Key Highlights

● Second-quarter net income rose about 17 per cent year over year to Ps 577.5 billion.

● Return on average equity reached 12.7 per cent, the company's highest in four years.

● Net interest margin rose to 5.5 per cent on a consolidated basis in the quarter.

● Net cost of risk was 1.9 per cent, up eight basis points sequentially.

Investors in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) in New York hold American Depositary Shares, not ordinary shares. According to the company's annual report on Form 20-F for 2025, each ADS represents 20 preferred shares and trades on the New York Stock Exchange under the symbol AVAL. The underlying preferred shares are listed in Colombia as PFAVAL. Results are reported in Colombian pesos under IFRS, so dollar returns on the ADSs also depend on the peso exchange rate. That currency layer matters when comparing the stock with a dollar benchmark. Any peso weakness can erode ADS returns even when local earnings improve, and the reverse is also true. Investors should also consider peso movements alongside reported performance.

Second-quarter 2026 results

Grupo Aval published its second-quarter 2026 results in mid-August 2026 through a Form 6-K filed with the US Securities and Exchange Commission. Net income attributable to owners of the parent was Ps 577.5 billion, or Ps 24.3 per share. The company reported this as roughly 72 per cent higher than the first quarter and about 17 per cent higher than the second quarter of 2025. Return on average equity was 12.7 per cent, which the company described as its highest in four years. Market data put the first-quarter figure at 7.4 per cent and the year-earlier figure at 11.3 per cent. Return on average assets was 1.1 per cent and the efficiency ratio was 49.3 per cent.

Margins and asset quality

Net interest margin was 5.5 per cent on a consolidated basis, against 3.3 per cent in the first quarter, while the margin on loans was 4.4 per cent. A swing of that size deserves caution. The sale of Multibank closed on 18 March 2026, and prior-period figures were restated on a pro forma basis, so quarter-to-quarter comparisons may not be like for like. Net cost of risk was 1.9 per cent, up eight basis points on the first quarter, and loans more than 90 days past due were 3.1 per cent of gross loans, unchanged. Those figures suggest asset quality was stable rather than improving, in our interpretation.

Restated Figures Complicate the Comparison

Grupo Aval's margin and profitability gains came alongside the completed sale of Multibank, which closed in March 2026 and required restating prior-period figures on a pro forma basis, so quarter-to-quarter comparisons carry extra caveats. The group's exposure runs across four banks plus a pension manager and merchant bank, giving it broad exposure to Colombia's economy, where a high 12 per cent policy rate can support lending margins while also pressuring borrowers.