AVAL

Welcome to Grupo Aval's Fourth Quarter 2025 Consolidated Results Conference Call. My name is Regina, and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A., Grupo Aval is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulation. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with Colombian IFRS, as reported, the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. On November 27, 2025, Banco de Bogota's subsidiary, Multi Financial Holding, Inc. MFG, entered into a share purchase agreement with BAC International Corporation, BIC, a subsidiary of BAC Holding International Corp. for the disposal of 99.57% of the issued and outstanding shares of Multi Financial Group, Inc. MFG, the parent company of Multibank Inc. For comparability purposes only, we have prepared and present supplemental unaudited pro forma financial information for the periods prior to 4Q '25, which reflects the reclassification of the operations relating to MFG as noncurrent assets and liabilities held for sale and discontinued operations. This supplemental unaudited pro forma financial information does not intend to represent and should not be considered indicative of the results of operations or financial position that would have been achieved had the transaction occurred on the dates assumed nor is it intended to project our results of operations or financial position for any future period or date. The pro forma financial information is unaudited and the completion of the external audit for the year ended December 31, 2025, may result in adjustments to the unaudited pro forma financial information presented herein. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential, or continue or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general, economic, and business conditions, changes in interest and currency rates, and other risks described from time to time in our filings with the Registro Nacional de Valores y Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update, or correct the information provided in this report, including any forward-looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The financial statements of Grupo Aval Acciones y Valores S.A. in accordance with Colombian regulations must be filed with the market and with the Superintendency of Finance with the opinion of an external auditor. At the time of this quarterly call, this process is still ongoing. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. [Operator Instructions] I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Ms. Maria Lorena Gutierrez Botero, you may begin.

Thank you. Good morning, and thank you for joining Grupo Aval's fourth quarter and full year 2025 earnings call. I'm so sorry, but I have a little flu, oh, a terrible flu, but I'm trying to -- that you can understand me. I am joined today by Diego Solano, our Chief Financial Officer; Camilo Perez, Chief Economist at Banco de Bogota; Paula Duran, Corporate Vice President of Sustainability and Strategic Project. I would like to start by highlighting the positive evolution of our results during 2025, despite the challenging and volatile local and global environment. We reached COP 1.7 trillion in net income during 2025, a 70% increase compared to the previous year and more than twice that of 2023. This improvement was primarily driven by stronger contributions from our banking business and a record performance year by Porvenir. Since our last call, we completed important milestones in line with our strategic focus to strengthen our strategic priorities. First, we completed the merger of our trust company. Second, we reached an agreement to acquire Banco Itau's Colombian retail business. Third, we reached an agreement to divest MFG. And fourth, Corfi has successfully completed transaction that will grow in business in the short-term. On January 2, 2026, we successfully merged our fiduciary businesses from Fiduciaria Bogota, Fiduciaria de Occidente, and Fiduciaria Popular into Aval Fiduciaria. This transaction consolidates our trust services into a single strong entity, enhancing our value proposition for existing and new customers and generating operational efficiencies. We expect this to result in an increase of our market share in trust fee income and AUMs and improve the profitability of this business. On December 23, 2025, Banco de Bogota announced the acquisition of Banco Itau with the banking business in Colombia and Panama. This move reinforces Banco de Bogota's focus on the affluent segment, enhances the quality of our client needs and strengthens our competitive positioning in Colombia. The acquisition is expected to add around 267,000 clients with USD 6.5 trillion in loans and USD 4.1 trillion in deposits. The deal excludes Itau's corporate banking and is pending regulatory approval. On November 27, Banco de Bogota announced that it has reached an agreement to sell MFG, a Panamanian bank to [ CAB ], that is the Central American Bank. This unit has delivered modest results since its acquisition in 2020 and require a large scale to achieve the desired performance. The divestment of MFG strengthens Banco de Bogota's position to pursue a stronger growth in its core market and reallocate capital towards businesses with a stronger strategic alignment and long-term potential. The sale process for this operation is expected to close over the following months, following regulatory approvals in Panama. This quarter, Multi Financial Group's balance sheet and P&L have been classified as discontinued operations. Corfi announced 2 major acquisitions. The first one, Corfi announced agreement to participate with a 51% stake in Sencia, the concessionaire of the 20 -- 29 sorry, year public-private partnership for the renovation, construction, and operation and maintenance of Bogota Nemesio Camacho Stadium complex. Sencia will develop a USD 2.4 trillion project, includes a new 50,000-seat stadium, cultural and commercial components, public space development, and mobility solutions. In the energy and gas sector, Promigas signed an agreement to acquire 100% of Zelestra's renewable energy generation platform, reinforcing its transformation into a multi-energy platform with operations in Colombia, Chile, and Peru. This transaction has a portfolio of more than 19 solar and storage projects totaling 1.4 gigawatts of contracted capacity and over 2.1 gigawatts under development, supporting diversification of nonregulated businesses and stable long-term contracted revenues, subject to project approvals in Colombia and Peru. Regarding results from continued operation for the quarter, positive trends continued to consolidate during the quarter. Our risk-adjusted NIM on loans for the quarter stood at 3.34%, the highest level in 3 years, while our cost of risk continued its positive trend. Return on average equity came in slightly below our initial expectations, mainly due to a weaker-than-expected NIM on investments triggered by volatile local and international capital markets and the onetime effects related to the MFG sale agreement, which Diego will explain in detail. I will now pass on to Paula, who will go over our sustainability achievements for the year. Paula?

Thank you, Maria Lorena. Good morning, everyone. In the fourth quarter, we closed an extraordinary year for sustainability, further consolidating our ESG strategy. One profitability is built by integrating strong financial performance, measurable social impact, and responsible environmental management. Our framework is structured around 3 pillars: Returns with purpose, opportunities for all, and environmental value. Under our first pillar, returns with purpose, we continue to scale sustainable finance. Our sustainable loan portfolio reached COP 44.9 trillion, including COP 36.2 trillion in social lending and COP 8.7 trillion in green lending. Social lending included targeted credit lines for senior citizens, housing, women entrepreneurs, coffee growers, and micro businesses. Green lending supported renewable energy, infrastructure, sustainable mobility and water management projects, among others. In our investment portfolio, Maria Lorena already mentioned our agreement with Zelestra that reinforces our commitment to clean energy. We also received important external recognitions. In the S&P Corporate Sustainability Assessment, we achieved a historic score of 81 out of 100 and were included in the S&P Sustainability EU. Additionally, Banco de Bogota, Equity Colombia, Banco de Occidente and Villas were also included in the EU, demonstrating the consistency and consolidation of our sustainability strategy across the group. In the MSCI assessment, we improved our rating to BBB, driven by stronger social impact metrics and enhanced responsible investment practice. On our second pillar, opportunities for all, this pillar focuses on generating inclusive growth and shared value. We calculated the total economic value generated and distributed, which reached COP 41 trillion in 2025. In this value distributed to more than 31,000 suppliers that received COP 11 trillion, our 67,500 employees also earned COP 3.8 trillion. We also paid COP 3.4 trillion in taxes and generated COP 13 trillion in returns for our clients. Additionally, we invested COP 70 billion in voluntary social programs, benefiting more than 2 million people, focusing on community infrastructure, education and research, socioeconomic development, and the promotion of culture, art and sports. Through Mision La Guajira, the most significant private sector social initiative in Colombia, we fulfilled our commitment, benefiting more than 21,500 people across 80 communities with potable water, electricity, and connectivity. The program also included financial education initiatives and supported over 1,500 value artisans fostering sustainable live schools. We also supported the VAMOS Finances scholarship program exceeding our fundraising goals and reaching COP 1.1 billion, benefiting more than 1,200 students. For our third pillar, environmental balance, we joined the partnership for Carbon Accounting Financials, CAF, committing to measuring the contributions associated with our financial activities. We also launched our nature strategy aligned with the NSE and began a pilot implementation with one of our entities. At the group level, we also achieved tangible equal efficiency improvements. Energy consumption reduced by 9.6%, renewable energy use increased to 38%, water consumption reduced by 2%, and waste generation decreased by 9%. In summary, we closed 2025 with meaningful progress across all 3 pillars, reinforcing our position as the Aval that drives support and transform the group. We continue to generate opportunities for more sustainable development and create long-term value for our shareholders and all stakeholders. Thank you.

Thank you, Paula. Now moving to the macro environment. A lot has happened since our last call that has changed our expectation for 2026. A massive and technical increase in minimum wages has triggered a substantial increase in inflation expectations and has a strong terms from the Central Bank to control inflation expectations. These recent events add to the increase in real interest rate expectations that result from growing concerns on the current administration's fiscal discipline. As a result, since our last call, we have raised 200 basis points our expectation on 2026 inflation and 350 basis points year-end 2026 Central Bank intervention rate, changing the improvement trends we previously anticipated. 2025 was characterized by elevated global uncertainty. The year was marked by abrupt changes in U.S. economic policy, increased trade tensions and greater economic fragmentation. Despite these challenges, global growth proved resilient, reaching an estimated of 3.3%, supported by a second half recovery, higher investment, and accelerated adoption of artificial intelligence technologies. In Colombia, economic activity remained resilient. GDP growth closed at 2.6% for 2025, driven primarily by household consumption and public spending. However, the GDP outlook remains challenging. Investment level stand at historical low levels and the country's fiscal deficit is among the largest globally, despite interest savings achieved through the government's liability management strategy. Household consumptions and government spending alone cannot sustain structural economic growth if investment remains absent and the government continues to crowd out the private sector. Inflation closed the year at 5.1%, remaining above the Central Bank's target range. Furthermore, inflationary pressures derived from -- derived from the 23.7% increase in the minimum wage led to the beginning of a new restrictive cycle in monetary policy as evidenced by 100 basis points increase in the Central Bank rate in January. Moving on to the exchange rate. The weaker U.S. dollar and the heavy dollar inflows from remittances and the national government liability management strategies led to 14.8% appreciation of the Colombian peso relative to the U.S. dollar. Camilo will now elaborate on our economic outlook. Camilo?

Thank you, Maria Lorena. Good morning. The Colombian economy grew by 2.6% in 2025, below the consensus estimate and that of technical staff of the Central Bank. The surprise came from investment results with gross fixed capital formation growing only 1.3%. The weak growth in investment was offset by the divestment of machinery and equipment, which registered an annual increase of 9% due to the needs faced by businesses to meet higher domestic demand. Meanwhile, investment in housing, infrastructure, and intellectual property contracted annually. As a result, Colombia ended 2025 with an investment rate of 16.6% of GDP, the lowest level so far this century. Ultimately, high levels of uncertainty, elevated interest rates due to persistent inflation and large fiscal deficits have led the country to face a complex investment landscape with the financial mining and energy construction and communication sectors being the most impacted. Conversely, the economy found supporting household and public sector spending. On the household side, higher income from wages, remittances, government transfers, coffee exports, and tourism led to an acceleration in private consumption growth from 1.6% in 2024 to 3.6% in 2025. The growth in goods expenditures surpassed that of services. As a result, sectors such as commerce, lodging, food, transportation, recreation, and services in general continued their upward trend. In manufacturing, while growth was observed in line with the increased household demand for goods, the appreciation of the peso reduced the competitiveness of local production. Meanwhile, amid the suspension of the fiscal rule and the higher budget execution, public spending increased from 0.6% growth in 2024 to 7.1% in 2025, the highest rate since 2021. Also public spending boosted local activity, it was financed with increased debt, leading to a widening of the primary fiscal deficit. Thus the fiscal stimulus appears unsustainable and ultimately display the private sector in an example of carrying out. In the external sector, lower national competitiveness explained by the appreciation of the Colombian peso against the dollar and higher labor hiring costs led to exports moderating the growth rate from 3.2% in 2024 to 1.8% in 2025. By 2026, amid more adverse financial conditions, weakening private consumption, a more challenging fiscal situation and high uncertainty surrounding the elections, the Colombian economy is projected to moderate its growth rate to 2.4%. Turning to prices. Inflation ended 2025 at 5.1%, virtually unchanged from 2024. Here, inflation improvements in rents and regulated prices were offset by increased pressure of food, goods, and services different from rents. At this point, higher labor costs resulting from the significant minimum wage increase, the reduction in working hours and the approval of labor reform weighed on inflation on goods and services. Meanwhile, high household and government spending limited the scope of improvement in inflation. By 2026, the minimum wage increase of over 23%, which in real terms was the highest in history, will lead to a resurgence of inflation. Specifically, inflation is expected to end 2026 at around 6.2%. The impact on inflation is also greater, thanks to the appreciation of the Colombian peso and its effect on the prices of inputs as well as the policy of reducing gasoline prices and the lower indexation based on rents. On the fiscal front, the government closed 2025 with the highest primary fiscal deficit, which excludes interest payments since the crisis of the 1990s and the pandemic. The government addressed the high spending pressures with active debt issuance using alternative mechanisms such as the direct sale of debt to an important investment fund and so of short and long-term debt during the year. Calculations by our economic research team indicate that the Ministry of Finance issued more than COP 110 billion of treasury bonds in 2025 when the stipulated limit was COP 95 billion. For 2026, no major changes are anticipated on the fiscal front. In fact, the deficit could exceed 7% of GDP, given the absence of the fiscal rule and, again, considering high spending and weak revenues. With this scenario where inflation is rebounding and the fiscal situation remains vulnerable, the Central Bank would consolidate an upward trend in interest rates. Our economic research team expects the benchmark interest rate to rise from 9.25% at the end of the year-end of 2025 to 11.25% by mid-2026, a level at which it would remain for at least the remainder of the year. The risks are tilted upwards. With a scenario of higher domestic interest rates, a weak dollar globally due to the United States trade policies and expectations of lower rates from the Federal Reserve, the exchange rate closed 2025 at COP 3,780 per dollar, 50% lower than at the end of 2024. However, in the second half of the year, the downward trend in the exchange rate intensified due to the government sale of dollars. In the second half of the year, the government sold more than $7 billion, an amount not seen since the pandemic. In 2026, the Colombian peso is expected to continue finding support from the wider interest rate differential, the international outlook and the nation's ample dollar availability. However, the election results will be crucial. Currently, the exchange rate is expected to remain below COP 4,000 per dollar throughout the year. Regarding the dynamics of dollar flows in the Colombian economy, it is important to note that for the first time in history, remittances surpassed oil exports as the primary source of dollars of the economy. This further consolidated diversification of the export basket. Finally, the legislative and presidential elections to be held in the first half of 2026 will define the country's economic future. It is too early to draw conclusions about the election results, but the central scenario is based on the expectation that Colombia will have a more fiscally disciplined government, which will reduce uncertainty and promote investment and in general, will make public policy decisions based on technical criteria that boost economic growth. Thank you. Back to you, Maria Lorena.

Thank you, Camilo. Turning to our financial results. 2025 was a transition year. In the banking segment, gross loans ended the year at COP 190.1 trillion, increasing by 4.8% compared to 2024. Profitability improved meaningfully, supported by a sharp decline in funding costs that expanded the spread between loan yields and funding costs by 41 basis points. Cost of risk improved from 2.3% to 1.9%, reflecting a stronger consumer portfolio performance and disciplined underwriting. Expense growth remained below the increase in the minimum wage, improving efficiency metrics. As a result, return on equity in the banking sector reached double digits. Banco Popular, Banco AV Villas returned to the profitability and Banco de Bogota, Banco de Occidente continue improving the results. Despite a weak market results at year-end, Porvenir delivered its strongest annual performance to date. Assets under management reached USD 271.2 trillion, an increase -- sorry, an increase 14.9% and ROAE reached 21.2%. Corfi worked throughout the year to lay the foundation for a new growth cycle driven by portfolio rotation and entry into high potential sectors. Deleveraging efforts and decline in rates led to a 16% reduction in funding costs, reflecting lower debt levels and more favorable interest rates. Finally, operational efficiencies continued to materialize following the exit from financial services. Now I would like to pass the call to Diego, who will give details of our results. Diego?

Thank you, Maria Lorena. I will start on Pages 11 and 12 with a few charts showing the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are unconsolidated figures under Colombian IFRS as published by the Superintendency of Finance. Starting on Page 11. During 2025, loans for the banking system grew 2.1% in real terms with mortgages growing 6.3%, consumer loans 1.48%, commercial loans 0.7%, all in real terms. During 2025, we continue to focus on profitable growth. We focused on local currency commercial loans in segments other than large corporates and on personal loans and credit cards and consumer lending. Peso-denominated commercial loan market share remained unchanged at 26.3%. We are selective in large corporate commercial lending given the aggressive pricing competition present throughout the year, where we lost 204 basis points. However, we gained 131 basis points of market share in local currency-denominated commercial loans other than large corporates. We gained market share in products and segments where we were underweighted such as factoring, where we gained 543 basis points to 24.2% and government loans where we gained 219 basis points to 23%. Regarding our dollar-denominated commercial loans where we have historically been overweighted, we reduced our market share by 356 basis points to 35.3%. In addition, in peso terms, the balances of dollar-denominated commercial loans were negatively impacted by the 14.8% appreciation of the Colombian peso over the year. As a result of the above, our market share for commercial loans fell 37 basis points. Consumer loans, we focused on diversifying our portfolio towards higher yielding and short-term loans, reducing our concentration in payroll lending. We gained 138 basis points of market share on personal loans to 21.5%. The Itau consumer business acquisition will take us to market weight. To strengthen our credit card business where we lost 132 basis points to 17.4%, we launched the [indiscernible] and other initiatives. All of this while maintaining our leadership position in payroll lending where we have 42.2% market share. Overall, our market share for consumer loans closed at 28.9% with a 53 basis points decrease. Moving on to mortgages. We continue gaining market share with 117 basis points increase throughout the year. As a result of the above mentioned, we closed our market share in total loans at 25%, 28 basis points lower than in 2024. On Page 12, loan quality for both the system and Aval banks showed an improvement during the year across all categories. Our banks continue to exhibit better loan quality portfolio than the system in all categories. I will now move to the consolidated results of Grupo Aval under IFRS. As mentioned by Maria Lorena, Banco Bogota entered into a share purchase agreement to sell MFG of Romanian bank. As a result, in December 2025, we classified this operation as noncurrent assets and liabilities held for sale and discontinued operations. For reason of comparison with previously reported periods, we're showing retrospectively on this call pro forma balances and ratios, classifying MFG as noncurrent assets and liabilities held for sale and discontinued operations. On Page 13, we present assets and loans. Assets grew 6.4% year-on-year and 1.5% for the quarter to COP 349 trillion. Fixed income investments, which account for 15.8% of our assets reached COP 5.2 trillion, growing 21.2% year-on-year and decreasing 0.2% over the quarter. Gross loans, which account for 54.7% of our assets reached COP 190.9 trillion, growing 46% year-on-year and 1.5% over the quarter. Growth metrics were affected by a 4.2% depreciation of the Colombian peso during the quarter and 14.8% over the year. Peso-denominated loans that now account for 91.3% of gross loans grew 6.8% year-on-year and 1.7% during the quarter. Commercial loans expanded by 1.9% year-on-year and 1.1% over the quarter. Peso-denominated commercial loans that account for 84.7% of gross loans grew 5.5% year-on-year and 1.4% during the quarter. Dollar-denominated commercial loans, which accounts for 15.3% of commercial loans grew 0.4% in dollar terms year-on-year and 3.9% during the quarter. In peso terms, our dollar-denominated loans contracted 14.5% year-on-year and 0.5% quarter-on-quarter. Consumer loans grew 4.7% year-on-year and 1.2% during the quarter. Personal loans grew 12% year-on-year and 5% during the quarter. Credit cards contracted 1.5% year-on-year and increased 2.9% during the quarter. Our loans grew 0.6% year-on-year and 1.1% during the quarter. Payroll loans increased 3.2% year-on-year and decreased 0.9% during the quarter. Mortgages grew 19.6% year-on-year and 3.9% during the quarter. On Page 14, we present the evolution of funding and deposits. Total funding increased 8.7% year-on-year and 1.4% in the quarter. The bank borrowings grew 28% year-on-year, in line with the expansion of our trading investment portfolio, as mentioned before, and account for 8.2% of total funding. Deposits that account for around 3/4 of our funding grew 11.2% year-on-year and 3.6% quarter-on-quarter. Our deposit to net loan ratio closed at 113%. On Page 15, we present the evolution of our total capitalization, our attributable shareholders' equity and the capital adequacy ratio of our banks. Our total equity increased 0.3% over the quarter and 4.8% year-on-year, while our attributable equity increased 0.2% over the quarter and 5.7% year-on-year. Total solvency and Tier 1 ratios evidence a relative stability in most of our banks. On Page 16, we present NIM, our net interest margin. Net interest income reached COP 9.3 trillion for the year, increasing 17.4% compared to 2024. Total NIM for the year increased 28 basis points to 3.78% in 2025. Our consolidated NIM on loans expanded by 28 basis points year-on-year to 4.71%, while NIM on investments decreased by 8 basis points to 0.82%. NIM on loans incorporates an 84% year-on-year expansion of NIM on retail loans to 6.33% and an 18 basis points year-on-year contraction in NIM on commercial loans to 3.5%. Focusing on our banking segment, the total NIM of our banking segment expanded 8 basis points over the year to 4.47% due to the same dynamics that affected our consolidated net interest margin. NIM on loans was 5.24%, increasing 9 basis points year-on-year. This incorporates a 69 basis points year-on-year increase in NIM on retail loans to 6.9% and a 39 basis points year-on-year decrease in NIM on commercial loans to 4.02%. Quarterly NIM was negatively impacted by adverse capital market performance, driven by a 3.48% negative NIM on investments. In contrast, NIM on loans for the quarter reached 5.05%, 48 basis points higher than the previous quarter and the best result in 12 quarters. As discussed by Maria Lorena, the recent shift in the monetary cycle in response to recent government decisions will act as a headwind for NIM over the next quarters. The development of our financial diversification strategic pillar continues to pay off. We have diversified our funding sources towards less sensitive non maturing deposits, including deposits from individuals and cash management linked deposits. Our banks lowered maturities and repricing gaps and actively implemented interest rate hedging strategies. On Page 17, we present our yield on loans, cost of funds spreads. On a consolidated basis, the average yield on loans for the year decreased 126 basis points to 12.06%, while the annual average 3-month IDR decreased 158 basis points to 9.4%. Consolidated cost of deposits decreased 148 basis points during the year to 6.63%, while our cost of funds decreased 141 basis points to 6.8%. On Pages 18 through 20, we present several portfolio quality ratios -- starting on Page 18. Loan portfolio quality ratios continued to improve during the quarter. PDL metrics continue to improve in all categories. 30-day PDL formation for the year reached COP 4.2 trillion, 32.8% lower than for 2024. 30-day PDLs were 4.37%, a 98 basis points improvement over 12 months and 37 basis points over the quarter. 90-day PDLs were 3.29%, a 77 basis points improvement over 12 months and 11 basis points improvement over the quarter. Commercial loans 30-day PDLs were 3.84%, a 101 improvement year-on-year and 38 basis points improvement quarter-on-quarter. 90-day PDLs were 3.48%, a 91 basis points improvement over the year and 19 basis points over the quarter. Consumer 30-day PDLs improved 117 basis points year-on-year and 16 basis points over the quarter to 4.67%. 90-day PDLs improved 63 basis points year-on-year and 5 basis points during the quarter to 2.79%. Mortgage 30-day PDLs and 90-day PDLs improved 8 basis points and 10 basis points, respectively, over the quarter to 6.18% and 3.75%, respectively. Finally, the ratio of charge-offs to average 90-day PDLs for 2025 was 0.82x. On Page 19. The share of our portfolio classified as Stage 1 grew to 89.8%, while Stage 3 decreased for a 6-month consecutive quarter -- consecutive quarter to 5.7%, driven by improvements in our consumer portfolio. Coverage measured as allowances for Stages 2 and 3 as a percentage of Stages 2 and 3 was 33.6%, decreasing 545 basis points relative to a year earlier due to improvement in the mix. On Page 20, in 2025, cost of risk net of recoveries fell 38 basis points to 1.9%, in line with our expectations for the year. For consumer loans, cost of risk net of recoveries improved 157 basis points to 4.2%. This includes a 449 basis points improvement in personal loans to 8.4%. For commercial loans, cost of risk net of recoveries was 0.7%. During the fourth quarter of 2025, cost of risk net of recoveries fell 27 basis points to 1.7%, the lowest in 12 quarters, driven by a decrease both in commercial and consumer portfolios of 36 basis points to 0.6% and 23 basis points to 3.8%, respectively. On Page 21, we present net fees and other income. Annual gross fee income grew 6.8%, while net fee increased 5.3%, quarterly gross and net fee income increased 8.5% and 9.6% year-on-year. In terms of annual gross fees, pension and trust fees grew 9.1% and 14.9%, boosted by performance-based management fees that followed the positive returns of the financial markets throughout the year. Our annual income from the nonfinancial sector was 84% of that recorded in 2024, mainly due to a lower contribution from the infrastructure sector. Quarterly income was affected by a lower income from the energy and gas sector and the infrastructure sector as well. This was partially offset by income from hotels. Finally, at the bottom of the page, the annual increase in the operating income is mainly driven by a COP 605 billion improvement in derivatives and FX gains. Hedging strategies relative to the nonfinancial sector are registered under foreign exchange gains and account for COP 863 billion yearly improvement. During the quarter, one of Promigas transportation pipelines measured as fair value reverted to the company's PP&E and implied a onetime fair value recognition of COP 303 billion. This effect was registered under net income from other financial instruments mandatory at fair value to P&L. This positive effect was offset by a onetime remeasurement of the deferred tax liabilities to COP 359 billion. Net-net, the transaction had a COP 56 billion negative effect on net income and COP 12 billion negative effect on our attributable net income. On Page 22, we present some efficiency ratios. Cost to assets remained flat at 2.6% Annual cost to income improved 101 basis points to 52.2% over the quarter. On a quarterly basis, it reached 54.9%, 550 basis points lower than a year earlier. Annual expenses grew 9.6% during the year. General and admin expenses grew 9.4% year-on-year. Personnel expenses grew 6.9% year-on-year, well below the 9.5% increase in Colombia's minimum wage. Finally, on Page 23, we present our net income and profitability ratios. Attributable net income from continued operations for the quarter was COP 474 million, 57.5% higher than the same quarter of the previous year. Total attributable net income for the year reached COP 1.72 trillion or COP 72.5 per share, increasing close to 70% compared to the previous year. Our annual return on average assets was 1% and our average annual return on average equity was 9.6%, 28 basis points and 366 basis points above 2024, respectively. In terms of discontinued operations, the results contributed by MFG's operations as all attributable net income adding COP 18 billion. To wrap up, we are updating our guidance to reflect changes in the macro environment impacting our business. We expect loan growth in the 10% area with commercial loans growing at 7% and retail loans growing at 14%. Total NIM in the 4.3% area with NIM on loans in the 4.7% area. Our NIM of the banking segment in the 5.1% area with NIM on loans in the 5.4% area. Cost of risk net of recoveries in the 2% area, cost to assets in the 2.8% area. Income from the nonfinancial sector, 1.3x that of 2025. Our fee income ratio in the 21% area. And finally, we expect a 2026 return on average equity to be in the 10.5% area. This guidance does not incorporate the recently announced wealth tax, which we estimate will have an impact on our ROE of 1 percentage point area. Back to you, Maria Lorena.

Okay. Thank you, Diego. Before moving into questions and answers, I would like to share some final thoughts of Colombia and Grupo Aval in 2026. We expect 2026 to continue to be challenging in Colombia given the effects of political volatility and electoral uncertainty. Economic conditions are expected to remain challenging, both locally and globally. We expect GDP growth to remain moderate in 2026 and a restrictive monetary environment. The massive minimum wage increase will put pressure on our cost base that of our customers. Inflation will remain above the Central Bank's target range, which implies a return to a higher for longer interest rate environment. Despite this backdrop, we strongly believe that we should remain focused in our strategy and improving our business and abstain from echoing uncertainty. The financial sector will continue to be a pillar of trust and investment. We expect to continue growing our financial business and invest through core fee in the nonfinancial sector in the region during 2026. As a result, we expect to continue strengthening our core business, supported on an expansion of risk-adjusted NIM on loans, commercial and operational effectiveness and a stronger fee generation. In 2026, we will continue delivering new and innovative products. In addition, during this year, we expect to see increases in efficiencies from shared services and IT integration initiatives and strengthening a client-center unified corporate culture. So we are now open for questions.

[Operator Instructions] Our first question will come from the line of Daniel Mora with CrediCorp Capital.

I have a couple of questions. The first one is regarding the new tax for companies. I would like to know what did you understand for liquid equity as it says that it is gross equity minus debt for the tax? So I would like to understand how it will be applied for Bank of Aval, you already mentioned a 1% point for the consolidated ROE, but I would like to understand what will be the impact across Bank of Aval? That will be the first question. And the second one is also on regulatory issues and regarding taxes, considering the previous economic emergency decree was put on hold, what is the effective tax rate that you are using in your numbers? Are you considering the 15% tax surcharge or paying, for example, deferred taxes?

Okay. I'll try to answer you, of course. I can't be a tax adviser here for you, but our understanding of how the network tax works is similar to what we've done -- we've experienced in the past, and it is subtracting from the tax base, the equity tax base of the bank or the company, its tax acquisition price of the shares it holds in its taxable balance sheet. That's the way it is expected to work, and it is similar to what has been in the past, the kind of language that we've seen in what has come up to date is basically the same that we saw in 2014. Regarding what happens to the group, yes, attributable should be something in the order of magnitude of 1 percentage point. And if you think that the attributable net -- the attributable equity of Grupo Aval is roughly 55%, 60% of the consolidated group. If you add what our group will be contributing to the tax in that sense would be almost twice of what we do attributable to our shareholders. Regarding how we calculate our tax in our guidance. The number comes out something similar to 35%. That is a combination of the taxes that we have to pay for our financial companies that have a surcharge in our numbers of 5% and then the taxes that other companies pay less those that have some exceptions. So...

But it means that is without the economic emergency...

Exactly.

For the situation that we have before that.

Exactly. That is what we expect on our base. And as I mentioned, the equity tax would add up to that around 5 percentage points if you were to make our calculation based on marginal tax.

Our next question will come from the line of Brian Flores with Citibank.

Can you provide an update on the guidance you provided in the third quarter regarding loan growth, cost of risk, and ROE? I think it would be very useful. And then just to confirm, basically, you're saying your base case is no change in the tax rate, right? You're basically saying we have no surcharge and we have no wealth tax. That is the base case implied in the guidance, right?

Yes. The 10.5%, you're right, the 10.5% basically takes taxes as well, not the taxes from the emergency, and that's why we are guiding into an additional effect that we could have from the wealth tax. Regarding our guidance, we have slightly reduced our guidance on growth. And regarding ROE, there is an implied 150 basis points reduction in guidance and ROE compared to our last call.

Okay. So just to confirm here, you were, if I'm not mistaken, guiding for a range of 12% to 12.5%. We're basically going to 11% or close to 11%. Is this...

Just restating, we are in the 10.5% area guiding. Last time we were in the 12% area with an upward bias at that point.

Okay. If I may, you basically are explaining that you are seeing no changes in the tax rate, slightly lower loan growth. So which is the driver here on the reduction? Is it -- I know you're liability sensitive or not as asset sensitive as other banks, so it could be the NIM? Or do you think this is more related to cost of risk? Because you mentioned efficiencies should be better in 2026 and onwards from what I understood.

Yes. It's a combination of several things. One and the main driver is a better mix of our loan portfolio that is also helping us to cope with the kind of behavior of the Central Bank rate that will imply a relatively better NIM year-on-year. There could be a reduction if you take the numbers that we had for the fourth quarter that was the best quarter in NIM, as I mentioned. However, year-on-year that there's an improvement. There's other things that are going to happen, and it is we expect Porvenir to have a better performance than what we had guided before, basically for 2 reasons. One, higher minimum wage implies higher fees from contributions from our customers. And then a higher interest rate environment is positive for Porvenir. On top of that, we have the other inorganic discussions that Maria Lorena pointed out that we expect to help us. We expect to see our mix improve. You've seen that throughout the past years, we've been moving towards retail to the retail segment. We've been working strongly on improving that organically and organically. That also improves our performance. And actually, when we compare our cost of risk, there is no change in cost of risk. The other area that -- where we could see a substantial improvement is NIM coming from investments. In general terms, we've seen volatility in this year, and there's been points in time as was fourth quarter where NIM on investments was negative on our results.

Super clear. I am very sorry to insist here. Just that I don't understand because if you're assuming no change in cost of risk and you're assuming a better mix and what I understood is a stable NIM, but then you're mentioning basically the reduction on ROE is of 100 bps year-over-year in the guidance. Is this only coming directly from a reduction in your expectations of loan growth, which I assume they were around 8% in the last call?

Yes. I have to correct myself. I just pulled out our guidance last time. We have actually a slight pickup on retail. And we also have, as I mentioned before, when you look at our effective tax rate, we're also building in a higher tax rate for this year.

[Operator Instructions] There are no further questions at this time. Ms. Maria Lorena Gutierrez Botero, I turn the call back over to you.

I just want to say thank you for being here with us and see you in 3 months. Bye.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for joining. You may now disconnect.

Welcome to Grupo Aval's Third Quarter 2025 Consolidated Results Conference Call. My name is Regina, and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A. Grupo Aval is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulations. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries in the Colombian banking system are presented in accordance with Colombian IFRS as reported, the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general economic and business conditions, changes in interest and currency rates, and other risks described from time to time in our filings with the Registro Nacional de Valores y Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update or correct the information provided in this report, including any forward-looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable, in this document, we refer to billions as thousands of millions. [Operator Instructions] With us today are Ms. María Lorena Gutiérrez Botero, Chief Executive Officer; Mr. Diego Solano, Chief Financial Officer; Mr. Jorge Castaño, Corporate VP of Financial Assets and Efficiencies; Mrs. Paula Durán, Corporate VP of Sustainability and Strategic Projects; Mr. Jorge Otalvaro, VP of Synergies at Aval Valor Compartido; and Mr. Camilo Pérez, Banco de Bogota's Chief Economist. I will now turn the call over to Ms. María Lorena Gutiérrez Botero, Chief Executive Officer. Ms. María Lorena Gutiérrez Botero, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for our third quarter 2025 conference call. I am here with Diego Solano, our CFO; Jorge Castaño, Corporate VP of Financial Assets and Efficiencies; Paula Durán, Corporate VP of Sustainability and Strategic Projects; Jorge Otalvaro, VP of Synergies at Aval Valor Compartido; and Camilo Pérez, Chief Economist of Banco de Bogota. This quarter, we reached a year-to-date net income of COP 1.4 trillion, 88% higher than the same period of 2024. Net income for the quarter was COP 521 billion, the highest quarter figure in 3 years, growing 25.3% over the year and 5.3% over the quarter. This performance reflects a strong net interest income as continued improvement in [indiscernible] loans, a pickup in loan growth and the results of our cost [indiscernible] efforts. Before addressing our financial performance, I will share the progress made in some of our strategic projects. First, our banks have continued working on improving their deposit mix towards retail funding. We launched accounts and saving pockets with a special remuneration rate and repositioning our bank's favorable account value proposition to both individuals and business. We also introduced product offerings to face increased competition, including short-term deposits and savings accounts with competitive rates. As a result of the above, peso-denominated deposits from individuals grew 22% over the year with saving and checking accounts growing 11% and term deposits 31%. Second, in addition to deposits, our efforts to deepen our presence in the consumer segment considers increasing our share of lending products where we are underweight and revamping our payment value proposition. We aim to increase our market share in credit cards where we have a space to grow. On this front, we entered an alliance with Visa that grant us exclusivity in Colombia for the FIFA World Cup. Third, on October 6, the Central Bank immediate payment system officially started operations, offering every day at any time instant and free transfers. This system will reduce the use of cash and promote financial inclusion. In Colombia, 75% of monetary transactions are with cash. We estimate these numbers could go down to 55% in future years, considering Brazil's peak experience. Given this opportunity in September 2025, we launched Gou Payments, our own instant payments with world-class infrastructure that will improve our time to market and offer innovative, safe and user-friendly solutions. Fourth, as we mentioned in the past, we are simplifying our processes through transversal initiatives, capturing value in our operational and administrative processes. This effort is based upon our main guiding principle, our external and internal customers go first. I will now invite Jorge Otalvaro to go into more detail on Gou Payments and our synergies plan executed through Aval Valor Compartido. Jorge?

Thank you, María Lorena. Good morning. At Grupo Aval, we are fully committed to driving the immediate payment system led by Central Bank in Colombia. Gou Payments will serve as our payment platform for the group's entities and will also enable fintechs, trust companies, and other players to connect the payment system where our value proposition is autonomy, differentiation, and agility in time to market with the Central Bank across all channels. Our strategy includes strength of the processing capabilities, traditional and instant payments, and clearing house services for Aval Banks and third parties. We are ready to launch innovative solutions that deliver a competitive edge, including interoperability for account-to-account merchants and payments, advanced capabilities in cash management, payment collections, QR solutions and open ecosystem for third parties. Our 4 banks [indiscernible] were the first and only players in Colombia, offering seamless credit cash transfers via WhatsApp, merging into our clients' day-to-day habits and offering an easy experience. We will measure success by the impact on cash reduction and the adoption of services by new clients, prioritizing cash management and excellence in B2B services. Let me mention our performance during the first month of credit, more than 8 million keys to individuals, 62% of them which are Tag Aval, the only customizable alphanumeric key in the market, more than 10 million transactions. We also have a market share over 45% in merchant keys with more than 1 million keys. And finally, we processed more than 10 million transactions with a total amount of COP 2 trillion. Now let me share our results on synergies and efficiencies at Aval Valor Compartido, AVC. In 2025, we focused on identifying potential synergies and implementing action plans to capture efficiencies through standardization and process mastering while raising productivity and control standards. After analyzing 30 administrative and operational processes, we initially selected 8 key processes for our synergy model. Administrative processes include procurement, property management, facility management, talent acquisition, payroll and physical security, currently serving Banco de Bogotá, Banco de Occidente, Aval Valor Compartido, and Gou Payments. Other entities will be incorporated in the coming months. A second wave to be launched next year will focus on operational synergies, particularly in back office banking processes and IT synergies such as cloud, data center operations, and optimization of our physical channel network. Some of the key achievements in 2025 are 40% reduction in procurement cycle time, 50% simplification of active contracts, and we also launched the Aval Real Estate portal, and we could by 2/3 the commercialization times for other real estate owned. In cybersecurity, we designed the cybersecurity synergy strategy, prioritizing the security operational center, SOC and the centralization of the critical tools. The SOC service points coverage increased from 16 to 23 connected companies. We also launched the Aval talent portal that will reduce 20% in real time to hire. Finally, talking about ATMs and banking agents, we are the first to implement Near Field Communication, NFC technology in Colombia, and we developed also a machine learning model to optimize coverage of Aval Bank's physical service points. Thank you all for your attention. Maria Lorena.

Thank you, Jorge. Last year, we announced the acquisition of Corficolombiana share in the trust company and the broker deal, and we launched Aval Fiduciaria while simultaneously creating Aval Investment Banking. We are now moving into the second phase by integrating the trust funds, trust state and fidiciary, separation of Fiduciaria Bogotá, Fiduciaria Occidente, Fiduciaria Popular into Aval Fiduciaria. With this strategy, Aval further expanding its leadership in the asset and wealth management business in Colombia and abroad. Now I invite Jorge Castaño, our VP, to share with you our advancements and perspective in the Aval Asset Management business. Jorge?

Thanks, María Lorena, and good morning, all of you. As María Lorena mentioned before, this operation is part of our extended corporate strategy aimed at improving operational efficiency, diversifying revenue streams and strengthening our competitive position in key markets as the non-banking financial services. The initiative is expected to deliver meaningful financial and operational benefits over time, supporting sustainable growth and resilience in an evolving economic environment. Aval Fiduciaria is set to become the largest fiduciary in Colombia by assets under management with COP 201 trillion and the leading institution in fee income with 21% of the market share. The company will oversee more than 5,500 trust funds and diversify our range of products and services, serving retail, small and medium enterprise, corporate and institutional clients. Through Aval Casa de Bolsa, we will strengthen our capabilities in fixed income, equities, derivatives, and FX markets, enhancing long-term value creation and consolidating our leadership in the Colombian financial sector. Next year, Aval Fiduciaria will continue to strengthen its position in the fiduciary market. We expect to increase our share of total industry fees and consolidate our position as the #1 player. In 2026, fee income is projected to grow around 13.2% versus 2025, exceeding COP 635 billion, [indiscernible]. We also expect tailwinds from deepening of the commercial model with Banco de Bogotá and Banco de Occidente and implementation of the new integrated commercial model with our other banks. By business line, we are targeting funds fee growth of 20%, explained by increase in assets under management, well above the sector's expected 12.7% and administration growth of 15.4% compared with 7.1% for the industry, supporting our ability to capture superior value in 2026. This transaction will also unify fiduciary risk management policies and operational processes and importantly, enhance commercial synergies across our other business segments. In addition, we expect to capture cost efficiencies in the medium term. We are working to strengthen Aval Fiduciaria's product portfolio and customer service. We will have an integrated commercial model in coordination with our 4 banks across the country as well as with Porvenir and Aval Casa de Bolsa. Their offering also incorporates cash management solutions and offshore investment access via digital platforms and corresponding agreements in Panama and the USA. The integration also accelerates the rollout of enhanced digital investment channels, enable better penetration across retail, small and middle enterprise and corporate clients and supporting a materially higher distribution capacity across Grupo Aval's client base. The transaction has already received regulatory approval by the financial superintendents and the required corporate approvals are expected to be received by month end. We aim for Aval Fiduciaria to start operation as a single company with unified clients facing challenges by January 2, 2026. That's all from me for now.

Thank you, Jorge. Now Paula will go over our sustainability achievements for this quarter. Paula?

Thank you, María Lorena, and good morning, everyone. The most relevant sustainability highlights for Grupo Aval in the quarter includes the definition of our sustainable strategy with a vision that further connects our business goals to our ESG impact. We call it sustainable ROE, R for returns with purpose, O for opportunities for all, and E for environmental value. Across all three pillars, we have defined specific goals and actions in close collaboration with our entities. Starting with our returns with purpose pillar, this quarter, all our entities participated in the CSA assessment of the Dow Jones Sustainability Index. Results will be released at the end of the year, but preliminary scores already reflect significant progress compared to global industry leaders. During the quarter, we also received several recognitions for our sustainability achievements. Banco de Bogota, Corficolombiana, and Promigas were included by [indiscernible] Colombia among the 50 leading companies in sustainability for this year. Additionally, the Global Compact Network Colombia announced the Sustainable Development Best Practices Award where Banco de Bogota, Corficolombiana, and Promigas won in five different categories: gender equality, climate actions, reduced inequalities, and decent work, and economic growth. In terms of sustainable finance, we continue to achieve strong results. Our sustainable portfolio reached COP 35 trillion with 78% representing our social portfolio and 22% our green portfolio. In line with our commitment to the energy transition and the development of resilient infrastructure in Colombia, we have consolidated our position as a leading player in the structuring and financing of major projects nationwide. Under the leadership of Aval Banca de Inversión, Banco de Bogotá and Banco de Occidente participated in the financing of the [indiscernible], a landmark infrastructure project connecting [indiscernible] with the Porto International Airport expected to generate over 2,000 direct jobs. Additionally, Grupo Aval led the COP 1.9 trillion refinancing for the [indiscernible]. We're also leaders in financing of social projects that incorporate more than 800,000 panels, expanding clear energy generation and strengthening the country's renewable infrastructure. Moving to the opportunities for all pillar, quarterly highlights include our participation in the Vamos Pa’lante 2025 campaign led by University of Los Andes and W Radio to support young people from vulnerable backgrounds to complete their university studies. All of our entities, branches and ATMs are open for donation to the campaign, which is expected to benefit 1,200 students through university scholarships. Our entities also continued advancing social programs focused on financial inclusion, education, SMEs and productive projects. Our progress on diversity, equity, and inclusion was also recognized by [indiscernible] ranking, where three of our companies were ranked among the top 10 in Colombia in their categories. Regarding our flagship social initiative, Misión La Guajira, we continue delivering on our commitment. Since its launch 1.5 years ago, we have brought water, energy, and connectivity to vulnerable communities, benefiting more than 21,000 people and 3,000 families across 80 communities. On the environmental balance front, during this quarter, we defined Grupo Aval's climate strategy, which establishes a comprehensive road map to strengthen the management of risks and impacts associated with climate change. The strategy adopts IFRS 2 guidelines and TNFD recommendations in line with the financial superintendence of Colombia's regulation with clear goals to reduce emissions by 51% by 2030 and to promote carbon neutrality by 2050. We reaffirm our commitment to a low-carbon economy aligned with the Paris Agreement and Colombia's National sustainability objectives. It is also worth noting that beyond our entity's individual progress [indiscernible] became the first bank in Latin America to report under the TNFD standards, assessing the impact of its operational nature. In conclusion, we continue delivering across all ESG dimensions, remaining firmly committed to achieving a sustainable ROE, proving that profitability and sustainability are not competing goals for two sides of the same vision, creating lasting value for people, for the planet and for the country. Thank you.

Thank you, Paula. Now moving to the macro environment. Let me share some key trends affecting our business. Monthly data indicates that in the third quarter, the Colombian economy continued to perform positively, primarily driven by increased household demand. The main sectors driven growth remain public administration, entertainment and e-commerce. Looking ahead, we expect GDP growth of 2.7% in 2025 and 2.8% in 2026. This inflation has stalled. Inflation reached 5.1% in October, surpassing the 2024 year-end figure of 5.2%. We now expect inflation to close at 5.3% in 2025 and 4.2% in next year. This view incorporates an upward pressure in the coming months, particularly driven by ongoing minimum wage discussions. The fiscal environment remains challenging. The government approved the 2026 national budget at COP 546.9 trillion. However, this lacks a clear path back to the fiscal rule suspended this year. Analysts project a fiscal deficit of minus 7.5% of GDP in 2025, worse than 7.1% forecast in the medium-term fiscal framework. In September, the Central Bank kept its policy rate unchanged at 9.25%, maintaining a cautious stance amid persistent inflationary pressures. We expect rates to remain steadily through early 2026 with cost begins in the second quarter of 2026, ending the year at 8.25%. Camilo will now elaborate on our economic outlook. Camilo?

Thank you, María Lorena. Good morning to all attendees. In the third quarter, the Colombian economy extended its upward trend to such an extent that annual growth rate is estimated to be around 3% for this quarter, a high since 2022. Domestic demand continued to explain its strong performance of local activity. Consumer companies returned to positive territory and has now been trending upwards for more than 2 years, while the national unemployment rate reached its lowest level ever for a third quarter, averaging 8.5% -- coupled with solid household income, both from employment and unemployment sources, Colombians continue to increase their consumption, especially of goods, which has also been supported by credit. Consumer loans reached their highest annual growth rate since 2023 in the third quarter. Furthermore, the increased domestic demand has also been supported by a high influx of tourists with more than 7 million visitors so far this year through August, a record high. For its part, government current and investment spending grew in real terms by more than 3% in the third quarter, also supporting economic activity. In this context, the best-performing economic sectors continue to be those most dependent on demand from both residents and nonresidents as well as the public sector, such as commerce, entertainment, transportation, accommodation, manufacturing, food services, and finance. On the export side, the best results are seen in coffee, processed foods, gold, bananas, and textiles, especially leather, which offset the decline observed in oil and coal exports. Regarding investment, the persistent lag in construction, especially buildings continues to hinder the sector's potential improvement, which is only supported by civil works, machinery, equipment, and biological resources investment. The investment recovery could improve after 2026 elections if uncertainty dissipates. Given this context, but acknowledging global risks and the local electoral cycle, the 2025 growth projection remains at 2.7%, close to the potential level and higher than the figures for 2023 and 2024. For 2026, the economy could improve to 2.8% growth. Turning to prices. This inflation process stalled in the third quarter with inflation reaching 5.2% in September, the same level as the year-end figure for 2024. In October, inflation increased to 5.5%. Inflationary pressures have persisted in food due to higher input costs, goods due to increased domestic demand, and non-rental services due to higher labor costs resulting from the minimum wage adjustment, the implementation of the labor reform and the reduction of the working hours per week. In this scenario, inflation is expected to end 2025 around 5.3%, above the 2024 level. As a consequence and pending the definition of the 2026 wage, the Central Bank has kept its benchmark interest rate stable at 9.25%. This level could remain for much of 2026 if inflation and its expectations do not show significant improvement. For the time being, interest rates remain restricted as the Central Bank acknowledges this, especially for investment. While for households, a limited impact is expected since the positive trend in consumption is based mainly on resources other than credit. On the fiscal front, favorable global financial conditions for emerging economies, debt management operations and stronger normal GDP growth will reduce interest payments to between 3.2% and 3.8% of GDP compared to the 4.7% of GDP projected in the medium-term fiscal framework. However, the primary deficit, which excludes interest payments, will approach historical highs, exceeding 3% of GDP and above the 2.4% projected for the world. If this occurs, the deficit will only be surpassed by those observed during the local crisis at the end of the 1990s and the pandemic. Despite the challenging state of the public finances between the end of June and September, the exchange rate fell from COP 4,102 per dollar to COP 3,970 per dollar, following the global weakening of the dollar. Furthermore, the government's monetization of dollars obtained from operations with international banks, the total return swap and external bond issuances led the Colombian peso to become the best performing currency in Latin America. Given that the government still has dollar excess balances and expects to issue new bonds for up to COP 5 billion and obtain direct credit from international banks for up to $1 billion, monetization will continue to impact the exchange rate. Ultimately, these flows would offset the effects of electoral uncertainty, which is expected to increase as the elections approach. Finally, the current account deficit is expected to widen from minus 1.8% of GDP in 2024 to minus 2.6% of GDP in 2025, driven by a stronger recovery in imports than exports, both in goods and services where terms of trade would be affected by lower commodity prices. It is important to note that for the first time ever, remittances surpassed oil exports as the economy's main source of foreign currency. This further strengthens the diversification of the export basket. To sum it up, it is important to highlight that we are currently at the beginning of the congressional and presidential elections, which will be held in the first half of 2026. It is too early to draw conclusions about the election results, but the economic scenarios are based on the expectation that Colombia will have a government that will need to be more fiscally disciplined, promote private investment by reducing uncertainty and generally make public policy decisions that promote economic growth. That will be all for my part.

Thank you. Thank you, Camilo. Moving to financial results. Our financial performance continued to improve with net income for the quarter reaching COP 521 billion, resulting in an 11.5% return on equity. The improvement throughout this cycle has been driven by consistent positive trends in the core business metrics of our banking segment. In addition, Porvenir was a strong contributor to our quarterly results. Gross loans and deposits grew 2.1% and 0.4% over the quarter, reaching 4.6% and 8.5% over 12 months. Consumer loans had the strongest quarterly growth in 10 quarters at 1.5%. As we had anticipated in our last call, commercial loan dynamics recovered significantly, growing 2.1% during the quarter. The strong performance in commercial lending includes benefits from the joint efforts of our banks with Aval Banca [indiscernible]. Peso-denominated commercial loans grew 3.1% over the quarter, the fastest pace in the last 8 quarters. Given our exposure to U.S. dollar-denominated loans, the 3.6% appreciation of the peso over the quarter had a negative impact on growth metrics. Our net interest income grew 11.6% to COP 2.9 trillion during the quarter, while our net interest margin improved to 4.3%, incorporating a consolidated NIM on loans of 4.6%. 90 days PDLs were 3.7%, the lowest level since the fourth quarter of 2022. Our cost of risk for the quarter was 1.9%. During the quarter, our investment portfolios performed well, driving NIM over investment. The performance of Porvenir's stabilization reserve during the quarter was struck. Now I would like to pass the call to Diego, who will give you our results. Diego?

Thank you, Maria Lorena. I will start on Pages 12 and 13 with a few charts showing the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are on consolidated figures under Colombian IFRS as published by the Superintendency of Finance. Starting on Page 11 for the 12 months ending in August 2025 commercial loans and mortgages for the system grew 0.8% and 5.8% in real terms, while consumer loans contracted 2.4% in real terms. Year-on-year, our Aval Banks gained 56 basis points of market share in consumer loans, 188 basis points for mortgages and last 77 basis points in commercial loans. This yielded year-on-year market share losses of 9 basis points in total loans. For the last 3 months, loans grew 1.6% in the system. This market growth begins to show signs of recovery, considering a 0.8% partly inflation. Mortgages grew 2.8% and commercial loans, 1.1% in nominal terms over the quarter, while consumer loans maintained their growth trajectory with 1.7% increase for the quarter. On Page 12. Loan quality for both the system and the Aval Banks showed an improvement during the quarter in most loan categories. Our banks continue to exhibit better loan portfolio quality than the system in gross loans, mortgage loans and consumer loans. I will now move to the consolidated results of Grupo Aval under IFRS. On Page 13, assets grew 7.2% year-on-year and 2.4% over the quarter to COP 344 trillion. Fixed income investments, which account for 17% of our assets reached COP 58 trillion, growing 24% year-on-year and 9.3% during the quarter. Gross loans, which account for 59% of our assets reached COP 203 trillion, growing 4.6% year-on-year and 2.1% over the quarter. Growth metrics were affected by the 3.6% appreciation of the Colombian peso spike during the quarter and 6.1% over 12 months. This peso appreciation reduced gross loan growth in 1.1 percentage points year-on-year and 0.6 percentage points quarter-on-quarter. Peso-denominated loans that account for 84% of gross loans grew 6.1% year-on-year and 2.8% during the quarter. While dollar-denominated loans, which account for 16% of gross loans grew 3.4% year-on-year and 1.8% in the quarter in dollar terms. Given the appreciation of the Colombian peso, our dollar-denominated loans contracted 2.9% year-on-year and 1.8% quarter-on-quarter in peso terms. Although retail loans continued to drive our growth, commercial loans have shown positive signs for the quarter. Consumer loans grew 4.1% year-on-year and 1.5% in the quarter. [ Gross ] loans growth continues to recover, increasing 4.4% year-on-year and 1.1% during the quarter. While personal loans grew 7.6% year-on-year and 4% during the quarter. Auto loans 1.9% year-on-year and 0.1% during the quarter; and finally, credit cards contracting 3.4% year-on-year and 0.4% during the quarter. Mortgages where we continue to be underweighted grew 18% year-on-year and 3.5% over quarter. Finally, commercial loans expanded 2.2% year-on-year and 2.1% during the quarter, this incorporates a negative impact of the peso appreciation of 1.4 percentage points year-on-year and 0.8% quarter-on-quarter. We expect our 2025 loan growth to be in the 4.5% area incorporating a negative effect of the peso appreciation on a dollar-denominated loans. On Page 14, we present the evolution of funding and deposits. Total funding increased 8.1% year-on-year and 2.9% during the quarter. Total bank borrowings grew 19% year-on-year, in line with the expansion of our investment portfolio and account for 8.8% of total funding. Deposits that account for around 3/4 of our funding grew 8.5% year-on-year or 0.4% quarter-on-quarter. Our deposits to net loan ratio closed at 109%. On Page 15, we present the evolution of our total capitalization, our attributable shareholders' equity and the capital adequacy ratio of our banks. Our total equity increased 2.9% in the quarter and 5.6% year-on-year, while our attributable equity increased 3.7% during the quarter and 5.9% year-on-year. Total solvency and Tier 1 ratio evidenced an increase in all of our banks. On Page 16, we present our NIMs. Net interest income reached COP 2.9 trillion, increasing 20.6% year-on-year and 11.6% during the quarter, driving -- driven by the strong performance of our trading investment income. Part of the quarterly net interest income was offset by hedging and derivatives that I will comment later, when covering other income. Total NIM increased 35 basis points to 4.35% quarter-on-quarter. Our consolidated NIM on loans expanded 21 basis points year-on-year and contracted 6 basis points during the quarter to 4.4%, while NIM on investments improved to 4.13%. NIM on loans incorporates a 60 basis points year-on-year expansion of NIM on retail loans to 5.9% and a 13 basis points year-on-year contraction of NIM on commercial loans to 3.28%. Focusing on our banking segments. The NIM on loans was 4.88%, materially stable year-on-year. This incorporates a 41 basis points year-on-year increase in NIM on retail loans to 6.4% and a 39 basis point year-on-year decrease in NIM on commercial loans to 3.72%. The total NIM of our banking segment expanded 17 basis points from the quarter to 4.74% due to the same dynamics that affected our consolidated NIM. On Page 17, we present our yields on loans, cost of funds and spreads. On a consolidated basis, the average yield on loans for the quarter decreased 2 basis points quarter-over-quarter to 11.7%, while the average 3-month IBR fell 6 basis points to 9.2%. Our consolidated cost of deposits remained relatively flat during the period, while our cost of funds slightly increased by 7 basis points quarter-on-quarter to 6.83%. The increase in the cost of funds is mainly attributable to a higher repo position related to our fixed income business. Finally, the Central Bank CapEx policy rate unchanged at 9.25% throughout the third quarter and a persistent inflationary pressures. We expect this level to remain over the following few quarters with rate cuts beginning by the end of 2026. On Pages 18 through 20, we present several loan portfolio quality ratios. Starting on Page 18, loan pay portfolio quality further strengthened during the quarter. PDL metrics continued to improve in all categories. 30-day PDL formation for the quarter reached COP 1.083 trillion, 23% lower than for third quarter 2024. 30-day PDLs were 4.64%, a 17 basis points improvement over 3 months and 113 basis points improvement over 12 months. 90-day PDLs were 3.37%, a 15 basis point improvement in the quarter and a 93 basis point improvement over 12 months. Commercial 30-day PDLs were 4.29% and 8 basis points improvement quarter-on-quarter and 110 basis points year-on-year. 90-day PDLs were 3.69%, an 18% improvement over the quarter and 105 basis points over the year. Consumer 30-day PDLs improved 39 basis points for the quarter and 136 basis points year-on-year to 4.68%, while 90-day PDLs improved 13 basis points during the quarter and 84 basis points year-on-year to 2.71%. Mortgages 30-day PDLs and 90-day PDLs improved 2 basis points and 5 basis points, respectively, over the quarter. Finally, the ratio of charge-offs to average 90-PDLs was 0.71x. On Page 20, coverage measured as allowances for Stages 2 and 3 as a percentage of Stages 2 and 3 loans was 31.9%, increasing 38 basis points relative to a quarter earlier. The shareable portfolio classified as Stage 1 grew to 89.1%, while Stage 3 fell for a fourth consecutive quarter to 5.8%, driven by improvements across all portfolios. On Page 20, cost of risk net of recoveries slightly increased this quarter to 1.9% in line with our expectations for the year. We expect 2025 cost of risk to be in the 1.9% area. Cost of risk net of recoveries from consumer loans improved 33 basis points to 3.9%. This includes a 41 basis point improvement in personal loans and to 7.7% while cost of risk for payroll loans was 1.9%. Cost of risk net for commercial loans was 1%. On Page 21, we present net fees and other income. Gross fee income grew 11.8% year-on-year and 7.5% quarter-on-quarter. Net fee income increased 11.5% and 8%, respectively, over these time periods. Both pensions and trust fees increased over the quarter due to high performance-based management fees driven by positive returns on financial markets. Banking fees increased 4.7% above growth -- loan growth. Our income from the nonfinancial sector was 88% of that reported in third quarter 2024 due to lower -- a lower contribution from the infrastructure sector. Finally, on the bottom of the page, the quarter-on-quarter decrease in operating income is mainly driven by derivatives and FX losses of COP 211 billion. These were mainly explained by hedging strategies of trading income in around our fixed income instruments. On Page 22, we present some efficiency ratios. Cost to assets for the quarter was 2.7%, including 9 basis points relative to a quarter earlier and increased 9 basis points year-on-year. Our quarterly cost-to-income improved 124 basis points to 50.7% over the quarter driven by the positive performance of our NIM. Quarterly expenses fell 1.4% quarter-on-quarter and grew 10.3% year-on-year. General and administrative expenses fell 0.8% quarter-on-quarter and reached 16% year-on-year. The year-on-year increase was driven by operating taxes, which account for 26% of this category and explain 7.9 percentage points of the year-on-year growth in administrative expenses. Personnel expenses grew 1.4% over the quarter and 4.8% year-on-year, well below the 9.5% increase in Colombia's minimum wage. Finally, on Page 23, we present our net income and portfolio ratios. Attributable net income for the quarter was COP 521 billion or COP 21.9 per share, increasing 25.3% relative to the third quarter of 2025, the highest since second quarter 2023. Our return on average assets and return on average equity for the quarter were 1% and 11.5%, respectively. I will now summarize our general guidance for 2025 and 2026. For 2025, we expect return on average equity to be in the 10.5% area with loan growth in the 4.5% area with commercial loans growing in the 2% area and retail loans growing 8.5% area. This incorporates an expected negative impact of the peso appreciation of 2 percentage points on commercial loan growth. We expect our consolidated NIM in the 4% area with NIM on loans in the 4.5%. NIM of our banking segment in the 4.6% area with NIM on loans in the 5.1% area. Cost of risk net of recoveries in the 1.9% area cost of assets in the 2.75% area, income from the nonfinancial sector of 85% for that of 2024 and fee income ratio in 21%. Now moving to our initial view for 2026. We expect loan growth in the 8% area with commercial loans growing at 7% in retail loans growing at 9%. Total NIM in the 4.3% area with NIM on loans in the 5.2% area. NIM of the banking segment is the 5% area with NIM on loans for banking segment is in the 5.6% area. Cost of risk net of recoveries in the 2% area cost to assets in the 2.8% area, income from the nonfinancial sector of 1.3x that for 2025, a fee income ratio of only 1%. Finally, we expect our 2026 return on average equity to be in the 12.5% -- in the 12% to 12.5% range.

Thank you, Diego. Finally, looking ahead, 2026 will be challenging for Colombian businesses, particularly during the first part of the year. The electoral cycle will bring political uncertainties that can be expected to bring volatility in the financial markets and delay investment decisions. In addition, the market consensus anticipates a high Central Bank real integration rate to prevail incorporate fiscal balance concerns and inflationary pressures due to a high minimum wage increase. Even though we recognize this to be a challenging environment, we remain positive for the continued recovery of the industry in which we operate. This view is supported on expectation of a sustainment sustained expansion of economic activity, a stable labor market, a slight improvement in asset quality, a reduction in average cost of funds relative to the year and opportunities for further banking penetration resulting from the introduction of Bre-B. In addition, we are working hard and focused on unlocking fundamental value supported on our strategic pillars. First, we expect to improve our presence in loans and deposits in the retail segment adding to the segment and businesses where we already lead, which will result in improvement in NIM and further growth. We continue working on improving the alignment of the strategy and the culture of our banks around a more client-centric experience further differentiation in target segments and products of each one of the business units as well as the redesign and centralization of key processes in Aval Valor Compartido, APC. We expect these elements to translate into a better customer experience, shorter innovation cycles and time to market and more competitiveness in our cost structure. We are committed to having a positive impact on the community and those we serve without losing focus on commercial and financial performance. Finally, regarding year-to-date share price performance, the price of our preferred shares has increased by 82%, 1.6x that of the [indiscernible]. Our ADR increased by 116%, 10.3x that of the Standard & Poor's 500. We are evaluating several options to further liquidity of our local shares and our ADR. On this front, we reached an agreement with JPMorgan. The depository bank of our ADR program to reduce by 80% the conversion cost of the issuance and cancellation of the ADRs in the United States. This measure will be effective starting next Monday, November '17 through next month and year April '17, 2026. So now we are open to questions.

[Operator Instructions] Our first question will come from the line of Brian Flores with Citibank.

The first question is more of a request. If you could repeat the guidance, I think you focus only on general loan growth and ROE for '25 and '26. It would be great. I try to catch it, but honestly, I have bad hearing. So apologies on that. On the second point, I wanted to ask you on the contribution from trading and other operating income. Do you think these levels are sustainable because we have seen good contribution from these lines in the second quarter and also in this third quarter. So just if we can think about these levels on a recurring basis. And my last question on your NIM profile. It seems the NIM on loans declining, but also the NIM in investments is increasing very healthily. So also, how recurring do you think this is?

Brian, I think those are great questions. Let me start with the easiest and just to recap our loan growth guidance. For this year, we are guiding to 4.5% with retail loans growing at 8.5% and 2% and that 2% includes a relevant negative impact of FX over our U.S. dollar-linked loans. For next year, we're guiding into 8% with a similar growth on the retail front, retail growing at 9% and commercial growing at 7%. 7% built in a seeing a combination of not having the negative impact and eventually having a positive income from FX and then reflecting growth over the past few months and I would say over the past quarters recovering on that front. Then I think questions 2 and 3 are linked and we're thinking on how to better transmit this to you guys. On the training front, you have to read 3 lines, when you look at our numbers. You have to look at what is happening in net interest margin, what is happening on the trading income and what is happening on the derivatives front. That's why I emphasized during the call that we had a negative effect from derivatives that affected the results and the fixed income front. What I'm gearing to is when you take into account those lines, our performance has been strong. However, given that we are conservative there and we go hedged, we are trying to lock in the kind of returns that we're looking into. The area where we had an upside during this quarter was we had a very strong performance from Porvenir. We expect to continue seeing positive performance from Porvenir, but this was a particularly strong quarter. So all in all, that is going on in the numbers. And the other question that you asked regarding the trends of peso of loans and investments having built an effect of having grown our fixed income portfolio that is in a relevant portion financed with repos. So we didn't want to change our methodology. But if you earmark the cost of those repos to fixed income, you see a better performance on the loan side, however, for comparability. We didn't want to move things around in each one of the quarters. To try to -- to get to the substance of your question, what we're seeing is we are seeing an improvement in pricing of loans and actually something that is built into our guidance is we are working on improving our mix, both on the asset side and on the liability side. So you see in the guidance, we are guiding into a better number for NIM for next year, but also a slightly worse number on the cost of risk side that what that is doing is it's bringing in that we've been growing more on some of the products that we haven't grown in the past, and we're making a richer mix on the asset side. We're doing basically the same on the liability side, where we're growing our deposits from the retail base from individuals that is helping us progressively and is built into those numbers. So bottom line, we are positive on the evolution of NIM. It's still shy of what were the stable numbers we used to run on before we saw this long cycle because of the Central Bank policy. But a lot of this is growth that is not dependent on Central Bank policy, what we're building in our numbers. Sorry for the long explanation, I think your questions were very relevant to understand how we're looking into the future.

No, it was very helpful. If I can, just a very quick follow-up. Can you repeat please the levels of cost of risk and ROE for both '25 and '26?

ROE for this year, 10.5% area and for next year, 12% to 12.5% range. And cost of risk for this year, 1.9% and for next year, 2%.

Our next question will come from the line of Diego Marquez with JPMorgan.

So just a quick follow-up there on asset quality. So we're seeing most metrics improving cost of risk down at 1.9%, similar to what you guided. Just to get a sense on what you [indiscernible] to reach and what you expect going forward? And also a quick question on coverage. So we saw stable 90-day NPLs ratios of 130%. So what level should we work with going forward? Do you expect this to continue?

Could you repeat your second question? I'm sorry, I'm not sure I caught it.

Yes. Just on coverage. So we saw levels of 130% it has been stable for the 90-day NPLs. So just going forward, what level should we expect?

Okay. And your first question, I have to be shortsighted on the answer to this one because it's very macro dependent. For next year, we're looking in this area of cost of risk that built in that we're closer to ending the cycle of recovery. So that's why we are not including any substantial improvement or any relevant improvement in cost of risk as a measure. It depends very much on how further years look like, what our sustainable costs of risks would look like. But -- what this built in is a growth, shy of 3% for GDP in Colombia, a stable labor market and a slight reduction in rates by the end of next year that should support that kind of level with a change in mix towards these kind of assets that I mentioned before then the coverage side is very much mechanics and how you provision under full IFRS. So it's not a target. It's a result -- it depends on how our different stages are behaving, therefore, what kind of provisions we're making and our write-off policies. So this basically is destroying that I would pay much more attention on a new PDL formation, where you can anticipate how things are going to evolve into the future where the trend has been consistently positive for our banks.

Our next question will come from the launch of Daniel Mora with CrediCorp Capital.

I have a questions. First 1 is regarding OpEx and efficiency ratios. How should we think about the synergies coming from a Valor Compartido. What will be the targeted efficiency ratio and the potential impact on ROE in 2026 and the years ahead, because if I'm not mistaken, it seems that the guidance of cost to assets suggest an increase from 2.5% to 2.8%. I would like to understand if OpEx will be in line with inflation or above or below? That would be my first question. And the second 1 is very short, is I would like to understand the impact on interest expenses this quarter, especially the interbank borrowings. I would like to know what was behind that? And if this is one-off or should we expect a similar impact going forward?

Okay. Starting with your last question, I think that's in the line of Brian's question. What we've been doing over the past few quarters is we've been increasing our position in FX and that position is being financed with repos and that's what is driving our repo position. So it has a repo financing that investment in securities plus the derivatives on top where we're locking in some of these results. So the reason why you see more expenses, there is more volume that's the key driver, tied to a larger positive carry on the other side of the balance sheet. Then regarding OpEx, Colombia is facing pressure for next year on the inflation side. We've built into our numbers, a minimum wage increase that could be in the order of 11%. So when you start out with loan growth, that is in the 8% area, and you into account that you have a minimum wage plus inflation ending year at 5.3%, you have a pressure on expenses that begins there. Then the other part of your question, I think, is that the most reliant thinking to the future and it says, we've only begun to work on the Aval Valor Compartido initiative. We started with admin processes. Those processes are being implemented. There are some restructuring costs associated to those that delay in some way, when you start seeing the net result what is being done there. However, as Jorge Otalvaro mentioned, we have a large aspiration there, and we're moving into our next phase where we're going to touch on back office and operational process over next year. And when we have additional information there we can touch back on that to give you a better idea of what we expect to achieve.

And there are no further questions at this time. Ms. Maria Lorena Gutierrez Botero, I turn the call back over to you.

Okay. Thank you to your attendance on today's conference call. This is the last time we meet in 2025. So see you next year. And I wish you all a happy holiday season. Merry Christmas, Happy New Year. So thank you for being with us.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.

Welcome to Grupo Aval's Second Quarter 2025 Consolidated Results Conference Call. My name is Regina, and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A. (“Grupo Aval”) is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulations. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval financial conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with Colombian IFRS as reported the Superintendency of finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as “may,” will,” “should,” “expects,” “plans,” “anticipates,” “believes, estimates,” “predicts,” “potential,” or “continue,” or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general economic and business conditions, changes in interest and currency rates and other risk described from time to time in our filings with the Registro Nacional de Valores y Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review update or correct the information provided in this report, including any forward looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. [Operator Instructions] With us today are Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer; Mr. Diego Solano, Chief Financial Officer; Ms. Paula Durán, Corporate VP of Sustainability and Strategic Projects; and Mr. Camilo Pérez, Banco de Bogotá's Chief Economist. I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Ms. Maria Lorena Gutierrez Botero, you may begin.

Thank you very much. Good morning, everyone, and thank you for joining us for our second quarter 2025 conference call. I am here with Diego Solano, our CFO; Camilo Pérez, Chief Economist of Banco de Bogotá and Paula Durán, Corporate VP of Sustainability and Strategic Credit. Let me start. During the first half of the year, we reached a net income of COP 856 billion, 1.7x higher than in the first half of 2024. Net income for the quarter was COP 494.9 billion, the highest quarterly figure in 3 years, growing 37% over the quarter and 142% over the year. Results of our banking segment continue consolidating positive trends in core business metrics. Our net interest margin reached the 4% level for the first time in 3 years with our consolidated NIM on loans at 4.5%. This level of NIM on loans [Technical Difficulty] that we have in the third quarter of 2022. At that time, the average Central Bank stood at 8.83% relative to this quarter's average of 9.3%. The cost of risk for the quarter was 1.7% and yields were 4.81%, the lowest level since the first quarter of 2023. Gross loans grew 3.2% year-over-year, while deposits grew 6.8%. Loan growth dynamics have been softer than we initially anticipated. However, activity has picked up in June and July. Our bank's deployed plans supported growth during the second half of the year, particularly in commercial loans working closely with Aval Banco in Brazil. During the quarter, our investment portfolio performed well, driving an expansion in NIM on investments. The performance of Porvenir stabilization reserve positively contributed to this quarter's results. Now regarding the progress of our strategic priorities, I'd like to highlight a few areas. Our banks have continued working on improving their deposit mix toward retail funding. The share of peso-denominated deposits held by individuals improved during the quarter from 16.7% in the first quarter of this year to 18.2% in the second quarter of 2025. Regarding the payment business, we continue complementing our offer of products and services to individuals and companies through [indiscernible] payment, recently authorized by the Superintendency of Finance as a low-value payment management entity, both for instant payments and traditional payments. This will allow us to accelerate the design and go-to-market to value-added products for our current and potential customers. We are on the track to adopt [indiscernible], the Central Bank instant payment system when it starts operating in September. We have already been certified to [indiscernible] in the centralized directory and in process to be certified for transaction [indiscernible]. On the synergies and efficiencies front, we conducted an analysis of the potential synergies between the processes of Grupo Aval entities. As a result, the first wave of implementation will continue through the second half of the year, focusing on 7 key areas, procurement, talent attraction and selection, payroll management, property management, facility management, physical security and physical challenge management. In the procurement front, we implemented a procurement synergy center, which seeks efficiency, economies of scale and a more competitive and sustainable value chain. This center will operate on an spending base of COP 4.3 trillion, 4,200 contracts and COP 16,000. We expect to capture efficiencies that will result in initial savings more than 10% of a COP 2.1 trillion manageable spending base and a reduction in contracting time of 40%. In talent attraction and selection, we will build a talent management center for Grupo Aval, which will allow us to attract the best talent, accelerate onboarding processes and promote internal mobility. As a significant milestone, next month, we will launch a digital employment platform that will become the largest job opportunity for us in the country. In payroll management, centralization will not only generate operational efficiencies, but also allow us to deploy people and analytics practices across the board. This will give us an integrated view of talent, facilitate identification of trends at the corporate level and improve data-driven decision-making. With this, we would be able to anticipate risks such as talent attrition, risking and killing needs or drops in productivity, among others. This has already been implemented by [indiscernible] Banco de Bogotá and will be rolled out during the year direct to our other 3 Colombian banks. Now I will invite Paula to go over our ESG achievements for this quarter. Paula?

Thank you, Maria Lorena. This quarter, Grupo Aval made significant progress in advancing our ESG agenda. We updated our double materiality assessment with input from 280 stakeholders, identifying 10 priority topics, including economic development, cybersecurity, innovation, sustainable finance, corporate governance, social impact and climate change. Annual goals in these areas are now under review to ensure full alignment with our strategy. In terms of corporate governance, we had significant development. For the first time, we held a joint meeting with the Board of Directors of Grupo Aval and its subsidiaries. The event brought together more than 130 directors for 2 days in May to address global and local challenges, share perspectives and foster collaboration. A key milestone during the event was the launch of the Aval Board of Directors guideline, a guidance framework for good governance, setting principles regarding the roles of Board members, effective and efficient Board management and Board evaluation. We also updated our corporate policies, guidelines and codes, aligning them with international standards and best practices in corporate governance. These updates reinforce the compliance with Colombia's regulatory framework and reaffirm our commitment to ethical transparency and sustainable management. They also sent clear messages to our entity regarding the minimum standards expected in their ESG management. In environment, our entities advanced in implementing the TCF framework supported by global consultancy, ERM, enabling stronger climate risk management and target setting. We also expanded sustainable mobility initiatives with over 5,700 employees adopting low emission transport, avoiding 300 tons of CO2 emissions. In terms of social impact, we fostered collaborative action in the municipality of Ambalema. [indiscernible] joined efforts to promote sustainable tourism, education and sports, while Banco de Bogotá, the financial education initiative positively impacting nearly 500 community members. In addition, we continue delivering on our commitments under the Nisóaajir initiative with 6 new water purification plants reaching a total of 81 communities now benefiting from social energy solutions. We also enabled free Internet [indiscernible] stones and announced new strategic partnerships with Claro Colombia, providing free connectivity to over 70 communities, the government of La Guajira, National Civil Registry and UNICEF, among others. This quarter, we participated in [indiscernible], the largest diversity and inclusion firm in Latin America, offering more than 1,000 job opportunities and contributing to the academic agenda with the participation of Grupo Aval's leaders and HR teams from our entity. Our entities was also recognized among the top 10 of the 2025 ranking of inclusive organizations in Latin America by the Chamber of Diversity. We remain committed to ensuring that ESG is not just a component of our strategy, but a driver of long-term value creation for our stakeholders. Thank you.

Thank you, Paula. Now on the macro side, let me share some relevant developments during this quarter. High frequency data indicates that in the second quarter of the year, the Colombian economy continued to perform positively, driven by increased household demand. The main sectors driving growth remain public administration, entertainment and commerce. For this year, we expect the economy to grow by 2.7%. Inflation reached 4.9% in July 2025, driven by service prices as indexation is still high in rents and other services are pressured by the elevated increase in minimum wage. We estimate that inflation will close this year around 4.9%. Despite the positive inflation outlook, the country's fiscal outlook was driven the Central Bank's policy rate. In July, the Central Bank opted to keep rates unchanged at 9.25%, maintaining a cautious stance due to both external and internal risks. We expect the Central Bank's rate to end 2025 at 8.5%. However, recent information would imply an upward pressure on this figure. The biggest challenge facing the economy is fiscal sustainability. In June, the government triggered the close of the fiscal growth and raised its fiscal deficit estimate to 7.1% for this year, 200 basis points above the original target that was 5.1%. Our estimates point towards a fiscal deficit closer to 8% of GDP. We anticipate pressure on short-term rates to stem from the Ministry of Finance liability management operations and underlying pressures on long-term interest rates to unfold in the upcoming months. Despite rising political noise in the pre-election year, we remain confident in Colombian's economic resilience and encourage the business sector to stay focused on executing their strategy. Camillo, welcome. Camillo will now elaborate on our economic outlook.

Thank you, Maria Lorena. Good morning. In the second quarter, household consumption continued to be the main driver of growth for the global economy. Despite growing domestic and external uncertainty, consumer confidence has reached highest level in 3 years, a situation that has supported domestic demand. This increase in household confidence has been supported by the strength of the labor market, where the unemployment rate reached its lowest level in almost 20 years. Furthermore, alternative sources of income have strengthen. Remittances reached a record high in the second quarter, while coffee and tourism exports continue to rise. In addition to higher incomes, household demand is now being leveraged by credit, which for the first time since 2023 grew during the second quarter. In this context, the best performing economic sectors continue to be those most dependent on private consumption, such as commerce, entertainment, transportation, lodging, manufacturing, food services and finance. Meanwhile, agricultural supply continued to rise due to lower input prices and favorable weather conditions. In fact, all other sectors with the exception of mining, construction and food services experienced an annual growth. In the case of mining and construction, progress in the implementation of public policy key to both sectors explain in part the weak performance. While construction investment in housing and infrastructure is lagging in second quarter, imports of machinery and equipment as well as corporate loans continue to rise, suggesting that the Colombian businesses amid high domestic demand have modestly expanded their investment plans. Given this favorable context by recognizing global risks and the uncertainty leading up to the election next year, economic growth of 2.7% is expected for 2025, close to potential levels and higher than those recorded in 2023 and 2024. Turning to prices. This inflationary process resumed in the second quarter as inflation fell from 5.1% to 4.8% between March and June, its lowest level since October 2021. In July, inflation picked up to 4.9% and no significant gains are expected by the end of the year, which is expected to slightly below 5%, once again, outside the target range set by the Central Bank. Meanwhile, thanks to gains in inflation and its expectations as well as a more complex and global environment towards emerging markets, the Central Bank cut its interest rate by 25 basis points to 9.75% in April. Accumulated gains in inflation and favorable global financial conditions are expected [indiscernible] Central Bank space to cut interest rates to around 8.5% by the end of the year. Nevertheless, recent inflation data in upward pressure on this figure and the Central Bank's move for rate cuts is not broader due to persistent fiscal challenges. In June, with the suspension of the fiscal rule, the government revised its assumed fiscal deficit of 2025 from 5.1% to 7.1% of GDP and for 2026 from 4.3% to 6.2% of GDP, the latter depending on the approval of a tax reform. Given this challenging outlook, Moody's and Standard & Poor's lowered the country's credit rating. The most significant decision came from Standard & Poor's, which not only assigned the country the lowest credit rating of the 3 rating agencies, [indiscernible], but also maintained its negative outlook. Despite the complex fiscal stance between March and June, the exchange rate went from COP 4,181 to COP 4,102 per dollar, following the global weakening of the greenback. In any case, the Colombian peso appreciated against the dollar by only 2% compared to an average of 6.5% for major Latin American economy. For the remainder of the year, the exchange rate will be volatile with competitive forces. As the dollar remains [indiscernible], the country risk premium could be affected by fiscal and electoral pressures. Furthermore, with a widening external deficit, the year-end exchange rate of around COP 4,200 per dollar is expected. Specifically, the current account deficit is forecasted to fall from 1.8% of GDP in 2024 to 3.6% of GDP in 2025 due to a stronger recovery in imports and exports, both in goods and services, where in terms of trade will be affected by lower commodity prices. This wraps up the macroeconomic outlook. Thank you. Back to you, Maria Lorena.

Thank you, Camillo. Given the economic outlook, let me say that we are pleased to report continued signs of recovery in the Colombian banking system. Loan demand has strengthened with growth in real terms turning positive for the first time in nearly 2 years. Cost of risk continues to trend downward, supporting improved profitability across the system. Only 6 out of 29 banks reported net losses as of May 2025 compared to 11 in the same period last year, highlighting a sustained improvement in financial performance. Now I would like to pass the call to Diego, who will give you details on our results. Diego?

Thank you, Maria Lorena. I will start on Pages 9 and 10 with the charts showing growth rates and quality of portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are on consolidated figures under Colombian IFRS as published by the Superintendency of Finance. Starting on Page 9, on the 4 months ending on May 2025, commercial loans and mortgages on the system grew 1.3% and 4.6% in real terms, while consumer loans contracted 5.1% in real terms. Year-on-year, Aval banks have gained 112 basis points of market share in consumer loans, 206 basis points in mortgages and lost 109 basis points in commercial loans. This yielded year-on-year 10 basis points lower market share in total loans. Our performance in commercial loans was driven by aggressive price competition in the market. Last 3 months, loans grew 1.7% in the system. Even though dynamics continue to show signs of recovery, real growth was stagnant considering the 1.7% quarterly inflation. Mortgages grew 2.3% and commercial loans 1.6% in nominal terms over the quarter, while consumer loans returned to growth with 1.3% increase for the quarter. On Page 10, loan quality for both the system and the Aval banks showed an improvement during the quarter for all loan categories. Our banks continue to activate better or equal loan portfolio quality in the system in all main categories. I will now move to the consolidated results of Grupo Aval under IFRS. On Page 11, assets grew 6% over -- year-on-year and 1.8% in the quarter to COP 336 trillion. Gross loans, which account for 57% of our assets reached COP 199.4 trillion, growing 3.2% year-on-year and 0.3% over the quarter. Retail loans have driven our growth. Consumer loans grew 6% year-on-year and 0.5% during the quarter with payroll loans levels recovering increasing 4.8% year-on-year and 0.6% during the quarter, personal loans growing at 4.3% year-on-year and 1% over the quarter, auto loans growing 3.9% year-on- year and contracting 0.9% during the quarter and credit cards contracting 4.7% year-on-year and 0.6% during the quarter. Mortgages, the second part of our retail loans continue or continue to be underweighted, grew 20% year-on-year and 2.8% during the quarter. Finally, commercial loans expanded 0.3% year-on-year and contracted 0.3% over the quarter. Our dynamics during the quarter reflect aggressive price competition from some of our peers. We expect 2025 loan growth to be close to 7%. On Page 12, we present the evolution of funding and deposits. Total funding increased 6.3% year-on-year and 1.5% during the quarter. Deposits that accounts for 3/4 of our funding grew 6.8% year-on-year and 1.9% quarter-on-quarter. Our deposits to net loans ratio closed at 110%. Page 13, we present the evolution of our total capitalization, our attributable shareholders' equity and the capital adequacy ratio of our banks. Our total equity increased 3.1% over the quarter and 6.2% year-on-year, while attributable equity increased 3.4% over the quarter and 6.2% year-on-year. Total solvency and Tier 1 ratio evidenced a slight increase in most of our banks. On Page 14, we present our yield on loans, cost of funds, spreads and NIMs. Total NIM increased 52 basis points to 4% quarter -- 2 basis points growth over the quarter, mainly driven by an improvement in NIM on investments to 2.4%. Our consolidated NIM on loans expanded 20 basis points year-on-year and 7 basis points quarter-on-quarter to 4.5%. This incorporates a 7 basis points year- on-year expansion of NIM on retail loans to 6% and a 34 basis points year-on-year contraction of NIM on commercial loans to 3.3% focusing on our banking segment. NIM on loans of our banking segment grew 9 basis points in the quarter to 5% with this incorporating a 10 basis points increase in NIM on retail loans to 6.5% and 6 basis points increase on commercial loans to 3.9% during the quarter. The total NIM of our banking segment expanded 38 basis points over the quarter to 4.6% due to the same dynamics that affected our consolidated NIM. On consolidated basis, the average yield on loans for the quarter decreased 4 basis points quarter-on-quarter to 11.7%, while the average 3-month IBR decreased 12 basis points to 9.2%. Consolidated cost of funds was materially stable falling 3 basis points quarter-on-quarter to 6.8%. Finally, driving the previous results, the Central Bank stood flat at 9.25% during the second quarter. With this slow rate cuts implying longer adjustment periods than previously anticipated in this scenario, our NIM will continue to expand, though at a slower pace. On Page 15 to 16, we present our loan portfolio quality ratios, starting on Page 15. Loan portfolio quality ratios further strengthened during the quarter. PDL metrics continue to improve in all categories. 30-day PDL formation for the quarter was the lowest since second quarter 2022, while 90-day PDL formation reached the lowest level of the last 3 years. 30-day PDLs were 4.81%, a 37 basis points improvement over 3 months and 99 basis points improvement over 12 months. 90-day PDLs were 3.51%, 23 basis points improvement over the quarter and 73 basis points improvement over 12 months. Commercial 30-day PDLs were 4.37%, a 41 basis points improvement quarter-on-quarter and 80 basis points improvement year- on-year. 90-day PDLs were 3.87%, a 19 basis points improvement over the quarter and 53 basis points improvement over the year. Consumer 30-day PDLs improved 39 basis points in the quarter to 5.07%, while 90-day PDLs increased 30 basis points to 2.84%. Mortgage 30-day PDLs and 90-day PDLs improved 13 basis points and 20 basis points, respectively, over the quarter. Finally, the ratio of charge-offs to average 90-day PDLs was 0.85x. On Page 16, the share of our portfolio classified as Stage 1 remained stable at 88.5%, while Stage 3 fell for the third consecutive quarter to 6.1%, driven by improvements across all portfolios. As a result, coverage measured as allowances for Stages 2 and 3 as a percentage of Stages 2 and 3 were 31.5% at end of quarter. On Page 17, cost of risk, net of recoveries continues to show the improvement in the quality of our portfolio. This decreased 31 basis points to 1.7%. We expect 2025 cost of risk to be in the 1.95% area. Cost of risk net for commercial loans decreased 46 basis points to 0.4% for the quarter and cost of risk net of recovery for consumer loans improved 27 basis points to 4.2%. The cost of risk of credit cards and other loans improved quarter-on-quarter. On Page 18, we present net fees and other income. Gross fee income grew 3.5% year-on-year and slightly increased 0.3% quarter-on- quarter. Net fee income increased 1% and 1.1%, respectively, over these periods. Our income from the nonfinancial sector was around 80% of that recorded in second quarter 2024 due to lower contribution from the energy and gas and infrastructure sectors. Finally, at the bottom of the page, the quarter-on-quarter decrease in other operating income is mainly driven by the seasonally high income from dividends in the first quarter, lower contribution from derivatives and FX and OCI realizations from Colombian government bond exchanges that position our portfolio with higher yields going forward. These were partially offset by stronger [indiscernible]. On Page 19, we present some efficiency ratios. Total expense increased 2.4% quarter-on-quarter and 9.2% year-on-year. General and administrative expenses increased slightly by 0.8% quarter-on-quarter and 4.4% year-on-year with operating taxes and deposit insurance accounting for 34% of this category. Cost to assets for the quarter were 2.8%, increasing 3 basis points quarter-on-quarter and 6 basis points year-on-year. Our quarterly cost to income slightly deteriorated to 52% over the quarter. Finally, on Page 20, we present our net income and profitability ratios. Attributable net income for the quarter was COP 195 billion or COP 20.8 per share, increasing 36.9% relative to first quarter 2025 and being the highest in the last 12 quarters. Our return on average assets and our return on average equity for the quarter were 1.1% and 11.3%, respectively. I will now summarize our general guidance and an outlook for this part of the presentation. We expect our 2025 return on average equity to be in the 10.5% area. These notes are the loan growth in the 7% area with commercial loans growing in the 5% area and retail loans growing in the 9% area. Our consolidated NIM in the 4% area with loans in the 4.5% area. NIM for banking segment in the 4.7% area with NIM loans in the 5.3% area. Cost of risk net of recoveries at the 1.95% area. Cost to assets in the 2.75% area, income from the nonfinancial sector of 90% for 2024 and fee income ratio at the 21% area.

Okay. Thank you, Diego. Before moving into questions and answers, I would like to share some final thoughts on Colombia and Grupo Aval in this year 2025. Our year-to-date performance has been largely in line with our projections. Net income has been supported by a positive trend in cost of risk, a gradual improvement in our NIM and controlled spending. However, the speed at which our NIM on loans has recovered is still modest, driven by high real Central Bank intervention rates, changes in regulation that forced lower interest rate caps for consumer loans and an intense price competition for high-quality corporate clients. We are actively working to adapt to this environment to improve our margins under this higher for longer monetary policies. That said, the progress in our financial diversification efforts is yielding. So 3 of our 4 banks have shifted the commercial focus towards higher yielding and faster breakeven products such as personal loans and credit cards. At the same time, we continue working on shifting our [indiscernible] towards lower cost and stable deposits. Although loan growth has been modest, we are already seeing a change in trend, which we expect to consolidate during the second half of the year, especially in commercial loans. We are encouraged by the solid results for this quarter, which support our constructive view on trends in net income and return on equity. We remain focused on sustaining double-digit profitability throughout the remainder of the year. With this, we are now open for questions.

[Operator Instructions] Our first question will come from the line of Brian Flores with Citibank. And that question has been withdrawn. Our next question will come from the line of Daniel Mora with CrediCorp Capital.

If I may, 3 questions. The first one is regarding the cost of risk. In this quarter, it was quite low, but was explained by high recoveries rather than by lower provisions. So can you provide further color on this performance? Do you see this as a trend that can be repeated in the coming quarters? Or should be considered a one-off in this particular quarter? That will be my first question. The second one is regarding other income. It had a solid performance, but I would like to understand what was the reason behind this number? It was the other income inside the total other operating income. And the third one is regarding NIM. Given the lower reduction of the monetary policy rate, how do you see the NIM evolving not only in 2025 but in 2026? Do you expect the recovery cycle of the banks of about to take longer than initially expected?

Thanks for the questions. Let me try to take them in order, starting with perhaps the most important one regarding NIM. As Maria Lorena mentioned in her closing remarks, we're actively focusing on expanding NIM beyond what happens to the monetary cycle. That's why we are changing our mix, both on the deposit side and on the loan side. But what we have seen in Colombia as well has been some distortion that has been implied by changes in regulation. It's tough to have a precise number of what the implication of the changes in the formula for interest rate caps has been, but there could be a discussion between 300 and 400 basis points compared to the previous formula for the consumer side. That has pressed numbers lower and in fact, has had an implication in growth for consumer loans. On the other hand, on the corporate side and the commercial side, we've included a new part in the graph on NIM here to try to show what is going on in the Colombian market. And it is we're having as expected NIM expansion on the consumer side as cost of funds goes down. But on the commercial side, the lack of growth has forced very intense price competition for the highest quality loans. As we have emphasized through a number of our previous calls, we are very disciplined in our pricing to make sure that we have profitable growth moving forward, and that's the reason that has driven lower growth on the consumer side than we might have desired in the past. However, when you look at the numbers, the trend has changed late May, June and July, we're having a better behavior in the market that makes us positive on how things will evolve. To wrap up what's going up with -- going on with NIM, what we're seeing is we expect the NIM on the commercial side to start to pick up again to more -- to levels closer to where Colombia should be operating at. And we expect to see the improvement on the consumer side to continue as rates go down. This is slower than what we could have anticipated or anybody in Colombia a year ago, but monetary policy has been quite slow. So I hope I didn't expand too much on that, but we are positive and that is the case for our guidance moving forward. On the cost of risk, you're right, this was a positive quarter on the cost of risk side. However, we have stuck to the guidance of 1.95% that we had given in the past and the guidance for our [Technical Difficulty] is positive, it does not change our view on what the numbers will look like. And finally, on other income, we have a different items going there. Some of those have to do with recoveries of some controversies we had that implied some positive income. Some of those have offsets on the higher expenses that you saw during this quarter. So all in all, we have stuck to our overall guidance, perhaps the only change is a slightly slower loan growth and a slightly more positive nonfinancial. But overall, basically the same guidance that we gave on the last call.

Our next question will come from the line of Brian Flores with Citibank.

I have a question on trading assets because on your balance sheet, it is clear that they are gaining relevance year-over-year, quarter- over-quarter. So just wanted to ask if you can share your thoughts. Are you taking a tactical advantage here of certain market opportunities? Is this a strategy to enhance yields? Just to want to understand not only what is being achieved because I think, as you see, trading is benefiting results, but also how you're managing risk here and the volatility on the segment? And a second maybe follow-up is if you could repeat the guidance. I'm a bit slow here in typing. So if you could repeat, it would be great.

Okay. Regarding trading assets, there's 2 things going on. One is we are indeed using -- taking advantage from the exchanges of bonds that the Colombian government has done during this year. And what that does is we give in bonds that already had OCI that reduced the price of those bonds in our book, but that [Audio Gap]. So some of what you see of our strategy there, thinking of expanding NIM is we are refreshing those portfolios. The other piece that you might see there is we've been working over time, expanding our treasury business for clients and some of the growth that you see on the trading assets on the trading book have an offset with positions that we've taken with clients. So when you take into consideration all those positions from the risk management that I think was your second question, that is taken care in that way. So we're not actually taking more risk on our portfolio, even though you've seen some growth because of that treasury business with our customers.

[Operator Instructions]

I think I didn't repeat guidance for Brian. I apologize for that. Brian, the ROE is in the 10.5% area. It's in the middle of the range that we had given out last time, the 10% to 11%. And that is building on loan growth in the 7% area with commercial loans growing 5% -- in the 5% area and consumer or retail loans in the 9% area. Then NIM -- consolidated NIM in the 4% area and NIM on loans in the 4.5%. And if you only look at the banking segment, NIM 4.7% area and NIM on loans, 5.3% area. Cost of risk, as I mentioned before, 1.95% area, cost to assets 2.75% area, income from the nonfinancial sector, 90% of that for 2024 and fee income ratio in the 21% area.

Ladies and gentlemen, that will conclude our call for today. We thank you all for joining. You may now disconnect your lines.

Welcome to Grupo Aval's First Quarter 2025 Consolidated Results Conference Call. My name is Rob, and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A. is an issuer of securities in Colombia and in the United States. As such, it is subject to compliance with securities regulations in Colombia and applicable U.S. securities regulation. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries in the Colombian banking system are presented in accordance with the Colombian IFRS as reported by the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others are explained when required in this report. This report includes forward-looking statements. In some cases, you may identify these forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general, economic and business conditions, changes in interest and currency rates and other risks described from time-to-time in our filings with the Registro Nacional de Valores y Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update or correct the information provided in this report, including any forward-looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and other figures included herein are intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable in this document, we will refer to billions as thousands of millions. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. With us today are Ms. Maria Gutierrez Botero, Chief Executive Officer; Mr. Diego Solano, Chief Financial Officer; Mrs. Paula Duran, Corporate VP of Sustainability and Strategic Products; and Mr. Camilo Perez, Banco de Bogota's Chief Economist. I will now turn the call over to Ms. Maria Gutierrez Botero, Chief Executive Officer. Ms. Maria Gutierrez Botero, you may begin.

Thank you very much. Good morning, everyone, and thank you for joining us for our first quarter 2025 conference call. I am here with Diego Solano, our CFO; Camilo Perez, Chief Economist of Banco de Bogota; and Paula Duran, Corporate VP of Sustainability and Strategic Projects. I would like to start by highlighting this quarter's results. Our net income was Ps. 362 billion, a 28% increase compared to the fourth quarter of 2024 and 3.2x that of the first quarter of 2024. We gained market share in deposits and loans, reaching a 25.3% share in loans are reaching 16.6% in mortgages, the highest level of our history. Core business trends evolved positively during the quarter despite a persistent high interest rate environment and a full performance of the capital market during March. NIM on loans increased slightly during the quarter. NIM on investment recovered, asset quality continued improving. Our non-financial sector was stronger than in the three previous quarters and OpEx remained under control. During the quarter, NIM on retail loans of our banking services segment reached the highest level in two years. However, total NIM on loans remained flat due to pressures on commercial loans from a strong price competition in the corporate segment. Even though our profitability continues to increase, the pace of improvement was slightly slower than initially anticipated, explained by a lower-than-expected NIM on investments due to the poor performance of local fixed income. A deterioration of the country's fiscal outlook and the resignation of the Minister of Finance affected the local markets during the second half of the quarter. This was clear in Porvenir's results for the quarter. Returns on Porvenir's [indiscernible] reserves were suffered during the latter part of the quarter, negatively impacting profitability. Corfi contributed strongly due to seasonal dividend, higher income from the infrastructure sector and a decrease in cost of funds, which reached single-digits in the quarter. Now moving on to our corporate priorities. I would like to give you a brief update. First, customer experience. In terms of customer experience, the system measure the Net Promoter Score, NPS across all of our entities to assess customer satisfaction and loyalty. The consistent improvement in NPS results reflects our strong commitment to enhancing customer journey. As part of this effort, we have implemented a comprehensive loyalty program that includes on Aval experiences, which provide customers with privileged access to events and concerts. Additionally, we have developed Augusta, a robust and integrated customer database that enables us to gain deeper insights into our clients' relationships across Aval entities and to serve them with greater precision and relevance. This year, we established a group-wide committee to promote the exchange of best practices and customer experience across our entities. As key steps in this effort, we are reviewing our entire voice of the customer model and standardizing Net Promoter Score, NPS, measure in line with the highest industry standards. Additionally, we'll launch a comprehensive internal program to further embed a customer-centric culture throughout our entities, which includes the care training session, strategic communication content and technological tools. Second, financial diversification. On this front, we have been working over recent quarters in three fronts. First, improve our commercial and marketing capabilities around retail deposits; second, reduce balance sheet sensitivity to interest rate risk volatility; and third, improve our non-banking fee generation capabilities. As part of our focus on increasing our share of retail funding, we have made changes in the incentive structure of our sales forces. In addition, we are reviewing our product base to strengthen our value proposition for retail customers. In addition, our banks, particularly those focused on retail lending, continue deploying these efforts to reduce their sensitivity to interest rate risk. First, they have increased the mix of the time deposits in their overall funding mix. Second, increasing the tenures on new time deposits to lever closer to the duration of their loans; and third, using hedging strategies to swap fixed rate time deposit to IDR. The speed of deployment of this strategy has been mindful of the persistence of the higher for longer interest rate environment in Colombia. We continue strengthening our services offering and non-banking fee generation by improving our asset management and advisory services. As mentioned in our last call, Aval acquired investment of core fee trust and brokerage business. In addition, we incorporate Aval Banca de Inversion Investment Banking as a joint effort of the holding company effort. Third, synergies and efficiencies. During the quarter, we set ourselves to capture efficiencies in the following calendar year. The first wave of synergies will leverage on the centralization through Aval Valor Compartido [ph] of the group's procurement, facility and property management, accounting function, cybersecurity, payroll and recruitment. During the first quarter, we successfully migrated Banco de Bogota processes into Aval Valor Compartido. Next semester, we will migrate these processes to Banco de Occidente, Banco Popular, and AV Villas. Fourth, digital transformation and innovation. We aim to consolidate our culture of innovation and modern technology, capitalizing on the benefits of artificial intelligence, assuring technological stability and security and promoting digital transformation to improve our business and product and service offerings. On this front, I am proud to announce we partnered with Microsoft to boost the usage of artificial intelligence in our everyday operations. This will leverage customer experience, operational efficiency and enhance the data driven decision making. We actively support the real-time payment system led by Banco de la Republica, achieving significant progress in the creation and use of our alphanumeric key known as Aval. As of today, we have enabled 8.9 million keys, an increase of 15%, since December of last year to receive near real-time transfer from other financial institutions. This has facilitated over 2.1 million transactions, a 70% increase compared to January. Fifth, corporate culture. To support the strategic priorities that I have mentioned, we continue to strengthen our performance and customer oriented culture. As part of this process, we have been working on promoting and improving the communication of our leadership across business units and throughout our organization around our strategic priorities as a group and key initiatives. In addition, we are well advanced in the process of refreshing part of the leadership teams and our brands combining bringing in new talent that adds to existing leaders. These changes, combined with the refreshment of our Board of Directors and CEOs of our main business units support the alignment of our management team to the new opportunities and challenges that we face. And finally, sustainability. We recently published our management and sustainability report, a document that reflects our economic results and progress in ESG terms. It released the impact we have on the millions of people who carry in our endorsement to fulfill their dreams. I invite you to read it if you have not already done so. The coming months will be key to consolidate an even more robust ESG strategy aligned with the sustainability challenges facing the country and the world. Now I would like to invite Paula to go over our ESG achievements to release this quarter.

Thank you, Maria. This quarter, we proudly received the results of the Medco ESG [ph] responsibility ranking, which recognizes the companies with the best reputation for their ESG impact in Colombia. In the ranking, Grupo Aval rose to 71st lane, signing 17 positions and positioning itself as the third largest business conglomerate in the country. In the financial sector, Banco de Bogota ranked third, Banco efficiency and Banco AV Villas were in the top 10. Corficolombiana ranked eighth and Porvenir reached second place in the ESG sector. One of our most significant social initiatives, Mision La Guajira advanced this quarter with registration and documentation programs with the National Register's Office and with financial education programs. During the quarter, we completed water solutions for 45 communities and Energy Solutions for 81 communities in [indiscernible]. Our commitment to diversity and inclusion continues to be an important driver for us. Today, 35% of our management positions are held by women and 55% of our employees are women. The percentage of women's participation in our board increased from 24% to 31% after the Q1 assemblies in which boards were elected. And in addition, the percentage of independent members increased from 58% to 60%. Regarding our progress in environmental issues, we continue to define our decarbonization route together with the group's entities, and we continue to implement eco-efficient projects such as the Banco Popular alliance with Promigas to generate social energy for 13 of its branches. This initiative will allow them to generate more than 570,000 kilowatts per year and avoid the emission of close to 300 tons of CO2. Finally, during the quarter, we enhanced our ESG management model by developing a comprehensive reporting system that enabled us to establish a baseline for more than 150 indicators across our entities. This foundation has allowed us to build dynamic dashboards to track progress in the key ESG areas. We firmly believe that by working together with our entities, sharing best practices and monitoring progress we can amplify the impact of our efforts and drive meaningful measurable change. We will continue to strengthen our internal capabilities, advance our environmental goals, deepen our social impact program and more accurately measure the value we generate. Thank you.

Thank you, Paula. Now on the macro side, let me mention some relevant issues this quarter. The Colombian economy posted a strong growth figures during the first quarter, driven by the public administration, entertainment and commerce sectors. For 2025, we forecast a GDP growth of 2.7%. We anticipate moderation in the following quarters due to the potential negative effects of tariffs on global trade. Thus, despite the recovery, global and local uncertainty will continue to take a toll on investments. Annual inflation slowed to 5.09% in March 2025, down from 5.2% at the end of 2024, marking its lowest level since October 2021. This is a positive development indicating that the Central Bank's efforts to stabilize prices are yielding results. However, regulated companies and food prices continue pressuring inflation. Our forecasted inflation is 4.7% for the end of the year. In this context, the Central Bank cut its policy rate by 25 basis points in its April meeting, balancing between the recovery of the economy and fiscal challenges. The deterioration of the fiscal front remain as the main stopper for a more dovish Central Bank. We expect the Central Bank rate to end 2025 in 8.5%. The fiscal deficit for this year will exceed 60% of GDP above the government target of 5.1%. Confidence in the government's fiscal adjustment plan has diminished amid high global uncertainty. We anticipate that pressure on long-term rates will continue in the coming months. Our belief is that the business sector must remain dedicated to executing their investment and strategies. As we enter the pre-electoral year, noise will be -- sorry, noise will continue to increase. However, we are confident in the resilience of the Colombian economy. Camilo will elaborate on our economic outlook. Camilo?

Thank you, Maria Botero, and good morning. The improving trend in the Colombian economy recorded in 2024 extended into early 2025. We estimate economic growth of 2.8% for the first quarter. The economy we have experienced its highest annual expansion since mid-2022. Similar to the beginning of 2024, public spending and household consumption were the main drivers. According to the Autonomous Committee for the Fiscal Rule, in the first quarter, public spending grew 21% annually, supporting the recovery phase. In fact, the best performing sector was public administration. On the other hand, the second most dynamic sector was trade, transportation, accommodation and food services, explained by higher private consumption of both goods and services. Without a doubt, the strength of the labor market, which at the end of the quarter recorded the lowest unemployment rate since May 2016 at 9.1% has been one of the major drivers of the Colombian increased purchasing power. Furthermore, annual growth of 24% in remittances in pesos during the first quarter also contributed to this. In this context, sectors such as manufacturing, finance and professional services also enjoyed an increase in their activity. Meanwhile, investment continues modest recovery, supported by an increase in import of capital goods for industry and agriculture as well as the execution of infrastructure projects in the country's main cities. Thus, amid favorable domestic demand, but recognizing latent risks in the international front, growth of around 2.7% is expected for 2025, still below the country's potential. For its part, this inflationary process paused in the first quarter, dropping from an inflation rate of 5.2% at the end of 2024 to 5.1% in March. The high indexation and the impact of the minimum wage on services, the increase in gas rates that pressure regulated prices, a slow but progressive transmission of the devaluation to prices of goods and a modest increase in food services explained the above. Inflation is expected to be around 4.7% by the end of 2025, once again outside the target range established by the Central Bank. Amid the described economic outlook and accompanied by a deterioration of Colombia's country risk due to a complex fiscal situation, the Central Bank paused its easing cycle, leaving the interest rate by 9.50%. New members appointed to the Central Bank's Board in February with a paradox view of the economy have added uncertainty to the decisions. In April, [indiscernible] consensus expected a third stability decision, but the Board unanimously opted to reduce the interest rate to 9.25%. Data dependence makes it difficult to forecast the interest rate. Despite this, it is expected to continue declining to around 8.50% at the end of the year, limited in part by a fiscal situation. Regarding the exchange rate, in line with global developments and prior to the burst of uncertainty, the Colombian Peso has strengthened against the U.S. dollar in the first quarter. Compared to the end of 2024, while the dollar lost 4% against G7 currencies to March, the devaluation against the Colombian Peso was 5% as the exchange rate fell from Ps. 4,405 to Ps. 4,181 per dollar. However, the Colombian Pesos performance was mixed. Standard & Poor's notification of the country's BB+ rating with a negative outlook and the upward adjustment of the rate expectations of the Central Bank supported the currency with the exchange rate hitting a low of Ps. 4,060 in mid-February. However, the deterioration in the fiscal outlook following the publication of the government's financial plan questioned the compliance with the Fiscal Rule in 2024 and put upward pressure on the currency. By 2025, the exchange rate is expected to average Ps. 4,300 against the dollar, amid high global volatility, a challenging fiscal balance and a widening of Colombia's external deficit. Indeed, we expect the current account deficit to fall from minus 1.8% of GDP in 2024 to minus 2.6% of GDP in 2025 due to a stronger recovery in imports than exports, both of goods and services, where the terms of trade would be affected by lower commodity prices. Finally, the fiscal situation in 2025 does not appear far removed from that observed in the previous year. In the first quarter, spending far exceeded revenue, resulting in record fiscal deficits and low cash flow levels. Unfortunately, the strategy for increased tax collection is not entirely clear, and the option of cutting the spending has been postponed to a point where if it takes place, it could be insufficient and too late. Given this scenario and considering that the three major rating agencies of Fitch, Standard & Poor's and Moody's have a negative outlook for the country, the likelihood of a rating downgrade is increasingly likely. Thank you. Back to you, Maria Botero.

Thank you, Camilo. Since our last call, we have continued to see positive trends in the consumer credit cycle, which have translated into lower cost of risk in the system and high profitability in the Colombian financial system. As of February, seven out of 29 banks accumulated net losses compared with 12 banks on February 2024. Although the system's profitability has improved, there is still a long way to go even more so as they incorporate during the first and second quarters of 2024, the reconstitution of countercycle's provisions that were released during 2023 and 2024. However, the system has sufficient solvency to absorb this cycle. Now I would like to pass the call to Diego, who will give details of our results. Diego?

Thank you, Maria Lorena. I will start on Pages 9 and 10 with a few charts showing the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are unconsolidated figures under Colombian IFRS as published by the Superintendency of Finance of Colombia. For the 12 months ending in February 2025, commercial loans and mortgages for the system grew 0.5% and 3.4% in real terms, with consumer loans contracting 7.4% in real terms. We continue to outgrow our competitors in total loans and retail loans and have grown slightly slower in commercial loans. This yielded year-on-year market share gains of 32 basis points in total loans, 156 basis points in consumer loans and 199 basis points in mortgages, while our share of commercial loans fell 48 basis points. For the last three months, loans grew 1% in the system. Even though dynamics continue to show signs of recovery, real growth was weak considering the 2.6% quarterly inflation. Mortgages grew 3% and commercial loans 1.4% in nominal terms over the quarter, while consumer loans contracted 0.9%. On Page 10, loan quality for both the system and the Aval banks showed an improvement during the quarter for all loan categories. Our banks continue to exhibit better loan portfolio quality than the system in all main categories. I will now move to the consolidated results of Grupo Aval under IFRS. On Page 11, assets grew 7.5% over the quarter and 0.6% to -- 7.5%, sorry, over the year and 0.6% over the quarter to Ps. 330 trillion. Gross loans, our main assets reached Ps. 199 trillion, growing 5.4% year-on-year and decreasing 0.3% over the quarter. Mortgages and consumer loans drove our year-on-year growth. Aggressive pricing competition for corporate clients remained the main challenge to achieve stronger growth in commercial loans. This has taken a toll on our share of commercial loans considering our pricing discipline. Commercial loans expanded 3.6% year-on-year and contracted 1.8% over the quarter. Consumer loans grew 3.9% year-on-year and 0.7% during the quarter with payroll loans growth continuing to recover, increasing 5.8% year-on-year and 1.6% during the quarter. Auto loans grew 7.7% year-on-year and contracted 1.2% during the quarter. Personal loans grew 3% year-on-year and 1.4% during the quarter. Credit cards contracted 5.8% year-on-year and 3.1% during the quarter. Finally, mortgages grew 22% year-on-year and 4.2% during the quarter. We expect our 2025 loan growth to be slightly lower than formerly estimated, in line with a tighter monetary policy and more volatile local and global environment. On Page 12, we present the evolution of funding and deposits. Total funding increased 8.3% year-on-year and 1% during the quarter. Deposits that account for 75% of our funding grew 9.8% year-on-year and 3.5% quarter-on-quarter. Our deposits to net loan ratio closed at 109%. On Page 13, we present the evolution of our total capitalization, our attributable shareholders' equity and the capital adequacy ratio of our banks. Our total equity decreased 1.6% over the quarter and increased 5% year-on-year. Our attributable equity decreased 1.6% over the quarter and increased 4.4% year-on-year. Dividends of Ps. 655 billion were declared to our shareholders during the quarter. In addition, minorities at our subsidiary level received dividends of Ps. 693 billion. Banco de Bogota¡ and Banco de Occidente declared dividends during the quarter. On Page 14, we present our yield on loans, cost of funds, spreads and NIMs. Total NIM increased 64 basis points to 3.5% quarter-on-quarter, mainly driven by an improvement in NIM on investments to a still soft 0.3%. Our consolidated NIM on loans expanded 12 basis points year-on-year to 4.4% and was flat for the quarter. Over the year, NIM on retail loans expanded 96 basis points to 5.8% and NIM on commercial loans decreased by 81 basis points to 3.4%. Over the quarter, NIM on retail loans expanded 19 basis points and NIM on commercial loans contracted 14 basis points. Aggressive price competition on commercial loans, especially in the corporate segment continued to press our NIM on commercial loans down. The benchmark rate for Colombia was flat at 9.5% during the first quarter. However, as mentioned by Camilo, the Central Bank unanimously cut its rate by a quarter to 9.25% in its April meeting. Focusing on bank and the banking segment, NIM on loans of our banking segment was materially stable over the quarter at 4.9%. This incorporates a 13 basis points increase in NIM on retail loans to 6.4% and 13 basis points decrease in NIM on commercial loans to 3.9%. The total NIM of our Banking segment expanded 53 basis points over the quarter to 4.2% due to the same dynamics that affected our consolidated NIM. On a consolidated basis, the average yield on loans for the quarter decreased 38 basis points over the three month period to 11.6%, while the average three months IBR decreased 5 basis points to 9.3%. Consolidated cost of funds fell 37 basis points quarter-on-quarter to 6.8%. Average rates on time deposits and saving accounts fell 43 basis points and 52 basis points quarterly, respectively. The modest reduction pace of the Central Bank implies a longer adjustment period to that initially anticipated. In this scenario, our NIM will continue to expand, though at a lower pace. On Page 15 through 16, we present several loan portfolio quality ratios. Starting on Page 15. PDL metrics continue to improve in all categories. 30-day PDLs were 5.18%, a 13 basis points improvement over three months and 68 basis points improvement over 12 months. 90-day PDLs were 3.74%, a 26 basis points improvement relative to the last quarter and 41 basis points improvement over 12 months. Commercial 30-day PDLs were 4.79%, a 16 basis point improvement over three months and 31 basis points improvement year-on-year. 90-day PDLs were 4.06%, a 37 basis points improvement over the quarter. 90-day PDL formation reached the lowest level of the last two years and continues to show a positive trend. 30-day PDL formation for the quarter was the lowest for our first quarter, since 2022. We recorded a 14 basis points decrease in consumer 30-day PDLs to 5.46% and 90-day PDLs decreased 10 basis points to 3.14%. Mortgages, 30-day PDLs and 90-day PDLs decreased 2 basis points and 14 basis points, respectively. Finally, the ratio of charge-offs to average 90-day PDLs was 0.88x. On Page 16, the share of our portfolio classified as Stage 1 remained stable at 8.5%, while Stage 3 fell slightly over the quarter to 6.3%, driven by commercial and consumer loans. During the quarter, we reclassified a portion of Stage 1 commercial loans to Stage 2 due to an increase in expected credit loss following rating updates that incorporated this company's 2024 financial performance information. As a result, coverage measured as allowances for Stage 2 and 3 as a percentage of Stage 2 and 3 loans slightly fell during the quarter to 33.3%. On Page 17, cost of risk net of recoveries increased 21 basis points to 2%. We expect 2025 cost of risk to be slightly below this level. Cost of risk net for commercial loans increased by 50 basis points to 0.9% for the quarter, reflecting the reclassification to Stage 2 previously described. Cost of risk for consumer loans improved 32 basis points to 4.5%. The cost of risk for credit cards and auto loans improved quarter-on-quarter, falling 89 basis points to 6.1% and 75 basis points to 3%, respectively. On Page 18, we present net fees and other income. Gross fee income grew 6.2% year-on-year and 0.6% quarter-on-quarter. Net fee income increased 0.9% and decreased 1%, respectively, over this time periods. Net pension and severance fees grew 9.1% for the quarter, mainly due to higher performance-based fees and a higher collection of mandatory contributions related to the increase in minimum wage at the beginning of the year. Annual gross banking fees grew 1.4%. This incorporates 3.9% growth of commissions and banking services that was offset by a 2.1% annual decrease in credit cards and debit card fees. Our income for the non-financial sector was around 83% of that reported in the same period for 2024. Finally, at the bottom of the page, the year-on-year increase in other operating income is mainly explained by higher derivatives and FX gains. On Page 19, we present some efficiency ratios. Total expenses decreased 5.2% quarter-on-quarter and increased 7.6% year-on-year. General and administrative expenses decreased 8% quarter-on-quarter and increased 6.7% year-on-year with operating taxes and deposit insurance accounting for 37% of this category. Cost to assets for the quarter was 2.7%, improving 19 basis points quarter-on-quarter. Our quarterly cost to income improved to 50.8% over the quarter. Finally, on Page 20, we present our net income and profitability ratios. Attributable net income for the quarter was Ps. 362 billion or Ps. 15.2 per share, increasing 28.5% relative to fourth quarter 2024 and 3.2x that for first quarter of 2024. Our return on average assets and return on average equity for the quarter were 1% and 8.4%, respectively. Before we move into questions and answers, I will now summarize our general guidance for 2025. We expect loan growth in the 9% area with commercial loans growing in the 7% area and retail loans growing in the 11% area, slightly lower than our previous guidance. Our consolidated NIM in the 4% area with NIM on loans in the 4.5% area. NIM of our banking segment in the 4.7% area with NIM on loans in the 5.3% area affected by the Central Bank's intervention rate expectations. Cost of risk net of recoveries at 1.95% -- in the 1.95% area better than our previous guidance. Cost to assets in the two and three quarters area, income from the non-financial sector of 85%, of that for 2024 slightly improving from our previous guidance. A fee income ratio at the 21% area better than our previous guidance. With this, our expectation for 2025 return on equity is expected to be in the 10% to 11% range.

Thank you, Diego. Before moving into questions and answers, I would like to share some final thoughts of Colombia and Grupo Aval in 2025. The trend of improvement of our net income and return on equity will continue in the upcoming quarters. Despite the challenging economic conditions due to an increasing local and global uncertainty, we are focused on returning to double-digit [indiscernible] in 2025. Positive drivers for our results incorporate stable cost of risk, higher operational effectiveness and a strong fee income generation from non-banking segments of operations will contribute positively to the results. The main headwind for a more solid improvement of return on equity continues to be our NIM on loans. The persistently high interest rate environment has slowed the recovery pace of our NIM on loans. As I mentioned earlier, one of the -- our corporate priorities consist in financial diversification. Achievements on this front will allow us to strengthen the mix of our deposits towards low cost and stable funding and reduce the cost of funding, there managing the impact of interest rate cycles. Our usual monetary policy will support the recovery of NIMs on loans. However, the speed we initially anticipated is no better than before, given the speed at which rates will be cut. In addition, our guidance incorporates stable spreads on commercial loans, which will support the persistent recovery overall already happening in NIM on retained loans. So we are now open to questions. Thank you very much.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Your first question comes from the line of Brian Flores from Citibank. Your line is open.

Hi, team. Thank you for the opportunity to ask questions. I have two on my side. The first one is a bit on your guidance. So from what I understand, the new ROE range is 10% to 11%. I think it was closer to 11% in the previous quarter. So I just wanted to understand if this is a correct reading, which is ROE could be weaker than you were expecting in the last quarter. And then as you mentioned, asset quality is perhaps a bit better than you were anticipating. But then as you mentioned, the key downside risk here seems to be NIM. So should we understand that at some point, you need to accelerate in origination to kind of compensate what is happening with pricing? That is the first question. And then the second one is more on the macro side. We know the pension reform starts implementation in July. If you could elaborate any impacts you're seeing in Porvenir and also if this is already reflected in the guidance? Thank you.

Yes. Let me start with -- your reading on ROE is right. Last time, we had guided into 11% area. Now we're guiding slightly lower than that in the 10% to 11% range. The reason, as I try to highlight when going line by line is we've experienced two negative things and some positives. The positive, you're absolutely on the spot. It is a better performance and evolution of the quality of the loan portfolio. So that's going to be a positive one. Then there's another one, and it is Corficolombiana, we had guided to a lower performance this year, and it has already performed better during the quarter. And then on the negative side, the slower pace of the Central Bank does affect our NIM on loans, particularly of consumer loans specifically. So that's what we're bringing into this guidance. And then we had a slower first quarter in loan growth than what we were initially foreseeing. Then you said, should you guys be accelerating origination? I think that's something we're evaluating very carefully because part of the reason why we didn't grow as fast as we expected was that we saw very aggressive pricing from some of our peers in particularly large corporate loans. We've been very disciplined with pricing to ensure that we're growing, but we're growing in a profitable way so that those are the kind of things we need to evaluate. However, we continue to work on origination and high-quality and high profitability origination very high.

Regarding the question about the pension reform, as you maybe know, given the EBITDA was approved in the Congress though, the short implementation of the reform is the 1st of July. So we are waiting because there are some -- we are waiting for the constitutional court because they are analyzing if the reform is okay with the constitution. So -- but we are prepared in Porvenir. The government has published a decree with the main issue for us that is the commissions and the commissions are set in the way that we were expecting. So I think we are waiting for the constitutional court, but Porvenir is prepared for both scenarios, with reform or without reform.

And then you also asked about our guidance. Our guidance is basically taking up a neutral scenario. The pension reform would be positive on our results if effective as planned. We've gone for our guidance on the prudent side.

No, perfect. Super clear. And then if I can just follow-up on that last comment. So if it goes as you, let's say, the positive expectation that you have on the pension reform, do you have an estimate on the impact particularly or not yet?

We need to see how regulation comes out before we get into those numbers. We would prefer to wait for that.

That makes sense. Thank you.

Thanks.

Your next question comes from the line of Yuri Fernandes from JPMorgan. Your line is open.

Thank you all. Just a follow-up on Porvenir. Just to see if I understood correctly, it's positive in the short term, but as the flows change in the future, it's negative, right, in the long run on Porvenir. And then I have a question on cost of risk. And I think Diego already mentioned this in the presentation regarding the increase in Stage 2. Just checking if this was one company or two or more companies, which sector are those companies from? And if this increase in Stage 2 should become Stage 3 at some point, like how you are seeing this or if you are comfortable with those? And if you plan to rebuild the coverage in the commercial Stage 2 and Stage 3 portfolio if your guidance somewhat reflects this? Thank you.

Let me start with your last one. This is actually a seasonal kind of review. So there is no reason to have any concern because of that, but there is a mechanical process where if companies didn't perform as well last year, then the rating falls. And even though they might be up to date and well performing with their loans, we need to change the rating, and that implies moving to the lower slice of Stage 2. The implication of that is we move from expected loss for 12 months to lifetime. Therefore, we increased the level of provisions, but it's more of an updating process that reflects how last year was rather than not how 2025, 2026 would look like. So not really a concern nor is this a change in trend. We obviously continue to be careful of other portfolios as we've done throughout the cycle, and we need to see the economy to continue to pick up to feel fully comfortable, but we are well on that track. Then you asked on Porvenir, the concise answer is it is a positive in the short term. In the long-term, not the medium, but quite long-term, we see a change because the volume that will go to the private sector will decrease. However, a substantial portion of current customers are part of the transition process. So the process of reducing the level of assets under management will take some time to offset the advantage of a better fee system.

Super clear. Thanks for the clarification, Diego. If I may, just a final one. If you can provide some comments, and sorry if you already did before, regarding the political outlook in Colombia, I know probably it's too soon to have a view. But whatever you can comment like for us to have some expectations, it's interesting for us here. Thank you.

I think, Diego, he doesn't want to answer that question. But I would say that the political outlook is uncertainty because you know that we have President Petro with the -- say, I don't know how to say [Foreign Language].

Sort of a referendum.

Like a referendum that the Congress is -- will discuss that next week. And we are waiting for that, and they are with the reforms, the labor reform and the health reform. And we have, I don't know, 40 candidates for next year in the Presidential election. So what you will see in the following months is uncertainty about that and more uncertainty that President Petro will create.

Yes, [indiscernible]. Well, thank you. Thank you for the detail everyone.

Your next question comes from the line of Juan Dower [ph] from Bank of Colombia. Your line is open.

Hello everybody. Can you listen me well?

Very low.

Okay, I will proceed with questions. I have a couple of questions. The first one is in regards to provisions. What is your expectation and especially how do you read the balance of risk at this moment of the juncture in perspective of the changes of the onetime policy part of rate cuts, also the country risk and the initiation of a trade war internationally. And if that reading of the environment could lead you to change your expectations towards provisions, which seem to have bottomed in the previous quarter. If you can give us some guidance in regards to that, I appreciate it. The other question is about commissions. We saw a decrease in the fee income ratio in this quarter. I would like to hear you elaborating a little bit on that decrease and on your expectations on the ratio for 2025. Also, you mentioned a strategic pillar improving the fees. So what could be your initiatives in that regard? Thank you very much.

Yes. Well, regarding provisions, I think that something that differentiates Aval from other peers in the system is the structure of our portfolio. So our guidance is tied more to that than other products. For example, we are much more concentrated in the payroll loans that even though they do carry the effect that we've seen on NIM are substantially better than some of the unsecured consumer lending and credit card products that are also part of the system. So we are in a position to have a better view on that. And then on the mix of industries, we have a slightly lower exposure to SMEs than some of our peers, and that also helps us. So that's the rationale behind why our performance has been substantially better than the rest of the system throughout this cycle and why we are able to have a more positive view. Then regarding fees, there's a mixture of effects here. If you've seen what we did was we raised our fee ratio because we saw the NIM slightly falling. We are pointing basically to the same guidance that we had before. We are thinking in peso-denominated fees, something that did affect us during the first quarter is you might have seen that Colombia had a pretty tough March due to market volatility, and we've seen some months affecting performance-related fees. However, we're seeing a pickup in retail activity that allows us to expect also an improvement on that side. Then there's something that is Aval-specific, and it is, as you well highlighted, that's one of our pillars because we feel we're not doing enough on the fee side. And given that we're actively working on that, that's also part of our source of being much more constructive on what we can achieve on fees moving forward.

Thank you.

And there are no further questions at this time. Ms. Maria Lorena Gutierrez Botero, I turn the call back over to you.

No. Thank you. Thank you to everyone to be with us in this call and see you in three months.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for your participation and you may now disconnect.

Welcome to Grupo Aval's Fourth Quarter 2024 Consolidated Results Conference Call. My name is Kelvin and I will be your operator for today's call. As a disclaimer, Grupo Aval Acciones y Valores S.A. is an issuer of securities in Colombia and in the United States. As such, it is subject to compliance with securities regulations in Colombia and applicable US securities regulations. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial conglomerate. The consolidated financial information included in this document is presented in accordance with the IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with the Colombian IFRS as reported in the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. These reports include forward-looking statements. In some cases, you can identify the forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein and a consequence of the changes in general, economic, business conditions, changes in interest and currency rates and other risks described from time-to-time in our filings with the Registro Nacional de Valores y Emisores and the SEC. Recipients of these documents are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update or correct the information provided in this report, including any forward-looking statements and do not intend to provide any update for such material developments prior to our next earnings report. The financial statements of Grupo Aval Acciones y Valores S.A., in accordance with Colombian regulations must be filed within the market and with the Superintendency of Finance with the opinion of an external auditor. At this time of solicitation, this process is still ongoing. The content of this document and the figures included herein and intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. With us today are Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer; Mr. Diego Solano, Chief Financial Officer; Mrs. Paula Duran, Corporate VP of Sustainability and Strategic Projects; and Mr. Camilo Perez, Banco de Bogota's Chief Economist. And I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for our fourth quarter 2024 conference call. I am here with Diego Solano, our CFO; Camilo Perez, Chief Economist of Banco de Bogota; and Paula Duran, Corporate VP of Sustainability and Strategic Projects. I would like to start by highlighting this quarter's results. First, positive trends continue to consolidate, leading to the results shown in some key business metrics. Our risk-adjusted NIM on loans for the quarter was the highest in the last seven quarters. The quarter's return on average equity was somewhat below our initial expectations. This was mainly due to a weaker-than-expected NIM on investment resulting from the performance of local and international capital markets. We continue to gain market share in deposits and credit. Porvenir had a weak quarter net income due to negative returns in line with weaker capital markets. However, I want to mention that Porvenir had the best year of results in 2024. Porvenir recovered from previous quarter and have a positive contribution to net income. Moving to strategic topics to 2024. 2024 was a year with multiple challenges, learning experience and most importantly, great achievements for Grupo Aval. We experienced an intense transformation driven by a demanding social and political context and an increasingly competitive financial landscape. This coupled with changes in management and the pace at which innovation and disruption are taking place added further complexity to our results. Despite these challenges, we remain determined in our commitment to progress, adaptation and delivering value to our stakeholders. Our results improved compared to 2023. Our net income was more than COP1 trillion, a 38% growth compared to the previous year. We gained market share in deposits and loans, reaching a 25.3% share in loans and consolidated our position in the Colombian financial system. We're strengthening our corporate governance, enables better decision-making. This includes a new composition of all Board of Directors as well as introducing new leadership across management teams, presidents and vice presidents all entities. Additionally, we remain committed to the highest standards in governance policies, ensuring transparency, accountability and long-term value creation. We strengthened our management model by taking advantage of synergies and efficiencies and changes in our organizational structure and coordination mechanism. We designed ATHs as AVC, Aval Valor Compartido, and structure a coordination model using committees and teams to define guidelines, make decisions, share best practices, reach agreements and above all generate share value. With the acquisition by the holding of Aval Fiduciaria, Aval Casa de Bolsa from Corficolombiana and the creation of Aval Banca de Inversion, we intend to strengthen our nonbanking financial services and take a better advantage of the scale of Aval. We have prepared ourselves by taking short-term actions and have a strategic vision that will enable us to achieve leadership in the markets and segments we have defined as a strategic. Looking ahead to 2025, our strategy focuses on the following corporate priorities. First, customer experience. We are confident of our value proposition. We have the people, the channels and the technology to deliver a unique and differential customer experience. We will further enhance our client-centric culture, improve customer satisfaction and our ability to anticipate to customer needs and expectations. We are seeking principality by enhancing the group's value offer to customers. Second, financial diversification. We will expand our low-cost stable deposits and optimize our capital structure. We believe the enhancements of the client experience will result in a stronger position on retail deposits and cash management relations. In addition, we will revise our bank's traditionally low usage of Tier 1 and Tier 2 instruments to align better the group's capital structure with our strategy. We will also seek high growth new line of business. To this end, we are strengthening our services offering and nonbanking fee generation by improving our asset management and advisory services. Third, synergies and efficiencies. We will continue to simplify our processes, capturing value in the development of operational and administrative efficiencies, developing transversal initiatives and enhancing the best practices of our entities. Fourth, digital transformation and innovation. We will consolidate our culture of innovation and cutting-edge technology, capitalizing on the benefits of artificial intelligence, guaranteeing technological stability and security and promoting digital transformation to improve our business and product and service offerings. We will continue to promote digitalization, inclusion of interoperability of services with initiatives such a TACA Aval and our active participation in the Banco de la Republica, BR instant payment system that we launched further ahead. Corporate culture. We will strengthen our corporate culture, aligning our talent with our strategy and purpose, aligning incentives with our strategic priorities, developing and improving our goal setting and performance review processes and improving mobility of talent across our subsidiaries. And finally, sustainability. Our ESG agenda will continue to be a core principle in the way we conduct our businesses. We will deepen our social impact, generating employment and growth opportunities to millions of people, developing social programs, focusing on sustainable finance, financial education, climate change management and high-impact environmental projects. I would like to mention that we expect to finish Mision La Guajira in 2025. So we will focus on finish our commitment with Mision La Guajira. Now I will invite Paula to go over our ESG achievements to release this quarter.

Thank you, Maria Lorena, and good morning to you all. Throughout the year, we have reported progress in terms of our ESG impact. Today, I would just like to highlight the main achievements that secured 2024 as a remarkable year in terms of our commitment to sustainability. In the Corporate Sustainability Assessment, CSA evaluation used to determine constituents of the Dow Jones Sustainability Index, we achieved continued improvement in all three dimensions, environmental, social and governance, achieving 65 points, an increase of 16 points compared to the previous year. In the same evaluation, our entities, Banco de Bogota and Corficolombiana obtained 78 and 80 points respectively. Banco de Bogota ranked in the top 15% and was included in the S&P Sustainability Yearbook. Corficolombiana had an outstanding result, positioning itself as the leading company in its industry in Colombia and as one of the top three in the world. Corfi was also included in the S&P Sustainability Yearbook in the top 10%. In terms of social impact, we have consolidated our position as one of the largest employers in Colombia, generating over 70,000 jobs among Grupo Aval and its subsidiaries. Women hold more than 52% of the position, which demonstrates our strong commitment to inclusion and diversity. We actively promote equal opportunities and foster a workplace where everyone can grow, contribute and drive the organization's sustainable success. This has been ratified by the friendly certification all of our companies received. In 2024, we dedicated important resources amounting to over COP70 billion to social programs tailored to communities in need. An example of this kind of project is Mision La Guajira, which was just mentioned by Maria Lorena, where we ended this year improving the quality of life of more than 21,000 people, 80 communities with solutions in potable water, sustainable energy and food security. The sustainability of these solutions was also enhanced with progress for income generation in craft, financial education and recycling. During the year, we also undertook additional social programs that benefited more than 15,000 people through financial education, student scholarships, entrepreneurship, productive communities and initiatives for the protection and care of the environment, among others. Our approach to sustainable finance enabled us to close the year with a sustainable loan portfolio of COP23 trillion. This includes COP5.8 trillion in financing for sustainable construction, mobility, agriculture and the circular economy as well as COP17.3 trillion in social loans focused on affordable housing and support for SMEs. In terms of environmental impact and climate change risk management, most of Grupo Aval subsidiaries have aligned their strategies with the recommendations of the Task Force on Climate-related Financial Disclosures, TCFD. In 2025, we will design and implement Grupo Aval decarbonization road map in line with the Paris Agreement and Colombia's environmental goals. Grupo Aval Holding conducts greenhouse gas inventory assessment following the GHG protocol methodology for Scopes 1, 2 and 3. Direct and indirect emissions for Scope 1 and 2 are measured from our offices in Bogota, totaling 4.3 tons of CO2 for Scope 1 and 36 tons of CO2 for Scope 2. We offset our carbon footprint through certified carbon credits. This year, we also enhanced our Scope 3 measurement by incorporating additional categories. As a result, our Scope 3 emissions amounted to 559 tons of CO2. Additionally, looking ahead, we will include Category 15 investment as financed emissions once the carbon footprint assessment of our entities is completed. In 2024, we also contributed to the preservation and regeneration of ecosystem through the planting of 1 million trees and the protection of more than 2,000 species of Flora and Fauna in Colombia. In terms of governance, we consolidated our model by establishing the ESG, IT and compensation committees within the Board of Directors, ensuring enhanced oversight, monitoring and decision-making aligned with best practice. At the executive level, we created a Vice Presidency of Sustainability and Strategic Projects for Grupo Aval, responsible for designing, leading and coordinating the sustainability strategy for Grupo Aval. We also created the Sustainability Committee of Grupo Aval, where all of the sustainability leaders of our entities define standards, common goals, share best practices and design transversal processes. Furthermore, we're strengthening our governance structure by creating, updating and reviewing essential corporate policies as well as sustainable finance declaration, reaffirming our commitment to integrating ESG criteria into investment decisions and the management of our investments. Finally, as we look ahead to 2025, we reaffirm our resolute commitment to sustainability as a cornerstone of our business. Beyond policies, initiatives and results, our ESG efforts reflect a deeper purpose to create lasting value for our stakeholders, empower communities and protect the planet for future generation. We believe that the true strength of a financial conglomerate is not only measured in numbers, but in its ability to drive profit, create opportunities and transform lives.

Thank you, Paula. Now on the macro side, let me mention some relevant issues during this quarter. Inflation continued to trend down and ended in December at 5.2%. Over the last two months, the Central Bank has been conservative and the market holding rates higher than anticipated. Faster rate cuts are needed to reduce the effect of the higher real interest rate levels on the economy. We expect GDP growth to return to levels exceeding 2.7%. Unemployment figures will remain under control. This will support internal demand dynamics. Now the main challenges in terms of our economic context will be changes in fiscal and public policy. With the country's fiscal accounts under pressure, we believe the financial plan and fiscal rule for 2025 will be challenging. Low government budget execution. Although investment has recovered slightly, it remains below historical levels. On the political front, we remain optimistic about the country's institutions. We strongly believe that we, the business community must focus on planning and executing our long-term strategy. Entering the pre-electoral year might generate short-term uncertainty, but we urge society to remain focused and direct our attention towards our priorities. Camilo will further comment on this, and we share our view on the economy. Camilo?

Thank you, Maria Lorena. Good morning to all attendees. Last year, Colombian economy grew 1.7%, continuing the recovery process after the pandemic and improving when compared with growth of 0.7% in 2023. The better performance was mainly due to a recovery in household consumption and a dynamic export sector. Household consumption grew more than 1% and partially offset the low dynamics of investment and public spending, thus becoming the basis of the economic recovery. More favorable financial conditions, thanks to lower inflation and interest rates, a resilient labor market, improving confidence and a strong increase in remittances explains the above. The export sector growth was explained by higher sales of coffee, coal, bananas, flour, gold, chemicals and paper as well as services, especially tourism. The recovery will extend in 2025 to such an extent that the economic growth would be around 2.7%, still below pre-pandemic levels because of low investment and a challenging fiscal situation. Meanwhile, this inflationary process steepened in 2024 to close the year with an annual change of 5.2%. Despite the new decline, Banco de la Republica completed four years with inflation above its target range. The moderation in inflation was due to a favorable performance of goods and regulated items. The lagged effect of the appreciation of the Colombian peso against the dollar between July 2023 and August 2024 allowed goods inflation to end the year below 1%. In regulated prices, the stability of gasoline helped, allowing for a moderation in the aggregate from 17% to 7%, which will continue in 2025. The risk will be on the side of energy rates. On the contrary, services contained the falling inflation to the extent that indexation was high in rents and in the rest of services, the high minimum wage adjustment weighted. At the end of 2024, inflation in services was 7%. For 2025, we forecast inflation of 4.1%, explained by high indexation in rents, but with a lower reference, inflationary pressures derived again from the increase in the minimum wage, potential depreciation of the peso and possible increases in energy and diesel rates. With the economic scenario described above, Banco de la Republica reduced its interest rate to 9.50% in 2024, above what was expected by analysts. In general, the Central Bank has acted cautiously in all meetings of the year with rate cuts reductions of 50 basis points in six sessions and 25 basis points in the remaining two, given the slow fall in inflation, more adverse global financial conditions and the challenging fiscal situation. In fact, these three elements would continue in 2025, amid a volatile global situation due to the beginning of Donald Trump's term as President of the United States, local inflation that could end the year once again above the target range and public finances affected by underfunded budget. In fact, in January, the Central Bank left the rate stable, reinstating its cautious approach. It is difficult to forecast a scenario, we expect the end of year interest rate around 7.75%. Regarding the exchange rate, 2024 was a year of strength for the dollar in global markets, following the upward adjustment in expectations for inflation and the Federal Reserve rate following Mr. Trump's victory. Likewise, the greater perception of risk in Latin America, especially in Brazil, Mexico and Colombia, generated volatility in the second half of the year. Thus, while the US dollar appreciated 7% against G7 currencies, it gained 19% against currencies in the region. The Colombian peso was the third weakest Latin American currency as the exchange rate went from COP3,874 per dollar to COP4,405 per dollar between 2023 and 2024. In addition to the external factors, the challenging fiscal situation also had an impact with the country risk premium measured by the five-year CDS going from 157 basis points to 212 basis points in the same period. In 2025, we expect the exchange rate to average COP4,400 against the dollar, given the greater strength of the dollar in the world due to Mr. Trump's policies and deterioration of the internal public finances and a marginal widening of the external deficit. Specifically, we expect the current account deficit to go from minus 2% of GDP in 2024 to minus 2.6% of GDP in 2025 due to a more significant recovery of imports than exports, both on goods and services and a lower dynamic in the inflow of remittances due to the immigration policies of the United States. Finally, the situation of public finances experienced in 2024 will be repeated in 2025. In particular, revenues would surprise the government to the downside, resulting in cash flow problems and making spending cuts necessary to comply with the fiscal rule. Going forward, we think that the debate would shift towards a fiscal sustainability. Although fiscal uncertainty is high, rating agencies such as Fitch and Standard & Poor's have kept their ratings unchanged or for the latter extended its negative outlook, while Moody's could lean towards a downgrade. That sums up our economic view. Thank you. Back to you, Maria Lorena.

Thank you, Camilo. Our financial system remains solid while facing the challenges from the current context, as Camilo mentioned. In 2024, 10 banks out of a total of 29 had net loss. The consumer credit cycle continues its recovery trend. However, margins are still under pressure due to the shy action from the Central Bank and regulatory pressures such as changes in interest rate caps. The Colombian financial system remains committed to the fact of credit. This program aims to lend COP253 trillion at competitive rates to clients in six prioritized sectors. As of January, banks have already disbursed COP61 trillion as part of this program. Over the year, we increased our market share in gross loans and deposits. As a result, net income to our shareholders was COP281 billion and return on average equity was 6.5%. For the year, net income was north of COP1 trillion and return on average equity was 6%. Now, I would like to pass the call to Diego, who will give details of our results. Diego?

Thank you, Maria Lorena. I will start on Pages 9 and 10 with a few charts regarding the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are unconsolidated figures under Colombian IFRS as published by the Superintendency of Finance. As you might have seen in the past, our banks continue to exhibit better loan portfolio quality and performance than the system in all main categories. On Page 9, during 2024, we continue to outgrow our competitors in all loan categories. This yielded as of November 12 month market share gains of 75 basis points in total loans, 52 basis points in commercial, 150 basis points in consumer and 152 basis points in mortgages. For the 12 months ended last November, commercial loans and mortgages for the system decreased 0.7% and increased 2.4% in real terms, while consumer loans contracted 8.7% in real terms. Over the quarter, loan dynamics for the system picked up as rates continued falling and credit quality improving, even though a modest 0.1% nominal growth. Consumer loans for the system grew for the first time since fourth quarter 2022. Mortgages grew 3.1%, while commercial loans grew 2.2% in nominal terms over the quarter. Partly, inflation stood at 0.6%. On Page 10, quality of consumer loans continued improving in the Colombian banking system. Meanwhile, commercial loans and mortgages slightly deteriorated. I will now move to the consolidated results of Grupo Aval under IFRS. Starting on Page 11. Assets grew 8.9% during 2024 and 2.3% for the quarter to COP328 trillion. Gross loans, our main assets reached close to COP200 trillion, growing 2.5% during the quarter and 7.3% year-on-year. Commercial loans and mortgages continue driving our annual growth, while consumer loans began to recover, delivering a second consecutive quarter of growth. Commercial loans expanded 7.8% year-on-year and 2.3% for the quarter. Consumer loans grew 3.3% year-on-year and 1.4% quarter-on-quarter. Payroll loans grew 4.8% year-on-year and 1.1% during the quarter. Auto loans grew 9.4% and 4%, personal loans grew 1.5% and 1.1%. Credit cards contracted 4.3% year-on-year and grew 0.6% quarter-on-quarter. Finally, mortgages grew 19.2% and 6.9%. We anticipate loan growth rates to continue recovering during 2025 due to a normalization of monetary policy, stronger GDP growth and improvements in consumer loan quality. On Page 12, we present funding and deposit evolution. Total funding increased 10.6% in 2024 and 2.5% during the quarter. Deposits grew 10.4% in 2024 and 2.5% quarter-on-quarter, accounting for 73.4% of our funding. Our deposits to net loans closed at 106%. On Page 13, we present the evolution of our total capitalization, our attributable shareholders' equity and the capital adequacy ratio of our banks. Our total equity grew 5.2% in 2024 and 1.1% for the quarter, while attributable equity increased 4% and 0.4% respectively. As a recent development, last November, Banco de Occidente was classified as a systemic bank by the Superintendency of Finance. This implies a 100 basis points increase in core equity Tier 1 capital requirements for which the bank will have a 24-month transition period. Core equity Tier 1 requirements will increase gradually over six month periods. On Page 14, we present our yield on loans, cost of funds, spreads and NIM. Our quarterly NIM performance was driven by poor performance of our NIM on investment that resulted from a shift in expectations and the speed at which the rates and inflation would trend back to normalized levels. This resulted in one of the weakest quarterly NIM on investments over the past couple of years. However, it was partially offset by favorable results of hedging strategies recognized under derivatives trading income and foreign currency under other income. Our NIM on loans, even though slightly improving quarter-on-quarter continues to be pressed. As discussed in the past, this has been the main driver by a still high cost of funds in line with the persistent high Central Bank rate. Lending rates continue to be pressed by high competition in high credit quality customers and products as a result of a modest volume growth in the system. Further pressing rates, the Superintendency of Finance introduced changes to the formula used to set interest rate caps [indiscernible] lowering the rate of some consumer loan categories. This environment resulted in a 29 basis points expansion to 4.3% of our consolidated NIM on loans during 2024 and our NIM on investments of close to zero for the year, resulting in a 3.4% total consolidated NIM. Our NIM on retail loans expanded 100 basis points to 5.2%, while NIM on commercial loans contracted 22 basis points to 3.6%. As mentioned in the past, our consolidated NIM on loans and total NIM are affected by our Merchant Banking segment, which mainly uses funding to generate nonfinancial income rather than interest income. For our banking segment, cleanup of the effect of the nonfinancial segment, annual NIM on loans expanded 12 basis points to 5%, the NIM on investments fell 50 basis points to 0.4% and the total NIM remained materially flat at 4.2%. During the quarter, our consolidated NIM decreased 105 basis points quarter-on-quarter to 2.8%, driven by negative NIM on investments of minus 2.6%. As mentioned before, this was partially offset by favorable results of hedging strategies recognized under all area. Our consolidated quarterly NIM on loans was 19 basis points higher quarter-on-quarter at 4.4%. Regarding our banking segment, quarterly NIM on loans increased six basis points quarter-on-quarter to 5%, still well below historic levels. This incorporates the NIM on retail loans that expanded 30 basis points to 6.3% and NIM on commercial loans that fell 12 basis points to 4%. The total NIM of our banking segment fell 93 basis points quarter-on-quarter to 3.7%. We expect an improvement in NIM driven by lower average cost of funds during 2025. The starting point of the Central Bank intervention rate for 2025 of 9.5% is already 2.4% of points below the 11.9% average for 2024. In addition, the Central Bank is expected to continue lowering its rate throughout the year, as mentioned by Camilo. Pages 15 through 17, we present several loan portfolio quality ratios, starting on Page 15. 30-day PDLs improved 46 basis points quarter-on-quarter to 5.3% and 90-day PDLs 29 basis points to 4%. The tighter origination policies that were put in place in 2023 led to an improvement in quality, especially across the consumer portfolio. This quarter, it saw the lowest PDL formation in seven quarters on a 30-day basis and in five quarters on a 90-day basis. The evolution of asset quality continues pointing to the end of the consumer loan credit cycle with PDL ratios and PDL formation peaks during first quarter 2024. Generally, PDL formation for the quarter was the lowest since the last quarter of 2021. Finally, the ratio of charge-offs to average 90-day PDLs was 0.8 times for the quarter and 0.69 times for the year. On Page 16, the quality of our loan portfolio improved year-on-year measured by stages across all categories. Stage 1 loans reached 88.5% of gross loans, the highest level since third quarter of 2023. The share of our portfolio classified as Stage 1 portfolio showed an improvement of 61 basis points over the quarter, driven by the better performance in all three main loan categories. Coverage measured as allowance for Stage 2 and 3 as a percentage of Stages 2 and 3 slightly fell during the quarter to 35.4%, with coverage for consumer and commercial loans at 42% and 34.4% respectively. As anticipated, the cost of risk net of recoveries continued to show improvement during the quarter only 11 basis points to 1.8%. Cost of risk net for commercial loans improved 52 basis points, resulting in a rate of 0.4% for the quarter, while cost of risk net of consumer loans for the quarter was 4.8%. Cost of risk net of recoveries for the year was 2.2% down from 2.3% a year earlier. We expect that our product mix heavier in lower risk products and segments will continue to support an improvement in cost of risk during 2025. We expect that cost of risk evolution for consumer loans will maintain its positive trends in credit cards and unsecured loans and the cost of risk on commercial loans will be similar to that for 2024. On Page 18, we present net fees and other income. Annual gross and net fee income grew 6% and 6.9% respectively. Gross and net fee income for the quarter increased 11.5% and 18.5% year-on-year and 3.8% and 3.1% respectively quarter-on-quarter. Annual net pension and severance fees grew 23% mainly due to higher performance-based fees and for higher collection on mandatory contributions related to the increase in minimum wage at the beginning of the year. Annual gross banking fees grew 1.4%. This incorporates stronger commissions and banking services growing at 3.9%, offset by a 2.1% annual decrease in credit card and debit card fees, explained by lower transactional volumes and a system-wide decrease in active outstanding credit cards. Income from nonfinancial sector decreased 23% in 2024 as anticipated in our previous calls. Our infrastructure sector contributed 34% less than in 2023, driven by some concessions transitioning from the construction to the operation phases. Energy and gas companies increased their contribution 7.1% related to a 16% increase in gas distribution volumes in Promigas and a stronger regasification volumes at SPEC. Hospitality business had a record high performance as women with revenues benefited from stronger occupancy rates. Finally, on the bottom of the page, other income during 2024 was higher than a year earlier. Profit taking on fixed income investments valued at fair value through OCI implied a COP41 billion increase in net gains on sale of investments and OCI realizations. Strong results for derivatives during the quarter correspond to hedging strategies of trading investments that mitigated the negative NIM on investments as described earlier on this call. On Page 19, we present some efficiency ratios. Total OpEx grew 3.7% in 2024, well below the 12% increase in minimum wage and the price indexation based on 2023 inflation of 9.3%. Personnel, depreciation and amortization and general and admin expenses grew year-on-year 5.1%, 6.3% and 2.4%, respectively. Operative taxes and deposit insurance account for 37% of total G&A expenses in 2024. Cost to assets for 2024 was 2.7%, improving from 2.8% in 2023. Cost to income was 54.2%, up from 52.1% during 2023. Total expenses increased 15.2% quarter-on-quarter, driven by operative taxes, marketing expenses and other seasonal expenses. Finally, on Page 20, we present our net income and profitability ratios. Attributable net income for the quarter was COP281 billion or COP11.8 per share. Our return on average assets and return on average equity for the quarter were 0.7% and 6.5% respectively. Our attributable net income for 2024 was COP1,015 billion or COP42.8 per share, increasing 37.4% relative to 2023. Before passing it back to Maria Lorena, I will now summarize our general guidance for 2025. We expect loan growth in the 10% area with commercial loans growing in the 9% and retail loans growing in the 11% area. NIM in the 4.15% area with NIM on loans in the 4.6% area. NIM of our banking segment in the 4.9% area with NIM on loans in the 5.4% area. Cost of risk net of recoveries in the 2% area, cost to assets in the 2.75% area, income from the nonfinancial sector of 80% of that for 2024, fee income ratio in the 20% area. And finally, we expect 2025 return on average equity to be in the 11% area.

Okay. Thank you, Diego. Before moving into questions and answers, I would like to share some final thoughts of Colombia and Grupo Aval in the current year. Economic conditions will remain challenging, both locally and globally. However, our recovery trend will continue. In 2025, we expect GDP growth to return to levels exceeding 2.7%. We are viewing a less likely return of inflation within the Central Bank's target range, which implies a higher for longer interest rate environment. We remain constructive on investment prospects as well as businesses and customer confidence, which will support the dynamics in 2025. In this context, we expect to reach double-digit profitability and benefit from a strong growth in real terms of the banking segment, as Diego mentioned. Our increase profitability compared to last year will continue to be driven by an improvement of risk-adjusted NIM on loans, lower cost of funding of our nonfinancial business, commercial and operational effectiveness and higher nonbanking and banking net fee income, mainly related to better origination and transactional activity. So we are now open for questions.

We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Brian Flores of Citi. Please go ahead.

Hi, Tim. Thank you very much for the opportunity to ask questions. I have two. The first one is asking your help to think about growth. You are, as you mentioned, outgrowing the market, particularly in consumer. So maybe if you can give us like a bird's eye view of what is helping you have this confidence in the recovery of the segment? And until when can you outgrow the market, right? Because maybe this is particular to you, maybe conditions are improving for everyone. So just how to think about your outgrowing the system. And also, you mentioned a very interesting comment on higher core equity Tier 1 requirements. So if you could remind us how the phasing will work and if this could limit your growth prospects? And then just finally on growth, if this higher growth, as we saw in the consumer segment is bringing probably higher provisions, if this could also push cost of risk a bit higher for the segment? I'll ask my second question later. Thank you.

Okay. Great questions. Regarding your first question, I will bring you back, you have it handy to Page Number 9 on the document, where you can see how Aval behaves not only for the past three years that are presented here, but how it has performed historically. The set of Pages 9 and 10 basically show you that Aval has a much more predictable growth pattern and credit quality cycle than the rest of the system. You can see how in those years of exuberant growth that you saw in Colombia around '21 and '22 where there was huge growth in unsecured consumer lending, credit cards and so on. Grupo Aval did not grow as fast. And as those banks that are basically in the -- going through the hangover after you have had that sort of growth are having to adjust down because of higher or more problems on those products on the credit front, we're able to outgrow them. So throughout the cycle, we basically are able to grow smoother, however, consistent in time. Second, and ties with your third question, is the kind of market share growth that we're having is sustainable growth. It's not a onetime high magnitude event, but more the kind of growth that you see month after month, gaining share in each one of the products. So that's to explain why we've been able to grow faster. We've been having less quality problems and we're basically going through a more consistent growth strategy. Then more a quantitative answer to what's going to happen moving forward. Most of Maria Lorena's presentation was regarding what we're doing strategically to try to align the sales forces to what our main objectives are, and that will continue to help us to outgrow the system. In addition, there's the macro wave that we are actually writing. You can see that our expectation on GDP is further growth, our expectation of rates, even though we are not happy with the speed at which it is happening, we do see that going on. Another point mentioned previously on the call that I would like to emphasize is we are already around 240 basis points below what the average Central Bank rate was last year. So the starting point for this year is already much better from the cost of funds perspective. Moving to your question on Banco de Occidente, it is 100 basis points over two years, and it's an increase of 30, 30, 20 and 20 basis points happening every six months or each six month period.

Perfect. Super clear. And then just wanted -- my second question to confirm some notions you mentioned the guidance, right? I think you revised the NIM -- overall NIM from 4.4% to 4.15%, I just wanted to check if you kept your cost of risk net of recoveries is the same just because it was a bit fast and I couldn't hear. But I know you reiterated the ROE in the 11 areas. So just wanted to hear your thoughts on if you're having perhaps a lower NIM and the same growth and perhaps similar cost of risk, does your 11% ROE level have, let's say, a downward bias vis-a-vis what you have after 3Q results? Thank you.

Yes. You got it right. We are basically ending up in the same guidance of 11% growth with a combination of two things happening. On the positive side, we see a much better performance than expected on the credit quality side. It is data dependent, but there could even be some upside there. We've lowered our guidance on cost of risk to 2%. Then the other thing that is happening, even though numbers are not as large is we are improving our efficiency expectation driven by the kind of initiatives we are running with our Aval Valor Compartido. So we're bringing our cost to assets to 2.75%, a slight increase. On the negative side, the NIM was affected by a change in our view on how the Central Bank will behave. However, we've been moving our balance sheets in such a way that we are somehow immunized to some of those changes. Therefore, the kind of changes in expectations, even though they do affect the way we are seeing our NIM on loans hasn't had a massive change compared to what was baked into our previous guidance. So in summary, same guidance on return on equity with a slightly lower NIM compensated by better performance on the cost of risk and a slighter better performance on the efficiency side.

Super clear. Thank you.

Your next question comes from the line of Nicolas Riva of Bank of America. Please go ahead.

Thanks for the chance to ask questions. I have a follow-up on the prior question from Brian about capital requirements for Banco de Occidente. Diego, so I understood Banco de Occidente is going to be considered a systemic bank in Colombia from now onwards and you explained that means an increase of 100 basis points in the minimum capital requirement and you said it's going to be phased in over four years. My question is, when I look at the capital ratios of Banco de Occidente today, right, in Slide 13 in the earnings call, the 12.8% total capital compared to the minimum fully loaded 11.5%, how do you look at that buffer? And if you see a need to raise additional capital at Banco de Occidente given these higher capital requirements? Thanks.

Yes. Bottom line, not really. What we're seeing is we have room not only for Banco de Occidente, but as a whole in the group to better use the Basel III options that we have with Tier 2 and AT1 capitalization. In addition, what we've seen is during this transition period, the bank will be able to generate enough internal capital plus the kind of approach it's following on its balance sheet to be able to cope with this change. Having said so, it has both a negative and a positive side. The negative side, obviously, is higher requirement. The positive side is we are standing with Banco de Occidente in a better position to get sovereign support.

We have two years now.

Yes, it's a two-year transition period.

Thanks very much, Diego.

Your next question comes from the line of Carlos Gomez of HSBC. Please go ahead.

Thank you for taking my question. It's a repetition of the theme of capital. Can you remind us what the capital requirement is right now for each of your four banks? And if it is also in transition or changing to a different level in the coming years? So that will be number one. Number two, can you give any comments about what you expect for dividend? And number three, a request, could you please publish the guidance? Because again it's very fast in the call and we are not able to catch it. Can it be part of the presentation? Thank you so much.

Okay. On your last one, we take note of that, and we'll take that into consideration. Regarding capitalization, the requirement moves up from total solvency of 10.5% to 11.5%. Those are the 100 basis points. And starting in November, every six months, there is an increase. So the first increase would move from 10.5% to 10.8%, the next one to 11.1% and so on up to 11.5%.

That's a two-year process, right? That's a two-year process. 2026, 2027.

Yes, 30, 30, 20, 20 basis points. The first happening six months after November last year. The second one is November 2025 and it goes until November 2026.

'26, okay.

And then on your dividend question, that's still a discussion in progress in our shareholders. However, just to remind you, the logic that we follow is Aval pays dividends based on cash dividends received and our banks tend to pay around 50% of what their net income from the previous period was, obviously, for those that were profitable during that period. And then Corficolombiana has projects in which it invests. So frequently goes below what the 50% standard looks for the rest of the group.

All right. And can you remind us what the current capital requirements are for the other banks in the group?

The only systemic bank that we had was Banco de Bogota that had an 11.5%. Now Banco de Occidente will join them within two years at that level. The rest of the banks have a 10.5% requirement.

Thank you so much.

Your next question comes from the line of Daniel Mora of CrediCorp Capital. Please go ahead.

Hi. Good morning and thank you for the presentation. I have just one question. I would like to understand what will be the profitability path during the year, considering the ROE guidance for this year is around 11%. I mean should we expect a single-digit ROE in the first half of the year and then evolve to drive figures even above 11% by the third or fourth quarter of the year? Thank you so much.

Yes. It's perhaps I'm answering the obvious, but given that what the drivers will be or the main driver will be an improvement in our NIM that will be a process that will happen over time. And, yes, the last quarter is expected to be above the year average. So we will be progressing in that direction. Without getting into specifics, if you look at what happened throughout 2024 is except for the last quarter where we had an impact on our investment portfolio and that has seasonally high expenses, we were making progress on, I will put my eye on risk-adjusted NIM and you can see the trend that we are looking into.

Your next question comes from the line of Julian Ausique of Davivienda Corredores. Please go ahead.

Hi, everyone, and thank you for having my question. My first question is regarding the major stable funding ratio. As I mentioned is in my understanding in August, there is a requirement for all banks to fulfill the legal requirements of 100%. So I would like to understand what are the impacts that you are expecting in terms of, for example, NIM cost of funding due to the requirements to fulfill the IFRS ratio. And the other question is regarding, if you have any estimation regarding the legal reserve that can may be released due to the pension reform that has been approved. So if you will be able to release some legal reserve and what will be the impact in Grupo Aval and furthering that growth? Thank you.

Regarding your question, this is, just to make sure I understood it right, you're referring to CFEN, the stable funding ratio requirement. What our banks have been doing over time is they've been preparing for the upticks in requirements that we've had. Therefore, the banks have already built in part of the additional cost. And then our guidance already built in moving progressively, not only on the CFEN side, but also on the interest rate risk requirements that we're managing in the Colombian system. Then I didn't really get your question. This is very much dependent on how the regulation is finally detailed. At this point, in our guidance, what we've built in is that if there was no impact from the pension reform. So the pension reform does actually, as written now, have a positive effect in the first year, that's not included in our guidance. We're basically at a point where we would be prepared for various scenarios. Regarding releasing the legal reserve and dividends, we haven't got into that until we fully see the regulation.

Okay. Thank you.

[Operator Instructions] There are no further questions at this time. With that, I will now turn the call back over to Ms. Maria Lorena Gutierrez Botero. Please go ahead. Once again, I will turn the call back over to Ms. Maria Lorena Gutierrez Botero. Please go ahead.

We're checking. It seems that the call got disconnected.

Apologies for the delay. And with that, ladies and gentlemen, that concludes today's conference. Thank you for participating. You may now disconnect your lines.

Welcome to Grupo Aval's Third Quarter 2024 Consolidated Results Conference Call. My name is Regina and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A., Grupo Aval is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulations. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial Conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with Colombian IFRS as reported to the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential, or continue, or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general, economic and business conditions, changes in interest and currency rates, and other risks described from time to time in our filings with the Registro Nacional de Valores y Emisores in the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time. We expressly disclaim any obligation to review, update, or correct the information provided in this report, including any forward-looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed, rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. With us today are Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer, Mr. Diego Solano, Chief Financial Officer, Ms. Paula Duran, Corporate VP of Sustainability and Strategic Projects, Mr. Jorge Castaño, Corporate VP of Financial Assets and Efficiency, and Mr. Camilo Perez, Banco de Bogota's Chief Economist. I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Ms. Maria Lorena Gutierrez Botero, you may begin.

Thank you. Good morning, everyone, and thank you for joining us for our third quarter 2024 conference call. I am here with Diego Solano, our CFO, Camilo Perez, Chief Economist of Banco de Bogota, Paula Duran, our Corporate VP of Sustainability and Strategic Projects. I will start by highlighting this quarter's results. Positive trends anticipate that increased costs continue to consolidate, leading to the positive results shown in some key business metrics. Return on average equity was 9.7%, back to level comparable to the third quarter of 2022. Our banking segment is back to net income levels close to the continued net income of third and fourth quarters of 2022, driven by improvements in cost of risk, a stronger mean on investment, and cost control. We continue to gain market share while growing at a prudent rate. Foreign needs have the highest net income for a quarter in its history. Coffee recovered from last quarter has a neutral contribution to net income. Moving to another topic, as part of the deployment of our Corporate Synergies and Efficiency Program, we have expanded ATH's role to reflect its broader scope. ATH's name has changed to Aval Valor Compartido, or AVC. AVC, we lacked a global centralized platform for our subsidiary business support processes, looking to unlock value for our shareholders by capturing synergies, efficiencies, and best practices. We aim to leverage knowledge and technical investment capabilities to improve our agility and time to market. To support this mandate, we strengthened AVC's management team and raised the profile of its support. We appointed Isabel Cristina Martinez as CEO, Jorge Ivano Dalvaro as VP of Synergies, and Andrea Arevalo as VP of Finance and Strategy. Isabel previously acted as Banco de Bogota Administrative VP, and has an astounding trajectory in banking, IT, Telecom, with a strong track record of execution in business transformation. Jorge Ivano more recently acted as NECI's COO, and has ample experience leading IT operations and administrative areas in banking institutions in Colombia. Andrea has various management roles in strategy and finance within Grupo Aval and Banco de Bogota, and more recently acted as Tuya's CFO. To support the execution of the strategy of AVC, we have a new board of directors as well. I am now the Chair of the Board, and this includes four top leaders, independent board members, with extensive senior level experience in relevant areas, including IT, innovation, shared services, management, and IT consulting, and ESG. On the payments front, we are supporting the central bank's initiative to create a real-time payment account-to-account system called BREVE. We believe that this platform will benefit customers and increase financial inclusion by increasing interoperability and providing efficient instant payments. As a step in this direction, in October, we launched TAC Aval as a feature that enables payment interoperability, enhancing the service offered by our banks. For over 30 years, BREVE Aval has offered interoperability between our banks. Now, TAC Aval is a numerical key assigned to each savings product that our clients have in our banks and dale! that enables instant payments between Aval accounts without the need for sharing personal information. In other matters, we continue in our efforts to participate in relevant public and private dialogues and events for the reactivation of the country's economy. This has allowed us to play an outstanding role in our sector, and we continue to convince that, aligned with our purpose of creating a sustainable condition for progress, BREVE Aval must continue actively promoting our efforts to reach maximum impact and feasibility. Now, I will invite Paula to go over our ESG achievements to read these words.

Thank you, Maria Lorena. To begin with, I would like to bring your attention to some of the most recent achievements that show the way we have enhanced and moved forward with our ESG committee. In the latest Corporate Sustainability Assessment, the evaluation used to define the Dow Jones Sustainability Index Composition, we reached our highest score so far, increasing 18 points from our previous score and placing us in the 90th percentile. We improved in all of the three dimensions, environmental, social, and governance, measured by the CSA. Our sustainable goal portfolio has become stronger, reaching 17.3 trillion pesos, financing sustainable construction, sustainable mobility, SMEs, sustainable agriculture, renewable energy, among other initiatives. In terms of governance, with the most recent appointments, female participation in the top management of our entities has increased considerably. At the group level, currently 35% of top management positions are held by women and 43% of the largest companies are led by women. This adds up to female presence in boards, which in most of our companies is higher than 30%. This is a strong signal of our commitment to attracting the best talent and promoting diversity of gender, experience, and abilities in our group. This quarter, we had an active participation in the United Nations Biodiversity Conference, COP16 that took place in Cancun, Colombia. The COP16 saw Grupo Aval playing a leading role in over 40 events and high-level dialogues. Most of our entities' CEOs participated actively, as well as Grupo Aval's CEO, Maria Lorena, who was the only representative of the Colombian financial sector in the Blue Zone during the Global Finance Day, organized by UNESCO. In addition, during the COP16, we signed the Mansion House Declaration of United for Wildlife with the British Embassy committing to fight against the illegal trafficking of wildlife species. We also made strong presence in different avenues with exhibitions of our biodiversity achievements, as well as conservation and reforestation initiatives. Banco de Cidences celebrated 30 years of the Planeta Azul Award that recognizes projects that preserve and conserve the country's water sources. Banco de Bogota expanded the reach of the Amazonía debit card, conserving mangroves in the Colombian Caribbean. Unifal Banco de Migas subsidiaries of Corte Colombiana launched an innovative energy project based on biogas captured from crude palm oil that powers more than 1,200 homes. As for our social impact, Mitio and La Guajira celebrated a new stage of their project, delivering business solutions in affordable water, sustainable energy, and food security to more than 4,500 people. I would like to highlight the relevance of this project that is led and followed up directly by our CEO, Maria Lorena, as well as the Chairman of Grupo Aval's Board of Directors, Mr. Ricardo Sarmiento Gutiérrez. Our aim is to benefit by mid-2025 more than 25,000 people in 81 communities. With this project, we have also inspired similar efforts from the private sector to work together with the government and communities in other regions of the country. Our entities continue social programs and commitments in every social, financial, education, management capability for small businesses and entrepreneurs, productive projects in Indigenous communities, and employment programs for senior citizens, among others. During the quarter, we also received several recognitions on the ESG Front. Grupo Aval was included in the list of the 25 leading companies in sustainability by Forbes. We were also ranked as the second conglomerate with the best reputation in Colombia and improved rating positions in the General Reputation Survey of the country. In the Medical Leaders Ranking, Maria Lorena Gutiérrez and Ricardo Sarmiento reached also top positions. Great Place to Work recognized Banco de Asistencia as the first company in Colombia. ADL, Coyandinas, Promigat also ranked in top positions in the same ranking. In the Global Compact Awards, Corte Colombiana won in the category Fight Against Corruption for its initiative building society through corporate transparency. Banco de Asistencia also won in the Best Business Practices category for its UNICEF credit card which contributes to communities in La Guajira. Orbenit received also recognition in the Consubsidio Exponsible Award for its contribution to the productive inclusion of senior citizens. Finally, as we move forward, we remain centered in integrating ESG principles across every aspect of our operations. We recognize sustainability not just as an obligation or commitment but as a value driver and catalyst for innovation, growth and shared value. This is the legacy we strive to build. Thank you.

Thank you, Paula. Now, on the macro side, let me mention some relevant issues during this part. As a positive evolution, inflation continues to trend down in October to 5.41%. Some challenges, such as a near-term pressure due to climate events and a stronger dollar, will most likely impact higher reservation rates during the remainder of this year. However, we believe that the positive evolution of inflation demands a more decisive action from the central bank for faster rate cuts to reduce the effect of the higher real interest rate levels. Even though still low, economic growth continues to pick up, supporting a healthy environment for our business. Unemployment metrics remain under control, which will support internal demand dynamics. Some obstacles for a strong recovery of Colombia remain and require big changes in fiscal and public policy and prompt government execution. Investment remains below historical levels, while private-public partnership programs have not made progress over the past couple of years. The country's fiscal accounts remain under pressure, even after a first spending cut program and the recently announced second wave of a spending cut of 33 trillion pesos. Camilo will forward comment on this and will share our view on the economy. Camilo.

Thank you, Maria Lorena. Good morning to all attendees. The Colombian economy registered annual growth of 1.9% in the year to date to August amid a recovery in household consumption, a resilient export sector, and some signs of improvement in investment. In 2024, Colombia's purchasing power has benefited from lower interest rates, real wage gains due to falling inflation, the resilience of the labor market, and higher income from remittances, government monetary transfers, and financial returns. The improvement in domestic demand has supported activities such as entertainment services, commerce, lodging, food services, and transportation. The arrival of more tourists has also helped growth. Higher agricultural production due to improved weather conditions and lower fertilizer prices has not only fulfilled domestic consumption, but has also helped sales abroad, where coffee has positioned itself as one of the most dynamic sectors in exports. In construction, housing sales bottom up, and progress is evident in some infrastructure projects other than roads. However, the recovery of the sector is still temporary. With this scenario, we maintain the growth projection for 2024 around 1.75%, with a consensus of analysts slightly above this level. For us, the adjustment of public spending to honor the fiscal rules is the main downside risk. It should be remembered that economic growth in the first half of the year was 1.5%, but excluding public administration, it would have been just 0.8%. Unemployment has behaved better than most feared, as sector activity has reshuffled hiring towards services, and the government contributed to job creation, at least in the first half of the year. More recently, expenditure cuts have taken a toll on public hiring. National unemployment fell to 9.8% in September, its lowest level in two years. This inflation process deepened at the beginning of the fourth quarter, and the annual increase in prices went from 7.2% in June to 5.4% in October, the latter being the lowest level since the end of 2021. While inflation in goods reached a new low, services remained elevated due to high indexation. For the remainder of 2024 and much of 2025, we anticipate an extension of the downward trend in inflation, albeit at a lesser pace than that seen recently, ending 2024 around 5.4%. On the external front, the country reached in the second quarter the lowest current account deficit in the last 15 years, standing at 1.6% of GDP. However, for the second half of 2024, the recovery of domestic demand, especially private consumption, would increase imports and deteriorate the external deficit. In fact, the positive numbers of imports, mainly in consumer goods and raw materials, already confirmed the situation. However, the arrival of dollars from remittances, coffee, and non-traditional exports, as well as from tourism, would partially offset the outflow from imports. With this, Colombia would have its second year with low financing needs in dollars, a situation that would be reversed by 2025 with a more dynamic economy. Passing on to the fiscal stance, the situation has become more challenging. On the one hand, tax collection would again surprise the government's estimates on the downside, making a deeper cut unnecessary to honor the fiscal rule in 2024. In fact, local media has been reporting on an expenditure cut of around 33 trillion pesos, which together with an under-execution of the budget could help comply with the fiscal rule. On the other hand, Congress did not approve the government's budget for the following year. If approved by decree as it stands, there is a high probability of underfunding, as the tax reform going through Congress has a low probability of passing. Finally, the reform to the general participation system compromised the sustainability of public finances in the medium term. In fact, the Autonomous Committee of the fiscal rule highlighted that the proposal is not consistent with the compliance of the rule in the coming years. The higher country risk premium partly explains the recent devaluation of the exchange rate, which has surpassed the barrier of 4,500 pesos per dollar. From the international front, the good results of the United States economy and the victory of Donald Trump generate expectations of higher inflation and a shallower reduction in interest rates, supporting a stronger dollar. There is also a risk of diplomatic backlash as Colombia's government could clash with that of the United States on topics such as drugs and security. Putting together, this explains the cautionary approach of Banco de la República in its process of interest rate cuts. In September and October, despite some expectations of deeper cuts, the rate adjustments continued in multiple of 50 basis points to 9.75%. For 2024, we project a return rate of 9.25%. To sum it up, growth and employment and inflation have fared better than expected, while the fiscal situation has become the biggest challenge for the country, limiting the space for a more ample monetary policy. For 2025, we expect growth to improve to 2.6%, while inflation will keep on trending downward to 3.6%. And the central bank could reduce its policy rate further to around 6%. Uncertainty on the political front and important relations could hinder the economic recovery. That sums up our economic news. Thank you. Back to you, Maria Lorena.

Thank you, Camilo. Our financial system has remained solid while facing the challenges coming from the current context. We believe that the consumer credit cycle has already entered the recovery phase. However, loan growth is still in negative ground in real terms and margins are still under pressure due to the shy action from the central bank and regulatory pressures such as changes in interest rate caps and high liquidity and solvency requirements. Nonetheless, Colombia's financial system has delivered on its commitment to the country's economic recovery. As part of this effort, banks committed in August to the Pacto por el Crédito. This aims to divert 55 trillion pesos as competitive rates to clients in six prioritized sectors. As of September, banks have already disbursed 10.6 trillion pesos as part of this program. In addition, to promote housing construction, banks lowered mortgage rates earlier this year. The spread between new credits and the central bank rate is now at its lowest level in history at around 2%. This has already resulted in a rebound in new credits. Finally, banks have efficiently transferred the central bank rate cuts to corporate and consumer clients. Let me go over the highlights of our financial results. Loan disbursements increased in the system during this quarter, even though loan and deposit growth continues to be soft. In this context, we continue to outgrow our peers and increase our market share. Over the quarter, our bank's combined gross loans grew 0.7%, reaching a 25.2% market share by September of this year. Cost of risk and asset quality improved relative to the previous quarter, and operating expenses remain under control. Regarding asset quality, cost of risk and delinquency for consumer loans and mortgages continue improving. A strong result in near loan investments resulting from positive market conditions helped profitability over the quarter. Finally, NIM on loans continue to be prepped by a conservative monetary policy, interest rate caps affecting consumer loans, and our concentration in higher quality segments and products. As a result, net income to our shareholders was $415 billion pesos, and return on average equity was 9.7%, the best result for our third quarter in three years. Now, I would like to pass the call to Diego, who will give the details for our results.

Thank you, Maria Lorena. I will start on pages 8 and 9 with a few charts regarding the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these are unconsolidated figures under Colombian IFRS as published by the Superintendency of Finance. On page 8, we continue to outgrow our competitors in all loan categories. This yielded, by end of August, year-on-year market share gains of 65 basis points in total loans, 65 basis points in commercial, a 138 basis points in consumer loans, and a 100 basis points in mortgages. Banco de Bogota's exit from the microcredit slightly shifted our market share in total loans. We are starting to see an increase in disbursements across all categories in the banking system as rates have come down and credit risk has decreased. As mentioned by Camilo, leverage for households has continued receding. Early total loans disbursements for the period end of August increased 18% over three months and 23% over the year, up from 5% and 13% contraction a quarter earlier. The most notable recovery was in consumer loans where disbursements grew 18% over the quarter and 28% year-on-year, reaching 19 trillion pesos. Even though a strong rebound, this is still three-fourths of what was disbursed eight quarters earlier. On page 9, the quality of consumer loans continued improving in the Colombian banking system while commercial loans and mortgages slightly deteriorated. Our banks continue to exhibit a better loan portfolio quality than the system in all main categories. I will now move to the consolidated results of Grupo Aval under IFRS. Starting on page 10, assets grew 1.3% over the quarter to 321 trillion pesos, accumulating 7.3% increase year-on-year. Gross loans, our main assets, reached 195 trillion pesos, growing 0.7% during the quarter and 4.3% year-on-year. Commercial loans and mortgages continued driving our year-on-year growth while consumer loans resumed quarter-on-quarter growth following two consecutive quarters of contraction. Commercial loans expanded 5% year-on-year and 0.1% over the quarter. Consumer loan growth, even though still at a soft 0.8% year-on-year, grew 0.9% during the quarter. With payroll loans and auto loans growing 1.4% and 2.1% respectively during the quarter, personal loans growing for the first time in three quarters at 0.8%, credit cards continuing to contract at 1.8% during the quarter, and finally, mortgages growing 4.8% over the quarter and 13.7% year-on-year. We anticipate loan growth rates to pick up in 2025 due to the normalization of monetary policies, stronger GDP growth, and improvements in consumer loan quality. We expect to continue outpacing the banking system's loan growth. On page 11, we present funding and deposits evolution. Loan funding increased 1.2% during the quarter, accumulating 7.3% year-on-year. Deposits account for 73.4% of our funding, growing 8.7% year-on-year, and decreasing 1.2% quarter-on-quarter. Our deposit-to-net loans ratio closed at 106%. On page 12, we present the evolution of our total capitalization, our attributable shareholders' equity, and the capital adequacy ratio of our banks. Our total equity grew 3.5% over the quarter and 6.6% year-on-year, while our attributable equity increased 4% over the quarter and 6.1% year-on-year. During the quarter, Banco de Villas issued a 150 billion pesos Tier 2 subordinated bonds that added around a 130 basis points to its solvency. On page 13, we present our yield on loans, cost of funds, spreads, and NIMs. Total NIM increased 47 basis points quarter-on-quarter and 3.9% year-on-year, driven by an improvement in NIM on investments to 2.8% during the quarter. Our consolidated NIM on loans was 7 basis points lower at 4.2%. NIM on retail loans, predominantly priced at fixed rates, expanded 22 basis points to 5.3%, while NIM on commercial loans, predominantly floated over IVR, fell 28 basis points to 3.4%. Regarding our banking segment, its NIM on loans contracted 6 basis points quarter-on-quarter to 4.9%, still far below historic levels. This incorporates our NIM on retail loans that expanded 28 basis points to 6%, and NIM on commercial loans that fell 30 basis points to 4.1%. The total NIM of our banking segment expanded 35 basis points to 4.6%, driven by the same trends impacting our consolidated NIM. NIM on loans expansion has continued to be elusive due to high funding costs resulting from a shy central bank intervention rate reduction pace and regulatory pressures such as changes in interest rate caps, formulas that forced additional reductions in products such as credit cards and personal loans. In addition, loan spreads on new loans have been lowered given the concentration of growth in higher-quality, lower-rate assets. We expect that the central bank will have room to accelerate its pace in rate cuts during 2025, given the positive evolution of inflation and the current high-forward-looking real interest rate level. This scenario supports our view of NIM expansion over the following quarters. On pages 14-16, we present several loan portfolio quality ratios. Starting on page 15, 30-day PDLs decreased 3 basis points to 5.8%, while 90-day PDLs increased 5 basis points to 4.3%. Consumer loans and mortgages PDL formation improved both on a 30-day and 90-day basis. The evolution of asset quality points to the end of the consumer loans credit cycle with PDL ratios and PDL formation peaking during Q1 2024 across all products. PDL formation for credit cards and personal loans was the lowest in seven quarters. In line with our expectation, commercial loans deteriorated over the quarter. As will be presented in a couple pages, this behavior partially offsetted the favorable effect and cost of risk of improvement in consumer loans quality. Finally, the annualized ratio of charge-offs to average 90-day PDLs was 0.67 times. On page 15, the share of our portfolio classified as stage 1 portfolio remained stable over the quarter, driven by a better performance in consumer loans and mortgages that was offset by commercial loans. Coverage measured as allowances for stages 2 and 3 as a percentage of stages 2 and 3 loans slightly fell during the quarter to 36.5%, with coverage for consumer and commercial loans at 44.6% and 34.9% respectively. On page 16, as anticipated, the cost of risk improved during the quarter. We expect cost of risk to hover around the 2% area for the following quarters, yielding a more favorable local macro scenario. Cost of risk net of consumer loans improved a 125 basis points to 4.3%. This is the first quarter yielding a positive risk-adjusted NIM on loans for consumer loans in six quarters. Cost of risk net for commercial loans was 0.9%. On page 17, we present net fees and other income. Gross fee income grew 4.7% year-on-year and decreased 0.5% quarter-on-quarter. Net fee income increased 2.6% and decreased 2.1% respectively during these periods. Gross pension and severance fees grew 15.7% year-on-year and 0.8% quarter-on-quarter due to higher mandatory pension fund management fees. Gross banking fees decreased 0.3% year-on-year and 2.8% quarter-on-quarter due to lower transactional volume and a system-wide decrease in active outstanding credit cards. Income from the non-financial sector contracted 18% year-on-year and 15.8% during the quarter. As mentioned in past calls, our year-on-year performance has been driven by some concessions that are transitioning from the construction to the operation phase. Finally, on the bottom of the page, the quarterly performance and other operating income was similar to that for previous quarters with a higher contribution of net gain on sales of investment and OTI realization and a weaker result in derivatives and FX. On page 18, we present some efficiency ratios. Efficiency metrics reflect our operational efficiency initiatives. Total operating expenses decreased 2.3% quarter-on-quarter and increased 3.1% year-on-year. General and administrative expenses decreased 10.8% quarter-on-quarter and 0.9% year-on-year with operating taxes and deposit insurance accounting for 37%. Cost to assets for the quarter was 2.6%, improving 12 basis points quarter-on-quarter and 9 basis points year-on-year. Quarterly cost to income improved to 58.7%. Finally, on page 19, we present our net income and profitability ratios. Our total net income for the quarter was 416 billion pesos or 17.5 pesos per share. Our return on average assets and return on average equity for the quarter were 0.9% and 9.7% respectively. Before passing the call back to Maria Lorena, I will now summarize our general guidance for 2024 and our initial view on 2025. For 2024, we expect loan growth between 6.5% and 7% with commercial loans growing between 7.5% and 8% and retail loans growing between 5% and 6%. NIM in the 3.6% area with NIM on loans in the 4.35% area. NIM of our banking segment in the 4.4% area with NIM on loans in the 5.1% area. Cost of risk net of recoveries in the 2.2% area. Cost to assets in the 2.7% area. Income from the non-financial sector of 80% of that for 2023 and the income ratio between 20% and 25%. Finally, we expect our 2024 ROE to be in the 6.25% area. Moving to our initial view for 2025, we expect loan growth in the 10% area with commercial loans growing at 9% and retail loans growing at 11%. NIM in the 4.4% area with NIM on loans in the 4.75% area. NIM of our banking segment in the 5% area with NIM on loans in the 5.5% area. Cost of risk net of recoveries in the 2.15% area. Cost to assets in the 2.8% area. Income from the non-financial sector of 80% of that for 2024. At the income ratio in the 20% area. And finally, we expect 2025 ROE to be in the 11% area.

Okay, thank you, Diego. Before moving into questions and answers, I would like to share some thoughts of Colombia and Grupo Aval in the upcoming years. Even though the economic context has been challenging over the last couple of years, our recovery trend continues to consolidate. In 2025, we expect GDP growth to return to levels exceeding 2.5%. We view a more predictable and a lower inflation that is expected to fall within the central bank's target range, allowing for a lower interest rate environment to consolidate. This will favor investment as well as businesses and consumer confidence and will support the end of the consumer credit and interest rate cycle. In this context, we expect to return to double-digit profitability and benefit from stronger growth in real-term services. Our increased profitability will be driven by an improvement of risk-adjusted needs on loans, lower cost of funding of our non-financial business, commercial and operation effectiveness, and higher net income relating to an increase in origination and transactional activities. So, we are now open for questions.

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from the line of Brian Flores with Citi. Please go ahead.

Hi, Team. Thank you for the presentation on the earnings. I just wanted to ask you a bit on mortgages. Because you're gaining market share, it seems that the market is a bit complicated in terms of the lean points still. So, I just wanted to think about your strategy for 2025. Should we continue to see you gaining share in this market? Do you think the market will improve and that will fuel your growth? Just to have maybe a better vision here. And also, if I can, a second, just very quick. Just to confirm, you're seeing ROE trends going to 11%. Just thinking if this is more coming from NIM, which I think it could be the case, or a betterment in terms of cost of risk. Many thanks.

Okay, Brian. For your two questions regarding mortgages. Yes, we do expect to outpace the system. The reason for that is we are widely underweighted in mortgages compared to our peers. Therefore, we are having a chance to better pick what our customers are. We're standing at around 15% with our, let's call it, natural share somewhere above one-fourth of the market. So, yes, we do expect to continue seeing that trend into the future. Then regarding the ROE trend, you basically touched on the point. When you look at our numbers, our numbers have improvement in cost of risk. We have cost control and we have two headwinds that we need to overcome. Number one, the system is growing at a low rate and we do expect the market to help us in the process. Plus, we do expect to continue outpacing the system, gaining some market share. The other part of the equation is the central bank is yet due to reduce over 300 basis points its rate that will benefit very strongly our portfolios that had contracted previously in the cycle. Therefore, the key driver of recovery will be a combination of those two, going back to real growth rates in Colombia and then expansion and NIM on loans as mentioned by Maria Lorena. We do expect ROE to improve throughout the year. This implies, obviously, going back to numbers closer to what our long-term ROE rate should be by the end of the quarter or and into 2026.

Perfect.

Our next question will come from the line of Daniel Mora with Credicorp Capital. Please go ahead.

Hi, good morning and thank you for the presentation. I have three questions from our side. I would like to understand the first one. We have struck a clear downward trend in the consumer segment, but the commercial segment continues deteriorating. Why is the commercial segment taking longer than expected when compared to the consumer one? And I would like to understand if there is a particular sector showing even a more challenging scenario and when do you expect to see an improvement in this segment? That will be my first question. The second one is regarding NIM. I would like to understand if you can provide a further color regarding the NIM with and without the trading income. What was the strategy taken during this quarter that showed a strong improvement in the NIM of investment and should we consider this to be a one-off or can we expect a better performance going forward? And the last one in this question is can you repeat the guidance of the NIM for 2024 and 2025? Thank you so much. And the last one is regarding the loan program with the government. Can you repeat how much you have disbursed under this program and what are the conditions of these loans? Do they have a guarantee attached or a subsidy of interest rates? Thank you so much.

Well, regarding your first question on the cycle, the reason why you see commercial skill lagging and the reason why we have guided into that kind of behavior is that what you usually see in the cycle is that the consumer cycle anticipates what happens with the commercial cycle. You know that households start to suffer and with some lag, companies see the impact of their sales dropping and margins starting to feel pressure. Therefore, what is happening was expected and is what you usually see and it is commercial cycle goes after the consumer cycle. Regarding your question on sectors, you have to realize that Grupo Aval had one quarter of the market. Therefore, we are exposed to all sectors. And in all parts of the cycle, even the boom parts of the cycle, we do have sectors that we have to look into that are affected by the macro conditions. Therefore, obviously, we have gone over several years already looking into different sectors that are sensitive either to increasing inflation, increasing rates, changes in exchange rates, and you can go down the list. Therefore, we do have all the time different sectors we're looking into. So, I'm not going to stop in any of those to point them out as a special sector. I would say at this point, we're not anticipating any large single event coming on. So, this is more how the economy is reacting, what gets reflected into our numbers. Then, regarding your question on NIM on trading income, that's a tricky one because this depends on how interest rates are falling down. So, I think you have to look beyond the cycle and look into the averages of how numbers behave. Part of the offset in our numbers, obviously, is what happens in the FX and derivatives line. What you can see into our numbers is you usually have some sort of offset in those numbers. The quarters where we have good results in NIM on investments are quarters where we have poor results. And FX and derivatives, given the hedging activity around our trading portfolio. Then, between the guidance and NIM, I'll start with the NIM for the banking sector that is more comparable to banks that do not have the non-financial sector. What we're seeing for this year, 2024, is total NIM for the banking segment in the 4.4% area with NIM on loans in the 5.1% area. For 2025, that same numbers are for the banking segment. Total NIM in the 5% area, so 60 basis points for the improvement. And NIM on loans in the 5.5% area, 40 basis points improvement, yet below what historic averages look like. Our guidance for total NIM that includes the interest expenses from our non-financial sector that pulls the numbers down. Total NIM for this year in the 3.6% area and NIM on loans in the 4.35% area. For next year, 4.4% for total NIM and NIM on loans 4.75%.

I can answer. Regarding the Pacto por el Crédito, all the financial sector, our commitment in the financial sector was 55 trillion pesos in 18 months. So, after one month, the results that the Superintendencia Financiera Colombiana published about the results of this Pacto por el Crédito, we disbursed 10.6 trillion pesos, especially in industry, renewable energy, housing, tourism, and the only sector that is not according to our goals nor is what the government call a popular economy. So, we have to find a way that we can go to find the demand for this credit in the country.

Perfect. Thank you so much. Just one last question regarding the 10.6 trillion that you already disbursed. What are the conditions of these loans? Do they have a guarantee attached or there is a subsidy to the interest rates or are they under normal conditions?

As you know, as Diego and I mentioned, the housing credit, we have special conditions because lower rates. With the renewable energy, we have some guarantees and we are working for a good business and a popular economy with some entities in the government like FINDETE, FINAGRO, and Fondo Nacional de Garantía. This is the way we are working with Pacto por el Crédito.

Our next question will come from the line of Marlon Medina with J.P. Morgan. Please go ahead.

Thank you. I'll follow up on the loan growth outlook and I would like to ask first, I think you mentioned in the chat that I didn't get the number, so if you can repeat the breakdown of loan growth between commercial and consumer. And number two, the competitive environment and as you mentioned, we want to keep up growing the system, but how is competition in your view reacting? Thank you.

Marlon, perhaps the main change that we're already seeing is a pickup in growth for consumer. There are many reasons for that from the supply and demand side. From the demand side, rates have fallen substantially and we're looking into over 300 basis points reaction next year. So, from the demand side, you do see that. Then, unemployment hasn't deteriorated, setting a different way the employment market continues to be healthy. And finally, from the supply side, we've already begun to see an improvement in quality that allows us to be more determined in lending in those segments. In certain products that we have shied away for some time. Therefore, it's a good mixture from the demand and supply side to see that increase. One of the drivers that is coming into the theme here is we are returning to see much better growth, real terms growth for most consumer products. I know you had a last question. Our competitive landscape. The Colombian market is very competitive. We've mentioned that as well. For example, we are concentrated in dispersing in the higher quality, low rate segments. Therefore, we see a lot of competition there because the market does behave in that manner. We have very strong competitors that we respect in not only the larger players, but also other players in certain products. So, that's the dynamics of the Colombian market. We are ready to be part of that and we are ready to be part of what generates competition in the system.

Perfect. Very clear. Thank you. And just can you repeat the loan growth you're expecting for commercial and consumer specifically?

Yeah. Loan growth for this year for commercial would be 7.5% to 8% with retail growing at 5% to 6%. Retail including consumer and mortgages. And then for next year, we're looking into commercial at 9%. That is a slight pickup compared to this year, but retail growing at 11%. That is very substantial compared to this year. So, overall, this year would be between 6.5% to 7% and next year in 10%.

[Operator Instructions] Our next question will come from the line of Julian Ausique with Davivienda. Please go ahead.

Hi, everyone. Thank you for having my question. First of all, I would like to, I don't know if you already talked about that, I mentioned in the call. But I don't know if you mentioned something about the ordinary bond that you are trying to issue for 400,000 million pesos. And if you can give us a little bit color of the uses of that and what is the purpose to acquire shares of some subordinated financial entities. Just to have a little bit of color of that. The other question is related Porvenir and Corficol and Corte Colombiana. I don't know if you can tell us a little bit about the operation, what you're expecting for 2025, and what was the main positive impact of those companies in the results of Grupo Aval during this quarter? And finally, just to know what are the expectations, like in the long term in terms of ROE? You mentioned that the provision for 2025 is 11%. I don't know if you are looking for a higher ROE for the next years or that is the long-term ROE that you are trying to get. Thank you.

Okay. So let me start at the top bottom. Regarding ROE, we expect our ROE long-term, medium-term, to return back to more than 15%. That's where we believe we should be heading by the end of next year and into the following year. Regarding Porvenir and Corficol, Porvenir has been a very relevant operation throughout this year. We expect it to continue to add to Grupo Aval. Obviously, there's many scenarios there. Business as usual, there's no any change with the pension reform where the numbers will be similar to what we've seen in the past, and then if the reform falls as expected, we might see a pickup in net income for the following years, but perhaps a lower growth longer term. Regarding Corte Colombiana. Corte Colombiana, you've heard our last calls. We've been guiding into a reduction in income from the non-financial sector over time, and the reason that we have given is we've seen our projects moving from the construction to the operations phase. Once we have information to disclose on the new projects that we are trying to build, the pipeline that we're building, you will get that information, but that's where we're focused at this point. Short term, Corte Colombiana will strongly benefit from a lower interest rate given that their projects have a relevant portion of impact of interest rate expense, and as interest goes down, you'll see Corte Colombiana picking back up. Then regarding our local bond, it's a small bond. It's a bond that should be, let's say, somewhere around $70 million, where one of the main uses is we have a year end during this week, and in a few weeks, we have some bonds coming due that's short of $40 million, and we want to continue being present in the market. Therefore, that's the reason why we're going back to the market.

There are no further questions at this time. Miss Maria Lorena Gutierrez Botero. I turn the call back over to you.

Thank you very much for being with us in this call, and see you in the next call. Have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for joining. You may now disconnect.

Welcome to Grupo Aval's Second Quarter 2024 Consolidated Results Conference Call. My name is Regina, and I will be your operator for today's call. Grupo Aval Acciones y Valores S.A., Grupo Aval is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulation. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial Conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with the Colombian IFRS as reported, the Superintendency of Finance. Details of the calculations of non-IFRS measures, such as ROAA and ROAE, among others are explained when required in this report. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as may, will, should, expect, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general, economic and business conditions, changes in interest and currency rates and other risks described from time to time in our filings with the Registro Nacional de Valores Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update or correct the information provided in this report, including any forward-looking statements and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. With us today are Ms. Maria Gutierrez Botero, Chief Executive Officer; Mr. Diego Solano, Chief Financial Officer; Mrs. Paula Durán, Corporate VP of Sustainability and Strategic Projects; and Mr. Camila Perez, Banco de Bogota Chief Economist. I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Ms. Maria Lorena Gutierrez Botero, you may begin.

Good morning, everyone and thank you for joining us for our second quarter 2024 conference call. I am here with Diego Solano, our CFO; Camila Perez, Chief Economist of Banco de Bogota; Paula Durán, our Corporate VP of Sustainability and Strategic Projects and people of the company. Let me start with some ESG highlight. To better support the execution of our strategy, we are taking actions to renew and strengthen our management teams, at the first and second levels, both at our main businesses and at holding company level. Juan Camilo Angel resigned as CEO of Banco AV Villas after 30 years of service. Gerardo Hernandez was appointed as his successor. Mr. Hernandez is the former Chief Legal Officer of Banco de Bogotá and previously served as part of the Board of Directors of Colombia Central Bank and as Superintendent of Finance. We also appointed Mrs. Milena López, replacing me as CEO of Corficolombiana. Milena has over 20 years of experience in the private and public sector, most recently serving as CFO to Ecopetrol and CENIT. Also in July, we strengthened our structure at the holding level with the creation of two new Corporate Vice Presidents. The VP of Sustainability and Strategic Projects led by Paula Durán and the Corporate Vice President of Financial Assets and Efficiency led by Jorge Castaño. Paula is the former VP of Strategy and Sustainability at Corficolombiana and Jorge is the former Financial Superintendent. They both have more than 20 years of experience in the public and private sectors. I am confident that the personal and professional qualities of our team will continue to strengthen our market position and help achieve our group of our long-term strategic goals. Now, I will invite Paula to go over additional ESG achievements during this quarter.

Thank you, Maria Lorena and good morning to you all. First of all, I would like to congratulate Banco de Bogotá on its issuance of COP500 billion in sustainable senior bonds. Also, our banks presented their Principles of Responsible Banking report as part of the adherence to UNEPFI. This implies that all our banks will have plans to move towards goals in terms of climate change, gender equality, financial inclusion and sustainable finance, among others. During this quarter, we received several recognitions for our advantages in terms of diversity and inclusion. Grupo Aval ranked sixth in Latin American for its commitment in these areas and Banco the Bogotá ranked first. Corficolombiana was also recognized for its work towards closing the generational gap. And Porvenir successfully launched a job site for employability of senior citizens. As per recent advances in environmental impact, Banco de Occidente celebrated 30 years of the Planeta Azul prize that recognizes initiatives aimed at water preservation and protection. Also, our toll road concessions successfully implemented several biodiversity projects in more than 700 hectares, as well as solar energy projects generating significant efficiencies in energy consumption. In terms of our social impact, in addition to our programs implemented by our subsidiaries, we continue advancing in the Mision La Guajira program. Up to now, we have benefited more than 340 families that is 3,500 people, with clean drinking water solutions as well as food security. Finally, I would just like to highlight that Grupo Aval sustainability is not just a commitment. It's a core principle that drives our every decision. We've dedicated to building a future where financial strength and social and environment sources go hand in hand, ensuring our positive interest for generations to come. We continue advancing the determination towards our sustainability inputs and goals.

Thanks, Paula. Now on the macro side, let me mention some relevant issues in this quarter. Inflation continues to trend down in July. Further supporting our view of an over Colombia's Central Bank that could cut rates faster, reducing real interest rates from current levels above 6%, and continuing to improve corporate, the banking sector and economic recovery. Economic growth has continued to be slow and investment remains well below historical levels. The country's fiscal accounts remain undisputed, even after spending cut program. The government is working on a second wave of spending costs and considering a tax reform or financial law, including surcharges to additional sectors while lowering the general corporate tax rate. Camila will further comment on this and share our view on the economy.

Thank you, Maria Lorena. Good morning to all candidates. Economic activity has turned out better than expected at the beginning of 2024, with an annual growth of 2% so far this year through May, compared with projections between 1.5% and 1.8% for the year. The improvement has been influenced, first by the recovery of the global economy, which has been reflected in a better performance of foreign trade. Secondly in the local context, better dynamics in sectors such as public administration, agriculture, recreation and utilities, especially electricity have also explained the positive surprise in economic performance. In contrast, more traditional sectors of the economy, such as construction, commerce and manufacturing, maintained construction rates at the beginning of the year. This is evidence of the current dispersion impacts our performance. Growth in 2024 is likely to exceed the 0.6% of 2023. However, it will remain below that of the long-term. A slow recovery in investment, affected by low levels of confidence for both businesses and households, coupled with still high interest rates, has had a negative impact on the present and has also reduced the outlook for future growth. The 12-month aggregate investment rate as of March 2024 approached its lowest level since the beginning of the series in 2005, that 13% of GDP, which will have a negative impact on economic growth in the coming years. Thus, potential growth is now estimated to be between 2.5% and 3%, lower than the pre-pandemic estimate of between 3% and 3.5%. Nevertheless, some modest signs from the consumer suggest that the worst is behind. The national employment rate show annual increase of just 0.2 percentage points in the first half of 2024 to 11.1%, benefiting from higher public and services hiring, which has compensated to some extent for job losses in sectors that were traditionally the engine of the labor market. In addition, we expect lower rates also higher purchasing powers as wages increase more than inflation and the exchange rate has revalued and a reduction in the financial burden will allow for a change in the consumption cycle. This has been evident in the positive presence of imports of consumer goods in the first half of the year. We have upgraded our estimate for growth for 2024 to around 1.75%, against a consensus just below that level. We will have the efficient numbers for growth in the second quarter later on today. In July, inflation with its downward trend falling below 7% after being stuck just above this level during the second quarter. Also, inflationary pathway continues indexation of services, especially rents, the potential depreciation of the Colombian peso and the increase in default prices will only allow inflation to represent the next crisis between 2% and 4% until mid-2025. For the year, our forecast is for inflation to trend towards 5.6%. The aforementioned macroeconomic balance has explained Banco de la Bogota political discussion in its process of easing monetary policy, where in July it completed four meetings with negative 50 basis points rate cuts. However, given the improvements in inflation and the convergence of expectations to those markets, the pace of rate cuts is set to accelerate to 75 basis points soon. Furthermore, the forecast of lower rates at a global level reinforces the above. For the year-end, we expect the Central Bank's rate to reach 8.75%. In terms of external accounts, the country has seen a significant adjustment, with a reduction in the current account deficit to levels close to 2% of GDP. This can be explained by a combination of lower demand for goods produced abroad, especially inputs and capital goods, while the country has seen a greater inflow of dollars from remittances and tourism. In net terms, this situation has resulted in a lower need for dollars, which has provided some support to the exchange rate. The other factors that play into the currency behavior are potential interest rate cuts by the Federal Reserve, the United States elections, the fiscal situation and local uncertainty. If rate cuts are delayed, the Republican does not convince the presidency, the fiscal situation deteriorates further and local political market returns, the exchange rate would tend to devalue. For the time being, the aforementioned forces have found a fragile balance that favors a flat exchange rate with an average balance, in the midst of recession period in the United States. On the fiscal front, even though the government has straightened out its accounts with a significant spending cut, risks are still present and compliance with the fiscal rule departed as indicated by the autonomous committee of the fiscal rule. For the remainder of the year, it is necessary for tax collection to meet the established targets and for the government to restrain its spending in order to ease concerns about the sustainability of public finances. In any case, rating agencies are alert to any new developments, while the markets are already pricing at a lower level for the foreign trading. Fiscal risks remain for 2025 due to potential budget financing issues, with the need for the approval in Congress of a financing law and an earlier end to the transition period of the fiscal rule. As of today, details regarding the financing law are still limited. That sums up our economic view. Thank you. Back to you Maria.

Thank you, Camila. We strongly believe that the country's recovery needs to be driven by government policies that lead to a stronger investment, effective execution and confidence on the legal environment and physical security. However, we believe that in addition to these forwarding efforts, private sector initiatives will add to recovery. We have set ourselves to contribute and support the country's economic recovery by launching a group-wide plan to contribute to sustainable growth and employment generation in key sectors such as, SMEs, housing, energy transition, agriculture and the popular solidarity economy. These sectors have immediate effects on economic activity and employment. We have committed to provide funds at preferential rates to these key growth sectors, ensuring strong risk management processes. We will also continue our ambitious plan of more than COP1.9 trillion in priority sectors such as infrastructure, gas, agribusiness and tourism. Before Diego gives the details of our results, let me go over the highlights of our financial results. The second quarter showed stronger loan and deposit growth that allowed us to continue increasing our market share. Over the quarter, our bank combined gross loans grew 1.8%, reaching a 25% market share by March of this year. Cost of risk and asset quality improved relative to the previous quarter and operating expenses remained under control. Regarding asset quality, it seems we have finally reached the peak in cost of risk and delinquency for consumer loans. On commercial loans, the increase in delinquency has been milder that -- what could be expected in this cycle. We remain vigilant for potential climate signals or weaker sectors. We are currently designing an ambitious corporate synergies and efficiency plan, which we will launch over the coming months. I expect to provide you details on our following calls. Finally, the Central Bank continues to be reluctant to speed up interest rate reductions. We maintain our view that the Central Bank can cut rates faster, reducing historical high real interest rates, which have resulted in a lower net interest margin than our initial forecast. Net interest margin on retained loans have benefited for the pricing process of loan. However, the adjustments made by the Superintendency of Finance to the formula used to determine interest rate cuts has forced a steeper decline in credit cards, personal loans and other target rate consumer lending growth. On the other hand, net interest margin for commercial loans has been affected by competition, which puts pressure in place, mainly in the higher credit quality corporate segment. As a result, net income to our shareholders was COP204 billion and return on average equity was 4.9%. This result was obtained in the Colombian context of 10 banks out of a total of 28, incurring cumulative net losses as of May, the worst figure since 2009. We expect the end of the credit cycle on consumer loans and the recovery of net interest margin will enable the banking sector to return to the profitability over the next months. To position our banks for upcoming growth and replenish capital in two of our banks with weak performance in the cycle, we are strengthening the capital structure of Banco de Occidente, Banco Popular and Banco AV Villas. Now, I would like to pass the call to Diego, who will give the details of our results.

Thank you, Maria Lorena. I will start on pages 8 and 9 with a few charts regarding the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system. For comparability reasons, these figures are unconsolidated under Colombian IFRS published by the Superintendency of Finance. We continued to outgrow our competitors in all loan categories. This yielded by end of May, year-on-year market share gains of 83 basis points in total loans, 108 basis points in commercial loans, 125 basis points in consumer loans and 57 basis points in mortgages. On Page 9, the quality of consumer loans appears to have begun to improve in the Colombian banking system, while commercial loans and mortgages slightly deteriorated. As mentioned in the past, Aval's portfolio composition is skewed towards lower consumer risk products resulting in a better credit quality than the system average. I will now move to the consolidated results of Grupo Aval under IFRS. Starting on Page 10. Assets grew 3.2% over the quarter to COP317 trillion accumulating a 6.2% increase year-on-year. Gross loans, our main asset reached COP193 trillion, growing 2.4% during the quarter and 4.8% year-on-year. An 8% depreciation of the Colombian peso during the quarter had a positive effect on quarter-on-quarter metrics, contributing 1.3 percentage points to quarterly growth. Over the year, the peso appreciated 0.7% having no material impact on growth metrics. Commercial loans and mortgages continue driving our nominal growth, while consumer loans resumed growth following two consecutive quarters of contraction. Commercial loans expanded 2.9% in the quarter and 5.9% year-on-year, with peso depreciation contributing 1.8 percentage points to quarterly growth. Consumer loan growth, even though still at a soft 0.9%, improved during the quarter. Payroll loans and auto loans grew 1.6% and 2.6% respectively during the quarter, while personal loans and credit cards continue contracting 0.3% and 1.7% respectively during the quarter. Finally, mortgages grew 4.3% over the quarter and 10.8% year-on-year. We anticipate loan growth rates to rise later this year and into 2025 due to the normalization of monetary policy, stronger GDP growth and improvement in consumer loan quality. We expect our 2024 loan growth to continue outpacing the banking system. On Page 11 we present funding and deposits evolution. Total funding increased 3.4% during the quarter accumulating 6.8% year-on-year. Deposits account for 75.2% of our funding, growing 4.8% quarter-on-quarter and 10.1% year-on year. Saving deposits grew 7.3% during the quarter and 14.8% year-on-year, increased their share of our deposit mix by 169 basis points and 94 basis points respectively for these periods. Our deposit to net loans ratio increased to 108%. On Page 12, we present the evolution of our total capitalization, our attributable shareholders equity and the capital adequacy ratios of our banks. Our total equity grew 1.9% over the quarter and 3% year-on-year, while our attributable equity increased 1.6% over the quarter and 1.5% year-on-year. We are in the process of strengthening the capitalization of our banks to position them for stronger growth. Banco de Occidente's second quarter ratios reflect a $175 million and a quarterly 145 Tier 2 notes issued on May 7 that added 145 basis points to its solvency. In addition, we recently announced issuances of COP100 billion in equity and COP100 billion in subordinated bond at Banco Popular to strengthen its capital position. Banco Popular's unconsolidated solvency ratios were 12.3% for total solvency and 10.6% for core equity Tier1. These issuances will add approximately 1 percentage point to unconsolidated solvency. Finally, we are also considering a subordinated bond issuance for Banco AV Villas. On Page 13, we present our yield on loans, cost of funds, spreads and NIM. Total NIM increased 5 basis points quarter-on-quarter to 3.4%. Our consolidated NIM on loans was stable at 4.3%. NIM on retail loans predominantly priced at fixed rates, expanded 21 basis points to 5.1%, while NIM on commercial loans predominantly floated over IBR, fell 18 basis points to 3.7%. The expansion of NIM on loans continues to be slow due to higher funding costs in line with a shy Central Bank intervention rate reduction pace. In addition, loan rates have been pressed by a concentration of growth in higher quality lower rate assets and by changes made by the Superintendency of Finance in the formula used to determine interest rate cuts affecting some credit cards and personal loans. We expect that the Central Bank will have room to accelerate its pace in rate cuts as the year progresses, given the positive evolution of inflation, the current high forward-looking real interest rate level and the recent reduction in the outlook for U.S. rate levels. This scenario supports our view of NIM expansion over the following quarters. Finally, contributing to total NIM expansion, our NIM on investments improved to 0.2% during the quarter. Regarding our banking segment, its NIM on loans contracted 11 basis points quarter-on-quarter to 5%, still far below historic levels. This incorporates a NIM on retail loans that expanded 14 basis points to 5.7% and a NIM on commercial loans that decreased 29 basis points to 4.4%. The total NIM of our banking segment expanded 3 basis points to 4.3%, driven by the same trends impacting our consolidated NIM. On pages 14 to 16, we present several loan portfolio quality ratios. Starting on Page 14, the evolution of asset quality points to the end of the credit cycle for consumer loans, with PDL ratios and PDL formation peaking during first quarter of 2024 across all products. PDL formation for credit cards and personal loans was the lowest in seventh quarters. 30-day PDLs decreased to 5.8% while 90-day PDLs increased to 4.2%. Consumer loans PDL formation improved on a 30-day and 90-day basis was reduced. Commercial loans and mortgages showed mild deteriorations over the quarter. PDL formation reflects an improvement in the 30-days horizon and the roll-forward to 90-days of a portion of commercial loans than became delinquent since last quarter. Finally, the annualized ratio of charge-offs to average 90-day PDLs was 0.64x. On Page 15, the share of our loan portfolio classified as Stage 1 portfolio improved slightly over the quarter, mostly driven by a better performance in consumer loans. Coverage measured as the allowance for Stage 2 and 3 loans as a percentage of Stage 2 and 3 loans, slightly fell during the quarter to 37.4%, with coverage for consumer and commercial loans of 45.9% and 35.4%, respectively. On Page 16, as anticipated, the cost of risk improved during the quarter. We expect a positive trend over the following quarters, building on a more favorable local macro scenario. Cost of risk, net for consumer loans improved 194 basis points to 5.56%. The cost of risk of credit cards and personal loans substantially improved quarter-on-quarter falling 563 basis points to 9.6% and 253 basis points to 12.9%, respectively. The lower cost of risk in commercial loans incorporates an improvement in credit ratings of previously deteriorated corporate clients that have had overtime a consistent good payment behavior. This explains improvements of 36 basis points in total cost of risk and 68 basis points for commercial loans during the quarter. On Page 17, we present net fees and other income. Gross fee income grew 2.3% quarter-on-quarter and 4% year-on-year. Net fee income increased 0.9% and 1.9%, respectively during these periods. Net pension and severance fees grew 2.7% quarter-on-quarter and 7.3% year-on-year, due to higher mandatory pension fund management fees. Gross banking fees increased 3.1% quarter-on-quarter and 3.6% year-on-year due to higher transactional volume. Income from the non-financial sector contracted 24.5% during the quarter driven by some concessions that are transition from the construction phase to operation. Finally, on the bottom of the page, the quarterly decrease in other operating income is explained by: one, derivatives and FX losses that are negatively correlated with the higher returns from the non-financial sector. Two; net losses on sale of investments and OCI realization associated with fixed income portfolio management. And three, the comparison with our seasonally high dividends received by our subsidiaries during the first quarter. On Page 18, we present some efficiency ratios. In line with our cost control efforts, total other expenses increased 0.9% quarter-on-quarter and 1.2% year-on-year. General and administrative expenses grew 3% quarter-on-quarter and 3.1% year-on-year. General expenses continued to be driven by operating taxes and deposit insurance that account for 38% of total G&A expenses. Cost to assets for the quarter was 2.7%, improving 4 basis points quarter-on quarter and 9 basis points year-on-year. Our quarterly cost to income increased to 54.7%, mainly due to lower power operating income described on the previous chart. Finally, on Page 18, we present our net income and profitability ratios. Attributable net income for the quarter was COP204 billion or COP8.6 per share. Return on average assets and return on average equity for the quarter were 0.6% and 4.9%, respectively. Before passing to the fact to Maria Lorena, I will now summarize our general guidance for 2024. We expect loan growth between 7.5% and 8% with commercial loans growing between 9% and 9.5% and retail loans growing between 5% and 6%. NIM in the 4% area, with NIM on loans in the 4.5% area. NIM of our banking segment in the 4.5% area, with NIM on loans in the 5.25 area. Cost of risk, net of recoveries in the 2.2% area. Cost to assets in the 2.7% area. Income from the non-financial sector of 80% of that for 2023. A fee income ratio between 20% and 25%. And finally, we expect our 2024 return on average equity to be between 6% and 6.5%. I pass it back to Maria Lorena.

Thank you, Diego. Finally, let me mention that we are focused on sustainable growth and expect that a better macroeconomic scenario in the second half of the year will support better profitability going into 2025. So may we have questions.

[Operator Instructions] Our first question comes from the line of Julian Ausique with Davivienda Corredores.

First of all, I would like to confirm the guidance.

We cannot understand what you were saying. Could you speak a little higher, please?

Okay. Can you hear me now? Is it better?

Go ahead, but it's still difficult to understand.

Okay. So first of all, I would like to confirm the guidance in terms of demand ROE. And my second question is regarding the impact of Banco Popular, due to the equity issuance that made -- that was announced yesterday. And why will the participation that Grupo Aval would have to take in that sense? And the third question is regarding if you already have any view about 2025 results, a little bit of what is the call or what are the expectations for 2025?

Could you please repeat your first question?

Yes. Could you confirm the ROE guidance?

Yes. ROE guidance is 6.5%. As you might remember, we give out two different sets of guidance for the banking segment and growth for our full year numbers and also consolidated [indiscernible] interest expense and in internal engine. So NIM of our banking segment is a 4.5% area with minimum loans of the banking segment in the 4.25% area. That implies of the remaining of 3.75% area, with retail loans in the 4.5% area, that's your first one. Then regarding Banco Popular, the issuance are supported by Grupo Aval as we financed in the past. So that's what we expect to see. We will be answering those. And finally, on the year 2025, here we can only be directional as Maria Lorena mentioned and [Paula Durán] emphasized a positive trend NIM and cost or risk and are returned to normal numbers from Central Bank somewhere at the middle of next year. If we had a positive results, we have given out quantitative guidance.

[Operator Instructions] Our next question comes from the line of Nick Dimitrov with Morgan Stanley.

I have a couple of questions, and apologies, the connection seems to be pretty bad. So I don't know you might have already answered this, but I have a question about your capital allocation decisions. So it became clear that Banco Popular shareholders have agreed to raise COP100 billion yesterday. Can you walk me through the rationale for that? Because I know that the entity has been struggling for 1.5 years. But when I look at capital, it's 18% -- 18.2% to be exact. At the same time, this is the strongest or the best capitalized subsidiary within the group. At the same time, there's banks such as Banco Occidente's, whose capital is significantly lower. So I was just kind of wondering about the rationale to raise equity for Banco Popular when it's the strongest capitalized entity within the group and why not Banco de Occidente? So that is the first question. And the second one is on -- I understand that there is also a decision to raise COP100 billion of Tier 2 capital, again for Banco Popular. So I was looking to get an update in terms of where you are in the process of raising the Tier 2 money?

Could you go over the first question just to make sure I got it right?

I'm sorry, say that again?

Could you repeat your first question just to make sure I got it right?

Yes. So the first question is the rationale for Banco Popular to raise money when optically it looks that it's well capitalized.

Sorry. Number two. Let me answer the first two and then you can repeat the third one. The decision to strengthen Banco Popular is two sided. Number one, we look not only at a consolidated number, but also the unconsolidated numbers and the only bank that’s there is a material difference between those numbers, in fact, when I went through the numbers, I will point out for Banco Popular. Then Banco Popular has a combination of two things happening with cycle. Number one, it's ha been losing money therefore, it's been destroying capital over several periods. And then we see a very strong potential for growth moving forward. So we're also capitalizing as because refinishing part of what was lost in the process. And also we expect the management of the bank to be able to execute a much more aggressive growth strategy, that we'll be requiring that sort of capitalization. Then moving into an Banco de Occidente. The Banco de Occidente is somehow different than Banco Popular because they've been quite topical throughout the cycle. We will continue strengthening the bank before the required is demanded by growth. At this point, the use of capital seems to be the right amount. But as we said in the past, if we see our bank enable to outflow our expectations, we can build and review that plan. And then could you repeat your question?

Yes. The second question is regarding COP100 billion of Tier 2 capital for Banco Popular. Where are you in the process of raising the money?

Okay. I think that was the previous question. I would say we are ready to support it from the group. So we do not see a market execution risk in that essence.

There are no further questions at this time. Ms. Maria Lorena Gutierrez Botero, I turn the call back over to you.

Thank you to all to be with us in this call. And as you know, if you have question comment in the coming months, you can call us. And see you in the next call. Have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for joining. You may now disconnect.

Welcome to Grupo Aval's First Quarter 2024 Consolidated Results Conference Call. My name is Regina and I will be your operator for today's call. Grupo Aval Acciones y Valores SA Grupo Aval is an issuer of securities in Colombia and in the United States SEC. As such, it is subject to compliance with securities regulation in Colombia and applicable U.S. securities regulation. Grupo Aval is also subject to the inspection and supervision of the Superintendency of Finance as holding company of the Aval Financial Conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASB. Unconsolidated financial information of our subsidiaries and the Colombian banking system are presented in accordance with Colombian IFRS as reported the Superintendency of Finance. Details of the calculations of non-IFRS measures such as ROAA and ROAE, among others, are explained when required in this report. This report includes forward-looking statements. In some cases, you can identify these forward-looking statements by words such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue, or the negative of these and other comparable words. Actual results and events may differ materially from those anticipated herein as a consequence of changes in general economic and business conditions, changes in interest and currency rates, and other risks described from time to time in our filings with the Registro Nacional de Valores Emisores and the SEC. Recipients of this document are responsible for the assessment and use of the information provided herein. Matters described in this presentation and our knowledge of them may change extensively and materially over time, but we expressly disclaim any obligation to review, update, or correct the information provided in this report, including any forward-looking statements, and do not intend to provide any update for such material developments prior to our next earnings report. The content of this document and the figures included herein are intended to provide a summary of the subjects discussed, rather than a comprehensive description. When applicable in this document, we refer to billions as thousands of millions. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to Ms. Maria Lorena Gutierrez Botero, Chief Executive Officer. Ms. Maria Lorena Gutierrez Botero, you may begin.

Good morning to you all. I'm delighted to be hosting this first quarter 2024 conference call. Before we begin, let me introduce myself. My name is Maria Lorena Gutierrez Botero. I joined AVAL in 2018 having the privilege [indiscernible] with this extraordinary team in addition to financial resource and proud to have managed to position Corfi as one of the Colombian leading companies in services and deal. Last year, we generated 883 billion pesos in net earnings as part of turnover 13.5 trillion pesos in value generated to our stakeholders. I'm passionate about contributing to Colombia's growth. Before coming to AVAL, I served several leadership roles in the Colombian government between 2010 and 2018 and previously I had been Dean of the Business School at Universidad de Los Andes. I want to take this opportunity to acknowledge Luis Carlos Sarmiento Gutierrez or Luis Carlos Sarmiento Angulo for their outstanding leadership of the years they served as CEO and Chairman of Grupo Aval and want to congratulate Mr. Sarmiento Gutierrez for his new role as Chairman of Grupo Aval. It is an honor to succeed him as CEO and to work beside him. I expect to consolidate Grupo Aval's position as the leading financial conglomerate in the Columbian market, recognized for its sound profitability, sustainability, innovation and its contribution to key economic sectors maximizing value for our investors and other stakeholders. Before Diego goes over our numbers for the quarter, I will summarize my view of Colombia's macro scenario, refer to some key events on the ESG front, and finish with some highlights of our financial performance and our overall views for 2024. The global economy has performed better than anticipated. Fears of a recessionary scenario for developed countries have dissipated and now seem unlikely. Resilient economic data in the United States sustained a soft landing scenario consistent with a higher prolonged interest rate stance. U.S. inflation, accelerated to 3.5% in March, is still far from the short term target of 2%. The Federal Reserve’s plans on lowering rate later in the year with a maximum up to 25 basis point cuts this year, down from the six cuts previously anticipated by the end of 2020. Commodity prices are and are projected to stay high due to ongoing geopolitical tensions and supply chain disruptions benefiting commodity exporting nations in Latin America, Colombia included. On the domestic front, we maintain Colombia’s growth projections of 0.75% to 1.25%. The economic activity index increased by 2.5% year-over-year in February 2024, surpassing consensus projections. Peer reviews suggest that the Colombian economic dip at the end of 2023 and have since started to bounce, fueled by the momentum in agriculture, and mining sector and policy administration. Nevertheless, a primary challenge persists in maintaining the trajectory of recovering the secondary sectors to ensure positive annual growth in the months ahead. Inflation has decelerated from 9.3% in December 2023 to 7.16% in April and is expected to continue declining to the 5.75% area by the end of 2024. This inflationary process may face headwinds in the second quarter due to transitory effects like El Niño on prices of perishable foods and electricity. However, a significant portion of expected inflation, particularly in service and regulated sectors, has raised the inflation and Colombian inflation is anticipated to continue trending downward in the coming months. Moving to the monetary policy the Central Bank’s Board has cut its policy rate from 13% to 11.75%, with decreases of 25 basis points in January and 50 basis points in the subsequent two meetings. The Central Bank might have been too cautious in the magnitude of its rate cut, considering the absurd and expected this inflation. Imposing a tolerant economic speed, the real interest rates have remained contractual through this year, standing at 7% at the end of April, when considering a 4.7% year ahead expected inflation. We adapt the market to room for a more decisive interest rate reaction phase. In line with the positive evolution of inflation, we estimate our year end rate of 8.5% area by the end of 2024. There has been a substantial weakening since 2022 of gross fixed capital investment in infrastructure, building construction, and mining sectors that have a considerable contribution on the supply side of GDP. We expect that these trends will continue to underpin an established economic performance in 2024. The recovery of GDP growth in Colombia that followed the COVID-19 pandemic was driven by household consumption. Even though it’s still strong, household consumption, the key driver to GDP dynamics over the last two years, has moderated significantly and is forecast to experience modest growth into 2024. Looking beyond 2024, there are concerns that if the current low fixed investment rate persists, Colombia's potential growth will decline to a range between 2.2% to 2.5%, down from 3% and 3.5% before the pandemic. Total investment that includes inventories but close to 25 in 2023. Reaching the investment level of 2022 will require substantial growth in gross fixed capital formation. Immediate and decisive public action intended to stimulate investment in critical sectors such as infrastructure and energy is of the effect. In this context, we highlight the government's role as the orchestrator of Colombian regulation. As such, efficient public spending will be crucial in boosting its multiplier and counter-cyclical effect. However, public investment reach an underwhelming 14% of execution, the lowest in at least eight years. In addition, low gross domestic savings hinders a substantial pickup in investment and GDP growth over the following years. The post COVID-19 consumption rebound in Colombia that contributed to inflationary pressures connected to an increase in the financial burden of household, both through their indebtedness and higher interest rates. The postponed consumption of durable goods and services was encompassed by a marked improvement in employment figures well below pre-pandemic level, leaving households well positioned to consume. Consistent with the contraction of retail in the Colombian banking system observed since the end of 2022, the financial burden on households reported by the superintendency of finance has already received the pandemic level. This behavior favors an improvement in the Linux fee of our consumer loan portfolio. However, the sharp economic slowdown since the last quarter of 2022 and a weaker labor market since mid 2023 have contributed to an increasing delinquency across the banking system. We expect the yearly average national unemployment rate to be 11% in 2024, up from 10.2% in 2023. In the fiscal term, without additional spending costs, it is projected that Colombian central government deficit will rise to 5.6% of duty, exceeding the 5.3% allowed by the fiscal growth. This shortfall is a tool to lower economic growth, impacting tax revenue and adjustments in expected revenue due to enhanced tax administration and litigation efficiency. To meet the fiscal rule, an additional cut in primary spending of COP14.2 trillion will be necessary. We are watchful on the recent discussion regarded eventual changes to the fiscal world, even signally regarding future fiscal discipline, with an eventual implication on interest rate level invested confidence and country with premiums. The reduction in currency demand due to a weak domestic demand has led to a substantial appreciation of the exchange rate, with the dollar falling below COP3,750 in early April, its lowest levels in June 2022. Nonetheless, the Colombian peso has been fully adjusted in the recent decline in macroeconomic fundamentals. Risk associated with fiscal accounts, long-term growth projections, oil production and a narrower interest rate gap compared to the United States could potentially trigger a depreciation of the U.S. dollar. Colombia peso exchange rate to level above 4,000 pesos in the latter half of the year. On the social front, we launched the Misión La Guajira project in December 2023. This is a joint effort between ourselves, the government and the community, intending to bring potable water, food security and energy to over 80 communities in this extremely poor region in the country. We expect this to be an initial phase of a project that we as part will have a broader long lasting impact in this figure. This project will impact five of the sustainable development goals, including no poverty, good health and well being, clean water and sanitation, affordable and clean energy, and reduce inequality. Regarding our talents among several of our subsidiaries that were certified by great place to work, I am proud to highlight that Banco’s Misións recognized as the best place to work for women in 2023 in companies with over 1,500 employees. On the government front, changes were implemented throughout the Group’s Board of Directors intended to refresh them and to adhere to international standards. We increased the proportion of independent members and the number of women in our Board. At Grupo Aval, the general shareholder meeting approved the Board to be reduced from 14 members, seven principal and seven attending to only nine principals and increase the ratio of independent Board members of two-third. In the environmental front, Bancolombia are carbon neutral and we will continue working to achieve this status in the remaining direct subsidiaries between 2024 and 2025. In addition, our most relevant financial subsidiaries are currently working on building the respective climate change risk matrices in accordance with the CCFC principles. Regarding our financial results, Diego will refer next in detail to our financial performance during the first quarter of 2024. However, I will highlight as follows. This quarter’s long lasting performance was driven by a pickup in cost risk. Other key business metrics such as growth, net interest margin and cost to asset efficiency fell largely in line with our expectations and last quarter’s guidance. Despite the challenges environment for our banking activities, our restricted trade origination policies that those claims in 2021, we increase our market share in all main lending categories. During this quarter, we gained 32 basis points in total loans, 39 basis points in commercial loans, 42 basis points in consumer loans and 17 basis points in mortgages. We gained 32 basis points in total loans, 39 basis points in commercial loans and 42 basis points in consumer loans. In the first quarter of the year, 10 banks out of a total of 28 post losses, when excluding equity methods, dividends and no recurring income from various organizations, this number increases to 13 banks on a consolidated basis, although still depressed, we have begun to see a recovery of the net interest margin on loans and expect this to continue as the Central Bank maintains, if rate cut cycles through the year. The slower anticipate a decrease in the benchmark rate has decided recovery path than what we have initially anticipated. In addition, price competition has increased in the corporate segment environment of lower than expected growth of the banking system. Cost of risk in the system remains high despite having shown signs of stabilization in new business. Notwithstanding a high ratio of charts off from some of our competitors, delinquency metrics remain well above historical levels. Our lower price consumer loan mix differentiates us from our main competitors with a higher ratio of payroll lending and lower share of unsecured consumer lending and has favored us in this credit cycle relative to the rest of the banking system. Finally, we expect the risk management actions taken throughout these credit cycles. The review of our banks strategies and cost control initiatives deployed throughout our bank. We reflect on our results in the latter part of the year. The speed of improvement will be determined by the decisiveness of the central bank to reduce rates and the actions taken by the government to stimulate recovery of economic speed. Headwinds from higher cost of risk and has been gross net interest margin will continue to undermine our performance within the following quarters. I thank you for your attention and now I pass the presentation to Diego who will explain in detail our business results and provide guidance for 2024.

Thank you. Maria Lorena. Before moving into our results, I would like to take a moment to highlight some aspects that characterize our banking operation that differentiate us from others in the Colombian banking system and explain our performance throughout the post pandemic cycle. Pages 9 and 10, you can find several charts regarding the quality and growth rate of our loan portfolio. For comparability reasons, these figures are unconsolidated under Colombian IFRS as published by the Superintendency of Finance. As mentioned in the past, Aval's portfolio composition is skewed towards lower risk consumer lending products and in line with our underwriting standards, who are a more cautious pace during the boom that followed the post pandemic rebound. Consistent with this risk profile, our banks have experienced a milder impact of the credit cycle and despite tightening underwriting policies, we have been in a better position to grow in this challenging environment. As a result, our banks in Colombia have gained market share in all major loan categories of the 12 months period ending on February. While experiencing a better evolution of the credit quality of the consumer portfolio and total loans. I will now move to the consolidated results of Grupo Aval under IFRS. Starting on Page 11, asset grew 2.7% over the year and 1.9% over the quarter to COP307 trillion. The year marked a 17.3% year-on-year appreciation of the Colombian peso that had a negative effect on year end growth metrics, particularly of net loans and leases. For the quarter, the peso appreciated 0.5% and had no material impact on growth metrics. Dollar denominated loans account for 16.6% of our total portfolio. These are contributed mainly by MFH in Panama by the U.S. agencies of Banco de Bogotá, our trade finance activities and offshore subsidiaries of Banco de Bogotá and Banco de Occidente. The bottom of the page, gross loans grew 2.2% over the year and 1.5% during the quarter. Our peso denominated loans increased 5.1% and 1.3% respectively, while U.S. dollars denominated loans grew 8.6% and 2% in dollar terms, respectively. We continued to outgrow our peers across all loan categories despite having tightened our origination policy several times over the cycle. This yielded at the end of February year-on-year market share gains of 89 basis points in total loans, 138 basis points in commercial loans, 110 basis points in consumer and 28 basis points in mortgages. Commercial loans grew 3.1% year-on-year and 2.3% over the quarter. Peso denominated commercial loans grew 7.1% and 2% year-on-year and quarter-on-quarter while U.S. dollar denominated commercial loans grew 10.5% and 2.5% in dollar terms, respectively. Consumer loans contracted 0.2% year-on-year and grew 0.1% over the quarter. Peso denominated consumer loans grew 0.6% year-on-year and remained flat quarter-on-quarter while U.S. dollar denominated consumer loans grew 6.4% and 1.7% in dollar terms, respectively. The sluggish dynamics of consumer loans have been driven by high interest rate environment and tighter underwriting policies in line with the slow economic activity and softer macro outlook. Consumer loan growth was slow across all main products. Several loans that account for 55% of our consumer loans contracted 1.7% year-on-year and grew 0.6% of the quarter. Demand for this product has gained traction as the reduction in funding rates allows for lower interest rates and new discretions. Personal loans that account for 24% of our consumer book grew 1.7% of the year and contracted 0.1% during the quarter. Credit cards that account for 12%, grew 4% year-on-year and contracted 1.6% quarter-on-quarter. Automobile loans that account for 9% of our consumer loans decreased 1.5% year-on-year and grew 0.4% quarter-on-quarter. Finally, mortgages grew 4.6% year-on-year and 2% over the quarter. Peso nominated loans grew 11.1% and 2.4% respectively, while dollar denominated mortgage loans booked by MFH grew 2.5% and decreased 0.8% respectively in dollar terms. We expect our 2024 loan growth to continue exceeding the banking system, albeit remaining soft across products and segments. Dynamics in the system will fall largely in line with sluggish domestic demand and investment dynamics. Loan growth rates in the system are expected to pick up later during the year and into 2025 driven by the normalization of the monetary policy and its positive effects on GDP growth. On Page 12 we present funding and deposit evolution. Total funding increased 2.8% year-on-year and 3.1% during the quarter. Peso nominated funding grew 11.5% year-on-year and 3.6% during the quarter. U.S. denominated funding decreased 1.4% in dollar terms year-on-year and increased 1% during the quarter. Deposits account for 74.1% of our funding, growing 4% quarter-on-quarter and 6.1% year-on-year. Peso nominated deposits increased 8.9% year-on-year and 3.9% quarter-on-quarter. U.S. denominated deposits increased 11.7% and 4.1% in dollar terms, respectively over 12 and three months. Time deposits that remain the most sought after type of funding continued driving overall deposit performance and gain share in our mix. Time deposits grew 7.1% year-on-year and 5.3% in the quarter. Our deposits to net loans ratio stood at 106%. On Page 13, we present the evolution of our total capitalization, our total shareholders’ equity and the capital equity ratios of our banks. Our total equity decreased 1.4% over the quarter and increased 2.8% year-on-year. Our attributable equity decreased 2% over the quarter and increased 1.7% year-on-year. Dividends of COP570 billion were declared to our shareholders during the quarter. In addition, minorities at our subsidiaries received dividends of COP623 billion. Lower core equity Tier 1 ratios in Banco de Bogotá and Banco de Occidente correspond to dividends declared during the quarter. Lower Tier 2 ratios in these banks reflect the decrease in capital contributions debt in accordance with regulatory amortization schedules. As a recent event not yet reflected in these figures, on May 7, Banco de Occidente issued its inaugural COP175 million Tier 2 notes with a maturity of 105 years non-corporate, which we estimate could add approximately 150 basis points to total solvency. Banco Popular and consolidated ratios were 12.7% for total solvency and 11% for core equity Tier 1. On Page 14, we present our yield on loans, cost of funds, spreads and NIM. The consolidated NIM and loans expanded 16 basis points quarter-on-quarter to 4.3%. NIM and commercial loans predominantly floated over IBR decreased 14 basis points to 3.9%, while NIM on retail loans, predominantly priced at fixed rates, expanded 58 basis points to 4.9%. Despite of the above mentioned positive results in NIM and loans, total NIM fell 49 basis points to 3.4% quarter-on-quarter due to our sharp contraction in our NIM and investments to minus 0.2%. Focusing on our Banking segment, NIM and loans of our Banking segment improved 8 basis points quarter-on-quarter to 5.1%, still substantially lower than historical levels. This incorporates a NIM and commercial loans that decreased 16 basis points to 4.7% and an NIM and retail loans that expanded 41 basis points to 5.6%. The total NIM of our Banking segment contracted 21 basis points to 4.2% due to the same dynamics that affected our consolidated NIM. The decrease of our NIM on investments is explained by two drivers. First, a softer quarter-on-quarter, yet still double digit NIM on investments from our Pension and Severance Fund Management segment. And second, a negative result in our Banking and Merchant Banking segments that mitigated by its strong results in FX and derivatives under our income in connection with hedging strategies. Interest breaking dynamics of our loans and funding are driven by the movements in the average benchmark rate in Colombia. On a consolidated basis the average yield on loans for the quarter decreased 54 basis points to 13.7% over three months, while the average Central Bank rate decreased 42 basis points to 12.8% in first quarter 2024, and average three month IBR decreased 64 basis points to 12.3%. Commercial portfolios reduced their yield by 84 basis points to 13.3% over the quarter. In addition to lower IBR, a preference for low risk sectors has implied lower spreads on new loans. The average yield on consumer loans decreased 22 basis points over the quarter due to a sharp decrease in Colombia's lending rate cap after changes in calculation methodologies implemented by the regulators. This change reduced the rates of some unsecured consumer lending products, mainly credit cards. It was partially offset by a continued repricing of loans with longer maturity, such as payrolls. On the cost of funding side, our banks recorded a 68 basis points quarter-on-quarter decrease in cost of funds. Average rates on time deposits and saving accounts fell 53 basis points and 88 basis points quarterly respective. As we have to mention in previous calls, last year, time deposits were issued at abnormally high spreads to the sovereign triggered by changes in the net stable funding regulation. A portion of those will mature over the following months, contributing to the downward trend in cost of funds. And Pages 15 through 17, we present several loan portfolio quality ratios. On Page 15, 90 day PDLs were 4.15% at 17 basis points deterioration relative to last quarter and 70 basis points deterioration over 12 months. 30 day PDLs increased to 5.85%, a 39 basis points change over three months and then 99 basis points deterioration over 12 months. Loan rates between 30 days and 90 day PDLs remain contained as a result of the collection strategies developed by our banks, 90 day PDLs formation increased 5% quarter-on-quarter after an 18% increase 30 day PDL formation a quarter earlier. Commercial 30 day PDLs were 5.1% and 33 basis points increased over three months. 90 day PDLs were 4.48%, 8 basis points deterioration over the quarter. We recorded a 53 basis points increase in consumers 38 PDLs to 6.81%, while 90 day PDLs increased 35 basis points to 3.91%. Mortgages 30 day PDLs and 90 day PDLs increased 33 basis points and eight basis points, respectively, and 120 day metrics PDLs were 3.5% or 11 basis points higher during the quarter. Finally, the ratio of charge-offs to average 90 day PDLs was 0.62 times. On Page 16, the share of our loan portfolio classified as Stage 1 portfolio fell slightly over the quarter, mostly driven by a mild deterioration in retail loans. Regarding coverage, the allowance for Stage 2 and Stage 3 as a percentage of loans classified as Stage 2 and Stage 3 was materially stable during the quarter for loans. The coverage for commercial loans continued increasing during the quarter. The allowance ratio for consumer loans and mortgages slightly increased over the quarter, reflecting an improvement in the mix of probabilities of default inside Stage 2 loans. On Page 17, as we anticipated in our last earnings call, the cost of risk remained high during the quarter, driven by a high cost of risk for consumer loans. Cost of risk net for consumer loans improved 4 basis points to 7.5% despite a slight contraction in average balances. The cost of risk of credit cards and personal loans improved quarter-on-quarter falling 63 basis points to 15.2% and 237 basis points to 15.4%, respectively. The increasing cost of risk on commercial loans is mainly explained by strong end of period loan growth in the quarter. On Page 18, we present net fees and other income. Net fee income grew 5.6% quarter-on-quarter and 3.9% year-on-year. Net fee income increased to 16.3% and 5.9%, respectively. Net pension and severance fees grew quarter-on-quarter and year-on-year, driven by performance based fees that incorporates a strong capital market performance at the end of 2023. As guided income from the non-financial sector was around 70% of that recorded in first quarter 2023 as some toll road concessions transitioned from the construction to the operations phase. In contrast, the energy and gas sector outperformed during the quarter due to the favorable effect of [indiscernible] businesses due to the higher natural gas consumption. Finally, on the bottom of the page, the quarterly increase in other operating income is mainly explained by higher derivatives and FX gains that as mentioned before, partially compensate lower results in NIM on investments. In addition, even seasonality further adds to the improvement relative to fourth quarter of 2023. On Page 19, we present some efficiency ratios. As a result of our cost control initiatives, total other expenses increased 0.8% year-on-year and fell 3.8% quarter-on-quarter. General and administrative expenses grew 0.2% year-on-year and contracted 7.9% quarter-on-quarter. General and administrative expenses are determined by operating taxes and deposit insurance that now account for 41% of these expenses. These line items grew 8.1% and 9%, respectively, year-on-year. Other general and administrative expenses decreased 4.8% year-on-year. Cost to assets for the quarter was 2.76%, improving 15 basis points quarter-on-quarter and four basis points year-on-year. Our quarterly cost to income improved to 50.4% of the quarter and deteriorated year-on-year, mainly due to a lower NIM on investments and income from the non-financial sector. Finally, on Page 20, we present our net income and profitability ratios. Attributable net income for the quarter was COP114 billion or COP4.8 per share. Return on average assets and return on average equity for the quarter were 0.6% and 2.7%, respectively. Before we move into questions and answers, I will now summarize our general guidance for 2024. We expect loan growth between 7.5% and 8% with commercial loans growing between 9% and 9.5% and retail loans growing between 5% and 6%. NIM in the 4% area with NIM on loans in the 4.75 area. NIM of our banking segment in the 4.75 area with NIM on loans between 5.25 and 5.5. Cost of risk net of recoveries in the 2.2% area. Cost to assets in the 2.7% area. Income from the non-financial sector up 70% of that for 2023. Our fee income ratio between 20% and 25%. Finally, we expect our 2024 return on average equity to be in the 6.5% area. We are now available to address your questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Nicolas Riva with Bank of America. Please go ahead.

Thanks very much, Diego and Maria Lorena, for taking my questions. I have a few questions. So the first one on provisions for loan losses, which were up 72% year-on-year and 10% quarter-on-quarter. Cost of risk at 2.9% in the quarter. If you can discuss any thoughts in terms of the outlook for provisions for loan losses for the rest of the year. That's my first question. And then I have a few questions on your standalone balance sheet for the holding company. Diego, you mentioned the Tier 2 raise from Banco de Occidente after the end of the quarter, the $175 million. I want to confirm that transaction is not going to have any impact on the standalone balance sheet of the holding company. I assume that Grupo Aval in this case did not buy any of the Tier 2 issue. But if you can confirm there, and also if you can tell us what's the amount of the AT1 issue from BAC’s Central America that is owned by Aval and that is included in the double leverage that the holding company reports of 123% at the end of the quarter. And finally, Diego, you gave us guidance for 2024 on a consolidated basis. Can you share your projection for double leverage for the holding company by the end of the year? Thanks.

Okay, Nicolas. Let me take it one of those. Regarding provision expenses, cost of risk, you might have noticed that we raised our expectation cost of risk for the year. Basically, what we are reflecting here is the credit cycle has been longer than what we expected. If you look at what has happened, you will find that there's been improvement as we had guided into before, but we haven't yet seen a turning point, particularly for consumer loans. From the macro side, there is a number of positives going on. We see the numbers reported by the superintendents of finance of household leverage improving. So that correlates to the contraction in consumer and retail loans that we've seen before. But we still have some caution on what is going to happen with unemployment. So that's perhaps the main change in the guidance for this call is a higher cost of risk with an expectation to trend to better numbers as the economy recovers. Even though it's data dependent, we see positives going on, on the inflation front. We see positive positives on the central bank front, and also from the growth – the GDP growth perspective. So even though cautious, we see an improvement in that area and that would help us to trend back to the sub-2% cost of risk that we are more familiar with. Regarding our standalone balance sheet, yes, Aval didn't buy bonds from Banco de Occident, particularly small issue and we wanted this to be the inaugural bond for a Banco de Occident. It was not benchmark a size transaction because of the needs of the bank, but still they were able to tap the market. Regarding the AT1, we will be looking at the call of the bank of the bond during next year. At this point, I would say the probability of that call is relevant given the trend of rates going on. And we have to wait a few months to see that happening but it is a possible scenario that it will be cold. Then you had a few other questions.

In that case, Diego, so again, assuming it's called what would be the – so right now what's the amount of the [indiscernible]?

Your question on double leverage, it's a very relevant event. What we are working on is trending down that to 120%. That is basically a ratio that rating agencies have pointed to. And the AT1 represents close to 11 percentage points of double leverage. So if the bond is called and we doing nothing else, we would be around 110 or under that number.

Okay, thanks very much, Diego.

[Operator Instructions] And your next question will come from the line of Julián Ausique with Davivienda Corredores. Please go ahead.

Hi everyone and thank you for having my questions. I have several questions. The first one, if you can maybe repeat the guidance, because I couldn't get the line when you were giving the guidance? And my other two questions are regarding; the first one is regarding the corporate deterioration segment, like how are you looking the deterioration for the year in terms of the corporate. Because here in the quarter that we are seeing some deterioration in the corporate sector. So what are your expectations and if you have some like sensitivities or sensibilities about the MPLs, both in 30 and 90 days for this segment? And my second question is regarding the NIM on investment. I was looking like the P&L and I saw that during the quarter you have an increase on interest and investments in debt securities of 11%. So, I could understand why the NIM on investments had a negative performance during the quarter and also to understand why the NIM on loans have some decrease, like some increase, because when so P&L, I saw a deterioration on the income of loan portfolio of 4% and also. But I saw an decrease in the cost of loans. So, I would like to understand a little bit more about the NIM on investment and the NIM of loans. Thank you.

I'm not sure I understood fully your questions. Could you repeat what part of the guidance you need?

It like if you can give the loan NIM quarter on ROE. That's the first one.

Okay. So a cost of risk of 2.3% and ROE in the 6.5% area might have some upward bias. But at this point we're cautious on the cost of risk side. And regarding a commercial loans. The segments in which Aval is concentrated are much more of a larger commercial companies and corporates, therefore, we've seen some slight deterioration, but it's quite mild at this point. If you look at that through stages, on the stages front, you even see some bias to an improvement there. So we are watchful of the deterioration and commercial, but it hasn't really shown, not in numbers yet. And it is related to the kind of customers that we have. There might be more concern if you go to smaller commercial loans and SME loans. But in our case, we are more at the point of making sure that everything keeps under control. You might imagine that we been looking into segments that are more sensitive than others. And perhaps at this point, something to mention is we're very well diversified across sectors and inside sectors, across customers. So we are not expecting any large surprise. On the NIM and investments front. Yes, it was perhaps one of the things that affected our overall NIM. We saw improvement in NIM on loans. However, a lower NIM on investment still affect us. Part of that, as I mentioned through the call, is offset with derivatives in the other income line. Having said so, the end of March was not that positive for the market. We've seen a better evolution during the second quarter on returns on fixed income investments. Therefore, we are expecting to see a better result over the year than what we saw for the quarter.

There are no further questions at this time. Ms. Maria Lorena Gutierrez Botero. I turn the call back over to you.

Okay, thank you to you all and see you soon in the next call. Good day.

Thank you, ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.