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Grupo Aval reported Q1 2026 attributable net income of Ps 336.6 billion (Ps 14.2 per share), down 6.9% year-on-year, with results materially depressed by a one-time Colombian government equity tax that reduced attributable net income by Ps 210.1 billion. Underlying operating momentum was broadly constructive, with loan growth, improving asset quality, and a sharp rebound in infrastructure and trading income partially offsetting NIM compression and elevated funding costs.
Performance Highlights
Grupo Aval posted Q1 2026 attributable net income of Ps 336.6 billion (Ps 14.2 per share), declining 2.3% quarter-on-quarter and 6.9% year-on-year, with ROAE of 7.4% against 8.4% in Q1 2025; excluding the one-time equity tax, ROAE would have been 12.0% and attributable net income Ps 546.7 billion, up 51.2% annually. The equity tax added Ps 311.7 billion to operating expenses and drove the cost-to-income ratio to 53.9%, versus a cleaner 47.3% on an adjusted basis.
The most important operating driver was continued asset quality improvement, with 90-day past-due loans falling to 3.1% from 3.8% a year ago — their lowest level in thirteen quarters — while net cost of risk declined 36 basis points year-on-year to 1.8%. Loan growth of 6.0% year-on-year was led by mortgages (+16.8%) and commercial loans (+5.0%), deposits expanded 11.7% annually to Ps 216.8 trillion, and gross profit from infrastructure surged 40.1% year-on-year to Ps 709.3 billion, with net trading income recovering sharply to Ps 540.0 billion from Ps 86.2 billion in Q4 2025.
Management Outlook and Forward Catalysts
Management's results, following the completed sale of Multibank (MFG) in March 2026 and the consolidation of fiduciary operations into Aval Fiduciaria, signal a deliberate portfolio simplification phase focused on deepening the Colombian franchise and redeploying capital into higher-yielding domestic assets. The intentional moderation of mortgage origination and the shift in consumer mix toward personal loans and credit cards reflect a yield-optimisation strategy that management expects to benefit NIM as the rate cycle evolves.
The central investor debate heading into Q2 2026 is whether NIM on loans — which compressed 66 basis points quarter-on-quarter to 4.4% due to faster funding cost repricing — has troughed, and whether the post-MFG capital structure can sustain earnings recovery absent further one-time tax charges. Bulls will watch for loan yield repricing catching up with funding costs and infrastructure revenues maintaining momentum; bears will focus on the 8.4% rise in interest expense, sticky cost of funds at 7.0%, and the risk of additional fiscal measures from the Colombian government.
Adjusted EPS vs. consensus breakdown — primary performance driver, segment revenue contribution, and gross margin trajectory relative to prior guidance...
Segment-by-segment revenue analysis, margin profile, and management commentary on demand trajectory vs. consensus range expectations...
Forward guidance implications for the sector, supply chain read-throughs, and investment implications for the broader competitive landscape...
