Grupo Aval Reports Strong FY25 Net Income Growth, Q4 Attributable Net Income Down 34% QoQ Due to Discontinued Operations
Summary
Grupo Aval reported strong full-year 2025 attributable net income growth of 69.6%, but Q4 attributable net income declined 33.9% sequentially due to discontinued operations and lower trading income, despite improving asset quality.
Key Events
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Strong Full-Year Attributable Net Income Growth
Attributable Net Income for the full year 2025 reached Ps 1,721.9 billion (Ps 72.5 pesos per share), marking a 69.6% increase compared to 2024. Full-year ROAE was 9.6% and ROAA was 1.0%.
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Significant Q4 Attributable Net Income Decline Sequentially
Net income attributable to owners of the parent for 4Q25 was Ps 344.4 billion, a 33.9% decrease from 3Q25 (Ps 521.0 billion). This was largely driven by a Ps 130.0 billion loss from discontinued operations (MFG) and an 83.4% QoQ drop in net trading income.
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Improving Asset Quality and Efficiency
The ratio of 90-day Past Due Loans (PDLs) to gross loans improved by 11 basis points sequentially to 3.3%. The Cost of Risk for the full year 2025 decreased by 38 basis points to 1.9%, and the Cost to Income ratio improved by 101 basis points to 52.2%.
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Solid Loan and Deposit Growth
Gross loans increased by 4.6% year-over-year to Ps 190.9 trillion, while consolidated deposits grew by 11.2% year-over-year to Ps 207.4 trillion.
Analysis
Grupo Aval reported robust full-year 2025 results with attributable net income increasing by 69.6% year-over-year to Ps 1,721.9 billion, driven by positive trends in its banking and pension segments. However, fourth-quarter 2025 attributable net income saw a significant 33.9% sequential decrease to Ps 344.4 billion. This quarterly decline was primarily due to a substantial negative impact from discontinued operations (MFG) and lower net trading income. Despite the Q4 dip, the company demonstrated improving asset quality, with 90-day past due loans decreasing to 3.3%, and an improved full-year cost of risk. Investors should focus on the underlying performance of continued operations, which showed a modest 5.0% QoQ decrease but a strong 67.5% YoY increase, indicating core business health despite the one-time and non-recurring factors impacting the headline Q4 attributable net income.
At the time of this filing, AVAL was trading at $4.09 on NYSE in the Finance sector, with a market capitalization of approximately $5.1B. The 52-week trading range was $2.25 to $5.28. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.