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Colombian banking majors see aggregate Q2 profit surge 36.1%

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Colombian banking majors see aggregate Q2 profit surge 36.1%

The aggregate second-quarter profitability for three of the largest listed banks in Colombia improved 36.1% from a year ago as a surge in operating income more than offset higher expenses.

Grupo Aval Acciones y Valores SA, Bancolombia SA and Banco Davivienda SA posted combined net income of about 2.11 trillion Colombian pesos for the three months through June, up from 1.55 trillion pesos in the prior-year quarter, according to data compiled by S&P Global Market Intelligence.

Stronger net interest and fee income helped the group's total operating income rise 13.4% year over year to 11.32 trillion pesos. This counteracted an increase in aggregate expenses, which ticked 8.8% higher to 8.63 trillion pesos.

Bancolombia, the only lender among the group to see loan-loss provisions fall year over year, booked the highest quarterly profit at 936.2 billion pesos, followed by Grupo Aval with 813.2 billion pesos and Davivienda with 359.2 billion pesos.

Moody's in June revised its outlook on the Colombian banking system to stable from negative, saying that prudent underwriting and controlled loan growth will help stabilize asset quality and capital buffers. However, the rating agency noted that a legislative proposal prohibiting banks from charging for certain services could jeopardize the sector's stable fee income.

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As of Aug. 23, US$1 was equivalent to 3,392.70 Colombian pesos.