Grupo Aval(AVAL)2024-11-14 19:11Financial Data and Key Metrics Changes - Return on average equity was 9.7%, comparable to the third quarter of 2022 [9] - Net income to shareholders was 415 billion pesos, marking the best result for the third quarter in three years [46][66] - Total net income for the quarter was 416 billion pesos or 17.5 pesos per share [66] Business Line Data and Key Metrics Changes - Combined gross loans grew 0.7%, reaching a 25.2% market share by September [46] - Commercial loans expanded 5% year-on-year and 0.1% over the quarter, while consumer loans grew 0.9% during the quarter [53] - Consumer loan disbursements grew 18% over the quarter and 28% year-on-year, reaching 19 trillion pesos [50] Market Data and Key Metrics Changes - The Colombian economy registered annual growth of 1.9% year-to-date to August, supported by household consumption and a resilient export sector [31] - National unemployment fell to 9.8% in September, the lowest level in two years [34] - Inflation decreased to 5.4% in October, the lowest level since the end of 2021 [34] Company Strategy and Development Direction - The company aims to leverage synergies and efficiencies through the newly named Aval Valor Compartido (AVC) [10][11] - The company is supporting the central bank's initiative for a real-time payment system called BREVE, enhancing financial inclusion [14][15] - The company expects to return to double-digit profitability and benefit from stronger growth in real-term services by 2025 [70] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation trends are positive, suggesting a need for faster rate cuts from the central bank [28] - The company anticipates GDP growth to exceed 2.5% in 2025, with a more predictable and lower inflation environment [70] - The fiscal situation remains a challenge, limiting the space for a more expansive monetary policy [41] Other Important Information - The company achieved its highest score in the Corporate Sustainability Assessment, placing it in the 90th percentile [17] - The company disbursed 10.6 trillion pesos under the Pacto por el Crédito program, aimed at supporting prioritized sectors [88] Q&A Session Summary Question: Mortgage market strategy and ROE trends - The company expects to continue gaining market share in mortgages due to being underweighted compared to peers and anticipates ROE trends to improve through a combination of cost control and market growth [74][76] Question: Consumer vs. commercial segment performance - The commercial segment is lagging due to the typical cycle where consumer performance leads, with no specific sector identified as particularly challenging [82][83] Question: NIM performance and guidance - NIM for 2024 is expected to be in the 3.6% area, with improvements projected for 2025 [87] Question: Loan program conditions - Loans disbursed under the Pacto por el Crédito have special conditions, including lower rates for housing credit and guarantees for renewable energy projects [89]