The following is a summary of the Grupo Aval Acciones Y Valores SA (AVAL) Q3 2024 Earnings Conference Call Transcript:

Financial Performance:

• Grupo Aval Acciones y Valores SA reported a positive return on average equity of 9.7%, matching levels from the third quarter of 2022.

• Net income for the banking segment approached levels seen in the third and fourth quarters of 2022, driven by improved cost of risk, investment returns, and stringent cost control.

• Loan disbursements increased across the system, with notable growth in consumer loans by 18% over the quarter. Total net income reached 416 billion pesos for the quarter.

• Loan and deposit growth remained modest, but Grupo Aval outpaced its peers, increasing market share, particularly in mortgages and consumer loans.

Business Progress:

• Grupo Aval expanded ATH's role and renamed it to Aval Valor Compartido (AVC) to create a centralized platform for subsidiary business support, aiming to capture synergies and improve operational efficiency.

• AVC appointed key executives to strengthen management and support its strategic initiatives.

• Demonstrated a commitment to financial inclusion and digital payments through support for the central bank's BREVE platform and launching TAC Aval for seamless account-to-account payments.

Opportunities:

• The Colombian economy shows positive signs with an expectation of lower inflation and interest rates, favorable for business and consumer confidence leading to increased loan disbursements and financial market expansion.

• Avance in ESG commitments and participation in sustainable and renewable energy projects present opportunities for brand enhancement and strategic partnerships.

Risks:

• Potential higher reservation rates from near-term economic pressures such as climate events and a stronger dollar affecting the fiscal outlook.

• Deteriorating conditions in commercial loans, reflecting lagged reaction to economic shifts, could impact overall financial health if not managed.

• Political and diplomatic uncertainties that could affect financial regulations and operations, particularly interactions with the U.S. influencing economic policies.

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