Grupo Aval(US:AVAL)2025-04-28 19:10Financial Performance - Grupo Aval's net income attributable to owners of the parent for 2024 was Ps 1,015.1 billion, a 37.4% increase compared to Ps 739.0 billion in 2023[708]. - Net income before tax expense decreased by 10.0% to Ps 3,137.9 billion[709]. - Net income for the year was Ps 865.8 billion, down 43.4% or Ps 664.3 billion from 2023[806]. - Net income for Banking Services rose by 37.5% or Ps 310.4 billion to Ps 1,137.6 billion in 2024 compared to 2023[766]. - Net income from commissions and fees increased by 11.6% or Ps 14.0 billion, reaching Ps 134.1 billion in 2024[806]. - Net income from commissions and fees increased by 1.9% or Ps 61.0 billion to Ps 3,333.8 billion, driven by a 6.6% increase in trust activities and portfolio management services[791]. - Net income for the pension and severance fund management segment increased by 16.8% or Ps 93.9 billion to Ps 654.1 billion in 2024[835]. Interest Income and Expenses - Net interest income rose by 15.6% to Ps 7,267.6 billion in 2024, driven by a 3.8% increase in the average balance of interest-earning assets[710]. - Total interest income decreased by 2.6% to Ps 28,181.9 billion, while total interest expense fell by 7.6% to Ps 20,914.3 billion[709]. - The average yield on interest-earning assets decreased by 77 basis points, impacting total interest income[769]. - Total interest income decreased by 13.6% or Ps 177.5 billion in 2024, primarily due to a 542 basis points reduction in the average yield of interest-earning assets to 17.5%[814]. - Net interest income increased by 8.5% or Ps 718.7 billion to Ps 9,128.1 billion in 2024, with the net interest margin rising by 18 basis points to 4.1%[768]. - Net interest expense was Ps 1,935.0 billion in 2024, a decrease of 10.6% or Ps 229.4 billion compared to 2023, attributed to lower funding costs[807]. Loan Portfolio and Impairment - Grupo Aval's average balance of gross loans increased by 4.1% to Ps 192,320.5 billion, with an average yield of 12.8%[714]. - Impairment loss on loans and other accounts receivable remained stable at Ps 4,755.1 billion, with a slight increase of 0.1%[709]. - Impairment losses for consumer loans decreased by 13.3% or Ps 586.6 billion, with Stage 1 credit cards increasing to 85.2% from 82.5%[725]. - Impairment loss on loans and other accounts receivable decreased to Ps 4,691.9 billion in 2024 from Ps 4,721.5 billion in 2023, a change of 29.5 billion or -0.6%[782]. - The coverage ratio for the consumer loan portfolio decreased to 6.7% in 2024 from 7.2% in 2023, reflecting improved asset quality[784]. - Total charge-offs increased to Ps 5,459.9 billion in 2024, up 1,293.6 billion or 31.0% compared to 2023, with charge-offs as a percentage of average gross loans rising to 2.9%[789]. Income from Commissions and Fees - Net income from commissions and fees increased by 6.9% to Ps 3,583.8 billion in 2024, driven by a 20.0% increase in pension and severance fund management fees[734]. - Banking and other fees increased by 1.4% to Ps 2,763.8 billion, supported by positive performance in banking service fees[737]. - The increase in pension and severance fund management fees was attributed to a 12.1% rise in minimum wage and strong market returns[735]. Expenses and Efficiency - Other expenses increased by 3.7% or Ps 305.3 billion in 2024, primarily due to a 5.1% or Ps 156.4 billion rise in personnel expenses and a 2.4% or Ps 106.4 billion increase in administrative and other expenses[758]. - The cost to income efficiency ratio was 54.2% in 2024, compared to 52.1% in 2023, reflecting a 3.7% increase in other expenses[760]. - Income tax expense decreased by 27.8% or Ps 364.0 billion to Ps 946.4 billion in 2024, driven by higher deductions from nontaxable income[761]. Market and Economic Conditions - The average Central Bank rate decreased by 165 basis points from 13.0% in 2023 to 11.4% in 2024, impacting average yields on commercial loans which decreased by 146 basis points to 12.2%[716]. - The Central Bank rate is projected to be around 7.0% – 8.5% by the end of 2025, reflecting a cautious stance due to economic conditions[894]. Sector Performance - Gross profit from sales of goods and services decreased by 23.0% to Ps 2,477.4 billion in 2024, down from Ps 3,218.0 billion in 2023[738]. - Gross profit from infrastructure companies in 2024 was Ps 1,594.5 billion, a decrease of 33.9% or Ps 817.5 billion compared to 2023, driven by a 25.4% or Ps 1,004.1 billion decrease in income[739]. - Gross profit for energy and gas companies increased by 7.1% or Ps 74.2 billion to Ps 1,125.9 billion in 2024, with income rising 12.2% or Ps 750.3 billion[742]. - Gross profit for hospitality companies improved by 4.0% or Ps 3.4 billion to Ps 89.1 billion, with income increasing by 5.4% or Ps 32.3 billion[743]. - Gross profit for agribusiness companies rose by 118.4% or Ps 20.2 billion to Ps 37.3 billion, with income increasing by 4.4% or Ps 13.1 billion[744]. Funding and Liabilities - Total liabilities increased to Ps 294,696.5 billion in 2024 from Ps 269,661.2 billion in 2023, reflecting growth in customer deposits and borrowings[856]. - Customer deposits rose to Ps 200,872.2 billion in 2024 from Ps 181,987.4 billion in 2023, representing a significant increase[865]. - Interbank borrowings and overnight funds increased to Ps 18,509.8 billion in 2024, up from Ps 15,081.9 billion in 2023, accounting for 6.8% of total funding[871]. - Bonds issued reached Ps 26,215.8 billion in 2024, compared to Ps 23,427.8 billion in 2023, representing 9.6% of total funding[874].