Grupo Aval(US:AVAL)2023-04-13 16:00Financial Performance - Porvenir's total assets under management decreased by 1.9% to Ps 191,192.5 billion in 2022 from Ps 194,808.4 billion in 2021[317]. - The number of clients increased by 5.4% to 16,635.1 thousand in 2022 from 15,778.9 thousand in 2021[318]. - Revenues from the stabilization reserve and proprietary portfolio represented (0.8)% and 15.7% of total revenues for 2022 and 2021, respectively[319]. - Banco de Bogotá's net income for the period decreased to Ps 2,805 million in December 2022 from Ps 4,357 million in December 2021, representing a decline of 35.5%[448]. - Banco de Occidente reported a net income of Ps 452 million for December 2022, down from Ps 580 million in December 2021, reflecting a decrease of 22.0%[450]. - Banco Popular's net income for the period decreased to Ps 80 billion in December 2022 from Ps 313 billion in December 2021, representing a decline of 74.5%[453]. - Banco AV Villas reported a net income of Ps 112 billion for December 2022, down from Ps 162 billion in December 2021, a decrease of 30.9%[456]. - Corficolombiana's net income increased to Ps 1,714 billion in December 2022, up from Ps 1,296 billion in December 2021, reflecting a growth of 32.3%[463]. Market Position - Porvenir holds a market share of 24.0% in gross loans, making it the second largest in Colombia[326]. - The market share of total deposits for Porvenir is 24.6%, ranking second among competitors[333]. - The company has a strong presence in payroll loans with a market share of 45.3%[326]. - Porvenir leads the private pension fund management sector with 57.6% market share in total individual customers and 44.6% in assets under management[345]. - Grupo Aval's market share in branches is 21.7% with 1,104 branches and 19.4% in ATMs with 3,114 ATMs as of December 31, 2022[340]. - Corficolombiana holds 85.3% market share in assets among merchant banks, with a net income share of 89.8%[342]. Efficiency and Ratios - The efficiency ratio for Banco de Bogotá was 43.1%, significantly lower than the average of 55.1% for Grupo Aval aggregate[324]. - The efficiency ratio for Porvenir, the leading pension fund manager, is reported at 66.9%[343]. - The CET1 solvency ratio for Banco de Bogotá was 10.06% at December 2022, slightly down from 10.21% at December 2021[448]. - Banco de Occidente's CET1 solvency ratio was 10.24% at December 2022, compared to 11.05% at December 2021, indicating a decline of 0.81 percentage points[450]. - The total solvency ratio for Banco de Occidente was 12.18% at December 2022, slightly down from 12.35% at December 2021[450]. - Corficolombiana's CET1 solvency ratio was reported at 47.52% in December 2022, down from 51.17% in December 2021[463]. Assets and Liabilities - Total funding composition for Grupo Aval shows deposits at 79.5%, with an average rate paid on deposits at 5.1%[337]. - Total interest-bearing liabilities increased to Ps. 207,233.3 billion, reflecting a 5.6% growth compared to Ps. 184,915.4 billion in the previous year[371]. - Total liabilities and equity amounted to Ps. 274,631.5 billion, up from Ps. 242,702.9 billion, representing a 13.2% increase[371]. - Total interest-earning assets increased to Ps 2,265.0 billion in 2022 from Ps 4,346.6 billion in 2021, reflecting a net change of Ps 571.4 billion[374]. - Total loan portfolio amounted to Ps 188,313.4 billion as of December 31, 2022[386]. Regulatory Environment - The Colombian Central Bank maintains regulatory authority over monetary policies, impacting the financial system's stability[400]. - The URF issued 8 decrees in 2022, including Decree 175 which addresses capital ratios for Trust Managers Corporations and Pension Funds Managers[405]. - Decree 1533 of 2022 amends regulations regarding legal lending limits and credit exposure to related counterparties, impacting profitability and business lines[405]. - The Superintendency of Finance supervises the Colombian financial system to ensure stability and protect users of financial services[406]. - Law 1870 of 2017 strengthened the regulation of financial conglomerates, requiring compliance with capital adequacy and risk management standards[419]. Credit Quality - The credit quality metrics indicate that Banco de Bogotá has loans past due more than 30 days at 3.9% of gross loans, which is competitive compared to the market[331]. - Domestic commercial credit ratio was 0.8% in 2022, down from 1.3% in 2021[387]. - Total domestic net charge-off during the period was Ps 2,988.6 billion, compared to Ps 3,470.1 billion in 2021[387]. - Total net charge-off for all loans was Ps 3,211.9 billion in 2022, down from Ps 3,546.1 billion in 2021[389]. Interest Rates and Yields - The average yield on domestic loans was 10.6% for 2022, while foreign loans yielded 6.8%[369]. - The average yield on interest-earning assets rose to 9.6% in 2022 from 7.1% in 2021, indicating improved profitability[376]. - The average interest rate on total interest-bearing liabilities was 5.6%, compared to 5.5% in the previous year[371]. - The average interest rate for total deposits was 4.8%[394]. Digital Transformation and Cybersecurity - The migration of main systems to the cloud is projected to yield technology cost savings post-2027[348]. - Grupo Aval's cybersecurity strategy includes a three-line model for risk management, focusing on prevention, monitoring, and compliance[357]. - The company has increased transaction monitoring processes and awareness campaigns to mitigate risks associated with digital channels[356].