Net Interest Margin on Loans from our financial operation (excluding non-financial sector and holding
company) was 7.2% for 2Q17, 7.1% in 1Q17 and 6.8% in 2Q16.
2.
Impairment loss on financial assets, net
Our
impairment loss on financial assets, net increased by 42.1% to Ps 1,054.6 billion for 2Q17 versus 1Q17 and by 41.7% versus 2Q16.
|
Impairment
loss on financial assets, net
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Impairment loss
on loans and accounts receivable
|
|
728.1
|
|
791.3
|
|
1,110.7
|
|
40.4%
|
52.6%
|
|
Recovery of charged-off
assets
|
|
(61.0)
|
|
(54.9)
|
|
(66.2)
|
|
20.4%
|
8.5%
|
|
Impairment loss on other
financial assets
|
|
77.1
|
|
5.6
|
|
10.0
|
|
79.6%
|
-87.0%
|
|
Impairment
loss on financial assets, net
|
|
744.2
|
|
741.9
|
|
1,054.6
|
|
42.1%
|
41.7%
|
Our
annualized gross cost of risk was 2.9% for 2Q17, 2.1% for 1Q17 and 2.1% for 2Q16. Net of recoveries of charged-off assets our
ratio was 2.7% for 2Q17, 1.9% for 1Q17, and 1.9% for 2Q16.
Over
the last quarter impairment losses on large corporates impacted our results once again, provisions for Electricaribe and SITP
amounted to 30 basis points of our cost of risk net of recoveries of charged-off assets and their respective allowances now cover
29.9% and 6.9% of our exposure, respectively
(1)
Grupo Aval’s
NIM without income from investment securities held for trading through profit or loss was 5.9% for 2Q17, 5.8% for 1Q17 and 5.3%
for 2Q16.
|
14
|
|
3. Non-interest income
|
Total
non-interest income
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Income
from commissions and fees
|
|
|
|
|
|
|
|
|
|
|
Banking
fees
1
|
|
897.1
|
|
919.4
|
|
950.3
|
|
3.4%
|
5.9%
|
|
Trust and portfolio management
activities
|
|
40.5
|
|
76.8
|
|
75.9
|
|
-1.1%
|
87.3%
|
|
Pension and severance fund
management
|
|
206.4
|
|
240.8
|
|
227.5
|
|
-5.5%
|
10.2%
|
|
Bonded warehouse services
|
|
47.5
|
|
44.3
|
|
43.9
|
|
-0.7%
|
-7.6%
|
|
Total
income from commissions and fees
|
|
1,191.5
|
|
1,281.2
|
|
1,297.6
|
|
1.3%
|
8.9%
|
|
Expenses for commissions
and fees
|
|
148.5
|
|
151.0
|
|
163.4
|
|
8.2%
|
10.0%
|
|
Net
income from commissions and fees
|
|
1,043.0
|
|
1,130.2
|
|
1,134.3
|
|
0.4%
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net trading
income
|
|
201.0
|
|
32.2
|
|
283.4
|
|
N.A.
|
41.0%
|
|
Net income from financial
instruments designated at fair value
|
|
45.3
|
|
44.2
|
|
58.0
|
|
31.5%
|
28.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gains (losses),
net
|
|
196.2
|
|
196.3
|
|
(1.5)
|
|
-100.8%
|
-100.8%
|
|
Net gain on sale of investments
|
|
38.8
|
|
3.8
|
|
10.9
|
|
184.2%
|
-72.0%
|
|
Gain on the sale of non-current
assets held for sale
|
|
17.0
|
|
4.3
|
|
2.7
|
|
-37.8%
|
-84.3%
|
|
Income
from non-consolidated investments
2
|
|
81.6
|
|
86.5
|
|
50.6
|
|
-41.5%
|
-38.0%
|
|
Net gains on asset valuations
|
|
0.4
|
|
(1.0)
|
|
12.8
|
|
N.A
|
N.A.
|
|
Income from non-financial
sector, net
|
|
212.6
|
|
172.1
|
|
127.9
|
|
-25.7%
|
-39.8%
|
|
Other operating income
|
|
151.5
|
|
84.8
|
|
85.9
|
|
1.3%
|
-43.3%
|
|
Total
other income (expense)
|
|
698.1
|
|
546.8
|
|
289.1
|
|
-47.1%
|
-58.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
1,987.4
|
|
1,753.3
|
|
1,764.9
|
|
0.7%
|
-11.2%
|
(1)
Includes commissions
on banking services, office network services, credit and debit card fees, fees on drafts, checks and checkbooks and other fees
(2)
Includes equity method
and dividends
3.1 Net income from commissions
and fees
Net Income
from commissions and fees increased by 8.8% to Ps 1,134.3 for 2Q17 versus 2Q16 and by 0.4% in the quarter. Income from commissions
and fees increased by 8.9% to Ps 1,297.6 billion in 2Q17 versus 2Q16 and by 1.3% in the quarter. Excluding FX, net income from
commissions increased 10.0% and 1.4%. In Colombia, net income from commissions and fees increased by 8.5% over the last year and
had a 3.8% decline over the quarter, mainly attributable to lower commissions from mandatory pension funds. In Central America,
net income from commissions and fees increased by 9.1% over the last year and 6.6% over the quarter; excluding FX, net income
increased by 11.9% and 6.7%, explained by a strong performance in commissions from credit cards, debit cards and merchant acquiring
which grew by 17.2% over the last year and 5.1% over the last quarter.
3.2 Net trading income
|
Net
trading income
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Investments
held for trading
|
|
174.0
|
|
90.0
|
|
137.4
|
|
52.7%
|
-21.0%
|
|
Trading derivatives
|
|
3.3
|
|
-114.8
|
|
74.2
|
|
-164.6%
|
N.A.
|
|
Hedging activities
|
|
23.7
|
|
57.0
|
|
71.8
|
|
26.0%
|
N.A.
|
|
Net
trading income
|
|
201.0
|
|
32.2
|
|
283.4
|
|
N.A.
|
41.0%
|
|
15
|
|
3.3 Other income (expense)
Total other
income (expense) for 2Q17 totaled Ps 289.1 billion decreasing by 58.6% versus 2Q16 and 47.1% versus 1Q17. The quarterly decrease
was mainly driven by lower income from foreign exchange gains (losses), net, lower income from non-consolidated investments (explained
by seasonality of dividends declared by equity investments) and lower income from our non-financial sector.
4. Other expenses
Total other
expenses for 2Q17 totaled Ps 2,181.3 billion increasing by 6.0% versus 2Q16 and decreasing by 0.5% versus 1Q17 (excluding wealth
tax paid in 1Q17 total other expenses increased 4.7%). Our efficiency ratio measured as operating expenses before depreciation
and amortization (excluding wealth tax) to total income, was 46.9% in 2Q17, 45.9% in 1Q17 and 47.2% in 2Q16. The ratio of annualized
operating expenses before depreciation and amortization (excluding wealth tax) as a percentage of average total assets was 3.5%
in 2Q17, 3.4% in 1Q17 and 3.5% in 2Q16.
In Colombia
our efficiency ratio measured as operating expenses before depreciation and amortization (excluding wealth tax) to total income,
was 44.5% in 2Q17, 42.4% in 1Q17 and 43.5% in 2Q16. The ratio of annualized operating expenses before depreciation and amortization
(excluding wealth tax) as a percentage of average total assets was 3.1% in 2Q17 and 2.9% in both 1Q17 and 2Q16.
In Central
America our efficiency ratio measured as operating expenses before depreciation and amortization to total income, was 51.8% in
2Q17, 53.4% in 1Q17 and 54.8% in 2Q16. The ratio of annualized operating expenses before depreciation and amortization as a percentage
of average total assets was 4.4% in 2Q17 and 1Q17 and 4.8% in 2Q16.
5. Non-controlling Interest
Non-controlling
interest in Grupo Aval reflects: (i) the minority stakes that third party shareholders hold in each of its direct consolidated
subsidiaries (Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas and Corficolombiana), and (ii) the
minority stakes that third party shareholders hold in the consolidated subsidiaries at the bank level (mainly Porvenir). For 2Q17,
non-controlling interest in the income statement was Ps 298.0 billion, showing a 4.8% decrease versus 2Q16 and a 8.8% decrease
versus 1Q17. The ratio of non-controlling interest to income before non-controlling interest was 38.8% in 2Q17, 35.8% in 1Q17
and 34.3% in 2Q16.
|
16
|
|
Information
related to Grupo Aval Acciones y Valores S.A. (Holding Company) and Grupo Aval Limited
The
holding company recorded a total gross indebtedness of Ps 1,654.1 billion (Ps 544.3 billion of bank debt and Ps 1,109.9 billion
of bonds denominated in Colombian pesos) as of June 30
th
, 2017. It also guarantees irrevocably and unconditionally
Grupo Aval Limited’s (144A / Reg S) 2022 (USD 1,000 million) bonds under its respective indentures. As of June 30
th
,
2017 the total amount outstanding of such bonds was USD 1.0 billion, or Ps 3,088.3 billion when translated into pesos.
The
debt at Grupo Aval Limited is serviced with interest income on loans to subsidiaries and cash & cash equivalents. Grupo Aval
Limited has not required, to this date, cash from Grupo Aval Acciones y Valores S.A. to fulfill its obligations. The main sources
of cash to pay the debt and debt service at Grupo Aval Acciones y Valores S.A. have been the dividend income from its subsidiaries
and the returns on its cash & cash equivalents.
When
combined, Grupo Aval Acciones y Valores S.A. and Grupo Aval Ltd. had Ps 1,971.0 billion of total liquid assets and a total gross
indebtedness of Ps 4,724.3 billion and a net indebtedness (including callable senior loans to subsidiaries) of Ps 2,753.3 billion
as of June 30
th
, 2017:
As
of June 30
th
, 2017 our combined double leverage (calculated as investments in subsidiaries at book value, subordinated
loans to subsidiaries and goodwill as a percentage of shareholders' equity) was 1.17x. Finally, we present an evolution of our
key ratios on a combined basis:
|
Debt
service coverage and leverage ratios
|
|
2Q16(4)
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Double leverage (1)
|
|
1.25x
|
|
1.17x
|
|
1.17x
|
|
0.00
|
-0.08
|
|
Net debt / Core earnings (2)(3)
|
|
4.1x
|
|
3.2x
|
|
3.1x
|
|
-0.1
|
-1.0
|
|
Net debt / Cash dividends (2)(3)
|
|
4.8x
|
|
3.5x
|
|
3.5x
|
|
-0.1
|
-1.3
|
|
Core Earnings / Interest Expense (2)
|
|
3.5x
|
|
4.2x
|
|
4.6x
|
|
0.4
|
1.1
|
(1)
Double leverage is calculated as investments in subsidiaries at book value (excluding revaluations), subordinated loans to subsidiaries
and goodwill as a percentage of shareholders' equity; (2) Core earnings are defined as annualized recurring cash flow from dividends
and investments; (3) Net debt is calculated as total gross debt minus cash and cash equivalents and fixed income investments;
(4) During 2Q17 Grupo Aval has not received dividends from Banco AV Villas given that the last payment was received during September
2016 and equivalent to a 6 month payment, however, when including the 9 months of dividends decreed by the bank staring on April
2017 the annualized Net debt / Core earnings metric would be 3.0x and the Core earnings / Interest expense would be 4.4x.
|
17
|
|
ABOUT GRUPO AVAL
Grupo Aval
is Colombia’s largest banking group, and through our BAC Credomatic operations it is also the largest and the most profitable
banking group in Central America. Grupo Aval currently operates through four commercial banks in Colombia (Banco de Bogotá,
Banco de Occidente, Banco Popular and Banco AV Villas). It manages pension and severance funds through the largest pension and
severance fund manager in Colombia (Porvenir) and owns the largest merchant bank in Colombia (Corficolombiana), each of which
Aval controls and consolidates into its results.
Investor Relations Contacts
Tatiana Uribe
Benninghoff
Vice President
of Financial Planning and Investor Relations
Tel: +571 241
9700 x3600
E-mail:
turibe@grupoaval.com
Alejo Sánchez
García
Financial Planning
and Investor Relations Manager
Tel: +571 241
9700 x3600
E-mail:
asanchez@grupoaval.com
|
18
|
|
|
Grupo
Aval Acciones y Valores S.A.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Financial Statements Under Full IFRS
|
|
|
|
|
|
|
|
|
|
|
Financial
Statements Under IFRS
|
|
|
|
|
|
|
|
|
|
|
Information
in Ps. Billions
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
2Q16
|
2Q17
|
|
Consolidated
Statement of Financial Position
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
21,004.5
|
|
24,542.3
|
|
22,958.8
|
|
-6.5%
|
9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
assets held for investment
|
|
|
|
|
|
|
|
|
|
|
Debt securities
|
|
2,189.2
|
|
2,651.1
|
|
2,389.1
|
|
-9.9%
|
9.1%
|
|
Equity securities
|
|
1,575.5
|
|
1,796.2
|
|
2,047.8
|
|
14.0%
|
30.0%
|
|
Derivative instruments
|
|
1,012.7
|
|
615.7
|
|
559.0
|
|
-9.2%
|
-44.8%
|
|
Total
financial assets held for trading through profit or losses
|
|
4,777.4
|
|
5,063.0
|
|
4,995.8
|
|
-1.3%
|
4.6%
|
|
Debt securities
|
|
19,527.4
|
|
17,313.5
|
|
16,362.7
|
|
-5.5%
|
-16.2%
|
|
Equity securities
|
|
730.2
|
|
750.2
|
|
802.7
|
|
7.0%
|
9.9%
|
|
Total
available for sale financial assets
|
|
20,257.6
|
|
18,063.6
|
|
17,165.3
|
|
-5.0%
|
-15.3%
|
|
Investments
held to maturity
|
|
2,265.6
|
|
2,636.8
|
|
2,688.7
|
|
2.0%
|
18.7%
|
|
Other
financial assets at fair value through profit or losses
|
|
1,978.7
|
|
2,117.7
|
|
2,174.9
|
|
2.7%
|
9.9%
|
|
Total
financial assets held for investment
|
|
29,279.2
|
|
27,881.2
|
|
27,024.6
|
|
-3.1%
|
-7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and receivables
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases
|
|
88,952.9
|
|
93,829.6
|
|
97,787.8
|
|
4.2%
|
9.9%
|
|
Commercial loans and leases
|
|
85,805.4
|
|
88,730.3
|
|
91,519.3
|
|
3.1%
|
6.7%
|
|
Interbank & overnight
funds
|
|
3,147.5
|
|
5,099.3
|
|
6,268.5
|
|
22.9%
|
99.2%
|
|
Consumer loans and leases
|
|
43,224.0
|
|
46,854.2
|
|
48,393.2
|
|
3.3%
|
12.0%
|
|
Mortgages and housing leases
|
|
13,556.3
|
|
14,613.9
|
|
15,390.9
|
|
5.3%
|
13.5%
|
|
Microcredit loans and leases
|
|
394.2
|
|
396.1
|
|
404.6
|
|
2.1%
|
2.6%
|
|
Total
loans and leases operations and receivables portfolio
|
|
146,127.5
|
|
155,693.7
|
|
161,976.4
|
|
4.0%
|
10.8%
|
|
Allowance for impairment
of loans and receivables
|
|
(3,840.8)
|
|
(4,389.7)
|
|
(4,876.1)
|
|
11.1%
|
27.0%
|
|
Total
loans and receivables, net
|
|
142,286.7
|
|
151,304.0
|
|
157,100.3
|
|
3.8%
|
10.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
accounts receivable
|
|
3,243.9
|
|
3,557.7
|
|
3,660.9
|
|
2.9%
|
12.9%
|
|
Hedging
derivatives
|
|
422.2
|
|
212.0
|
|
71.8
|
|
-66.1%
|
-83.0%
|
|
Non-current
assets held for sale
|
|
156.7
|
|
240.9
|
|
229.7
|
|
-4.7%
|
46.6%
|
|
Investments
in associates and joint ventures
|
|
1,009.7
|
|
1,134.5
|
|
1,122.4
|
|
-1.1%
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Own-use property, plant
and equipment, net
|
|
5,903.2
|
|
5,738.0
|
|
5,787.0
|
|
0.9%
|
-2.0%
|
|
Investment properties
|
|
560.4
|
|
633.9
|
|
690.9
|
|
9.0%
|
23.3%
|
|
Biological assets
|
|
266.3
|
|
59.0
|
|
61.7
|
|
4.7%
|
-76.8%
|
|
Tangible
assets
|
|
6,729.9
|
|
6,430.9
|
|
6,539.6
|
|
1.7%
|
-2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
6,696.6
|
|
6,644.0
|
|
6,903.1
|
|
3.9%
|
3.1%
|
|
Concession arrangements
rights
|
|
2,415.1
|
|
2,816.2
|
|
2,883.7
|
|
2.4%
|
19.4%
|
|
Other intangible assets
|
|
688.3
|
|
756.9
|
|
786.7
|
|
3.9%
|
14.3%
|
|
Intangible
assets
|
|
9,799.9
|
|
10,217.1
|
|
10,573.5
|
|
3.5%
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
847.6
|
|
865.8
|
|
746.7
|
|
-13.8%
|
-11.9%
|
|
Deferred
|
|
332.0
|
|
144.4
|
|
209.7
|
|
45.3%
|
-36.8%
|
|
Income
tax assets
|
|
1,179.6
|
|
1,010.2
|
|
956.4
|
|
-5.3%
|
-18.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
574.0
|
|
581.8
|
|
550.5
|
|
-5.4%
|
-4.1%
|
|
Total
assets
|
|
215,686.2
|
|
227,112.6
|
|
230,788.5
|
|
1.6%
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments held
for trading
|
|
910.0
|
|
581.6
|
|
602.7
|
|
3.6%
|
-33.8%
|
|
Total
financial liabilities at fair value
|
|
910.0
|
|
581.6
|
|
602.7
|
|
3.6%
|
-33.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
from clients at amortized cost
|
|
137,016.2
|
|
146,736.3
|
|
150,117.8
|
|
2.3%
|
9.6%
|
|
Checking accounts
|
|
30,056.9
|
|
33,562.8
|
|
33,085.7
|
|
-1.4%
|
10.1%
|
|
Time deposits
|
|
55,425.5
|
|
62,182.6
|
|
64,872.1
|
|
4.3%
|
17.0%
|
|
Savings deposits
|
|
51,114.9
|
|
50,411.8
|
|
51,718.5
|
|
2.6%
|
1.2%
|
|
Other deposits
|
|
418.8
|
|
579.0
|
|
441.5
|
|
-23.8%
|
5.4%
|
|
Financial
obligations
|
|
42,482.9
|
|
42,628.7
|
|
42,941.5
|
|
0.7%
|
1.1%
|
|
Interbank borrowings and
overnight funds
|
|
8,702.2
|
|
7,984.8
|
|
6,590.1
|
|
-17.5%
|
-24.3%
|
|
Borrowings from banks and
others
|
|
16,540.5
|
|
18,368.5
|
|
19,199.0
|
|
4.5%
|
16.1%
|
|
Bonds
|
|
17,240.2
|
|
16,275.4
|
|
17,152.4
|
|
5.4%
|
-0.5%
|
|
Borrowings
from development entities
|
|
2,739.4
|
|
2,790.1
|
|
2,801.7
|
|
0.4%
|
2.3%
|
|
Total
financial liabilities at amortized cost
|
|
182,238.4
|
|
192,155.2
|
|
195,861.1
|
|
1.9%
|
7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
derivatives
|
|
90.9
|
|
37.6
|
|
56.8
|
|
51.2%
|
-37.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation
|
|
159.4
|
|
157.8
|
|
163.8
|
|
3.8%
|
2.8%
|
|
Other provisions
|
|
536.3
|
|
483.4
|
|
503.6
|
|
4.2%
|
-6.1%
|
|
Provisions
|
|
695.7
|
|
641.2
|
|
667.4
|
|
4.1%
|
-4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
716.5
|
|
712.2
|
|
208.2
|
|
-70.8%
|
-70.9%
|
|
Deferred
|
|
1,276.9
|
|
1,466.0
|
|
1,451.6
|
|
-1.0%
|
13.7%
|
|
Income
tax liabilities
|
|
1,993.4
|
|
2,178.2
|
|
1,659.8
|
|
-23.8%
|
-16.7%
|
|
Employee
benefits
|
|
1,034.4
|
|
1,132.1
|
|
1,104.0
|
|
-2.5%
|
6.7%
|
|
Other
liabilities
|
|
4,942.0
|
|
6,681.3
|
|
6,115.0
|
|
-8.5%
|
23.7%
|
|
Total
liabilities
|
|
191,904.8
|
|
203,407.2
|
|
206,066.8
|
|
1.3%
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
attributable to owners of the parent company
|
|
15,083.7
|
|
14,881.8
|
|
15,523.4
|
|
4.3%
|
2.9%
|
|
Non-controlling
interests
|
|
8,697.7
|
|
8,823.6
|
|
9,198.3
|
|
4.2%
|
5.8%
|
|
Total
equity
|
|
23,781.4
|
|
23,705.4
|
|
24,721.7
|
|
4.3%
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
|
215,686.2
|
|
227,112.6
|
|
230,788.5
|
|
1.6%
|
7.0%
|
|
19
|
|
|
Grupo
Aval Acciones y Valores S.A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Financial Statements Under Full IFRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Statements Under IFRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information
in Ps. Billions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of income
|
|
YTD
2016
|
|
YTD
2017
|
|
Δ
|
|
2Q16
|
|
1Q17
|
|
2Q17
|
|
Δ
|
|
|
|
|
2017
vs. 2016
|
|
|
|
|
2Q17
vs. 1Q17
|
2Q17
vs. 2Q16
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan portfolio interest
|
|
7,951.3
|
|
8,990.0
|
|
13.1%
|
|
4,048.7
|
|
4,491.0
|
|
4,499.0
|
|
0.2%
|
11.1%
|
|
Interests on investments
in debt securities
|
|
468.9
|
|
467.5
|
|
-0.3%
|
|
206.2
|
|
238.0
|
|
229.5
|
|
-3.5%
|
11.3%
|
|
Total
interest income
|
|
8,420.2
|
|
9,457.4
|
|
12.3%
|
|
4,254.9
|
|
4,728.9
|
|
4,728.5
|
|
0.0%
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking accounts
|
|
135.8
|
|
164.6
|
|
21.2%
|
|
69.1
|
|
86.8
|
|
77.8
|
|
-10.4%
|
12.5%
|
|
Time deposits
|
|
1,548.9
|
|
1,848.4
|
|
19.3%
|
|
827.6
|
|
917.8
|
|
930.7
|
|
1.4%
|
12.4%
|
|
Savings deposits
|
|
980.6
|
|
1,073.6
|
|
9.5%
|
|
523.5
|
|
574.6
|
|
499.0
|
|
-13.2%
|
-4.7%
|
|
Total
interest expenses on deposits
|
|
2,665.3
|
|
3,086.6
|
|
15.8%
|
|
1,420.3
|
|
1,579.2
|
|
1,507.4
|
|
-4.6%
|
6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
1,135.3
|
|
1,111.6
|
|
-2.1%
|
|
580.5
|
|
567.7
|
|
543.9
|
|
-4.2%
|
-6.3%
|
|
Interbank borrowings and
overnight funds
|
|
316.7
|
|
163.5
|
|
-48.4%
|
|
167.6
|
|
82.7
|
|
80.8
|
|
-2.2%
|
-51.8%
|
|
Borrowings from banks and
others
|
|
255.7
|
|
372.5
|
|
45.7%
|
|
133.2
|
|
187.2
|
|
185.2
|
|
-1.1%
|
39.0%
|
|
Bonds
|
|
562.9
|
|
575.6
|
|
2.3%
|
|
279.6
|
|
297.8
|
|
277.9
|
|
-6.7%
|
-0.6%
|
|
Borrowings
from development entities
|
|
104.1
|
|
83.0
|
|
-20.3%
|
|
55.9
|
|
42.2
|
|
40.8
|
|
-3.4%
|
-27.0%
|
|
Total
interest expense
|
|
3,904.7
|
|
4,281.2
|
|
9.6%
|
|
2,056.7
|
|
2,189.1
|
|
2,092.1
|
|
-4.4%
|
1.7%
|
|
Net
interest income
|
|
4,515.5
|
|
5,176.2
|
|
14.6%
|
|
2,198.3
|
|
2,539.8
|
|
2,636.4
|
|
3.8%
|
19.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
loss on financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on loans
and accounts receivable
|
|
1,446.6
|
|
1,902.0
|
|
31.5%
|
|
728.1
|
|
791.3
|
|
1,110.7
|
|
40.4%
|
52.6%
|
|
Recovery of charged-off
assets
|
|
(110.6)
|
|
(121.1)
|
|
9.5%
|
|
(61.0)
|
|
(54.9)
|
|
(66.2)
|
|
20.4%
|
8.5%
|
|
Impairment loss on other
financial assets
|
|
78.3
|
|
15.6
|
|
-80.1%
|
|
77.1
|
|
5.6
|
|
10.0
|
|
79.6%
|
-87.0%
|
|
Impairment
loss on financial assets, net
|
|
1,414.3
|
|
1,796.5
|
|
27.0%
|
|
744.2
|
|
741.9
|
|
1,054.6
|
|
42.1%
|
41.7%
|
|
Net
interest income, after impairment loss on financial assets
|
|
3,101.2
|
|
3,379.7
|
|
9.0%
|
|
1,454.1
|
|
1,797.9
|
|
1,581.8
|
|
-12.0%
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from commissions and fees
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking fees
|
|
1,802.7
|
|
1,869.6
|
|
3.7%
|
|
897.1
|
|
919.4
|
|
950.3
|
|
3.4%
|
5.9%
|
|
Trust activities
|
|
75.0
|
|
152.7
|
|
103.6%
|
|
40.5
|
|
76.8
|
|
75.9
|
|
-1.1%
|
87.3%
|
|
Pension and severance fund
management
|
|
419.9
|
|
468.3
|
|
11.5%
|
|
206.4
|
|
240.8
|
|
227.5
|
|
-5.5%
|
10.2%
|
|
Bonded warehouse services
|
|
89.4
|
|
88.2
|
|
-1.4%
|
|
47.5
|
|
44.3
|
|
43.9
|
|
-0.7%
|
-7.6%
|
|
Total
income from commissions and fees
|
|
2,387.1
|
|
2,578.8
|
|
8.0%
|
|
1,191.5
|
|
1,281.2
|
|
1,297.6
|
|
1.3%
|
8.9%
|
|
Expenses for commissions
and fees
|
|
293.8
|
|
314.3
|
|
7.0%
|
|
148.5
|
|
151.0
|
|
163.4
|
|
8.2%
|
10.0%
|
|
Net
income from commissions and fees
|
|
2,093.3
|
|
2,264.5
|
|
8.2%
|
|
1,043.0
|
|
1,130.2
|
|
1,134.3
|
|
0.4%
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net trading
income
|
|
333.8
|
|
315.6
|
|
-5.4%
|
|
201.0
|
|
32.2
|
|
283.4
|
|
N.A.
|
41.0%
|
|
Net income from financial
instruments designated at fair value
|
|
87.0
|
|
102.2
|
|
17.5%
|
|
45.3
|
|
44.2
|
|
58.0
|
|
31.5%
|
28.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gains (losses),
net
|
|
397.2
|
|
194.8
|
|
-51.0%
|
|
196.2
|
|
196.3
|
|
(1.5)
|
|
-100.8%
|
-100.8%
|
|
Net gain
on sale of investments
2
|
|
186.6
|
|
14.7
|
|
-92.1%
|
|
38.8
|
|
3.8
|
|
10.9
|
|
184.2%
|
-72.0%
|
|
Gain on the sale of non-current
assets held for sale
|
|
19.5
|
|
7.0
|
|
-64.3%
|
|
17.0
|
|
4.3
|
|
2.7
|
|
-37.8%
|
-84.3%
|
|
Income from non-consolidated
investments
|
|
167.8
|
|
137.0
|
|
-18.3%
|
|
81.6
|
|
86.5
|
|
50.6
|
|
-41.5%
|
-38.0%
|
|
Net gains on asset valuations
|
|
0.4
|
|
11.7
|
|
N.A.
|
|
0.4
|
|
(1.0)
|
|
12.8
|
|
N.A
|
N.A.
|
|
Income from non-financial
sector, net
|
|
425.5
|
|
300.0
|
|
-29.5%
|
|
212.6
|
|
172.1
|
|
127.9
|
|
-25.7%
|
-39.8%
|
|
Other operating income
|
|
253.8
|
|
170.6
|
|
-32.8%
|
|
151.5
|
|
84.8
|
|
85.9
|
|
1.3%
|
-43.3%
|
|
Total
other income (expense)
|
|
1,450.8
|
|
835.9
|
|
-42.4%
|
|
698.1
|
|
546.8
|
|
289.1
|
|
-47.1%
|
-58.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on the sale of non-current
assets held for sale
|
|
3.7
|
|
5.4
|
|
43.9%
|
|
3.3
|
|
4.1
|
|
1.3
|
|
-67.6%
|
-60.3%
|
|
Personnel expenses
|
|
1,740.8
|
|
1,820.2
|
|
4.6%
|
|
863.9
|
|
895.6
|
|
924.6
|
|
3.2%
|
7.0%
|
|
General and administrative
expenses
|
|
2,278.9
|
|
2,243.0
|
|
-1.6%
|
|
1,041.1
|
|
1,143.5
|
|
1,099.5
|
|
-3.8%
|
5.6%
|
|
Depreciation and amortization
|
|
212.2
|
|
255.4
|
|
20.4%
|
|
104.9
|
|
127.9
|
|
127.4
|
|
-0.4%
|
21.5%
|
|
Other operating expenses
|
|
77.3
|
|
49.6
|
|
-35.9%
|
|
44.7
|
|
21.1
|
|
28.5
|
|
34.6%
|
-36.4%
|
|
Total
other expenses
|
|
4,313.0
|
|
4,373.6
|
|
1.4%
|
|
2,057.9
|
|
2,192.3
|
|
2,181.3
|
|
-0.5%
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
2,753.1
|
|
2,524.4
|
|
-8.3%
|
|
1,383.6
|
|
1,358.9
|
|
1,165.4
|
|
-14.2%
|
-15.8%
|
|
Income tax expense
|
|
1,043.2
|
|
841.8
|
|
-19.3%
|
|
469.3
|
|
445.2
|
|
396.6
|
|
-10.9%
|
-15.5%
|
|
Income
from continued operations
|
|
1,709.8
|
|
1,682.6
|
|
-1.6%
|
|
914.2
|
|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Income from discontinued operations
|
|
-
|
|
(0.0)
|
|
-
|
|
-
|
|
-
|
|
(0.0)
|
|
-
|
-
|
|
Net
income before non-controlling interest
|
|
1,709.8
|
|
1,682.6
|
|
-1.6%
|
|
914.2
|
|
913.7
|
|
768.8
|
|
-15.9%
|
-15.9%
|
|
Non-controlling interest
|
|
642.3
|
|
624.8
|
|
-2.7%
|
|
313.1
|
|
326.7
|
|
298.0
|
|
-8.8%
|
-4.8%
|
|
Net
income attributable to the owners of the parent company
|
|
1,067.5
|
|
1,057.8
|
|
-0.9%
|
|
601.1
|
|
587.0
|
|
470.8
|
|
-19.8%
|
-21.7%
|
(1)
Includes commissions
on banking services, office network services, credit and debit card fees, fees on drafts, checks and checkbooks and other fees
(2)
Includes equity method
and dividends
|
20
|
|
Item
2
1 IFRS 2Q17 Consolidated Earnings Results
2 Grupo Aval Acciones y Valores S . A . (“ Grupo Aval”) is an issuer of securities in Colombia and in the United States, registered with Colombia’s National Registry of Shares and Issuers ( Registro Nacional de Valores y Emisores) and the United States Securities and Exchange Commission (“SEC”) . As such, it is subject to the control of the Superintendency of Finance and compliance with applicable U . S . securities regulation as a “foreign private issuer” under Rule 405 of the U . S . Securities Act of 1933 . Grupo Aval is not a financial institution and is not supervised or regulated as a financial institution in Colombia . As an issuer of securities in Colombia, Grupo Aval is required to comply with periodic reporting requirements and corporate governance, however, it is not regulated as a financial institution or as a holding company of banking subsidiaries and, thus, is not required to comply with capital adequacy regulations applicable to banks and other financial institutions . All of our banking subsidiaries (Banco de Bogotá, Banco de Occidente , Banco Popular and Banco AV Villas), Porvenir and Corficolombiana , are subject to inspection and surveillance as financial institutions by the Superintendency of Finance . Although we are not a financial institution, until December 31 , 2014 we prepared the unaudited consolidated financial information included in these quarterly reports in accordance with the regulations of the Superintendency of Finance for financial institutions and generally accepted accounting principles for banks to operate in Colombia, also known as Colombian Banking GAAP because we believe that presentation on that basis most appropriately reflected our activities as a holding company of a group of banks and other financial institutions . However, in 2009 the Colombian Congress enacted Law 1314 establishing the implementation of IFRS in Colombia . As a result, since January 1 , 2015 financial entities and Colombian issuers of publicly traded securities such as Grupo Aval must prepare financial statements in accordance with IFRS . IFRS as applicable under Colombian regulations differs in certain aspects from IFRS as currently issued by the IASB . The unaudited consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB . Details of the calculations of non - GAAP measures such as ROAA and ROAE, among others, are explained when required in this report . Because of our recent migration to IFRS and recent implementation of IFRS accounting principles, the unaudited consolidated f ina ncial information for the first and second quarters of 2017, and the second quarter of 2016, may be subject to further amendments. This report may include forward - looking statements, which actual results may vary from those stated herein as a consequence of changes in general, economic and business conditions, changes in interest and currency rates and other risks factors as evidenced in our Form 20 - F available at the SEC webpage . Recipients of this document are responsible for the assessment and use of the information provided herein . Grupo Aval will not have any obligation to update the information herein and shall not be responsible for any decision taken by investors in connection with this document . The content of this document and the unaudited figures included herein are not intended to provide full disclosure on Grupo Aval or its affiliates . When applicable, in this document we refer to billions as thousands of millions . Disclaimer
3 Highlights (1/2) The following are the main highlights of our 2 Q 2017 results under IFRS : • Contrary to our expectations, the Colombian economy did not reactivate in the first semester of this year and instead showed on ly marginal growth at 1.2% and 1.3% during the first two quarters, significantly less than the 2.25% to 2.50% growth expected. A c ollateral damage of this lackluster economic performance is a deterioration in urban unemployment, which increased by 60 bps. in the la st year and by 100 bps. since 2015. • A slow moving economy always results in lesser commercial credit demand. It also tends to exacerbate credit problems, such as Electricaribe , and to magnify the effect of these problems in the cost of risk ratios of the financial system. A rising unemployment rate tends to accelerate consumer loan delinquencies and the booking of provisions for foreseeable loan losses. Aval has not been impervious to these impacts as can be seen in this semester’s results. • As predictable, the economy has also had consequences in the performance of the non - financial sector in which we participate th rough Corficolombiana . Additionally, 4G infrastructure construction – and financing - is off to a slow start as the financial sector awaits anxiously the resolution of the Ruta del Sol debacle and with it the first payment that the Government offered to make for approximately half of the US$800 million outstanding financial debt owed by CRDS to the largest Colombian banks. • In the midst of this economic scenario, our Total Gross Loans, excluding interbank and overnight funds, grew by 2.7% in the f irs t semester (+2.2% excluding the impact of FX movement in our Central American operation), as a result of a contraction of 0.7% in the fi rst quarter (+0.4% excluding the impact of FX) and growth of 3.4% in the second quarter (+1.8% excluding FX impacts); in the last twelve mon ths Gross Loans grew by 8.9% (+7.6 % excluding FX movements), evidencing a deceleration during 2017 in sync with the economy. • During the second quarter, our 30 day PDLs and NPLs deteriorated by 17 bps and 27 bps up to 3.8% and 2.5% respectively, drive n primarily by a deterioration in our consumer and microcredit portfolios. Consumer loan 30day PDLs and NPLs deteriorated by 40 bp s and 37 bps during the quarter. This worrisome deterioration, although generalized in the colombian financial system, is currently our main area of focus. On the other hand, most of the deterioration in our Commercial Loan PDLs and NPLs in the last year has been d riv en by Electricaribe where our exposure amounts to approx. US$200 million. • As a result of the deterioration mentioned above, our consolidated cost of risk increased by almost 80 bps during the quarter to 2.9% before recoveries and 2.7% after recoveries. Provisions in connection with Electricaribe accounted for approximately 30 pbs . of the increase and the general deterioration of the mentioned loan portfolios contributed with the rest. • Total Deposits grew by 4.3% in the first semester (+3.9% excluding the impact of FX movement in our Central American operatio n), as a result of growth of 2.0% in the first quarter (+3.1% excluding the impact of FX) and growth of 2.3% in the second quarter (+0 .7% excluding the impact of FX); in the last twelve months Deposits grew by 9.6% (+8.3% excluding FX movements), once again evidencing a deceleration during 2017 in sync with the economy.
4 Highlights (2/2) • Partly as a consequence of the growth slowdown, the second quarter was one in which our consolidated equity ratios improved. Our total equity to total assets ratio improved from 10.4% in March 31, 2017 to 10.7% in June 30, 2017 and our tangible capital r ati o improved from 7.4% to 7.6%. • Furthermore, as of June 30, 2017 all our banks continued to show strong Tier 1 and full solvency levels (between 9.4% and 11. 2% and between 11.2% and 14.2%, respectively). • Recently, the strength in our capital position drove two Rating Agencies to change their outlook of both Banco de Bogotá and Gru po Aval’s ratings from negative to stable. This is a great accomplishment after multiple years of discussions with both of them. • The NIM of our consolidated operation improved by 22 bps to 6.1% during the quarter and by 52 basis points versus this same r ati o as during 2Q16. Our consolidated NIM on loans expanded by 14 bps to 7.0% during the quarter and by 46 bps versus 2Q16. Our consolidated NIM on total investments expanded by 72 bps to 1.4% during the quarter and by 57 bps versus 1Q17. These increase s were mainly driven by a 28bps decrease in our average cost of funds during 2Q17 and 21 bps vs 2Q16. • Our gross fee Income grew by 1.3% in the quarter when compared to the first quarter of 2017. This growth was supported on a s tro ng performance of our banking fees (73% of total fees) which increased 3.4% in the quarter. • Our other operating income for the period was Ps. 493.1 billion for the quarter versus Ps. 533.1 billion in the previous quar ter . This result was mainly affected by the performance of Corficolombiana’s investments in the infrastructure sector, delays in the 4G infrastructure concessions and by the effect of the general slowdown of the economy in the performance of other non - financial se ctors in which Corficolombiana holds equity positions. • Our consolidated efficiency ratio, measured as cost to income, was 46.9% in 2Q17, versus 45.9% during 1Q17 and 47.2% during 2Q16. This quarter’s deterioration is partially explained by a seasonality of the expenses. • Attributable net income for the quarter was Ps 470.8 billion or 21 pesos per share, compared to Ps. 587 billion in 1Q17. As m ent ioned before, the result for the quarter was negatively affected by a 42% increase (Ps. 313 billion) in provision expenses, a third of which is explained by provisions associated with Electricaribe and also by greater provisions required in our consumer portfolio and our SME portfolio.
5 GDP Growth Expectations (%) Source: Bloomberg Consensus Source : DANE. Unemployment (%) Current Account (% of GDP, quarterly) Source : Banrep and DANE . Macroeconomic context – Colombia (1/3) 10.0% 9.2% 9.2% 8.2% 8.9% 8.7% 9.6% 8.4% 8.7% 8.6% 8.7% 2012 2013 2014 2015 2016 2017 Unemployment as of June of each period Unemployment as of December of each period (2.8%) (4.4%) (8.0%) (6.0%) (4.0%) (2.0%) 0.0% 2.0% 4.0% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Trade balance Current Account Deficit 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 2017E 2018E 1.8 2.8
6 2% 4% 6% 8% Dec-12 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Aug-17 Colombian Central Bank's Interest rate (EoP) DTF(1) IBR(2) 5.55% 5.50% 5.06% 3.40% 5.50% 1.3% 0% 3% 5% 8% 10% 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 Real GDP growth Inflation Colombian Central Bank's Interest rate Inflation (%) Source: Banrep Source : Banrep . (1) End of period DTF rate (2) End of period 3 - month interbank (IBR) rate Source: Banrep and DANE Central Bank’s Monetary Policy Macroeconomic context – Colombia (2/3) Jul - 17: 3.40% 2014: 4.4% 2015: 3.1% 2016: 2.0% 2013: 4.9% 2012: 4.0% FY GDP 2.4% 2.2% 1.9% 2.8% 3.7% 4.4% 6.8% 8.6% 5.7% 4.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% dic.-12 mar.-13 jun.-13 sep.-13 dic.-13 mar.-14 jun.-14 sep.-14 dic.-14 mar.-15 jun.-15 sep.-15 dic.-15 mar.-16 jun.-16 sep.-16 dic.-16 mar.-17 jun.-17 12-Month inflation Lower target range Upper target range Jul - 17
7 Source: Bloomberg Source: Bloomberg. ( 100=Jan 31, 2016) Colombian Peso Exchange Rate COP vs Emerging markets’ currencies Colombian Peso vs WTI US$/barrel Macroeconomic context – Colombia (3/3) 2Q16 1Q17 2Q17 2Q17 vs. 2Q162Q17 vs. 1Q17 Average 2,993.002,924.262,920.25 -2.43% -0.14% End of Period 2,919.012,885.573,050.43 4.50% 5.71% 60 80 100 120 140 160 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Colombian Peso Brazilian Real Mexican Peso Chilean Peso Peruvian Nuevo Sol Turkish Lira South African Rand 1,700 2,200 2,700 3,200 3,700 20 40 60 80 100 120 Jan-16 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 WTI (US$ - Lhs) COP Exchange Rate
8 Macroeconomic context – Central America Source: IMF; (*) Average growth of all the Central American countries Real GDP CAGR Evolution Source: SECMCA, last twelve months as of May 2017 Oil & gas imports / Total imports (%) Source: SECMCA Central Banks’ Monetary Policies 4.1% 5.6% 4.7% 4.2% 3.8% 3.4% 2.1% 4.1% 6.1% 4.4% 4.0% 3.5% 3.6% 2.2% Central America* Panama Nicaragua Costa Rica Guatemala Honduras El Salvador CAGRs '13-'16 CAGRs '16-'19 5.50% 4.50% 3.00% 0% 1% 2% 3% 4% 5% 6% 7% Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 CR GU HO 9.7% 8.3% 7.6% 11.8% 10.2% 13.4% 9.8% Central america Panama Costa Rica El Salvador Guatemala Honduras Nicaragua
9 Assets Assets Breakdown Total Assets Figures in Ps. Trillions (1) Foreign operations reflect Central American operations. (2) Net loans and leases include interbank and overnight funds. 215.7 227.1 230.8 2Q16 1Q17 2Q17 2Q17 / 2Q16 = 7.0% 2Q17 / 1Q17 = 1.6% 2Q17 / 2Q16 = 5.7% 2Q17 / 1Q17 = 0.0% Growth excl. FX movement of Central American Operations 66.0% 11.1% 1.5% Net loans and leases Fixed income investments Unconsolidated equity investments Other 66.0% 11.1% 1.5% 21.4% 2Q16 68.1% 9.3% 1.7% 20.9% 2Q17 Colombian operations , 72.2% Foreign (1) , 27.8% Colombian operations , 71.9% Foreign (1) , 28.1% Colombian operations , 70.7% Foreign (1) , 29.3% 66.6% 10.0% 1.6% 21.8% 1Q17
10 Loans Gross loans Gross loans Breakdown Figures in Ps. Trillions – Excluding interbank and overnight funds % Growth excluding FX movement of Central American Operations 143.0 150.6 155.7 2Q16 1Q17 2Q17 2Q17 / 2Q16 = 8.9% 2Q17 / 1Q17 = 3.4% 2Q17 / 2Q16 = 7.6% 2Q17 / 1Q17 = 1.8% Growth excl. FX movement of Central American Operations 60.0% 58.9% 58.8% 30.2% 31.1% 31.1% 9.5% 9.7% 9.9% 0.3% 0.3% 0.3% Commercial Consumer Mortgages Microcredit 6.7% 12.0% 13.5% 2.6% 5.8% 10.3% 10.5% 2.6% 2Q17 / 2Q16 2Q16 1Q17 2Q17 143.0 150.6 155.7 Gross loans 2Q17 / 1Q17 3.1% 3.3% 5.3% 2.1% 2.0% 1.3% 1.8% 2.1%
11 Loan portfolio quality 1.0x 0.8x 0.7x 2Q16 1Q17 2Q17 Charge offs / Average NPLs 2.7% 2.9% 3.1% 1.5x 1.3x 1.3x 0.9x 0.8x 0.8x 2Q16 1Q17 2Q17 Allowances / NPLs Allowance / 30+ PDLs Allowance / Gross loans 2.9% 3.6% 3.8% 1.8% 2.2% 2.5% 2Q16 1Q17 2Q17 30 days PDLs / Total loans NPLs / Total loans 2.1% 2.1% 2.9% 1.9% 1.9% 2.7% 2Q16 1Q17 2Q17 Impairment loss / Average loans Impairment loss (net of recoveries of charged-off assets) / Average loans (1) 30 days PDLs and NPLs include interest account receivables. (2) NPL defined as loans more than 90 days past due (1) 30 days PDLs and NPLs include interest account receivables. (1)(2) (1)(2) (1)(2) (1) (1) Impairment loss / Average loans Impairment loss , net / Average loans Cost of Risk
12 Loan portfolio quality 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 Commercial 2.2% 2.9% 3.0% 1.6% 2.2% 2.5% Consumer 4.4% 4.8% 5.2% 2.1% 2.3% 2.7% Mortgages 3.1% 3.4% 3.5% 1.7% 1.7% 1.9% Microcredit 12.6% 14.5% 15.4% 8.0% 10.0% 10.7% Total loans 2.9% 3.6% 3.8% 1.8% 2.2% 2.5% Past due loans (1) Non-performing loans (2) (1) Past Due Loans + 30 / Total Loans including interest accounts receivable (2) NPL defined as loans more than 90 days past due including interest accounts receivable Figures in Ps. Billions 2Q16 3Q16 4Q16 1Q17 2Q17 Initial PDLs 4,252 4,203 4,432 4,484 5,393 New PDLs 620 716 678 1,537 1,090 Charge-offs (669) (487) (627) (629) (640) FinalPDLs 4,203 4,432 4,484 5,393 5,843
13 Funding Figures in Ps. Trillions 2Q16 1Q17 2Q17 Others 0.3% 0.4% 0.3% Time deposits 40.5% 42.4% 43.2% Checking accounts 21.9% 22.9% 22.0% Savings accounts 37.3% 34.4% 34.5% Total deposits 2Q17 / 2Q16 = 9.6% 2Q17 / 1Q17 = 2.3% 137.0 146.7 150.1 Deposit composition 2Q17 / 2Q16 = 8.3% 2Q17 / 1Q17 = 0.7% Growth excl. FX movement of Central American Operations 2Q16 1Q17 2Q17 Interbank borrowings 4.8% 4.2% 3.4% Long term bonds 9.5% 8.5% 8.8% Banks and others 10.6% 11.0% 11.2% Deposits 75.2% 76.4% 76.6% Total funding 182.2 192.2 195.9 Funding composition 2Q17 / 2Q16 = 7.5% 2Q17 / 1Q17 = 1.9% 2Q17 / 2Q16 = 6.2% 2Q17 / 1Q17 = 0.4% Growth excl. FX movement of Central American Operations 0.96x 0.97x 0.96x 2Q16 1Q17 2Q17 Deposits / Net loans (%) 15.3% 16.7% 15.3% 2Q16 1Q17 2Q17 Cash / Deposits (%)
14 Capital Attributable Shareholders Equity Attributable Equity + Minority Interest Figures in Ps. Trillions Consolidated Capital Adequacy of our Banks (%) 2Q16 1Q17 2Q17 Minority interest 8.7 8.8 9.2 Attributable equity 15.1 14.9 15.5 2Q17 / 2Q16 = 4.0% 2Q17 / 1Q17 = 4.3% 23.8 23.7 24.7 15.1 14.9 15.5 2Q16 1Q17 2Q17 Attributable shareholders equity 2Q17 / 1Q17 = 4.3% 2Q17 / 2Q16 = 2.9% Total equity / Assets Tangible capital ratio (1) 11.0% 10.4% 10.7% 7.9% 7.4% 7.6% (1) Tangible Capital Ratio is calculated as Total Equity minus Goodwill and other Intangibles divided by Total Assets minus Goodwill and o the r Intangibles. 2Q161Q172Q17 2Q161Q172Q17 2Q161Q172Q17 2Q161Q172Q17 Primary capital (Tier 1) 6.8 9.2 9.4 9.8 10.6 10.5 9.4 9.5 9.6 10.1 11.3 11.2 Solvency Ratio 13.0 13.9 14.2 12.4 12.9 12.7 9.7 11.3 11.2 11.2 12.4 12.4
15 NIM – Net Interest Margin (1/3) Composition of Interest Earning Assets Composition of funding Calculated as composition of average balance for the period. Non - Financial Sector + HoldCo refers to companies from the non financial sector and the sum of Grupo Aval Acciones y Valores S.A. + 100% owned and guaranteed subsidiaries, net of eliminations. 99.6% 98.8% 98.7% 0.4% 1.2% 1.3% 2Q16 1Q17 2Q17 Financial Sector Non-Financial Sector + HoldCo 94.8% 95.1% 95.0% 5.2% 4.9% 5.0% 2Q16 1Q17 2Q17 Financial Sector Non-Financial Sector + HoldCo
16 6.8% 7.2% 7.2% 6.8% 7.1% 7.2% 6.0% 6.5% 7.0% 7.5% 2Q16 1Q17 2Q17 Financial Sector Consolidated NIM – Net Interest Margin (2/3) Average Yield on Loans Average Cost of Funds Average Spread (Yield on Loans – Cost of Funds) 11.2% 11.6% 11.5% 11.3% 11.7% 11.6% 10.0% 11.0% 12.0% 2Q16 1Q17 2Q17 4.4% 4.5% 4.2% 7.1% 6.9% 6.1% 4.5% 4.6% 4.3% 2Q16 1Q17 2Q17
17 NIM – Net Interest Margin (3/3) Net Interest Margin (1) Loans Interest Margin (2) Net Investments Margin (3) 2Q16 1Q17 2Q17 2Q17 / 2Q16 2Q17 / 1Q17 2.4 2.6 2.8 16.9% 5.5% Net interest income(1) (trillions) (1) Net Interest Income and Net Interest Margin: Includes net interest income plus net trading income from investment securities held for trading through profit or loss divided by total average interest - earning assets. (2) Loans Interest Margin: Net Interest Income on Loans to Average loans and financial leases. (3) Net Investments Margin: Net Interest income on fixed income securities, net trading income from equity and fixed income investment securities held for trading through profit and on interbank and overnight funds to Average securities and Interbank and overnight funds. 5.8% 6.1% 6.3% 5.6% 5.9% 6.1% 2Q16 1Q17 2Q17 6.8% 7.1% 7.2% 6.5% 6.8% 7.0% 2Q16 1Q17 2Q17 1.0% 0.7% 1.6% 0.8% 0.6% 1.4% 2Q16 1Q17 2Q17 Financial Sector Consolidated
18 Fees and other operating income Figures in Ps. Billions (1) Includes income from trading and hedging derivatives reflected as part of the net trading income on the Statement of Profit or Loss. (2) Includes equity method income, dividend income and other income . Other operating income 75.3% 71.8% 73.2% 3.4% 6.0% 5.9% 17.3% 18.8% 17.5% 4.0% 3.5% 3.4% 2Q16 1Q17 2Q17 Gross fee income Banking fees Trust and portfolio management activities Pension fees Other 1,191.5 1,281.2 1,297.6 2Q17 / 1Q17 = 1.3% 2Q17 / 2Q16 = 8.9% 2Q17 / 2Q16 = 10.0% 2Q17 / 1Q17 = 1.4% Growth excl. FX movement of Central American Operations 2Q16 1Q17 2Q17 Income from non-financial sector, net 212.6 172.1 127.9 Gains on valuation of assets 0.4 -1.0 12.8 Net income from financial instruments designated at fair value 45.3 44.2 58.0 Derivatives and foreign exchange gains (losses), net (1) 223.2 138.5 144.4 Income from non-consolidated investments and other (2) 288.9 179.4 150.0 Total other operating income 770.4 533.1 493.1
19 Efficiency ratio 47.2% 45.9% 46.9% 2Q16 1Q17 2Q17 3.5% 3.4% 3.5% 2Q16 1Q17 2Q17 Efficiency Ratio is calculated as personnel plus administrative and other expenses excluding wealth tax divided by net interest income plus net trading income, other income and fees and other services income, net ( e xcluding others). Operating expenses / Total Income Operating expenses / Average Assets Efficiency Ratio is calculated as annualized personnel plus administrative and other expenses excluding wealth tax divided by average of total assets.
20 601.1 587.0 470.8 2Q16 1Q17 2Q17 Net income attributable to controlling interest $27.0 $26.3 $21.1 EPS 22,281 22,281 22,281 Avg shares $29.0 645.3 Profitability (1) ROAA for each quarter is calculated as annualized Net Income divided by average of total assets . (2) ROAE for each quarter is calculated as annualized Net Income attributable to Aval's shareholders divided by average attributable shareholders' equity. Figures in Ps. Billions 1.7% 1.6% 1.3% 2Q16 1Q17 2Q17 ROAA (1) 2.0% 16.3% 15.4% 12.4% 2Q16 1Q17 2Q17 ROAE (2) 17.3%
21
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date:
September 1, 2017
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GRUPO AVAL ACCIONES Y VALORES S.A.
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By:
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/s/ Jorge Adrián
Rincón Plata
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Name:
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Jorge Adrián Rincón Plata
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Title:
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Chief Legal Counsel
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