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Grupo Aval's Q2 profit improves 19.3% on stronger interest, fee income

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Grupo Aval's Q2 profit improves 19.3% on stronger interest, fee income

Grupo Aval Acciones y Valores SA's second-quarter attributable profit jumped 19.3% from a year earlier. Higher interest and fee income and income from the sale of goods and services drove the increase.

The Bogotá-based lender said net income attributable to owners of the parent reached 813.2 billion Colombian pesos in the second quarter, up from 681.5 billion pesos a year earlier. EPS improved to 36.5 pesos from 30.6 pesos.

The company's net interest income ticked 4.9% higher year over year to 2.831 trillion pesos from 2.699 trillion pesos and was up 3.7% from the first quarter. Its net interest margin was 5.7%, up from 5.5% in the linked quarter but down from 5.8% a year ago.

Net income from commissions and fees rose 12.4% to 1.347 trillion pesos. Net income from sales of goods and services increased 131.6% to 599.7 billion pesos. Net trading income, however, fell 14.7% to 208.6 billion pesos.

Grupo Aval booked 911.1 billion pesos in net impairment loss on financial assets, up 19.9% from 759.9 billion pesos in the second quarter of 2018. Total other expenses shot 6.7% higher annually to 2.409 trillion pesos.

The company's net total loans and receivables portfolio held 166.401 trillion pesos at the end of June, representing growth of 5.1% from a year ago. Consumer loans and leases increased 10.4% annually, while mortgages and housing leases were up 13.9%.

The loan growth was accompanied by a small decline in asset quality, however, as the bank's 90-day nonperforming loan ratio increased to 3.2% from 3.1% in both the linked and year-ago quarters.

"The quality of our loan portfolio slightly deteriorated during the quarter mainly driven by the slow growth of Colombia's corporate loan book; and some deterioration in Central America mainly in Nicaragua," Grupo Aval said.

The company's return on average equity increased to 18.3% from 17.7% a year earlier, while return on average assets improved to 2.1% from 2.0%.

As of Aug. 20, US$1 was equivalent to 3,417.00 Colombian pesos.