The combined profit of the three largest listed banks in Colombia fell 6.73% year over year in the first quarter of 2018 as the lenders booked higher asset write-downs, which led to a rise in overall expenses.
Aggregate net income for the three banks — Grupo Aval Acciones y Valores SA, Bancolombia SA and Grupo Bolívar SA — totaled 1.344 trillion pesos in the three months ending March 31, down from the 1.441 trillion pesos earned in the year-ago period. Grupo Aval recorded a modest 1.82% annual increase in its first-quarter profit, but Bancolombia and Grupo Bolívar saw their quarterly profits slump 14.29% and 8.41%, respectively.
Grupo Aval's net income of 597.70 billion pesos made it the most profitable bank in the group for the period, replacing Bancolombia, which had the highest profit in both the linked quarter and prior-year period.
Bancolombia's return on average equity and net interest margin declined to 9.14% and 5.40%, respectively, from 11.36% and 5.81% a year earlier. ROAE for Grupo Aval, on the other hand, improved to 15.23% from 15.11% while its net interest margin jumped 17 basis points to 5.19%.
The banking majors tallied higher aggregate net interest income and net fees and commissions in the first quarter, hitting 6.596 trillion pesos and 1.962 trillion pesos, respectively. This resulted in overall operating income rising 2.36% from a year ago to reach 10.001 trillion pesos.
However, the banks also registered higher combined expenses, which rose 3.13% to 8.081 trillion pesos in the first quarter due mainly to an increase of 257 billion pesos in asset write-downs.
A weak domestic economy and exposure to troubled conglomerates also had an impact on credit quality. Grupo Aval's ratio of loan provisions to average amortized loans rose to 2.32% from 1.95% a year earlier, while the same ratio for Bancolombia increased to 2.32% from 2.13%.
During the last year, the quality of Grupo Aval's loan portfolio "evidenced a deterioration in line with a slower pace of the economy, a slight weakening in urban and national unemployment metrics and due to certain corporate exposures," the company said in its earnings release.
Moody's, meanwhile, changed its outlook on Colombia's banking system to negative in April, citing, among other factors, deteriorating asset risk and slow loan growth. Following a six-year deceleration, the rating agency expects the country's economy to grow 2.5% this year and 3.0% in 2019.

See a section dedicated to financial highlights for your bank. To do so, search the company in the top search box and go to the "Financial Highlights" section, housed under the Templated Financials on the left-hand panel. Here is an example for Grupo Aval Acciones y Valores SA. |
As of May 23, US$1 was equivalent to 2,864.10 Colombian pesos.

