GET DAILY SIGNALSGrupo Aval (AVAL) Delivers Q3 2026 Results With a 29% Drop in Net Income
Key Takeaways
- Grupo Aval Acciones y Valores reported third-quarter 2026 attributable net income of COP 368 billion, down 29% from COP 521 billion a year earlier.
- Earnings per share (EPS) fell to COP 15.5 from COP 21.9 in the prior-year period, while return on average equity (ROAE) slipped to 7.9%.
- Net interest income dropped 15% year over year and 32.9% quarter over quarter to COP 2.4 trillion, as investment-related margins cooled sharply after an exceptional second quarter.
- Net interest margin (NIM) on loans improved to 4.9%, but consolidated NIM compressed to 3.6% as NIM on investments turned slightly negative.
- Gross loans grew 10.1% year over year to COP 207 trillion, boosted by the Itaú retail portfolio, while deposits rose 12% to COP 224 trillion.
- Management raised its 2026 NIM-on-loans guidance and introduced initial 2027 return on equity (ROE) guidance of around 12%.
Earnings Context and Why It Matters
Grupo Aval is Colombia's largest financial conglomerate, operating four commercial banks as well as pensions, merchant banking, and trust businesses. Its quarterly results offer investors a broad read on Colombian credit demand, asset quality, and the health of the country's financial system. The third-quarter report was especially significant because it marked the first full quarter incorporating the Itaú retail banking portfolio acquired into Banco de Bogotá, an integration that reshaped loan growth and added one-time costs. Coming after a record second quarter driven by unusually strong investment and trading income, the Q3 figures tested whether core lending profitability could offset the normalization of market-related gains amid elevated inflation and a rising local yield curve. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
Grupo Aval reported third-quarter 2026 attributable net income of COP 368 billion, a 29% decline from COP 521 billion in the same period a year earlier. EPS reached COP 15.5, down from COP 21.9, while ROAE came in at 7.9%. For the nine-month period, attributable net income totaled COP 1,282 billion, compared with COP 1,377 billion a year ago.
The profit decline reflected two main factors cited by management: a lower-than-average NIM on investments following an exceptional second quarter, and one-time impacts from incorporating the Itaú retail banking business. Net interest income fell to COP 2.4 trillion, down 15% year over year and 32.9% quarter over quarter. Consolidated NIM compressed to 3.6%, as NIM on investments turned slightly negative at -0.1%, a sharp contrast with 8.7% in the second quarter. Encouragingly, NIM on loans continued to improve, reaching 4.9%, up 44 basis points quarter over quarter. From what I see, the loan-side margin improvement is a positive sign worth monitoring closely.
Loan growth remained robust. Gross loans rose 4.7% quarter over quarter and 10.1% year over year to COP 207 trillion, including roughly COP 6.3 trillion from Itaú. Deposits reached COP 224 trillion, up 12% year over year. Cost of risk increased to 2.5%, partly from the day-one accounting impact of the Itaú transaction; excluding that effect it was 2.1%. Asset quality held steady, with 90-day past-due loans at 3.15%. The trust unit Aval Fiduciaria posted record fee revenue of COP 486.7 billion, up 12.7% year over year.
Market Reaction and Investor Sentiment
Investor reaction to the report was cautious. The U.S.-listed AVAL ADR declined in the session following the release, as the market weighed the sharp drop in investment-related income against solid loan growth and improving loan margins. While the company highlighted healthy credit expansion, stable asset quality, and record results in its trust business, the 29% decline in net income and the swing in investment NIM into negative territory weighed on sentiment. Analysts focused on the sustainability of the improved NIM on loans and the path of the Itaú integration, which added roughly COP 6.3 trillion in loans but also pressured efficiency ratios and cost of risk during the quarter.
Forward Outlook and Key Factors to Monitor
Looking ahead, management raised its 2026 NIM-on-loans guidance and provided initial 2027 ROE guidance of around 12%, signaling confidence that portfolio repricing and the Itaú integration will support profitability over time. The company also indicated it expects 2027 loan growth near 9.5%, with commercial loans growing about 9% and retail loans about 10%.
Several factors deserve close monitoring. The trajectory of Colombia's inflation and the central bank's policy rate will remain central to both funding costs and the value of the bank's fixed-income portfolio. Fiscal adjustment, the approval of the Economic Rescue Law, and any agreement with the International Monetary Fund (IMF) will shape the broader macro backdrop. The timing and implementation of pension reform, potentially effective in 2027 or delayed to 2028, could also affect the pensions business.
Finally, investors should watch the pace of Itaú integration synergies, cost-of-risk normalization, and whether the expansion in loan margins can continue to offset volatility in investment-related income. I’m watching this closely as the integration plays out.
Using Tickeron’s AI Tools for Deeper Analysis
In preparing this review I ran a quick scan with Tickeron’s AI Screener to compare AVAL against regional peers on key metrics like NIM trends and loan growth. The tool helped surface how the stock’s valuation stacks up against similar financial names in Latin America, giving a clearer sense of relative positioning without replacing my own fundamental work.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AVAL sees MACD Histogram crosses below signal line
AVAL saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 27, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 39 instances where the indicator turned negative. In 28 of the 39 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 72%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 26, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AVAL as a result. In 59 of 101 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 58%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AVAL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 62%.
The Aroon Indicator for AVAL entered a downward trend on November 11, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where AVAL's RSI Oscillator exited the oversold zone, 17 of 26 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 65%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 41 of 58 cases where AVAL's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 71%.
Following a +3.25% 3-day Advance, the price is estimated to grow further. Considering data from situations where AVAL advanced for three days, in 147 of 228 cases, the price rose further within the following month. The odds of a continued upward trend are 64%.
AVAL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 1 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 2 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 56, placing this stock better than average.
The Tickeron Valuation Rating of 16 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: AVAL's P/B Ratio (0.000) is slightly lower than the industry average of (1.262). P/E Ratio (0.003) is within average values for comparable stocks, (13.479). Projected Growth (PEG Ratio) (0.430) is also within normal values, averaging (1.190). Dividend Yield (0.014) settles around the average of (0.035) among similar stocks. AVAL's P/S Ratio (1.089) is slightly lower than the industry average of (3.738).
The Tickeron Price Growth Rating for this company is 60 (best 1 - 100 worst), indicating fairly steady price growth. AVAL’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 97 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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