Grupo Aval Reports Q1 2026 Results: Net Income Down Due to One-Time Tax, Loan Quality Improves
Summary
Grupo Aval reported Q1 2026 results showing a decline in net income and ROAE due to a one-time equity tax, but underlying performance and asset quality improved significantly.
Key Events
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Q1 2026 Attributable Net Income Declined
Attributable net income was Ps 336.6 billion, decreasing 6.9% compared to 1Q25. However, excluding a one-time equity tax of Ps 210.1 billion, net income would have increased 51.2% year-over-year.
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Improved Asset Quality
Loans past due more than 90 days decreased to 3.13% at March 31, 2026, a 69 basis point improvement year-over-year and the lowest level in 13 quarters.
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Strong Loan and Deposit Growth
The consolidated loan portfolio grew 6.0% year-over-year, while total deposits increased 11.7% year-over-year.
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One-Time Equity Tax Impact
A one-time equity tax of Ps 210.1 billion reduced attributable net income and increased operating expenses by Ps 311.7 billion, significantly impacting reported profitability metrics.
Analysis
Grupo Aval's reported net income and return on equity declined in Q1 2026, primarily due to a significant one-time equity tax of Ps 210.1 billion. Excluding this non-recurring impact, the company's underlying net income and ROAE would have shown strong year-over-year growth. This indicates solid operational performance despite the headline figures. Furthermore, the company demonstrated improved asset quality, with 90-day past due loans reaching a 13-quarter low, alongside healthy growth in both its loan portfolio and customer deposits. The completion of the Multi Financial Group Inc. (MFG) disposal also impacts the reported financial structure.
At the time of this filing, AVAL was trading at $4.19 on NYSE in the Finance sector, with a market capitalization of approximately $4.8B. The 52-week trading range was $2.61 to $5.28. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.