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Grupo Aval reverses trading loss as Q1 profit jumps 27.6%

Grupo Aval Acciones y Valores SA's attributable profit for the first quarter rose 27.6% year over year, supported by stronger interest income and higher gains from fees, trading and the sale of goods and services.

The Bogotá-based company booked net income attributable to owners of the parent of 762.9 billion Colombian pesos, rising from 597.7 billion pesos in the year-ago period.

The bank's net interest income totaled about 2.730 trillion pesos in the first quarter, down 1.0% from the linked quarter but up 2.5% from 2.663 trillion pesos a year earlier. The company's net interest margin, including net trading income, improved to 5.7% from 5.6% in both the linked and prior-year quarters.

Meanwhile, net income from commissions and fees jumped 9.5% year over year to 1.259 trillion pesos, which Grupo Aval attributed to "a strong performance in banking fees, sustained income from our pension fund business and a decline in fee expense."

Net income from sales of goods and services surged 179.1% annually to 574.5 billion pesos. Grupo Aval also posted net trading income of 108.2 billion pesos for the first quarter, compared to a net trading loss of 90.3 billion pesos a year ago.

The lender registered 833.1 billion pesos in net impairment loss on financial assets for the first quarter, up 3.8% from 802.6 billion pesos a year ago. However, Grupo Aval said its cost of risk declined quarter over quarter due to "a decrease in the marginal provisions done in our bank's CRDS, Electricaribe and SITP exposures."

Total other expenses ticked 4.7% higher year over year to about 2.287 trillion pesos.

The company's net total loans and receivables portfolio expanded 5.5% on an annual basis to reach 164.738 trillion pesos at the end of the first quarter, while its 90-day past due loan ratio came in at 3.1%, unchanged from the linked quarter but up from 2.9% a year ago.

Grupo Aval's return on average equity improved to 17.4% from 15.3% a year earlier. Similarly, return on average assets rose to 2.1% from 1.6%.

As of May 20, US$1 was equivalent to 3,360.10 Colombian pesos.